Bear Stearns Makes $1 Billion Bet on Subprime Market Decline

Friday, February 08, 2008 | 11:08 AM

Talk about late to the party!

Bear Stearns, which made a disasterous series of sub-prime bets, has found religion. They have now bet a $1Billion that the Subprime market will decline further:

Bear Stearns Cos., the U.S. securities firm that posted its first-ever loss last quarter on mortgage writedowns, is betting more than $1 billion that subprime home loans and bonds will continue to decline.

While I do not expect us to be done with the subprime slime yet, I do get a "Is this a bottom indicator?" sense from Bear on this.

No one firm is a reliable fade. Still, one cannot help but wonder how ironic it would be if they caught leaning the wrong way in both directions . . . 

Bear Stearns Makes $1 Billion Bet on Subprime Market Decline
Bradley Keoun
Bloomberg, Feb. 8 2008

Friday, February 08, 2008 | 11:08 AM | Permalink | Comments (16) | TrackBack (1) add to | digg digg this! | technorati add to technorati | email email this post



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» Time To Go Long Subprime? Bear Stearns Shorts It For $1 Billion from
Bear Stearns has more than $1 billion of short positions on subprime, up $400 million from the end of November, Bloomberg reports. Of course, since Bear Stearns got the subprime trade so wildly wrong last year, people are already wondering... [Read More]

Tracked on Feb 8, 2008 3:29:07 PM


where did you hear this Barry? I think they are on the right side of this trade, even if it is late. They probably took the trade many months ago too.

Housing is the key to this whole mess and no way this BIG SHIP will turn around on the very small propeller that is driving it! More pain to come. 4-5 years of unsustainable gains, it will take at least that to correct the problems that we are facing now.

Posted by: UrbanDigs | Feb 8, 2008 11:18:38 AM

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