``The real fear has to do with just how many other funds and warehouses could be in trouble,'' said Jeremy Shor, who oversees about $3 billion in asset-backed bonds as a portfolio manager at Brown Brothers Harriman & Co. in New York. A warehouse is a credit line extended to funds to buy the securities.
And that's where the real potential problem lies. I don't know why this story broke publicly. However, it did and it highlighted the problem with one hedge fund.
But this isn't the only fund out there. And the real question now becomes, "how many other problems are out there waiting to happen?"
2 comments:
and, how the re-pricing of these bonds and related assets (if bear's fund is liquidated) will cascade into the rest of like products; and, and...who'd still want to trust any inv banker who doesn't much of their own money in a fund enough to invest in a similiar structured fund
thanks for headlining this very much pushed aside (in the mainstream finanacial news, except for bloomsberg, see jody shen's great coverage: http://www.bloomberg.com/apps/news?pid=20601009&sid=ag0kwucb442E&refer=bond) possibly pivitol news
Let's just leave it with two concepts: Alan Greenspan and Long-Term Capital Management. It was bad enough when the Fed had to bail out one naughty fund backed to the hilt by the banks. What happens when they're faced with bailing out every bank and fund on the planet? The Fed should have listened to those complaints about moral hazard which were raised at the time. Just another example of Dubya's raging economy being built on quicksand.
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