Magnetar, according to Wikipedia is a type of neutron star with an extremely powerful magnetic field, the decay of which powers the emission of copious amounts of high-energy electromagnetic radiation, particularly X-rays and gamma rays.

Magnetar, according to ProPublica, could keep money flowing — via its small investments in CDOs — and could use that money to pay for its bets against CDOs.

A brilliant slide show that spells out what they did.

The perverse capitalistic business Magnetar was involved in:

The hedge fund bought the riskiest portion of a kind of securities known as collateralized debt obligations — CDOs.

The hedge fund acknowledges it bet against its own deals[.]

At the same time it was investing in the equity, the fund placed bets that many of the same CDOs it had helped create would actually blow up.

“Figure out a way to make money and figure out how to repeat it and do it over and over again,”

Crisis explainer: Uncorking CDOs from Marketplace on Vimeo.

That’s capitalism in 2010.

From what we’ve learned, there was nothing illegal in what Magnetar did; it was playing by the rules in place at the time.

And the same rules apply today. “Wall Street” was bailed out with our money. They can/are still doing this. Think about that.

Just about everybody lost out, including Thrivent Financial for Lutherans, a Minnesota-based not-for-profit fraternal organization, whose $10 million investment was wiped out.

Leveraged, securitized, CDO-ed gold star to Yves of Naked Capitalism.