Bear Stearns Hedge Fund Liquidating

[SD Realtor]

I am to lazy to post the link. I read the story in Yahoo Finance. Bear Stearns is liquidating a hedge fund of mortgage backed securities that were based on subprime mortgages.

[(former)FormerSanDiegan]

Here is a link to the bloomberg article on the subject

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0LL0_ucig4Q&refer=home

[(former)FormerSanDiegan]

Here is a link to the bloomberg article on the subject

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0LL0_ucig4Q&refer=home

[pencilneck]

Here is the part I find most interesting:

“Investor Redemptions

The Bear Stearns fund halted redemptions after investors sought to withdraw $300 million by June 30, the newsletter Hedge Fund Alert said last week.”

The fund is imploding and current investors can’t withdraw their money. Some of them have allegedly been attempting to withdraw their funds since February, and can not.

[pencilneck]

Here is the part I find most interesting:

“Investor Redemptions

The Bear Stearns fund halted redemptions after investors sought to withdraw $300 million by June 30, the newsletter Hedge Fund Alert said last week.”

The fund is imploding and current investors can’t withdraw their money. Some of them have allegedly been attempting to withdraw their funds since February, and can not.

[Anonymous]

And check this out:

“…investment manager believes the company will not have sufficient liquid assets to pay investors.”
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070612_748264.htm

That doesn’t sound too good at all.

[Anonymous]

And check this out:

“…investment manager believes the company will not have sufficient liquid assets to pay investors.”
http://www.businessweek.com/bwdaily/dnflash/content/jun2007/db20070612_748264.htm

That doesn’t sound too good at all.

[Nancy_s soothsayer]

Before, Amaranth. Now, this.

Is the sd-county pension fund involved in collateralized debt obligations (CDO’s)? Methinks, it is probable if they were involved with Amaranth before.

[Nancy_s soothsayer]

Before, Amaranth. Now, this.

Is the sd-county pension fund involved in collateralized debt obligations (CDO’s)? Methinks, it is probable if they were involved with Amaranth before.

[donaldduckmoore]

I am ignorant, what is the implications?

[donaldduckmoore]

I am ignorant, what is the implications?

[Anonymous]

I am ignorant, what is the implications?

If Bear Stearns, people who are the supposed experts on mortgage bonds, are having problems because of subprime defaults, then pension funds etc… (who most likely don’t have near the same information as these guys have) could get hit really hard.

[Anonymous]

I am ignorant, what is the implications?

If Bear Stearns, people who are the supposed experts on mortgage bonds, are having problems because of subprime defaults, then pension funds etc… (who most likely don’t have near the same information as these guys have) could get hit really hard.

[SD Realtor]

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!!!

SD Realtor

[SD Realtor]

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!!!

SD Realtor

[Author]

Posts