Bear Sterns is taking a hit reportedly for insolvency issues caused by investments tied to MBS (Mortgage Backed Securities).   The problem are bond funds backed by mortgages, which in some cases they (the funds) do not know the value of the mortgage portfolios.  Earlier this week we discussed the case of Carlyle Group which defaulted earlier on $16. 6 billion of residential mortgage backed bonds, which could grow to $21.7 billion in the near future.

Yesterday S&P said that they feel that banks and other institutions have accounted for the Subprime Crisis with $285 billion in write downs.  Are the write down accurate?  Does S&P statement include brokerage houses such as Bear sterns?  Only time will tell.