Last week was a slow one for most Wall Streeters, with the exception of people who manage portfolios of housing-backed securities. They had a lot of damage to assess and a lot of assumptions to bin. Given the growth of the asset-backed securities (ABS) market in recent years, and the imbalance between the complexity of the securities and the inexperience of the new entrants, the scale of the losses that followed the train wreck of Bear Stearns' two hedge funds was predictable. While most have not reported their results for June, there are housing credit-heavy fund managers facing losses of 30 per cent or even 50 per cent of capital. Some are already preparing to shut down.

Other managers, though, were prepared for an event such as the post-Bear unwind. One of them, Barak Laks of Alpha Beta Capital Partners, a fund of funds with heavy exposure to ABS strategies, is already working to exploit the opportunities arising from forced liquidations.