6 replies to this topic

[greenie]

I remember in Indian history that when brothers of a muslim empire started to fight, it was usually the end of the empire.

This one looks no different.

Here is fresh news on bear stearns.

"Merrill to Dump Bear Fund's Assets

A day after managers of a troubled internal hedge fund at Bear Stearns Cos. presented lenders with a last-ditch plan to reinvigorate the fund with additional financing, creditor Merrill Lynch & Co. pushed forward with plans to sell hundreds of millions of dollars in collateral assets out of the fund, said traders late Tuesday.
"

http://online.wsj.co...5971540990.html

[greenie]

now it is over - Tuesday, June 19, 2007 WSJ: Bear Stearns Funds Face Shutdown Two big hedge funds at Bear Stearns Cos. moved toward the brink of closing down ... as a bailout plan ... fell apart ... The funds, which once controlled more than $20 billion in a combination of investor and lender money ... had invested heavily in various securities backed by subprime loans ... ... the funds had effectively paid down $2.25 billion of their $9 billion in outstanding credit. The first two lenders to exit their positions, Goldman Sachs Group Inc. and Bank of America Corp., agreed to unwind complicated transactions with Bear without dumping lots of bonds on the broader market. ... By unwinding those loans in an orderly manner, rather than through a series of fire-sale auctions, Bear's fund managers ... could help stave off painful ripple effects in the broader market for mortgage-backed securities and related instruments. ... Merrill, on the other hand ... opted to revive a planned auction for hundreds of millions of dollars worth of collateral from the Bear funds.

[Tor]

I remember in Indian history that when brothers of a muslim empire started to fight, it was usually the end of the empire.

This one looks no different.

Here is fresh news on bear stearns.

"Merrill to Dump Bear Fund's Assets

A day after managers of a troubled internal hedge fund at Bear Stearns Cos. presented lenders with a last-ditch plan to reinvigorate the fund with additional financing, creditor Merrill Lynch & Co. pushed forward with plans to sell hundreds of millions of dollars in collateral assets out of the fund, said traders late Tuesday.
"

http://online.wsj.co...5971540990.html

I work in the business, and think this happens literally all the time. Its legal responsibility ultimately.

[ogm]

Moody's is reviewing ratings on 100s more of these "investments" . Would be interesting to see if other lenders start getting shaky and decide to check the portfolios of other hedgehogs they lend money to. A lot of that junk that is being stuffed in the portfolios isn't rated at all and can't be properly valued. So they just mark it as they see fit on their books to rip the management fees. If lenders will start getting nervous that could become an issue.

[TTHQ Staff]

Posted a couple of days ago...but you knew that.
Link

[jawndissedi]

now it is over -

Tuesday, June 19, 2007
WSJ: Bear Stearns Funds Face Shutdown


Two big hedge funds at Bear Stearns Cos. moved toward the brink of closing down ... as a bailout plan ... fell apart ...

The funds, which once controlled more than $20 billion in a combination of investor and lender money ... had invested heavily in various securities backed by subprime loans ...

... the funds had effectively paid down $2.25 billion of their $9 billion in outstanding credit. The first two lenders to exit their positions, Goldman Sachs Group Inc. and Bank of America Corp., agreed to unwind complicated transactions with Bear without dumping lots of bonds on the broader market. ...

By unwinding those loans in an orderly manner, rather than through a series of fire-sale auctions, Bear's fund managers ... could help stave off painful ripple effects in the broader market for mortgage-backed securities and related instruments. ...

Merrill, on the other hand ... opted to revive a planned auction for hundreds of millions of dollars worth of collateral from the Bear funds.

This is very sad. Cain and Abel in the Judeo-Christian context. I was quite bullish when I thought this was going to be worked out, but now that they're going the liquidation route, I'm afraid Greenie's interpretation is correct.

[greenie]

Another update (from CR website):

CNBC: JPMorgan Started Selling Stearns Assets

Reported on CNBC: JPMorgan Started Selling Stearns Hedge Fund Assets Tuesday Night

update: CNBC also reporting that Deutsche Bank and others are selling hedge fund assets.


exciting - reminds me of late-Mughal era

I work in the business, and think this happens literally all the time. Its legal responsibility ultimately.

I do not know what type of companies you work at, but Wall Street is a bit different. Just see the pattern - Bear Stearns starts a hedge fund, but leverage is provided by JPM, MER, Citibank, GS and all others, which are supposed to be competing companies. In fact, it was BSC, who contributed the least there. You will rarely hear Microsoft designing a new OS, but most of the coding are done by GOOG and ORCL, or GM comes out with a new model and sales pitch, but the cars are manufactured at Chrysler's plant.

Wall street acts differently, because the goal is to capture all the suckers out there and divide the loot. In good times, there are so many suckers that it is easy turkey shot. When those firms start fighting among each others, it just means there is a shortage in the pool of outside suckas, even including late bulls, who have been bearish for last four years and just turned bullish. And lack of suckers is clear, if you follow the news closely. BSC already tried to dump those junks on pension funds, sell as IPO and so on. Now the fun part begins for us spectators.