This is an attempt to sell at fire sale prices, so they can get out before everyone is heading for the exits.

It is the start of a panic.

Bear Stearns fund scrambles to sell bonds

Hedge fund faces losses as it tries to sell about $4 million in mortgage-backed bonds to raise cash for redemptions, according to a report.
June 14 2007: 8:03 AM EDT

NEW YORK (Reuters) — A hedge fund managed by Bear Stearns Cos. Inc. is trying to sell large amounts of mortgage-backed bonds in a potentially troubling sign for the broader mortgage-backed bond market, The Wall Street Journal reported in its online edition.

Bear Stearns’ (Charts, Fortune 500) High-Grade Structured Credit Strategies Enhanced Leverage Fund is facing losses and, together with a sister fund, is trying to sell about $4 billion in bonds to raise cash for redemptions and to prepare for likely margin calls, according to the report, which cited people close to the fund.