Bear Stearns Fund Failure Redux??????

Bear Stearns Halts Redemptions on Third Hedge Fund After Losses
By Yalman Onaran
July 31 (Bloomberg) -- Bear Stearns Cos., manager of two hedge funds that collapsed last month, halted redemptions from a third fund after investors demanded their money back.
The fund had about $900 million invested in asset-backed securities, including mortgage bonds, spokesman Russell Sherman said in a telephone interview. The fund probably had losses in July and was overwhelmed by redemption requests, Sherman said.
Bear Stearns has no plans to close the fund, which has $50 million in cash and gets about $13 million in principal and interest monthly, Sherman said. The fund can wait until the slump in the mortgage market is over, he said. Less than 0.5 percent of the portfolio is in subprime securities, he said.
``We don't believe it's prudent or in the interests of our investors to sell assets in this current environment,'' Sherman said. ``The fund portfolio is well positioned to wait out the market uncertainty.''
The Wall Street Journal earlier reported that the fund was up 5 percent this year through June, before its performance plummeted in July.
``This shows you don't necessarily have to be a subprime fund now to be having problems,'' said Bryan Whalen, a portfolio manager in Los Angeles at Metropolitan West Asset Management, which oversees more than $21 billion in fixed-income assets.

My favorite part: "we believe by suspending redemptions, we can ensure the best long term results for our investors."

BWAHAHAHAHA. Let me translate:

"we believe by suspending redepemtions, we can ensure that our rich ass fund manager can collect fees for another few months. Also, we can ensure that our other portfolios of horrible quality mortgage paper and derivatives is not immediately marked to market so we can pull the wool over everyone's eye's and sell just a few more pieces of this toilet paper to dumb ass fund managers. Also, we can allow enough time to take on sufficient swap hedges on the junk as we desperately try to make up for some of the lost revenue.