Post by unlawflcombatnt on Jul 6, 2007 15:54:31 GMT -6
Here is yet another case of a hedge fund collapse, putting still more downward pressure on the price of overvalued bonds backing subprime mortgages. The title of the article is HEDGE HORROR LANDS IN DENVER
By RODDY BOYD
"July 6, 2007 -- Another day, another hedge fund casualty of Wall Street's subprime mortgage debacle.
Braddock Financial Corp.'s $300 million Galena Street Fund, the most recent victim of the collapse of subprime mortgage bonds, notified investors earlier in the week that it will be closing its doors.
The Denver-based Galena Street fund appears to have fallen prey to the investor panic surrounding default-ridden subprime bonds. Shocked and scarred investors - prompted by the collapse of two Bear Stearns hedge funds - have been yanking assets from the hedge funds that invest in these bonds.
In turn, the hedge funds have been flooding the market with subprime mortgage bonds in order to raise cash needed to return to investors. That has driven down prices across the board, depressing fund performance and making the bonds less attractive as collateral for loans.
Investors are expected to learn over the next two weeks just how much damage hedge funds have sustained as a result of the subprime mortgage mess, and if the news is as bad as some market players expect, there is a fear that investors could pull out in droves.
Already, some wide swaths of the $6 trillion mortgage-backed securities market have sold off sharply, adding to the concern that there could be many more Galena Street scenarios forthcoming...."
The full article can be found at:
HEDGE HORROR LANDS IN DENVER
By RODDY BOYD
"July 6, 2007 -- Another day, another hedge fund casualty of Wall Street's subprime mortgage debacle.
Braddock Financial Corp.'s $300 million Galena Street Fund, the most recent victim of the collapse of subprime mortgage bonds, notified investors earlier in the week that it will be closing its doors.
The Denver-based Galena Street fund appears to have fallen prey to the investor panic surrounding default-ridden subprime bonds. Shocked and scarred investors - prompted by the collapse of two Bear Stearns hedge funds - have been yanking assets from the hedge funds that invest in these bonds.
In turn, the hedge funds have been flooding the market with subprime mortgage bonds in order to raise cash needed to return to investors. That has driven down prices across the board, depressing fund performance and making the bonds less attractive as collateral for loans.
Investors are expected to learn over the next two weeks just how much damage hedge funds have sustained as a result of the subprime mortgage mess, and if the news is as bad as some market players expect, there is a fear that investors could pull out in droves.
Already, some wide swaths of the $6 trillion mortgage-backed securities market have sold off sharply, adding to the concern that there could be many more Galena Street scenarios forthcoming...."
The full article can be found at:
HEDGE HORROR LANDS IN DENVER