Just wondering:The biggest hedgefund bailout since LTCM is taking place down the street and no one here has anything to say about it?I DD'd the fund in question about a year back and gave it a wide berth. Anyone else here took a close look at the "Bear Stearns High Grade ......." Fund?

Do you mean you had foreseen some trouble? wow

"Bear Stearns High Grade ......."Evidently it wasn't.

QuoteOriginally posted by: bskilton81"Bear Stearns High Grade ......."Evidently it wasn't.The name just has a minor typo. The real name of the fund was "Stern Bear's Steep Grade". Hopefully, there's a runaway fund ramp at the bottom as the tranches topple like dominos.

QuoteOriginally posted by: PolysenaDo you mean you had foreseen some trouble? wowHowever tempting it is to claim the credit (and one of my colleagues was gracious enough to call in the middle of the night to remind me that I had "prophesied" correctly), I have to qualify my prediction.What I did not like about this fund was multiple-layers of synthytic-structuring; and we are talking about much (much!) more than CDO-squared etc.For someone who still has concerns about correlation modelling for "ordinary" CDOs, I was not convinced that the Bear's guys were upto the task of managing risk on this fund in times of market stress.The funny thing is that Bears' sales guys initially took just about 7 minutes to describe this "High Grade" fund. But whn I sat down with the Bear's structuring team, it took them nearly one and half hours just to describe the mutiple layers of structuring and the liquidity arrangments. At the end of the session, I was convinced that it was going to b difficult for Bear's to propoerly manage ALL the fund's risks in a crises.So it boiled down to gut feel: there were other less risky opportunities (with comparable returns) where we could deploy the shareholders' capital.

Thank you IceQueen for this nice account of a well-conducted DD... exemplary....and you probably are right: if it is very complexa. either it is good but you aren't sophisticated enough to follow so abstainb. or it isn't and conclusion abstain alsoRespectfully

While I think that you made a good call IceQueen, the comparison (which you implicitly make in phrasing your statement) to LTCM by you and the media is REDICULOUS. This is orders of magnitude smaller and will in the end have zero effect on anything. The fund really is not down that much and the only reason why Bear is bailing them out is that they are trying to protect the brand name. I do think it should raise concerns for people invested in funds where the management company is particularly sensitve to headline risk i.e. banks.

GammaSkimmer:I think you are right (probably even without the UPPER CAPS!], but only partly.Unless there is fraud, hedge funds don't usually collapse/go-bust because of "losses" in the traditional meaning of the word: they collapse because of "risk".In the case of both, LTCM and BS High Grade the "risk" came in the form of the twin horsemen of the hedge fund-apocalypse: leverage and lack of liquidity in the structured products/markets.In "When Genious Failed", you cannot help but feel sympathy for the LTCM guys who were deperate for a few dollars more of cash to meet margin calls resulting from astronomical leverage. As we subsequantly saw, if someone with a few billion dollars of cash had stepped in to help with the temporary margins-crunch, LTCM would still be around.Similarly, if BS had not stepped in to provide (lend) cash, the High Grade fund would be toast by now.

I agree with Gamma Skimmer.I believe what happened shouldn't affect Bear's creditworthiness. S&P's has already stated this and as usual other rating agencies will react in a similar way. Bear's actions is intended to mitigate any damage to it's reputation.In my opinion, what is interesting to understand is the credit contagion...other HFs when volatility kicks in and positions have to be liquidated can be affected. This can results in a marked re-pricing of many CLO/CDO products with following market ramifications.

QuoteOriginally posted by: IceQueenIn "When Genious Failed", you cannot help but feel sympathy for the LTCM guys who were deperate for a few dollars more of cash to meet margin calls resulting from astronomical leverage. As we subsequantly saw, if someone with a few billion dollars of cash had stepped in to help with the temporary margins-crunch, LTCM would still be around.I don't have that much sympathy. If someone with a few billion dollars of cash had stepped in, then LTCM and other firms would have not learned a lesson and tried to pursue even riskier strategies, which would have ended up with bigger problems.

Troubles now also at Cambridge Place (CPIM) and Cheyne.

Thx for posting Icequeen!

QuoteOriginally posted by: PolysenaThx for keeping us posted Icequeen!Who the f**k is "us"??? R u the latest forum "motivator"? LOL!

Which funds at those two shops are in trouble, both have several funds

QuoteOriginally posted by: GammaSkimmerWhich funds at those two shops are in trouble, both have several fundsCPIM: Caliber Global Inv. FundCheyne: Queen's Walk Inv