tag:blogger.com,1999:blog-18675105.post5515419755291695813..comments2023-12-30T10:06:37.450+00:00Comments on HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008: FLASH: Bear Stearns Tells Hedge Fund Investors There's `No Value Left'bloggerhttp://www.blogger.com/profile/06585266242070350399noreply@blogger.comBlogger40125tag:blogger.com,1999:blog-18675105.post-16832308304120450302007-07-19T20:19:00.000+01:002007-07-19T20:19:00.000+01:00I'll be one of the dead ones:----------------As wi...I'll be one of the dead ones:<BR/><BR/>----------------<BR/><BR/>As will I..but I am taking as many as possible before I expireBillhttps://www.blogger.com/profile/06623291271325261181noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-69088079397591161532007-07-19T15:09:00.000+01:002007-07-19T15:09:00.000+01:00Remember:America IS one BIG ENRON.Have a nice day ...Remember:<BR/><BR/>America IS one BIG ENRON.<BR/><BR/>Have a nice day SUCKERS !Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-88363392652724201032007-07-19T14:53:00.000+01:002007-07-19T14:53:00.000+01:00This one Bears summary ... Ann Ominous posted: 1....This one Bears summary ...<BR/> Ann Ominous posted: <BR/>1. … but stay in the safety of<BR/> bonds (i.e. debt)<BR/>2. Leverage ...in a 10-1 margin...<BR/>3- …CDOs backed by MBSs backed by<BR/> sub-prime …<BR/>4- … tranching process …<BR/>7- … a margin call is made …<BR/>8- …"unwind"…(in the order of<BR/> secured to unsecured to equity<BR/> holders) and when the assets<BR/> run out anyone still standing<BR/> in line gets nothing …<BR/><BR/>[and I add:'To Hell with Kudlow !'<BR/> & "Save the USD !"]edd brownehttps://www.blogger.com/profile/08825894326281481673noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-695157529582183272007-07-19T12:51:00.000+01:002007-07-19T12:51:00.000+01:00Why no coverage on this? From yesterday's WSJ: Ins...Why no coverage on this? From yesterday's WSJ: <BR/><BR/>Insiders at Reit's Like What They See<BR/><BR/>Some investors have abandoned real-estate investment trusts lately, but REIT insiders have been rushing in.<BR/><BR/>REIT executives and directors spent close to $60 million on their companies' stocks in the second quarter, the largest amount in the past 26 quarters, according to research by Thomson Financial.<BR/><BR/>After performing strongly in recent years, REITs have come down sharply this year. The result is that REIT stocks are trading at a significant discount to the value of their underlying real-estate assets, said John Lutzius, chief executive of REIT research-and-trading firm Green Street Advisors...<BR/><BR/><A HREF="http://online.wsj.com/article/SB118471766230569645-search.html?KEYWORDS=reit+insiders&COLLECTION=wsjie/6month" REL="nofollow">Full Article</A> (subscription req'd)Osmanhttps://www.blogger.com/profile/02510751654484933836noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-91503018481846231692007-07-19T07:44:00.000+01:002007-07-19T07:44:00.000+01:00Enjoy the side show,Basis Capital Australia, now s...Enjoy the side show,<BR/><BR/>Basis Capital Australia, now says it is worth 50 cents to a dollar. <BR/><BR/>2b melted to 1b. <BR/><BR/>Seems to be "contained explosion"Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-82605449184156426752007-07-19T04:32:00.000+01:002007-07-19T04:32:00.000+01:00Anonymous said... ``This is a watershed,'' my a...Anonymous said...<BR/><BR/> ``This is a watershed,'' my ass! Unless you think about all the people going to rebell against this government soon. <BR/><BR/>No one is going to rebel.<BR/><BR/>Right now the pentagon is planning on how to squash domestic insurrection.<BR/><BR/>Why do you think all those Marines are being railroaded by the UCMJ?<BR/>It's to keep the rest of them inline when the SHTF.<BR/><BR/>Once the first few "protests" are crushed the rest of you, I'll be one of the dead ones, will herd like cattle into the re-education camp to be implanted(branded)with a microchip(MOTB)before being pimped out to China to pay back our debt.<BR/><BR/>Tanks and cruise missiles beat pistols and shotguns every time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-55013115339235060422007-07-19T03:57:00.000+01:002007-07-19T03:57:00.000+01:00bear stearns is getting all lawyered up now ,it wo...bear stearns is getting all lawyered up now ,it would appear. i think they are on the hook for some heavy cash because of this. they mislead a lot of people. them and the rating agencies are in deep doo doo because of this...i think some serious class action stuff whill be going on now. surely there will be more of these blow ups too.....<BR/><BR/>oh well......as al gore said one time....<BR/><BR/>everything that is up is down and everything that is down is up.......imagine that.....Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-43499149029729640962007-07-19T02:53:00.000+01:002007-07-19T02:53:00.000+01:00The Jig is up!The Jig is up!Billhttps://www.blogger.com/profile/06623291271325261181noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-58735355361259859382007-07-19T02:17:00.000+01:002007-07-19T02:17:00.000+01:00Kieth,I think the real question is... Who are thes...Kieth,<BR/><BR/>I think the real question is... Who are these "investors" who just lost a lot of money?<BR/><BR/>RayNLAAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-80004076952541902472007-07-19T01:07:00.000+01:002007-07-19T01:07:00.000+01:00The SEC and Fed regulates margin levels for indivi...The SEC and Fed regulates margin levels for individual investors in stocks.<BR/><BR/>There is no regulation for institutional investors in bonds. <BR/><BR/>By the way, LTCM's failure was in exactly the same situation:<BR/><BR/>they were very levered and trading what seemed to be very "safe" bonds. (treasuries, in fact). They didn't have defaults, but an abnormality in the term structure persisted and went the 'wrong' way for much longer than naive models would predict.<BR/><BR/>In the present circumstance (packaging of mortgages) the underlying facts are that the supposed facts about the underlying mortgages going in are just plain lies. Garbage in, garbage out.<BR/><BR/>The thing about the bond market is that 'volatility' is nearly a point process. 99.99% of the time, barely nothing happens, and then one day you're whacked. <BR/><BR/>Ironically, if the hedge funds had been invested in something really obviously volatile like emerging market equities, it wouldn't have blown up because that volatility is consistent enough that it gets into the models and the lenders won't allow as much leverage. <BR/><BR/>Let's remember though, somebody else is on the other side of most of these trades. Amaranth collapsed in natural gas---and another hedge fund on the other side of them made out like bandits. <BR/><BR/>There will be de-leveraging and destruction of money and credit though. <BR/><BR/>When you start to get forced margin calls at the various funds and banks have to sell for "institutoinal" or "regulatory" reasons (and not economic/trading ones), then you ought to take the other side of these trades.<BR/><BR/>At some (low enough) price level, these toxic waste bonds will be a great buy---ironically again better than Treasuries whose returns will be inflated away. <BR/><BR/>Actually the problem is with the "AAA" bonds, not the low ones now.<BR/><BR/>AAA bonds should virtually never go below 99.9 or so---it's supposed to be the same credit rating as the US Treasury and GE for god's sake! The Bank of Japan doesn't have AAA any more, but we know that of course this is more creditworthy than some junk mortgages.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-79731599014977425112007-07-19T01:06:00.000+01:002007-07-19T01:06:00.000+01:00OH,now I get it.They didn't steal the money. They ...OH,now I get it.They didn't steal the money. They Borrowed it! <BR/>!!!!!Bahahhahahhahhahahahahahha$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$!!!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-45125338271629986002007-07-18T22:29:00.000+01:002007-07-18T22:29:00.000+01:00Haha, the fraudsters on Wall St. never seem to run...Haha, the fraudsters on Wall St. never seem to run out of suckers!<BR/><BR/>Remember this;<BR/><BR/>"Bear Stearns' Profits Rise 8% Despite Housing Slowdown"<BR/><BR/>"Posted on Mar 15th, 2007 with stocks: BSC"<BR/><BR/>"Bear Stearns Companies said this morning its Q1 2007 profit was up 8% on strong bond-trading revenues. Net income climbed from $514 million to $554m, on a rise in revenues from $2.19 to $2.48 billion."<BR/><BR/>This is Enron all over again, but this time the broker and investment bankers can't fail because they'll take the global system down with them! ROFLMAO<BR/><BR/>As a reporter that's been on Wall St. for 15 years I can't believe anyone's surprised, this is just the tip of the iceberg folks ;-)<BR/><BR/>*PARTY OVER*Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-62106887819746290672007-07-18T22:13:00.000+01:002007-07-18T22:13:00.000+01:00They are having trouble with the AAA rated bonds?T...They are having trouble with the AAA rated bonds?<BR/><BR/>The real collapse is with lower grade bonds.<BR/><BR/>ABX-HE-AAA 07-1....95.23<BR/>ABX-HE-AA 07-1.....88.11<BR/>ABX-HE-A 07-1......68.50<BR/>ABX-HE-BBB 07-1....47.09<BR/>ABX-HE-BBB- 07-1...45.02<BR/><BR/><A HREF="http://www.markit.com/information/affiliations/abx" REL="nofollow">Source</A><BR/>Note: This data might not be directly related to the particular hedge fund, but it's definitely incredible.Out at the peakhttps://www.blogger.com/profile/10855394670202295976noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-1888597167445726442007-07-18T21:51:00.000+01:002007-07-18T21:51:00.000+01:00Alright you Punsters...Looks like Bear Steans got ...Alright you Punsters...<BR/><BR/>Looks like Bear Steans got Seared and Burned!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-859149023973991052007-07-18T21:33:00.000+01:002007-07-18T21:33:00.000+01:00"Can Wall Street be trusted to value risky CDOs?"S...<B>"Can Wall Street be trusted to value risky CDOs?"</B><BR/><BR/>Sure, just like we trust the government to release honest numbers for economic growth and inflation. With a former money-center guy like Paulson at the helm of Treasury, their word is bond.<BR/><BR/>You can take it to the bank - LOL!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-51780057348601708562007-07-18T18:23:00.000+01:002007-07-18T18:23:00.000+01:00The FHA, Fannie Mae and Freddie Mac have been orde...The FHA, Fannie Mae and Freddie Mac have been ordered to buy more MBS's. Paulson is also urging China to buy more martgage securities.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-12784682386319933672007-07-18T18:11:00.000+01:002007-07-18T18:11:00.000+01:00Here's what happens to investors when the trouble ...Here's what happens to investors when the trouble begins:<BR/><BR/>"Investors tried to get out of the funds, but in May, Bear Stearns halted redemptions. Shortly after that, several banks and brokerage firms that had provided loans began demanding more cash as collateral. On June 26, Bear Stearns said it would offer a $1.6 billion loan to shore up the more conservative fund and unwind its positions. <BR/><BR/>In yesterday’s letter to clients, Bear Stearns said that some $1.4 billion of the loan remains untapped."<BR/><BR/>If, as some analysts have pointed out, the stock market lags the housing market by about six months, now would be a good time to get the hell out. True, the markets can remain liquid for quite a while through credit, but that has probably played itself out.RJhttps://www.blogger.com/profile/07307437595686083352noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-22952836867363555662007-07-18T17:58:00.000+01:002007-07-18T17:58:00.000+01:00Tigher lending standards means fewer borrowers.Mor...Tigher lending standards means fewer borrowers.<BR/><BR/>More empty houses on the market.<BR/><BR/>Lower and lower prices.<BR/><BR/>We "hit bottom" when demand can finally keep pace with supply - <BR/>no one can really say when this will happen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-27232256118131772692007-07-18T17:38:00.000+01:002007-07-18T17:38:00.000+01:00Best as I can tell this is how this went down:1-Co...Best as I can tell this is how this went down:<BR/><BR/>1-Collect money from investors who want higher yields but stay in the safety of bonds (i.e. debt)<BR/><BR/>2-Leverage investor cash in a 10-1 margin ratio (amt borrowed to investor cash in one funds situation is was 10 billion borrowed and backed by 1 billion in investor cash)<BR/>---I think this is an illegal margin arrangement in stock brokerage accounts but I guess hedge funds or Bond fund have different rules?<BR/><BR/>3-Use the borrowed cash to purchase CDOs backed by MBSs backed by sub-prime mortgages backed by overpriced/overvalued illiquid realty assets and people with poor credit and/or fraud.<BR/><BR/>4-CDOs are rated as being = to AAA paper by the tranching process which is too odd to explain so watch the video Keith had previously posted: http://www.youtube.com/watch?v=0YNyn1XGyWg<BR/><BR/>5-The CDOs & MBSs are not realy traded to valuation is done on a mark to market basis (a process made famous by the Enron scandal) http://en.wikipedia.org/wiki/Mark_to_market<BR/>which basically means we waived our magic wand & sprinkled some pixie dust and decided it has value "X" which = the 10 billion borrowed.<BR/><BR/>6-Consider steps of bullet # 3 to be a steep hill w/ the sub-prime borrower at the top. In some fashion they collapse and the $h!t starts rolling down hill.<BR/><BR/>7-At some point a margin call is made and the fund now must sell an illiquid asset that no-one now wants because its viewed as worthless.<BR/><BR/>8-The fund has no choice but to "unwind" (A term used for when a partnership or corporation goes bankrupt, sells its assets and settles its debts (in the order of secured to unsecured to equity holders) and when the assets run out anyone still standing in line gets nothing, e.g. the investors who will be last in line for their money!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-13236110085853927712007-07-18T17:22:00.000+01:002007-07-18T17:22:00.000+01:00I love your posts by the way you are the best. I ...I love your posts by the way you are the best. I am so glad you actually pick up on what is really going on out there. I had to dig to really get the inside scoop. I saw this tiny note on my nvestment feed last night. But with you it is always fresh and on the front page. Thanks again!<BR/><BR/>your benevolent strangerbenevolentstranger.blogspot.comhttps://www.blogger.com/profile/12719575046057478265noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-87847257310979373862007-07-18T16:55:00.000+01:002007-07-18T16:55:00.000+01:00So BS basically told the group of people who are a...So BS basically told the group of people who are asking (aka "investors") that all your money is of course gone, but we still plan to hold off marking the securities to market in an effort to soften the blow to creditors and the rest of the market?<BR/><BR/>Better hope there isn't some poster boy pension invested in these funds to parade across the evening news.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-79651656194790850672007-07-18T16:25:00.000+01:002007-07-18T16:25:00.000+01:00"It begs the question of how other market particip..."It begs the question of how other market participants have fared."<BR/><BR/>OK. "Beg the question" is not a fancy way of saying "ask the question", or "pose the question".<BR/><BR/>To beg the question means to leave a question unanswered, or to avoid answering a question. (Think of the way a typical politician answers a question.) Question begging is a type of logical fallacy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-53834569123587607982007-07-18T16:15:00.000+01:002007-07-18T16:15:00.000+01:00This is just the tip of the iceburg. Wall Street ...This is just the tip of the iceburg. Wall Street is the money behind the subprime mess.<BR/><BR/>Lehman bros is even worse off than Bear Stearns. Goldman Sacs owns and has sold alot of subprime toxic waste as well.<BR/><BR/>And don't forget all the pension funds that bought this CDO crap with promises of double digit returns.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-77810247709124020962007-07-18T15:14:00.000+01:002007-07-18T15:14:00.000+01:00Billy Ray Valentine to the Duke Brothers, circa 19...Billy Ray Valentine to the Duke Brothers, circa 1985: "Sounds like you a coupla bookies to me." <BR/><BR/>Ophellia to Winthrop: "I'm just protecting my investment.....shut up and go to sleep."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-45548202555124757032007-07-18T15:07:00.000+01:002007-07-18T15:07:00.000+01:00To those suckers who gave their money to Bear Stea...To those suckers who gave their money to Bear Stears!<BR/><BR/>You LOSE !!! HAHAHAHAHAHA<BR/><BR/>Rembmer, just because they wear a tie, and work for Bear Sterns doent mean they are SMART.<BR/><BR/>snicker.Anonymousnoreply@blogger.com