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July 25, 2008 12:12:34 AM CDT

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Bear Stearns Funds Nearly Wiped Out

Posted Jul 18, 07 11:08 AM CDT in Business 

(Newser) – Bear Stearns told clients yesterday that two of its hedge funds backed heavily by subprime mortgages were close to valueless. The investment bank is putting up $1.6 billion in rescue financing, as Wall Street looks to dump other bonds that have been hit by the subprime downturn as quickly as possible.

Meanwhile, the record-setting market is either oblivious or resilient, the Journal reports, though investors are keeping a sharp eye on the index that tracks the performance of subprime-related bonds. The ABX hit a record low yesterday, and it's unclear just how deep it may dive. "Right now things are starting to come unglued," says a hedge-fund co-founder.

Source Wall Street Journal

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"Right now things are starting to come unglued," - Charles Gradante, co-founder of the hedge-fund consultant Hennessee Group.   (shutterstock.com)
High-risk investment fails to pay out.   (Shutterstock.com)
Wall Street, the financial center of the nation.   (Index Open)
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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