Bear Stearns Co-President Resigns
A: Now, urbandigs isn't a news site. Its a site to discuss current events so that future decisions on the investment in Manhattan real estate could be a bit more profitable. But with so much uncertainty, and a few posts I'm about to publish, I feel a need to pass this on. Bear Stearns Co-President and Co-COO resigns today amid the bankruptcy of two large hedge funds that invested in mortgage backed securities.
Bear Stearns Co-President, Co-COO Quits -
Bear Stearns Cos. said Sunday that co-President and co-Chief Operating Officer Warren Spector has resigned following the meltdown of two hedge funds that invested in risky mortgage-backed securities.Don't forget that Bear Stearns CFO recently described the current credit markets as "...the worst I've seen in 22 years!"."In light of the recent events concerning (Bear Stearns Asset Management's) High Grade and Enhanced Leverage funds, we have determined to make changes in our leadership structure," Chairman and Chief Executive James Cayne said.
The funds filed for bankruptcy protection Tuesday, two weeks after the company told investors that one with assets of about $638 million was essentially worthless, and another worth about $925 million before taking on losses in March had lost more than 90 percent of its value.
I'm not sure how the street will take this. On one hand, I'm on the train of thought that every lender needs to come clean, book bad bets to market value, write off losses, and announce restructuring (I'll go into this more in tomorrow's post that I delayed publishing to follow up on research). On the other hand, the markets are selling off on any news and this news could produce another selloff with the uncertainty around a high end change at Bear. Lets see.
One things for sure, the credit markets are in turmoil and buyers should expect higher rates as more and more bad news leading to future uncertainty comes out; more risk means a higher premium to take it on!
This type of news is significant because if the stock markets continue to selloff due to continued uncertainty (I'm not sure what the tradable markets will do this week), then the New York City real estate market gets one step closer to a correction in our marketplace. Lets be open minded here and at least discuss intelligently what is really going on in the world!
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Comments (1)
"Lets be open minded here and at least discuss intelligently what is really going on in the world!"
If rates or credit tightening doesn't knock the ny market down a peg then news among those suckling at the teat of wall street, that end of year bonuses are threatened, or (gosh) layoffs could be possible, will certainly take the wind out of the sales (and sails) almost overnight.
Subtract the wall street well-connected and you're left with the 2007 phenom: cash rich russians. There are a lot of those for sure, but they can't hold the market up all by themselves.
Posted by Anonymous | August 6, 2007 1:18 AM