Bear Stearns: We got our backs

Today certainly had that feel of a market wanting to deteriorate. If it weren't for my protestations of wanting explain every "unknown" on a conspiracy, it pretty much felt as if someone was standing there with its mouth wide open swallowing-up all the supply anyone wanted to unload into an otherwise sick feeling market. It felt like a " breakeven" was being aggressively defended. Both the S&P 500 and the Dow Industrials “kissed” breakeven on the day, not once but three times throughout the day. Each time it was met with a flood of buy programs keeping damage well under control. The last several days has been a bit of a publicity nightmare for the cabal of Wall Street Banks. Since last week, we’ve had to watch Bear Stearns (BSC) and its lenders try to “contain” collateral damage to its franchise. This morning, The New York Times ran a piece on the front page of its business section, “Funds’ Woes Didn’t Deter A Stock Offer.” Woe and behold, in early May, the benevolent folks over at Bear Stearns (BSC) had apparently devised a way for the “ma and pa” investor to own a chunk of some of the most toxic stuff inside their “High-Grade Structured Credit Enhanced Strategies” and “High-Grade Structured Credit Strategies Enhanced Leverage” Funds. They had founded a company literally overnight and called it Everquest Financial. Sounds prett good, huh? Bear Stearns subsequently funded it with $400-million and bought assets from the aforementioned hedge funds that it had been managing for some of its “accredited investors” (read: some of its wealthier clientele). As you might know, within six-weeks of it filing to go public with this faux-company, one of the funds from which it bought assets from was worth less-than-zero and the other may or may not have had a positive value. No one seems to know for sure. What sweet guys. Obviously, that filing has since been shelved. No harm, no foul, right? If its not obvious to most by now, be skeptical. Be very, very skeptical of anything that Wall Street says is good for you and especially me. Wall Street, for the most part, only knows how to help themselves…..It should also not be lost on folks, that Blackstone Group’s “common units,” just priced with great fanfare on Friday, went to a discount on just its third day of trading (an affront to speculative manias everywhere) and Fortress Investment (FIG) plumbed a fresh post-IPO low today to boot. Meanwhile, another bad report from a major homebuilder, Lennar (LEN) and weaker than expected existing and new home sales had the bubble-onians yelping for another bottom in housing—just as the leveraged private equity and hedge fund folks sit upon the cusp of rolling-out their own declarations of a bottom. Wow, we may be seeing two bubbles that are probably bigger than the tech and dot-com bubbles of the late 90s both searching for a bottom at the same time. Oh, and the government agency, the Securities and Exchange Commission, that is supposed to "protect investors, maintain fair, orderly, and efficient markets" has officially opened-up 12-probes in CDO matters. At least SEC Chairman, Christopher Cox, will be on record as getting ahead of this freight train long after it left the station.