Respected mortgage analyst Gyan Sinha of Bear Stearns has had his views on the subprime market scrutinized in the wake of the meltdown of two of the bank’s hedge funds, reports The Wall Street Journal. In a conference call in early February, Sinha told 900 investors that they had little to worry about in the subprime market. Soon after, the ABX index, which tracks the subprime market, started hitting new lows.
There has, however, been no evidence Sinha was trying to hype the market to help Bear. Unusual market conditions, including the unprecedented combination of falling housing prices and stable unemployment figures, have made the mortgage-securities market difficult to assess.