OK, so it's not really "securities litigation"-related (at least not yet), but the WSJ has an interesting article about a new security offering that will let investors hedge against possible real estate losses. According to the article, Robert Shiller, a Yale University professor and the author of "Irrational Exuberance," is also a lead figure at a company called Macro Securities Research. This company has
developed financial instruments – called "MACROs" – that will be tied to a housing index that tracks property values in certain cities. By purchasing Up MACROs or Down MACROs, investors would be able to place bets on whether a property market is going to keep rising, or whether it's going to fizzle.
In effect, speculators could play the bubble: They could short the City of Angels and go long on the Big Apple, or vice versa. Homeowners in bubbly markets could hedge against a pop. They could stand to gain if the value of their homes go down. If property values keep rising, of course, the homeowners lose on their MACRO investments -- but at least their homes would be worth more.
The article states that MACRO Securities has filed plans for the new securities with the SEC, and hopes to list the securities on the American Stock Exchange.