In the world of competitive finance, there’s never a bad time to make money. Sure the subprime market has many feeling the pinch, but the real opportunists find ways to profit in any circumstance. For example, one strategy is short selling or in other words, betting on a loss. In a must read NYTimes article, Ben Stein examines Goldman Sach’s practices of knowingly creating and selling flawed financial investments while covering themselves in the process.
But it’s not just the Big Guys who are getting all the breaks. In my favorite story of the subprime fiasco, some people are fighting foreclosures with impressive Talmudic reasoning:

A Federal Court Judge rejected 14 foreclosure claims by Deutsche Bank, which was trying to collect on securitized sub-prime mortgage loans it acquired. The judge stated that the Bank did not really own the ?bad loans? because it acquired them after defaults had already occurred. He asked the bank to prove it held the mortgage at the time of the foreclosure notices or said he will dismiss its claims.

The snowballing effect of subprime defaults is the result of repackaging, revaluing, and reselling various debts to various investors. However, once the debt is securitized and resold it can be difficult to track down who owned what and when. As a result Deutsche Bank not only loses on the initial investment, but cannot even recoup the losses through the typical hedge of property foreclosure.
Almost makes you feel sorry for them.