Protesters are taking to the streets in Greece, but there's at least one man who's happy about the debt crisis that's causing prematurely graying hair on the heads of EU government officials. Mark Hart III, a Texas-based hedge fund manager, runs a firm that's been solely devoted to betting against European debt for years.
As a result, investors have seen good returns, especially now as Europe devolves into financial chaos. Call him the John Paulson of international debt; sometimes it doesn't hurt to be a contrarian.
Indeed, in the past few years, it appeared to most investors that countries were equally unlikely to default, as it cost the same amount to purchase credit-default swaps to protect Greek debt as it did to protect German debt. But to Hart, Germany was in a much better place economically (i.e., less debt-ridden) than were Greece, Portugal and Spain. Such analysis enabled him to bet against the so-called PIIGS economies that are now grappling with debt problems.
Moral of the story? If something seems too good to be true, it usually is.
Write to Julie Steinberg