Two years ago, Gary put some money with hedge fund superstar John Paulson who shorted the ABX BBB Index.

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The next index to collapse will be the ABX-AAA Index.

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That index, known as the ABX, is up 14% this year, after dropping 30% from March to November 2011, and recently traded at about 50 cents on the dollar, according to data provider Markit.

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Croesus first wrote about Markit in August 2007 (see "Profiting from the Meltdown"), in a story about how a few major firms created an index of subprime mortgages (ABX) and one for leveraged loans on their balance sheets that needed to be hedged (LCDX).

FORBES: Commentary