European Government Bonds Advance as Asian Stocks Slide on Subprime Losses

(Bloomberg) -- European government bonds rose for a
second day as Asian stocks slid on concern U.S. subprime mortgage
losses will slow economic growth and drive up global financing
costs.

Gains in bunds pushed benchmark 10-year yields to near the
lowest since May as investors sold riskier assets and sought the
relative safety of government debt. Bear Stearns Cos. ousted Co-
President Warren Spector after credit-market losses and eroding
investor confidence.


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Bear Stearns Ousts Co-President Warren Spector After Hedge-Fund Losses

(Bloomberg) -- Bear Stearns Cos. ousted Co-President
Warren Spector after credit-market losses and eroding investor
confidence increased pressure for management changes at the
second-largest underwriter of securities tied to the slumping
U.S. housing market.

The board of the nation's fifth-biggest securities firm
agreed today that Alan D. Schwartz, 57, will become sole
president, the company said in a statement. Spector, 49, was
responsible for fixed income and asset management and was viewed
by analysts as the top candidate to succeed 73-year-old Chief
Executive Officer James E. Cayne.


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New Zealand Dollar Falls a Second Day; Housing Woes Spur Carry Trade Exit

(Bloomberg) -- The New Zealand dollar declined for a
second day as concerns U.S. subprime mortgage losses will slow
global growth deterred traders from buying riskier investments.

So called carry trades, where investors borrow cheaply in
yen to buy higher-yielding assets elsewhere, have seen New
Zealand's dollar gain 25 percent against Japan's currency in the
past year. U.S. stocks dropped Aug. 3 after Samuel Molinaro,
chief financial officer at Bear Stearns Cos. called the current
crisis in fixed-income the worst ever.


Read more at Bloomberg Currencies News

New Zealand Dollar May Fall as Housing Woes Spur Exit From Risky Bets

(Bloomberg) -- The New Zealand dollar may decline
today as concerns return about the U.S. subprime mortgage market,
deterring traders from riskier investments such as the carry
trade.

The trade, where investors borrow cheaply in yen to invest
in higher-yielding assets elsewhere, has seen the currency gain
25 percent against the yen in the past year, with investors
lured to the nation's record 8.25 percent benchmark rate. U.S.
stocks dropped Aug. 4 after Samuel Molinaro, chief financial
officer at Bear Stearns Cos. called the current crisis in fixed-
income the worst ever.


Read more at Bloomberg Currencies News

ACA Capital shares could fall on subprime: Barron's

(Reuters) - Should the U.S. subprime troubles prove to be systemic across different geographies, then not only would shares be hammered, but the company could be toast, Barron's said.




If ACA buckles under, Wall Street firms whose securities the company insured would also be hurt. The $61 billion of ACA's insured exposure would come cascading back to balance sheets of the likes of Bear Stearns , Merrill Lynch , Lehman Brothers , and Citigroup along with some 25 other Wall Street counterparties, Barron's said.


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Bear Stearns preparing to oust president: WSJ

(Reuters) - Bear Stearns' board is due to meet on Monday to consider the departure of Spector, who heads up its stock and bond trading operations, the paper said, citing a person familiar with the situation.




Spector, 49, had widely been seen as a candidate to become the firm's next chief executive, the Journal said.


Read more at Reuters.com Business News

TREASURIES-Bond prices gain after soft jobs, services data

(Reuters) - NEW YORK, Aug 3 - U.S. government debt prices
rose on Friday as soft data on the U.S. job market and services
sector spurred more bond investors' bets the Federal Reserve
may start cutting interest rates before year end.




U.S. stocks sagged partly on weak signals in the data,
helping to contributed to safe-haven bids for Treasuries, with
worries about riskier credit and the impact of subprime debt on
the financial sector resurfacing. Credit rating agency Standard
& Poor's cut Bear Stearns 's debt outlook, sending its
shares down.


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US STOCKS-S&P drops 1 percent as Bear Stearns sinks

(Reuters) - NEW YORK, Aug 3 - U S. stocks dropped on Friday,
with the S&P 500 losing more than 1 percent, after Standard &
Poor's cut Bear Stearns Cos. Inc.'s rating outlook,
dragging down shares of the investment bank and other
financial-sector stocks.




The Dow Jones industrial average was down 118.52
points, or 0.88 percent, at 13,344.81. The Standard & Poor's
500 Index was down 14.72 points, or 1.00 percent, at
1,457.48. The Nasdaq Composite Index was down 21.67
points, or 0.84 percent, at 2,554.31.


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US STOCKS-Mortgage fallout, economic data weigh on Wall St

(Reuters) - NEW YORK, Aug 3 - U.S. stocks fell on Friday, as
worries about mortgage losses deepened after a ratings agency
cut its outlook on investment bank Bear Stearns Cos.'
debt, and data suggested weakness in the economy.




Standard & Poor's said it changed its ratings outlook on
Bear Stearns, the biggest U.S. underwriter of mortgage bonds,
to "negative" from "stable," indicating there is a better
chance of a downgrade over the next two years. For details,
see [ID:nN03300207].


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UPDATE 3-S&P changes Bear outlook to negative; shares fall

(Reuters) - NEW YORK, Aug 3 - Standard & Poor's on Friday
changed its rating outlook on Bear Stearns Cos. to negative
from stable, indicating a greater chance of a downgrade over
the next two years, as it warned of problems that could hurt
the firm's performance "for an extended period."




S&P said issues include problems at some of Bear Stearns'
managed hedge funds.


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Mortgage fallout, economic data weigh on Wall St

(Reuters) - Standard & Poor's said it changed its ratings outlook on Bear Stearns, the biggest U.S. underwriter of mortgage bonds, to "negative" from "stable," indicating there is a better chance of a downgrade over the next two years.




"People are very concerned. They do not know how deep these loan problems are and how it will affect the economy," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.


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Japan's Bonds Advance on Speculation Mortgage Losses to Slow U.S. Growth

(Bloomberg) -- Japan's five-year notes rose for a
fourth week on speculation losses tied to mortgages will slow
growth in the U.S., making it harder for the Bank of Japan to
raise interest rates this month.

Five-year notes completed the longest weekly advance since
May 2005 on concern riskier assets such as corporate bonds and
stocks will extend losses. Bear Stearns Cos., the manager of two
hedge funds that collapsed last month, said this week it blocked
investors from pulling money out of a third.


Read more at Bloomberg Bonds News

Treasuries Climb as Jobs, Services Data Add to Bets on Economic Slowdown

(Bloomberg) -- Treasuries rose after weaker-than-
forecast reports on jobs and services reinforced speculation
that losses in mortgage-backed bonds will lead to a broad-based
economic slowdown.

Two-year notes, more sensitive than longer-maturity debt to
changes in monetary policy, led the rally as traders increased
bets that the Federal Reserve will cut interest rates this year.
The gains accelerated after Bear Stearns Cos., the second-
largest underwriter of mortgage-backed bonds, had its credit-
rating outlook cut to negative by Standard & Poor's.


Read more at Bloomberg Bonds News

Stock Bulls Grow More Bullish as Global Equity Markets Lose $2.1 Trillion

(Bloomberg) -- The biggest losses in stock and
credit markets in five years are making the U.S. stock bulls
more bullish.

The Dow Jones Industrial Average posted its steepest gain
since 2003 on July 12, two days after tumbling on Standard &
Poor's plan to cut credit ratings for bonds backed by subprime
mortgages. The benchmark for America's biggest companies climbed
to a record the next week, following a decline sparked by losses
in Bear Stearns Cos. hedge funds. Some of the world's largest
investors say the S&P 500's biggest slump since September 2002
last week now offers them even more opportunities to profit.


Read more at Bloomberg Stocks News

UPDATE 1-US brokers' CDS spreads widen 20 bps on credit woes

(Reuters) - NEW YORK, July 26 - U.S. brokers' credit spreads
widened by about 20 basis points on average due to worries
about risky mortgages and a recent spate of pulled financings
for corporate buyouts, analysts said on Thursday.




Bear Stearns Cos.' credit default swap spreads
jumped about 25.5 basis points to 110 basis points, which means
it costs $110,000 annually to protect $10 million of its debt
for five years.


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Old Dominion, Saia fall on Bear Stearns downgrade

(Reuters) - The soft market has hit prices. Last week, LTL operator Con-way Inc. Chief Executive Doug Stotlar told Reuters that pricing has now bottomed out and should not worsen further in 2007.




But concerns over the pricing environment for LTL companies persist, which were reflected in the Bear Stearns decision to downgrade both Old Dominion and Saia to "underperform" from "peer perform."


Read more at Reuters.com Hot Stocks News

Bear Stearns Shares Show Cayne's Dummy `Body Blow' Won't Prove Massive

(Bloomberg) -- When Bear Stearns Cos. Chief
Executive Officer James E. ``Jimmy'' Cayne told the New York
Times the failure of the firm's hedge funds was a ``body blow of
massive proportion,'' he may have been using a tactic honed in
three decades of championship bridge.

To win the card game, a player sometimes will misstate the
number of tricks he can win to dupe opponents into
underestimating his hand. So far, Bear Stearns shareholders
aren't showing much anxiety. The stock has outperformed its peers
since Cayne's remarks were published on June 29, even after Bear
Stearns told investors in the High-Grade Structured Credit
Strategies and High-Grade Structured Credit Strategies Enhanced
Leverage funds that almost all of their money was wiped out.


Read more at Bloomberg Stocks News

Barclays may have lost big in Bear fund-WSJ

(Reuters) - Bear Stearns said on Tuesday that assets in the fund are at
this point essentially worthless.




The Journal said Barclays was reviewing its options for
recovering the $400 million, citing arbitration, a negotiated
settlement or litigation as possible strategies.


Read more at Reuters.com Bonds News

European Bonds Rally as Subprime Defaults Prompt Investors to Seek Safety

(Bloomberg) -- European government bonds rallied on
speculation defaults on U.S. subprime mortgages will hurt the
global economy, fueling demand for the safest assets.

Bunds gained, sending 10-year yields to their lowest in
almost three weeks, after the risk of owning European corporate
debt touched a two-year high. Government debt was buoyed this
week after Bear Stearns Cos. told investors they weren't likely
to get any money back from two of its hedge funds that bet on
securities backed by subprime mortgages.


Read more at Bloomberg Bonds News

Bear Stearns Says There is `No Value Left' for Investors in Failed Funds

(Bloomberg) -- Bear Stearns Cos. told investors in
its two failed hedge funds that they will get little if any money
back after ``unprecedented declines'' in the value of AAA rated
securities used to bet on subprime mortgages.

Estimates show there is ``effectively no value left'' in the
High-Grade Structured Credit Strategies Enhanced Leverage Fund
and ``very little value left'' in the High-Grade Structured
Credit Strategies Fund, Bear Stearns said in a two-page letter.
The second fund still has ``sufficient assets'' to cover the $1.4
billion it owes Bear Stearns, which as a creditor gets paid back
first, according to the letter, obtained yesterday by Bloomberg
News from a person involved in the matter.


Read more at Bloomberg Bonds News