The saga at Bears Stearns finally reached the crisis stage

The saga at Bears Stearns finally reached the crisis stage. Bear Stearns would not let investors out with losses so now it will be interesting to see if investors get anything at all back now that Merrill Lynch has seized Bear Stearns fund assets. BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? The saga at Bears Stearns finally reached the crisis stage. Bear Stearns would not let investors out with losses so now it will be interesting to see if investors get anything at all back now that Investment bank Merrill Lynch has seized $400 million in assets of a troubled hedge fund at Bear Stearns Cos. Inc. and plans to sell them off, The Wall Street Journal reported in its weekend edition. The report said Merrill Lynch had seized the assets of the High-Grade Structured Credit Strategies Enhanced Leveraged Fund, despite the sell-off by the fund's managers of nearly $4 billion in high-quality mortgage bonds to cover losses. The losses related to subprime mortgages. Bids for the seized assets are scheduled to be negotiated starting at noon EDT on Monday, the report said. Since no one wants to comment I will: This is just the start of what's to come. Many hedge funds are going to have assets seized and sold over bad bets on CDOs, the carry trade, and just plain out and out over leverage into everything. This saga has two more steps to complete and by the time it concludes here will be more scandals underway all following the same pattern: leverage troubles, redemptions halted, asset seizure, lawsuits, and investigations. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.