Bear funds barely there

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News item: Those Bear Stearns hedge funds that imploded after betting heavily on securities backed by subprime mortgages are now nearly worthless. We knew the funds were nearly wiped out, but the latest damage assessment from Bear Stearns raises new concerns.

The L.A. Times: ‘Particularly troubling was the company’s warning that bonds that had high credit ratings were experiencing ‘unprecedented declines’ in value.’ The New York Times: ‘While risky mortgages are thought to have been central to the funds’ misfortunes, Bear’s letter said that ‘unprecedented declines in the valuations of a number of highly rated (AA and AAA) securities’ contributed to June’s woeful performance.’

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