I would suspect most all hedge funds in this category have shown big losses and will continue to do so. The liquidation of a fund of this size is somewhat surprising but in reality I think it is a prudent move by Bear Stearns. It does show that Bear Stearns thinks the problem is not going away for now. Thus they ran the numbers and believe liquidating the fund is better then keeping it.
The sad part is that when you look at who the investors of these funds are, you will cringe.
The funny (but sad) part about these funds is that these investors trusted the underwriting process… they bought these funds assuming that the underwriting process from which these mortgages were originated would weed out potential defaults… Doh!!!
