Bear Stearns Plans $3.2 Billion Fund Rescue to Halt Fire Sale

[abducens]

If it does not work out, the government will bail them out.

 

[Prevail]

Quote from atticus:

Interbreading? I assume that something to do with a bakery, after-hours? Let's assume for a moment you mean interbreeding... which would involve non-relations. Therefore, you are a proponent of inbreeding.

How long did you ruminate on that? How many extra chromosomes are you carrying?

sounds like a baker to me too...

 

[atticus]

Quote from Prevail:

sounds like a baker to me too...

I hear he's perfected the Rye-Pumpernickel hybrid/cross.

 

[AAAintheBeltway]

Back to the topic. My understanding is that the Bear fund ran into trouble because it was forced to sell relatively illiquid paper to meet redemptions. My question is what kind of lockup did the fund have? It seems more than a little foolish to be highly leveraged in stuff you might not be able to dump easily and allow monthly redemptions? What's the story?

 

[JamesVU2000]

The CDO stuff is so complicated its mind boggling.

 

[RedDuke]

CDOs are so complicated that a lot of people that hold them, do not even know what they are worth.

Imagine it for a second, you have a huge porfolio and have no clue what it is worth.

I guess those higher yield paying trenches are risky after all.

Interesting times are ahead.

 

[flytiger]

It's the leverage. Brookstreet used retail as a sponge, and at even 50% margin, they wiped out 3000 accounts.

Read the WSJ this weekend. CDO's owned CDo's, owned CDO's. What 's the leverage? 10:1? More like 20 or 30. You may only yield 1% onassets, but with the leverage, you outperform - until.

this is the one, IMHO. Remember, it only takes a swoon to wipe you out on margin. It can snap back, but you won't.

 

[nkhoi]

It was Bear Stearns, the biggest broker to hedge funds, that nine years ago declined to join 14 other investment banks in the bailout of Long-Term Capital Management LP. Then last week, as New York-based Bear Stearns pleaded for help to rescue two of its hedge funds teetering on the brink of collapse, many of the same firms refused to come to its aid.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYDTeHYnV3ms&refer=home

 

[RedDuke]

Quote from flytiger:

...Read the WSJ this weekend. CDO's owned CDo's, owned CDO's...

I read this article over the weekend, very interesting. This has been know for a while though. Try to read some parers by Frank Portnoy (authour of FIASCO). He used to work for Morgan Stanley,
and has been warning about CDOs risks for a while.

 

[Dackster]

Quote from atticus:

I hear he's perfected the Rye-Pumpernickel hybrid/cross.

Thought a boring fuck type, like atticus, would know how to spell interbreeding.

Pitty you didn't spot the joke...

Clever, atticus...

Yeh, sure.