Mutually Assured Mayhem

I’ve been remiss in not discussing the trouble in the subprime market this week—led by revelations last week that two Bear Stearns hedged funds that were invested in subprime mortgage debt were in deep trouble; while Bear agreed to invest $1.6 billion to shore up one of the funds, it so far hasn’t offered to bail out the other fund, which is acknowledges has suffered heavy losses. My BusinessWeek colleague Matt Goldstein has been on top of the story with these early dispatches (click here, here, here, and here), and Matt collaborated on a broader analysis in this week’s magazine with David Henry, Mara Der Hovanesian and others (which can be read by clicking here).

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