Scary stuff. No wonder the attempt to selloff Bear Stearns' "assets" was quickly aborted and pushed undergroundand out of sight. This fire-sale had to potential to start a desperatepanic to the exits if holders of these derivatives suddenly realizedthat their "high investment grade instruments" were in reality toxic debt that might be virtually unsaleable in an emergency.
Now Bear Stearns havefessed up revealing that one stricken fund has lost all…I repeatall…its value…while the other fund is only worth 9 cents or less on thedollar. Talk about a wipe-out!
No doubt there is a lot of soul searching goingon at the moment amongst holders of this toxic debt as they anguishover how to quietly try to offload it to someone else without startinga panic among other holders, if that is indeed possible.
The very survival of many investors and funds maynow depend on how they manage the present situation from here so as toensure that they are not the last ones to be holding the bag (of Toxic Debt).
