Tuesday, July 17, 2007

Bear credit hedge funds almost wiped out: sources

What a surprise.....Too bad that leverage works both ways......The earnings call should be fun. I´ll give Bear a 50% chance that they are impertinent enough to report an earnings number excluding the implosion ... :-)

Get ready for the takeover spin to pump up the stock (heavy rotation).....To put things into perspective....Bear just pumped money into a worthless asset. Not insignificant with a marketcap of $20 billion ( 1.57 book value).....

Here te letter to clients

Zu blöd das der Hebel in beide Richtungen wirkt......Die Tefefonkonferenz dürfte Slapstick pur werden. Zudem gebe ich Bear eine 50% Chance das die sich die Blöße geben in Ihrem Quartalsbericht eine Ergebniszahl auszuweisen die das aktuelle Debakel herausrechnet ... :-)

Spätestens heute ab 14.30 Uhr wird die Maschinerie in Sachen Übernahmekandidat auf heavy rotation laufen. Wenn man bedenkt das die Marktapitalisierung bei lediglich 20 mrd $ (1,57 x Buchwert) liegt ist es umso erstaunlicher das Bear Stearns dem schelchten noch gutes Geld hinterhergeschmissen hat ..... Weiter oben gibt es den Link zum Brief an die Klienten des Hedgefonds

Leveraged fund worth nothing; larger fund reportedly loses 91% of its value

SAN FRANCISCO (MarketWatch) -- A Bear Stearns Cos. hedge fund that made leveraged bets in the subprime mortgage market is worth nearly nothing, according to two people briefed by the investment bank.

Investors have been waiting for Bear to update them on the High-Grade Structured Credit Enhanced Leveraged Fund and a larger, less leveraged fund called the High-Grade Structured Credit Fund. The Wall Street Journal reported on Tuesday that the larger High-Grade Structured Credit Fund is worth roughly 9% of its value at the end of April.

Bear said last month that it would pump as much as $3.2 billion into the larger High-Grade Structured Credit fund but didn't touch the more leveraged one.

>Here the link to the totally useless bailout.....

>Klickt auf den Link um den sinnlosen Rettungsversuch zu bestaunen....

Bear shares fell $4.11, or 2.9%, to $135.80 during after-hours trading on Tuesday. The stock has dropped 14% so far this year.

The problems have also roiled the subprime mortgage market and may have triggered big losses and big gains at other hedge funds, depending on which side of the trade managers were on.

Bear's hedge fund problems, combined with rising subprime mortgage delinquencies, have already triggered margin calls in mortgage-backed securities and CDO markets.

One cent bid
The reported 91% loss suffered by Bear's larger High-Grade Structured Credit Fund may be bigger than some investors were expecting, judging by recent activity on Hedgebay, a secondary market for hedge fund stakes.

A few weeks ago, activity on the Hedgebay market suggested investors were willing to sell their stakes in the High-Grade Structured Credit Fund for roughly 50 cents on the dollar, according to a person familiar with the market.

That dropped to 20 cents on the dollar more recently.

Late Tuesday, one investor was bidding one cent on the dollar to exit their position in the High-Grade Structured Credit Fund, the person said

via Marketwatch
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