Bear Stearns Needs English Lessons

What is it about banks that they find it impossible to write in English? Here's a crucial part of the letter Bear Stearns sent to investors yesterday:

On June 26th, Bear Stearns committed $1.6 billion in a collateralized repo line to the High-Grade Fund. At this time, approximately $1.4 billion remains outstanding on this line and we continue to believe there are sufficient assets available in the High-Grade Fund to fully collateralize the repo facility.

On reading this, you might think that so far Bear Stearns has only actually spent $200 million of the $1.6 billion which it said it was willing to spend. It committed $1.6 billion, and there's still $1.4 billion remaining, right? Think again. Here's Bloomberg's Yalman Onaran:

The second fund still has "sufficient assets" to cover the $1.4 billion it owes Bear Stearns, which as a creditor gets paid back first, according to the letter, obtained yesterday by Bloomberg News from a person involved in the matter.

Back in June, I pleaded for more transparency from Bear Stearns on this matter. In fact, Bear just seems to be getting increasingly obfuscatory: not only was the letter not released to the press (it had to be forwarded on from its recipients), but it was also worded in such a way as to make it very difficult to understand.

I can guarantee you that within Bear Stearns, people don't talk about "fully collateralizing the repo facility". They speak English there: they wonder if the hedge fund is good for the $1.4 billion lent to it by Bear Stearns. But the minute they have to communicate with the outside world, they fall back onto gobbledegook. For no reason whatsoever.