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Economy and General Discussion
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Re: Bear Stearns Plans $3.2 Billion Bail Out / Largest since LTCM
Posted by: RodgerRafter
Date: 06/23/2007 11:47AM
It looks like Bear Sterns didn't want egg on their faces for having this get any worse. Bailing out the fund by taking over the creditor role from Merrill and others saves the bond market from more forced sales and saves Bear from the negative publicity. As the mortgaged backed bonds continue to deteriorate the losses will go back to being slow and steady, rather than dramatic and eye catching.
Meanwhile, high risk MBSs continue to tank. Bear will probably pull the plug somewhere down the line so that hedge fund investors are the big losers and Bear as creditor will be largely protected.
Meanwhile, high risk MBSs continue to tank. Bear will probably pull the plug somewhere down the line so that hedge fund investors are the big losers and Bear as creditor will be largely protected.
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