Sushi Money

Hmmm…  Apparently Barclays PLC has lost some big bucks in the Bear Sterns hedge fund blowup, according to the Wall Street Journal.   The WSJ says Barclays is “reviewing its options for recovering the $400 million, citing arbitration, a negotiated settlement or litigation as possible strategies.”   Other sources indicate that investors may take litigation against Bear Sterns for their losses over the subprime mortgage investments.  

Oh those subprime loans
Some even lost their homes
But they bet all our money
And now it’s not so funny
‘Cause we didn’t really know
What was in that CDO!

I mean no disrespect to those who have lost money, but why does it seem any time a large investor/company is subject to investment loss that they want to sue someone for it?  Probably because they can?  But small-time retail investors don’t really have that option… when we invest in the market and it doesn’t pan out?  Too bad.  In the end, the cost of those subprime investment losses, and litigation, will be passed on to the rest of us.  Even if it’s in the form of reduced profits for companies who settle with investors.  I’m simplifying the situation to be sure, but weren’t those “High-Yield” funds high risk investments for a reason?   If you seek the potential gain, you bear the risk.  If there is no risk, aka that losses can be recouped via litigation… then what does that say about the market, risk spreads, etc?   Equally however, due diligence certainly takes on new meaning.