This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bear Stearns Girds for More Losses

Bear Stearns (BSC) expects to take a $1.2 billion writedown related to its exposure to mortgage-related securities in the fourth quarter, but said its leveraged finance business is getting better.

The writedowns are linked to the liquidation of Bear's warehouse of collateralized debt obligations and other subprime mortgages, whose prices have been crushed in the market over the past two months.

However, Bear has cut its exposure to CDOs by more than half since the end of August, to $884 million, and its long position in domestic subprime mortgages has been eliminated. That apparently led investors to believe Bear has gotten a handle on the biggest of its problems, and they sent its shares up 6.1% to $107 in premarket trading.

"[I] don't want to predict that things couldn't get worse, because things keep surprising," Chief Financial Officer Sam Molinaro Jr. commented during an investor conference in New York sponsored by Merrill Lynch (MER). "While hedges have worked reasonably well ... there are no perfect hedges. The perfect hedge is selling the assets."

Molinaro said that the business of originating and selling mortgage securities had essentially coming to a "grinding halt," but he held out hope that the company's prime brokerage and global clearing business in the U.S. and internationally would excel.

"We think that the business more broadly away from mortgages is very well poised in 2008," he said.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.09 -0.66%
FB $105.55 -0.18%
GOOG $749.27 0.13%
TSLA $229.64 5.20%
YHOO $33.13 0.52%


Chart of I:DJI
DOW 17,822.08 +9.89 0.06%
S&P 500 2,091.56 +2.42 0.12%
NASDAQ 5,122.5010 +19.6930 0.39%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs