Should Warren Spector have known?

At first is seems as if Warren Spector's career is the victim of a much broader economic downturn in the sub-prime real estate market. Two of his major funs collapsed this summer amid rising defaults in real estate lending.

But Warren Spector was a very senior leader within Bear Sterns -- he set strategy regarding how much risk to take in order to try for stronger returns. He purposefully decided to roll the dice by shifting his portfolio of funds towards higher risk segments. And he got stung.

He'll recover quickly and land at another fund or company. He's still well respected within the community.

Linked from http://news.bbc.co.uk/1/hi/business/6932750.stm
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The mortgage funds headed by Mr Spector had relied heavily on securities that were backed by sub-prime mortgages - which are effectively loans for those on low incomes or with a poor credit rating.

Defaults on these risky loans have risen in the wake of the weakening housing market, as higher interest rates have increased the burden of mortgage payments.