UPDATE 1-Brookstreet Securities hurt by CMOs, may shut down
Thu Jun 21, 2007 7:16PM EDT
By Dane Hamilton and Svea Herbst-Bayliss
NEW YORK/BOSTON , June 21 (Reuters) – Brokerage firm Brookstreet Securities Corp. said it may have to shut down in the wake of a severe liquidity crisis sparked by losses on collateralized mortgage obligations.
“Disaster, the firm may be forced to close …,” the Irvine, California-based company told employees in an e-mail on Wednesday.
Reuters obtained a copy of it on Thursday.
“It would take a capital infusion of at least $5,000,000 to keep the company in compliance with no guarantee that additional markdowns may not be forthcoming,” the firm wrote in the seven paragraph-long email that details the disaster that the firms says occurred in one day.
Fidelity Investments’ National Financial unit, which acts as Brookstreet’s clearing firm, marked down the values of all of Brookstreet’s collateralized mortgage obligations, Brookstreet said. CMOs are securities of repackaged loans that are divided and sold to investors.
“Many of those accounts were on margin and have suffered horrendous markdowns and unrealized as well as realized losses,” the e-mail said.
The Bear Stearns fiasco is spilling out. These subprime CDOs are being re-valued from par and now we’re finding out what they are worth…nothing. This firm was wiped out over night.
God save us now if this creates a domino effect. If more of these CDOs get revalued lower, and you know they are not worth what these firm are claiming they are, we’re in for a real meltdown. A serious meltdown that will take more than the housing industry with it.
The Bear Stearns fiasco is spilling out. These subprime CDOs are being re-valued from par and now we’re finding out what they are worth…nothing. This firm was wiped out over night.
God save us now if this creates a domino effect. If more of these CDOs get revalued lower, and you know they are not worth what these firm are claiming they are, we’re in for a real meltdown. A serious meltdown that will take more than the housing industry with it.
jg.. You are a pisser! How did you know that I just got back inside from dancing naked in my backyard (we do it every year). Anyway, lets keep the G word out of these posts… I will try to be good and not laugh at your beliefs anymore.. I promise!
jg.. You are a pisser! How did you know that I just got back inside from dancing naked in my backyard (we do it every year). Anyway, lets keep the G word out of these posts… I will try to be good and not laugh at your beliefs anymore.. I promise!
“God save us now if this creates a domino effect. If more of these CDOs get revalued lower, and you know they are not worth what these firm are claiming they are, we’re in for a real meltdown. A serious meltdown that will take more than the housing industry with it.”
“Eat drink and be merry for tomorrow we shall die.”
From the looks of things, the host of characters on this thread,after skipping the kool-aid, indulged themselves in something stronger!
“God save us now if this creates a domino effect. If more of these CDOs get revalued lower, and you know they are not worth what these firm are claiming they are, we’re in for a real meltdown. A serious meltdown that will take more than the housing industry with it.”
“Eat drink and be merry for tomorrow we shall die.”
From the looks of things, the host of characters on this thread,after skipping the kool-aid, indulged themselves in something stronger!
Obviously you have no concept of what is going on in this Bear Stearns Hedge Fund crisis and I’m not going to waste anytime explaining it to you. YOu’ll find out soon enough if they do not contain it. Me? I’m short the market and you know what? It’s raining cash. Here, hold my kool-aid while I open my umbrella
Obviously you have no concept of what is going on in this Bear Stearns Hedge Fund crisis and I’m not going to waste anytime explaining it to you. YOu’ll find out soon enough if they do not contain it. Me? I’m short the market and you know what? It’s raining cash. Here, hold my kool-aid while I open my umbrella
