Analysis slams Bear Stearns subprime activity

The role of Wall Street firms in the on-going subprime meltdown is being debated. With earnings season upon us, there is some hand-wringing about what effect this will have on the top firms. CreditSights, an independent research firm, has waded into the debate with a report that takes Bear Stearns--and to a lesser extent Morgan Stanley and Lehman Brothers--to task for lax standards when buying these loans. More than 4.5 percent of Bear Stearns' loans are delinquent, compared with 1.42 percent at Countrywide. Two major subprime issuers, Fremont General and New Century Financial (see above), have ceased issuing these loans. There has always been an issue of whether top broker dealers would get stuck with too many loans that can't be sold. The bottom-line effect is as yet unclear, though earnings reports may clear that up a bit.

For more:
- here's a New York Post article