Bear Stearns Is `Short' Subprime Mortgages $1 Billion

Discussion in 'Wall St. News' started by ASusilovic, Feb 8, 2008.

  1. Bear Stearns Cos., the U.S. securities firm that posted its first-ever loss last quarter on mortgage writedowns, has more than $1 billion of trades that profit if subprime home loans and bonds continue to deteriorate.

    The ``short'' positions on subprime mortgage securities increased from $600 million at the end of November, Chief Financial Officer Sam Molinaro said today at an investor conference in Naples, Florida. The company also reduced its holdings of so-called collateralized debt obligations and underlying bonds, Molinaro said.

    The sinking value of assets tied to mortgages led to Bear Stearns's fourth-quarter loss of $854 million, and Molinaro said today that one of the firm's biggest mistakes was ``not being conservative enough and bearish enough on the subprime market.'' The firm has reversed ``long'' subprime trades that stood at $1 billion at the end of August, Molinaro said.

    ``There's definitely a lot of short plays out there,'' said Mark Adelson, a founding member of Adelson & Jacob Consulting in Long Island City, New York. Some subprime bonds ``could easily be bad enough that they don't pay off a penny,'' said Adelson, a former Nomura Holdings Inc. mortgage analyst.

    In an interview after Molinaro's remarks, Bear Stearns spokesman Russell Sherman said the New York-based firm's subprime trades are a ``hedge'' against potential losses on investments in higher-rated mortgages, he said.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a.2mZwwn1WtU&refer=home

    :D :D :D
     
  2. Saved their asses from becoming in-solvent.

    However, their Clients are still fucked beyond belief.

    Who would allow "Brokers" to handle their money, oh wait, 99% of Americans.

    Fools
     
  3. Wouldn't it be ironic if we read a headline in a year that goes like "Bear Stearns realizes trading losses of $500m on a short subprime mortgage bet that went the wrong way".
     
  4. Lets have a friendly bet that it happens. Exactly my thoughts... Articles like this mark the bottom.

    This needs to be pinned.
     
  5. Wall Street is a cesspool of Sh!t and a den of thieves. Goldman Sachs has the same game going on, shorting mortgage backed derivatives in-house while putting all it's clients money long in the same derivatives.

    For the vast majority, the stock market is fools gold. The only ones getting rich are the individuals pandering services to the fools.
     
  6. pretty sarcastic point of view....:D :D :D
     
  7. Doesnt matter. no one is going to ever trust structured finance ever again. They better figure out new ways to make money.
     
  8. Bottom is near, all news should be priced in by now, though things could be so bad that BSC's short will pay off. We could see writedown after writedown after writedown.
     
  9. 9999

    9999

    Of course they will.
    They'll sweep all this crap under the rug, find new fancy names and wait for new blood to come in. Easy.
     
  10. "Bear Stearns Cos., the U.S. securities firm that posted its first-ever loss last quarter on mortgage writedowns, has more than $1 billion of trades that profit if subprime home loans and bonds continue to deteriorate."

    Maybe they should pay attention.


    Now the wind is blowing the other way (a long time ago). How about if we short now. Sounds like a plan. Is it break time yet, spring break, gotta focus, focus, golf course, in the vacation zone,
     
    #10     Feb 9, 2008