Containment, Bear Stearns style

It appears problems with the third Bear Hedge Fund are coming to light. What took so long?

Bear Stearns Cos., already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 million in mortgage investments, according to people familiar with the matter.

The fund, known as the Bear Stearns Asset-Backed Securities Fund, ran into trouble in July and has refused to return investors’ money for the moment. WSJ

The extent of the losses are unlikely to be as severe as the first two funds, but it won’t ease investors pain. More heads will have to roll at Bear.  And we don’t mean the client’s heads, Jimmy.

Of course, the third fund’s problems should be no surprise.

July 16th
But what about the third fund that everyone missed? True, this fund is not an all out debacle. But street scuttlebutt has the third fund down close to double digits in a single month, steep losses for fixed income investors to swallow, particularly if they had money in the other two vehicles.

Jitters surrounding these funds dragged down the ABX index on Monday. The Ghostbusters could not contain this slime. 1440 Wall Street

Like we said, women and children first, please.

Another Bear Hedge Fund Spanked
1440 Wall Street

Another Bear Stearns Hedge Fund Is in Trouble
WSJ
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position BSC

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