a tid-bit from todays Market Beat column in the WSJ online:
August 2, 2007, 10:02 am
Reading: Scanning the Books
Posted by Joanna Ossinger
In today’s Journal, David Reilly and Karen Richardson talk about how hard it is to find subprime-mortgage-related losses in financial companies’ statements. They quote a hedge-fund manager as saying that “We’ve been looking for financials that show losses from these securities on their books, and they’ve been very tough to find” because “it’s very opaque.” They write that some ways to value assets “can allow a firm to take an unrealistically optimistic view that overlooks potential losses,” particularly in securities that are thinly traded. They say that coming accounting-rule changes could help, but likely not for a year or more.
Roddy Boyd writes in today’s New York Post about some of the hedge funds that are suffering, taking “their sharpest losses in years” in the wake of the market’s recent turmoil. “Among the big names slammed were hedge-fund guru Paul Tudor Jones II, who had two funds take a hit yesterday, and billionaire Steve Cohen,” he says, and “Already, two funds run by Bear Stearns Asset Management have gone bankrupt and Sowood Management, a hedge fund created with great fanfare by a former executive of Harvard University’s $30 billion endowment, has collapsed.”
