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July 25, 2008 10:43:13 PM CDT

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Hedge Fund Crisis Could Be 'Tip of Iceberg'

Posted Jun 21, 07 5:54 AM CDT in Business,  US 

(Newser) – The near-collapse of a $20 billion pair of hedge funds has left Wall Street jittery, though not yet in panic mode, the Journal reports. Speculation about the fate of the Bear Stearns funds rippled through yesterday's markets, where stocks and bonds dipped widely; news that banks were struggling to unload subprime-backed securities had traders biting their nails.

"The fear is that this Bear situation is the tip of the iceberg and could lead to other funds being liquidated," one said. But 10-year Treasury notes and gold, traditional shelters in turbulent markets, both fell, indicating investors are not running for cover just yet. And recent scares (like housing) may provide a roadmap for recovery from the subprime debacle.

Source Wall Street Journal

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Traders crowd a post on the floor of the New York Stock Exchange, Wednesday afternoon, May 30, 2007. The Dow, the first of the major market indexes to recover from Wall Street's prolonged slump in the...   (Associated Press)
The headquarters for securities firm Bear Stearns is shown March 16, 2006 in a New York file photo. Bear Stearns Cos., the fifth-biggest U.S. investment bank, said Thursday, June 14, 2007 fiscal second-quarter...   (Associated Press)
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