The IER has been tracking the secondary market for mortgage backed securities, specifically collateralized debt obligations (CDO) and how they are funded by the large New York money center corporations.
Today, Bear Stearns Cos. of New York, finally came clean and told the world how their hedge funds have performed with CDOs.
Bear Stearns Cos. Inc. has told investors in its two troubled collateralized debt obligation (CDO) funds that the funds are now essentially worthless.
Yes, you read that correctly.
BSC told its investors that their investment is a total loss. Zero. Toilet paper.
I seriously doubt BSC is the only grenade rolling around on the floor.
Once the big banks get whacked, the sea of liquidity contracts.
That liquidity has been behind the zany increase in mortgages in the past 4 years.
More information as it breaks.
Ernst Stavro Bloviator,
Senior Fellow - IER
1 comment:
Some great photos on this site very impressive.
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