The article in Bloomberg makes the case that mortgage hedge funds are benefiting from less competiton from Fannie Mae and Freddie Mac as well as from Wall Street trading desks.

“These were the policemen that kept prices in line,” said Steve Kuhn, the head of fixed-income trading at Minnetonka, Minnesota- based Pine River who manages a hedge fund that’s gained 32 percent this year. “It’s the golden age of the relative value hedge fund.”