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Opinion on  Bear Stearns Companies Inc. The (BSC)     Sector: Financial  >  Industry: Investment Services
Hedge Fund Worries Weigh On The Market

Jun 26, 2007 06:27 AM GMT
Return Risk
-21.03% HIGH
Tracked Blogger

Fundamental Analysis  
Via mymoneylife.blogspot.com/:  

 
The concerns over the bailout of the Bear Stearns (BSC) sponsored hedge funds is really weighing on the market. There were some conference calls held today that shed additional light on the problems that face BSC right now, and that weighed on the entire financial sector.
 
Some are classifying this as the biggest bailout since LTCM . Others are saying that it is the biggest test BSC has faced in decades.

The graph above shows that the major subprime indexes have made new lows recently, as the subprime mortgage mess continues to work its way through the system. Last month, it looked like these indexes had bottomed and were turning higher. But the recent news and turmoil among hedge funds is sparking a new round of concerns.

These things can take time to play out. When funds get in trouble, there are plenty of other players that take delight in shooting against them, and trying to profit from their misfortune. Remeber what they said in The Godfather , "...it isn't personal, it's just business".
 





Update 09/26:
Via mymoneylife.blogspot.com/:  

There is a rumor going around right now that Warren Buffet is considering taking a 20% stake in Bear Stearns (BSC).

The news has traders giddy, and the stock is spiking $12 higher, or +10% on the news. This is also helping push the XBD index up nearly 3% on the day.

On an unrelated note, the CME is also spiking $25, or nearly +5% on the day. I have not seen any major news to account for the surge.

The market is turning higher, and putting more pressure on those underinvested or leaning short. With quarter-end only a couple of days away, this buying pressure could persist.

Glad I put more money to work last week.

long CME

This is a tracking account  [?]   SocialPicks is not affiliated with Jordan Kahn. The POS/NEG sentiment is automatically determined by SocialPicks from this blog post and should not be recognized as a position recommendation by Jordan Kahn

BSC:  This call was made on 06/26/07 @ $139.72
Rating:   Positive   $139.72 (06/26/07)
Gain/Loss:   -92.67% in 894 days


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