Tuesday, July 17, 2007

Bear Sterns "Dropped" a Zero

Quoting from this blog three weeks ago "Hedge Fund Meltdown" June 21

".........So, April means a June withdrawal, and June means a September 1 withdrawal. These two funds are toast, but it’s going to take a while. Look’s like there is 15 to 20 billion to unwind here."

It's kind of a moot point now, since there is nothing left to withdraw.

At first they were ready to jump in with 3.2 billion. A question runs through my mind. How much is in play? I would guess 10 to 20 times the amount offered.

The Bear Sterns Fund loss could be considerably bigger. From what can be read, the total loss appears to be around 1.5 billion dollars. So when you show up with 3.2 billion to begin with, it makes you wonder.

It's kind of like when your wife buys you a new car (don't hold your breath). Whose pocket did it really come out of? The wife writes a check, the husband has the job. Then to carry it one step further, the car she bought is a Lamborghini.

When you get to this point, you have to realize that the focus of Bear Sterns is damage control. Nobody is going to wheel in that much money to prop up something unless there is a chance of a salvaging the situation. Plus where did the money come from?????? And if that isn't obvious, well, we won't go there.

This country was settled with people that voted with their feet. Sadly with Bear Sterns, people will still vote with their feet.

There is a zero missing, it just isn't that apparent yet. The real problem, is that its on the left hand side of the decimal point, not the right.

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