Bear Stearns Co

The Chinese government's decision to pump $5 billion into Morgan Stanley is the latest sign of foreign investors' growing interest in U.S. financial firms that have been battered by the sub-prime mortgage crisis. For its money, China Investment Corp. will earn 9% a year on its investment until it converts into as much as 9.9% of Morgan Stanley's common shares in 2010, making the so-called sovereign wealth fund the second-largest shareholder in Wall Street's No. 2 investment bank.

Bear Stearns Cos. on Monday cut 300 jobs to reduce costs as the nation's fifth-largest investment bank continued to deal with the credit turmoil stemming from the sub-prime meltdown. Positions were cut in various units, including the company's equity trading business, according to an internal memo obtained by the Associated Press. The layoffs represent about 2% of the staff, which totaled 15,516 employees at the end of August.

Bear Stearns Cos. and China's government-controlled Citic Securities Co. agreed Monday to invest $1 billion in each other, giving the U.S. firm an entrance into the insular Chinese financial sector. Under the agreement, Citic would invest about $1 billion and receive securities convertible into a roughly 6% equity stake in Bear Stearns. The Beijing-based investment bank would also get an option to acquire up to a 9.9% stake, which would make it one of Bear's largest shareholders.

Bear Stearns Cos., the second-biggest underwriter of U.S. mortgage-backed securities, is cutting 310 jobs from units that originate mortgages after the firm reported the biggest profit decline in more than a decade. The New York company said it would also merge its Irvine-based Encore Credit and Scottsdale, Ariz.-based Bear Stearns Residential Mortgage divisions. Bear Stearns has cut the mortgage-origination workforce by 40% this year.

Brokerage Bear Stearns Cos. said Tuesday that investors in two of its hedge funds that owned mortgage-backed bonds had lost virtually all of their money -- an announcement likely to jolt the already shaky market for those bonds. Particularly troubling was the company's warning that bonds that had high credit ratings were experiencing "unprecedented declines" in value.

Anxiety intensified Friday about the toll the sub-prime mortgage meltdown is taking on the financial industry at large, as Bear Stearns Cos. pledged to lend $3.2 billion to rescue a hedge fund battered by rising defaults on home loans. The jitters sent stocks tumbling across the board. "We know that these holdings are not unique to Bear Stearns," said Drexel University professor Joseph R.

Merrill Lynch & Co. is proceeding with a plan to sell about $800 million of bonds from a money-losing hedge fund run by Bear Stearns Cos., a day after delaying a similar auction, people with knowledge of the offering said. Merrill Lynch, a creditor to the fund, began distributing a list to investors of bonds it may offer in the sale, according to the people familiar with the bond offering.

For decades, civic leaders have talked about Los Angeles' role as a key gateway to the Pacific Rim. But often, it's been more hype than reality. Enter Donald Tang. By day, he's a vice chairman of Bear Stearns & Co. By night, he's chairman of the Asia Society Southern California. In between, he sits on the boards of multiple L.A. civic and cultural groups.

Bear Stearns Cos., the biggest U.S. underwriter of mortgage-backed bonds, said rising sub-prime loan delinquencies were not spilling over into other markets and may be an opportunity for the firm to expand its market share. Making loans to borrowers with poor credit histories and packaging them into bonds accounted for 3% of Bear Stearns' mortgage business, Chief Financial Officer Samuel Molinaro said Thursday after the New York firm announced an 8% increase in first-quarter earnings.

UBS, Europe's biggest bank by assets, and Bear Stearns Cos. were subpoenaed by Massachusetts officials looking into why the companies wrote upbeat reports on sub-prime mortgage lenders as bad loans rose to a four-year high. The firms were asked to provide documents by March 27, Secretary of the Commonwealth William Galvin, the state's top financial industry regulator, said Tuesday.