Bear Stearns says hedge funds worthless

Post #289,388 by JayMehaffey 7/19/07 10:21:50 AM Reply	Bear Stearns says hedge funds worthless [link\|http://news.yahoo.com/s/afp/20070718/bs_afp/uscompanyfinance\|Yahoo] Wall Street firm Bear Stearns has told investors in a hedge fund it manages that the fund's value has been wiped out following losses of billions of dollars tied to mortgage securities. The investment bank and brokerage said in a letter to investors, obtained by AFP Wednesday, that its Enhanced Leverage Fund, has "no value left" while another hedge fund it runs had "very little value left." The two funds, which had a total value of $20 billion on paper are now worthing nothing. Their debts from mortgages is more then the value of their other investments, everything will have to be sold just to cover debts. It appears they have avoided a total collapse like Long Term Capital Management, but Bear Stearns will be putting some $1.6 billion into the fund to pay off it's expenses and debts as it closes down. Hedge funds are generally highly leveraged, so it isn't clear just how much the investors lost. But it must be in the millions and could be in the billions. Jay
Post #289,391 by Andrew Grygus 7/19/07 10:40:25 AM Reply	My heart doth bleed. [link\|http://www.aaxnet.com\|AAx]
Post #289,397 by bepatient 7/19/07 11:07:15 AM Reply	And those investors knew the risk going in. These things aren't blue chips. Too much of today's music is fashionable crap dressed as artistry._{Adrian Belew}
Post #289,403 by boxley 7/19/07 11:49:18 AM Reply	waiting for the indictments and taxpayer bailout Quantum materiae materietur marmota monax si marmota monax materiam possit materiari? Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 51 years. meep reach me at [link\|mailto:bill.oxley@cox.net\|mailto:bill.oxley@cox.net]
Post #289,408 by a6l6e6x 7/19/07 12:28:03 PM Reply	Bear Stearns has been bulking up with lawyers. If nothing else, there will be plenty of lawsuits. Alex Nobody has a more sacred obligation to obey the law than those who make the law. -- Sophocles (496? - 406 BCE)
Post #289,416 by bepatient 7/19/07 1:04:01 PM Reply	All defended with the same tactic It was all in the prospectus. Hedge funds state in the prospectus that they should be considered speculative and only invested in with the understand that a complete loss is possible. Too much of today's music is fashionable crap dressed as artistry._{Adrian Belew}
Post #289,407 by a6l6e6x 7/19/07 12:25:36 PM Reply	Re: two funds Bear, the lying bastards, initially said only one fund was worthless. [link\|http://biz.yahoo.com/rb/070627/bearstearns_hedgefund.html?.v=2\|Yahoo (2007/6/27):] Bear Stearns Cos. Inc. (NYSE:BSC) said on Tuesday it does not plan to bail out the High-Grade Structured Credit Strategies Enhanced Leverage Fund, the second of two struggling hedge funds. Instead it will provide $1.6 billion of financing to save its High-Grade Structured Credit Strategies Fund. Days earlier the bank had said it would provide up to $3.2 billion in financing. Incidentally, Bear Sterns is hated by the street. During the Long Term Capital fiasco they did not "chip in" funds to mitigate the disaster. But, I'm with Beep. These are big boys making big bets for big rewards. And, sometimes you lose the bet. F#ck 'em! Alex Nobody has a more sacred obligation to obey the law than those who make the law. -- Sophocles (496? - 406 BCE)
Post #289,412 by JayMehaffey 7/19/07 12:53:36 PM Reply	I don't care much about the investors Investors in hedge funds are rich folk willing to take big risks to make big money, or they ought to be. I'm worried about the side effects, Long Term Capital Management crashed so hard, so fast there where worries it might take the US economy with it. Because of their tendency to be heavily leveraged and own many different risky investments, a hedge fund can do a lot of damage when it goes down. I also think it is interesting just how much money they managed to lose on home mortgages. Quite a few fund, not all of which are hedge funds, are going to lose a lot of money over them. Jay
Post #289,422 by tonytib 7/19/07 2:13:21 PM Reply	Better to crash sooner than later and, yes, the BS hedgie crash will have impact...for one, it will lead to repricing of assets in other funds. But people need to reminded of the very real risks, or speculation gets out of control. That's why, although I'm not a big fan of the Chinese government, I think their efforts to try to squash their bubbles in real estate and the stock market are smart. If the US stock market had crashed in 1999, it would have been less painful. If the US real estate market had peaked in 2003 (when it would have except for mortgage "innovations"), it would have been a lot less painful it will be. --Tony
Post #289,425 by a6l6e6x 7/19/07 3:16:57 PM Reply	Total sub-prime mortgage losses are in the $50-100 B range. Alex Nobody has a more sacred obligation to obey the law than those who make the law. -- Sophocles (496? - 406 BCE)
Post #289,433 by bepatient 7/19/07 5:24:21 PM Reply	Those are estimates and real losses depend on the impact on home prices. The assets against those loans still exist and can/will be resold at some time. Too much of today's music is fashionable crap dressed as artistry._{Adrian Belew}
Post #289,434 by bepatient 7/19/07 5:24:23 PM 7/19/07 5:24:43 PM Reply	dupe Too much of today's music is fashionable crap dressed as artistry._{Adrian Belew} Edited by bepatient July 19, 2007, 05:24:43 PM EDT Expand All History

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