After Bear Stearns sent a letter to investors regarding the essential collapse of two of its hedge funds, stating that "there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the investors in the High Grade Fund," several insiders say the losses were worse than expected.

Alpha Capital Management's Brad Alford, who talked one investor out of the fund early enough, says his client is extremely grateful and will probably "be a client for life," as he saved him millions. "It was not a surprise that the Enhanced fund was wiped out, but as for the flagship fund...it is a tremendous shock to everyone," Alford says, referring to the High Grade fund, which lost 91% of its value.

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