Comments on: Fools and Their Money (Bear Stearns Hedge Funds Edition)

By: Anonymous

Anonymous — Sat, 21 Jun 2008 18:09:00 +0000

So what's the big deal here....? Is this some kind of earth shaking event.....?

Investors and speculators make and lose money every day..... Look at LEH.... Two years ago they were the smartest kids on the street and look at them now.... MER, MS, C, CFC, BOA, WCI, look at them all, hugging the root, scrambling around like a bunch of cockroaches.

The name of the game right now is, SAVE YOUR OWN SKIN.

Best regards,

Econolicious

By: Yves Smith

Yves Smith — Fri, 20 Jun 2008 19:38:00 +0000

tz,

Please read the indictment language versus my comment. Headline inflation was under 2% when the first fund was formed.

By: tz

tz — Fri, 20 Jun 2008 16:01:00 +0000

No, they just said 12% returns, not REAL returns. If Housing just kept up with inflation in other things like oil it would not be an issue.

The difficulty is saying something will never go down in value (then there's liquidity...).

It was a systemic ponzi scheme. Adding more buyers, liquidity, or capital will make prices go up even if nothing else changes. So by securitizing mortgages, and with the various products that could make hairdressers afford mansions (or earlier, simply get more house for a good income) they both caused and benefited. Those with the early MBS probably aren't underwater quite yet. But the successive ones were based on the phantom (ponzi) margnial value added to the houses, and it kept going until it collapsed.

By: Anonymous

Anonymous — Fri, 20 Jun 2008 14:42:00 +0000

When someone assures me that there is no risk of a loss,I assume that they mean it is a certainty.

By: Anonymous

Anonymous — Fri, 20 Jun 2008 14:13:00 +0000

As guilty as they may be, they are scapegoats for the fat cats that will never be indicted. It is really and indictment of the entire industry. Remember that Elliot Spitzer uncovered the Merril practice of emailing their largest clients that certain stocks were dogs while simultaneously emailing their small investors that those same stocks were a great buy. The fat cats retaliated by following his every move until they had something on him, which turned not to be difficult.

By: scott

scott — Fri, 20 Jun 2008 13:59:00 +0000

Actually, of the folks I know in the hedge fund industry (and it really is only a handful), they all peddle this line or better: one told me the returns on his fund were 15% “guaranteed”, another was targeting 12% or more with little risk. I think they believed what they were selling, too.

By: Richard Kline

Richard Kline — Fri, 20 Jun 2008 10:26:00 +0000

“Anything that promises money market risk and 8-10% real returns is not an investment. It’s a scam.” And the ‘investors’ should really, really have known this from moment one. Those that didn’t accept the obvious and get out long agao, including the one whose $57M [reported in NYT, I think] went down with the ship, have had an education in parabolic speculation.

By: Allen Smithee

Allen Smithee — Fri, 20 Jun 2008 09:09:00 +0000

That was a very definitive concluding statement.

Couldn’t agree more with it.