Bear Market Rallies

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"About 60 other hedge funds are preparing to go bargain shopping for distressed (read: mortgage-backed) debt and leveraged loans for sale by besieged financial institutions. A London fund, Toscafund Asset Management, approached the board of Washington Mutual with an offer to participate in any consortium looking to recapitalize the mortgage lender, according to a report in the Wall Street Journal. Toscafund is part of Old Oak Holdings, which has a sizable stake in WaMu.

Such moves by hedge funds will help shore up the banks and begin to establish floors for "toxic" asset prices, industry experts say. "They're going to be buyers of paper from other hedge funds and from the investment banks," said Mr. Snider. "People are expecting about $200 billion worth of mortgages will be sold."

Good to know that creative minds are always at work. Where there is crisis, there is also opportunity.

Watch the Dow and keep glued to the TV for late breaking news on Fed measures and announcements. They are about to get quite creative too.

Happy Trading.