In yet another of the mounting casualties of the subprime...

In yet another of the mounting casualties of the subprime mess Brookstreet Securities hurt by CMOs, may shut down. Bear Stearns (BSC) unveiled a $3.2 billion rescue plan for its in-house High - Grade Structured Credit hedge fund after it was hit hard by mortgage-derivatives trades that went awry. Before that, Bear had only invested $35 million in the fund and another more leveraged vehicle called the High Grade Structured Credit Enhanced Leveraged Fund and it hadn't lent any money to them. But now the bank has 'meaningful exposure,' to one of the funds, analyst Guy Moszkowski wrote in a note to clients of Merrill Lynch. Bear Stearns is one of the leading players in the mortgage market, so the bank should be able to extract value out of the fund's assets, given enough time, the analyst said. However, Moszkowski estimated that if Bear Stearns loses half the amount of its loan, that would knock roughly $7 a share off its net earnings in a year. That's about half this year's forecast profit, the analyst noted.