The ABX index for sub-prime at 18.55 is now at levels that shorts must cover. I'd buy ABX swaps on this until the cows come home. Why? Because it's almost at zero!
Assume that three year coupon to hold an ABX "short" is at 500 bps. What's your upside? Why do you think Wall Street is screaming at the banks to puke up their holdings and mark it to Mr. Market's price now?
It's time to get the prospectuses out and do some buying. The bond desks need to get a Christmas bonus. And the simplest way is to get your competitor, who lost his, to sell their inventory to you. Mark it up, and then sell it to the smart shorts. They need a bonus too!