Wednesday, June 13, 2007

Another Day , Another Bear Stearns News......

things getting more an more interesting on a daily basis..... this is a follow up on yesterdays post. make sure you have read it before you continue to read this one.

das ganze wird von tag zu tag interessanter..dieses ist die fortsetzung vom gestrigen post. solltet ihr es noch nicht gelesen habe bitte ich dieses zum besseren verständnis nachzuholen.

Is Bear Stearns Cutting Its Losses?

A nearly $4 billion bond sale pushed by the firm has many on Wall Street figuring its hedge funds are preparing to close shop

Wall Street bond traders are raising eyebrows at Bear Stearns' (BSC) attempt to sell some $3.86 billion in mortgage-backed bonds. The big bond deal is prompting speculation that Bear Stearns traders are helping a big loser in the mortgage market—most likely a hedge fund—raise cash by selling off some of its better assets.

There's even speculation that some of the bonds being sold may be the better-performing assets held by two Bear Stearns hedge funds that have run into trouble this year after investing in risky bonds backed by subprime mortgages, or home loans to consumers with shaky credit histories.

If Bear Stearns is moving to liquidate its two hedge funds, that could spell the demise of Everquest Financial, a Bear Stearns affiliate that has purchased risky bonds from both hedge funds. Bear Stearns, in May, filed a prospectus to take Everquest Financial public

The rise in mortgage defaults—particularly in the subprime market—ultimately will impair the value of many bonds that are backed by those risky home loans. But up until now, most bondholders have not have had to readjust their valuations for those mortgage-backed securities. Bond investors are not required to reduce the value of a bond unless it's either downgraded by a credit rating agency or sold for a reduced price in the secondary market. ...

>this is long overdue...... and it looks like some want to unload as much as possible of the ticking timebomb when the rating agencies finally have the courage ta take action.....

>diese downgrades sind längst überfällig....und ich denke jeder möchte noch rechtzeitig möglichst viele der beriets lange tickenden zeitbomben aus den büchern bekommen.....

Do the Bears Have It?
More than pleasing the bear, a reduction in the value of mortgage bonds could force hedge funds to report losses to investors, hit Wall Street trading desks, and cause Wall Street firms to withdraw capital from market making. Depending on how much contraction followed, credit could tighten up for a wide range of borrowers, from home buyers to private equity firms raising money for the leveraged buyouts that have been supporting the stock market.

Then again, the bears have been wrong many times in predicting a total meltdown in the mortgage market. It's possible that Bear Stearns may have nothing more up its sleeve than selling this big batch of higher-rated mortgage bonds.

>but with all the action from Bear Stearns in the last month it is no wonder that there is so much speculation.....

>dank der ganzen zweifelhalten aktioenen von Bear Stearns dürfte es keinen überraschen das die spekulationen ins kraut schiessen.....


The Bear Stearns Companies Inc. today reported earnings per share (diluted), after a non-cash charge, of $2.52 for the second quarter ended May 31, 2007, down 32% from $3.72 per share for the second quarter of 2006. Second quarter results include the effect of a $227 million or $0.88 per share (diluted) non-cash charge related to the write-down of intangible assets, representing goodwill and specialist rights of Bear Wagner Specialists

according to the website

Bear Wagner Specialists, a subsidiary of The Bear Stearns Companies, Inc., is the most progressive and skilled specialist firm on the NYSE.

>it is very telling that there is no other mentioning in the full press release related to this issue.....

>bezeichnenderweise gibt es bis auf diesen absatz keine weiter erläuterung zu diesem themenkomplex.....

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