Bund Tbond e altre delizie...rekkia is fashion (VM 18) (2 lettori)
- Creatore Discussione vilasguil
- Data di Inizio
gipa69
collegio dei patafisici
Complex Names: Attraction to Investors.
Bear Stearns High Grade Structured Credit Strategies fund
High Grade Structured Credit Strategies Enhanced Leverage Fund
Bear Stearns Fund Manager Cioffi’s Brain Child is the Bear Stearns High Grade Structured Credit Strategies fund established in October 2003. The High Grade Fund invested in collateralized debt obligations that were backed by subprime mortgage loans. As the debt obligations are collateralized it should return every month only plus no negative. If even 0.001% negative returned in a month, it is a mere collapse. The safeguard is that much built. Unless a fraud is committed in this fund there is no report of loss.
Real Estate Developers develop a property and sell it to the clients against the loans taken by the clients with the banks. The banks given loans about 5 times for a property which is worth one time only. As the fund manager is ready to purchase these on discount from the banks the banks did not bother about the worth of the properties. The difference of 4 times gone into the pocket of Real Estate Developers, Bank officials and Fund Managers. The capital and interest payment are structured by the bank as instalments to their clients will flow into the separate account of the Bearn and stern for the mortgages taken over to the fund.
Thereafter, every credit based fund managers started doing the same fraud as business and gave the fear of risk in cioffi. The risk is well known to the fund manager Cioffi and hence he wanted to come out of the fund at the earliest before the other fund managers world wide realize the ‘domino effect’ in case of fall in mortgaged property values. Hence, in August 2006, Cioffi establishes a second one, the High Grade Structured Credit Strategies Enhanced Leverage Fund, on the line of the first funds’ investing style but borrowed more money as a multiple of its equity to boost returns. It is leveraged about 20 times of the investor’s money. This fund after returning 7 percent in the first six months loses about 0.1 percent in February 2007, the first month in which prices of mortgage-related assets dip. 0.1% dip means a great fall in the value of the underlying mortgaged property.
On June 15, 2007 Merill Lynch one of the largest lenders to the two hedge funds, seizes assets when its demand for increased collateral can't be met. The seized assets are worth of 1/20 times to merill lynch. On June 22, 2007 after coming under pressure by other Wall Street firms who had loaned money to the funds, Bear Stearns offers to lend $3.2 billion of their own fund (which has been also lost in the market ) to the original hedge fund to replace the debt remaining on its books. On July 17 2007, Investors in the two funds are told there is no value left in the funds, wiping out $1.6 billion originally invested. On July 31, 2007 Bear Stearns files for bankruptcy protection for the two funds in courts in Cayman Islands and the U.S. Before January 2008 no media reports have highlighted the gravity of the situation or given an extensive coverage on the issues.
The collapse of the two funds in November 2007 (which has not been publicly reported to the attention it is needed) exposed the problems with subprime securities and triggered a credit-market rout that has so far led to almost $400 billion of losses in banks worldwide. As the enhanced fund is leveraged about 20 times, the losses are big enough to wipe out all the equity.
On Dec. 19, 2007 Bear Stearns confirmed that Cioffi left the firm a week earlier just as the Securities and Exchange Commission said they were investigating possible wrongdoing by the funds' managers. On March 14, 2008: Bear Stearns seeks and gets emergency funding from the Federal Reserve as a run on the bank depleted its cash reserves in three days. On March 16, 2008 JP Morgan & Chase agrees to buy Bear Stearns for 7 percent of its market value (that is the value of the assets is only 7%) in a sale brokered by the Fed and the U.S. Treasury during the weekend following the emergency funding.
The outcome:
Leverage and Margin are bad words in financial circles nowadays.
For Leveragers: loss of $400 Billion on Credit based derivative who has leveraged 16 times are more. $60 Billion in equity markets.
For Holders: Uncertainity, heart attack on Credit based derivatives, for the stock market wait for another 12 months are so if you have invested before Nov2007, 9 months. For the rest it is 6 months.
And of course you are having another court case ::: U.S. v. Cioffi, 08-00415, U.S. District Court, Eastern District of New York (Brooklyn).
Bear Stearns High Grade Structured Credit Strategies fund
High Grade Structured Credit Strategies Enhanced Leverage Fund
Bear Stearns Fund Manager Cioffi’s Brain Child is the Bear Stearns High Grade Structured Credit Strategies fund established in October 2003. The High Grade Fund invested in collateralized debt obligations that were backed by subprime mortgage loans. As the debt obligations are collateralized it should return every month only plus no negative. If even 0.001% negative returned in a month, it is a mere collapse. The safeguard is that much built. Unless a fraud is committed in this fund there is no report of loss.
Real Estate Developers develop a property and sell it to the clients against the loans taken by the clients with the banks. The banks given loans about 5 times for a property which is worth one time only. As the fund manager is ready to purchase these on discount from the banks the banks did not bother about the worth of the properties. The difference of 4 times gone into the pocket of Real Estate Developers, Bank officials and Fund Managers. The capital and interest payment are structured by the bank as instalments to their clients will flow into the separate account of the Bearn and stern for the mortgages taken over to the fund.
Thereafter, every credit based fund managers started doing the same fraud as business and gave the fear of risk in cioffi. The risk is well known to the fund manager Cioffi and hence he wanted to come out of the fund at the earliest before the other fund managers world wide realize the ‘domino effect’ in case of fall in mortgaged property values. Hence, in August 2006, Cioffi establishes a second one, the High Grade Structured Credit Strategies Enhanced Leverage Fund, on the line of the first funds’ investing style but borrowed more money as a multiple of its equity to boost returns. It is leveraged about 20 times of the investor’s money. This fund after returning 7 percent in the first six months loses about 0.1 percent in February 2007, the first month in which prices of mortgage-related assets dip. 0.1% dip means a great fall in the value of the underlying mortgaged property.
On June 15, 2007 Merill Lynch one of the largest lenders to the two hedge funds, seizes assets when its demand for increased collateral can't be met. The seized assets are worth of 1/20 times to merill lynch. On June 22, 2007 after coming under pressure by other Wall Street firms who had loaned money to the funds, Bear Stearns offers to lend $3.2 billion of their own fund (which has been also lost in the market ) to the original hedge fund to replace the debt remaining on its books. On July 17 2007, Investors in the two funds are told there is no value left in the funds, wiping out $1.6 billion originally invested. On July 31, 2007 Bear Stearns files for bankruptcy protection for the two funds in courts in Cayman Islands and the U.S. Before January 2008 no media reports have highlighted the gravity of the situation or given an extensive coverage on the issues.
The collapse of the two funds in November 2007 (which has not been publicly reported to the attention it is needed) exposed the problems with subprime securities and triggered a credit-market rout that has so far led to almost $400 billion of losses in banks worldwide. As the enhanced fund is leveraged about 20 times, the losses are big enough to wipe out all the equity.
On Dec. 19, 2007 Bear Stearns confirmed that Cioffi left the firm a week earlier just as the Securities and Exchange Commission said they were investigating possible wrongdoing by the funds' managers. On March 14, 2008: Bear Stearns seeks and gets emergency funding from the Federal Reserve as a run on the bank depleted its cash reserves in three days. On March 16, 2008 JP Morgan & Chase agrees to buy Bear Stearns for 7 percent of its market value (that is the value of the assets is only 7%) in a sale brokered by the Fed and the U.S. Treasury during the weekend following the emergency funding.
The outcome:
Leverage and Margin are bad words in financial circles nowadays.
For Leveragers: loss of $400 Billion on Credit based derivative who has leveraged 16 times are more. $60 Billion in equity markets.
For Holders: Uncertainity, heart attack on Credit based derivatives, for the stock market wait for another 12 months are so if you have invested before Nov2007, 9 months. For the rest it is 6 months.
And of course you are having another court case ::: U.S. v. Cioffi, 08-00415, U.S. District Court, Eastern District of New York (Brooklyn).
gipa69
collegio dei patafisici
maria ha scritto:Immagine sostituita con URL per un solo Quote: http://www.investireoggi.it/forum/immagini/1213953554lapoelkann.jpg
Eletto da VOGUE AMERICA come l’ uomo più elegante al mondo...ma va, va!
E un paio di stivali presentati alla pitti uomo dal costo di 9000 euro li avete visti? Mi sarei vergognata come una ladra a portarli... Non c'è più religione...
Spero di sbagliarmi e che gli indici scendano, scendano, scendano (oh, non per sempre...per un po'
P.s. speriamo che a Ditro non passi per la testa di farsi pagare le analisi...altrimenti siamo nei guai! Grande Ditro
Questo è diventato l'icona dei busoni del thread.
dan24
Forumer storico
India: inflazione all'11%, il Sensex crolla
Finanzaonline.com - 20.6.08/12:03
Ribasso del 3,6% a 12234 punti in chiusura per l'indice Sensex della Borsa di Mumbai (la ex Bombay). Sul listino ha pesato la diffusione di un dato shock sull'inflazione, salita nella settimana chiusa il 7 giugno all'11,05%, il livello massimo degli ultimi 13 anni. Nella stessa settimana dello scorso anno il tasso si era attestato a un valore nettamente inferiore, il 4,3 per cento.
booooo
Finanzaonline.com - 20.6.08/12:03
Ribasso del 3,6% a 12234 punti in chiusura per l'indice Sensex della Borsa di Mumbai (la ex Bombay). Sul listino ha pesato la diffusione di un dato shock sull'inflazione, salita nella settimana chiusa il 7 giugno all'11,05%, il livello massimo degli ultimi 13 anni. Nella stessa settimana dello scorso anno il tasso si era attestato a un valore nettamente inferiore, il 4,3 per cento.
booooo
