A investment letter you don't want to get
Courtesy of Big Picture, here is the letter that Bear Stearns just sent to investors in its subprime mortgage hedge funds. The essential message is: We lost all or most of your money. (Big Picture & the letter are hyperlinked but it's hard to see with our new graphics, at least on my screen.)
A couple nice touches:
"During June the Fund experienced significant declines in the value of their assets resulting in losses of net asset value. the Funds' reported performance, in part, reflects the unprecedented declines in the valuations of a number of highly-rated (AA and AAA) securities."
Translation: MOODY'S TOLD US THIS MONEY LOANED TO PEOPLE WITH BAD CREDIT HISTORIES BUYING HOUSES THEY COULDN'T AFFORD WAS A GOOD RISK. IT'S NOT OUR FAULT!
"The preliminary estimates show there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the investors in the High-Grade Fund as of June 30, 2007."
Translation: THE HIGH-GRADE FUND LOST ONLY 90 PERCENT OF ITS VALUE. WE REMIND YOU THAT HIGH-GRADE IS A RELATIVE TERM.
