Monday, July 02, 2007

Bear Stearns Investors Await Tally on Losses -- WSJ

This is ugly: "Investors in two Bear Stearns hedge funds will have to wait until as late as July 16 to learn how much money they have lost." That's to learn what the damage is so far. It did not say that is what they will receive back, or when that will be. As I noted last week, investors in these funds could be said to be locked in like steerage passengers on the Titanic.

Uglier: "Investors are watching the process closely because they believe that other hedge funds also are holding thinly traded mortgage-related securities, and they want to see how far Bear thinks their value has fallen."

And who is invested in all these funds? Pension funds, seeking juiced returns from the large-brained super-traders at the hedge funds. Accredited investors, who are soooo sophisticated. Right. They bought these things. Investors in hedge funds-of-funds, who may not necessarily be accredited investors. Caveat emptor.

Readers of John Mauldin's weekly e-letter got a good bit of detail on the attempted auction by Merrill Lynch of the some of the portfolio holdings of the Bear Stearns funds. No bids on much that was offered. Really ugly. Mauldin's e-letter is free, always good in that it's well written and he actually must be large-brained, not that I agree with all or even most of his conclusions, and viewable on his site, but you have to register. Here's the site.


Bear Stearns Investors Await Tally on Losses - WSJ.com

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