Bear Stearns told clients in its two battered hedge funds late yesterday that their investments, worth an estimated $1.5 billion at the end of 2006, are almost entirely gone. In phone calls to anxious investors, Bear Stearns brokers reported yesterday that May and June had been devastating months for the portfolios.

The more conservative fund, the High-Grade Structured Credit Strategies Fund, was down 91 percent by the end of June, investors were told. The High-Grade Structured Credit Strategies Enhanced Leverage Fund, which used extensive borrowings and assumed more risk, has no investor capital left, the firm said.

The announcement that the funds are now almost worthless came as a surprise to many on Wall Street. “How did you go from reporting very high returns to suddenly now saying the collateral is worth nothing?” asked Janet Tavakoli, president of Tavakoli Structured Finance, a research firm in Chicago.

The Bear Stearns funds, like so many others, bought collateralized debt obligations, investment pools consisting of hundred of loans and other financial instruments. Wall Street divides the pools up in slices based on their credit quality and sells them to investors.

Mark H. Adelson, head of structured finance research at Nomura Securities, said that the Bear Stearns funds steep decline had broad implications for investors in these bonds. “It’s going to provide an additional item that argues for lower valuations on these positions,” he said.

Ms. Tavakoli said other hedge funds would face a tougher time justifying to both investors and regulators the value they have assigned to mortgage-backed securities they hold. “Depending on how aggressive the S.E.C. wants to be, this could get ugly,” she said.

“There are a bunch of unanswered questions here,” said Joshua Rosner, a managing director at Graham & Fisher, an investment firm. “For me, one of the big unanswered questions is, do the prime brokers and others who have extended lines of credit to the hedge funds really have a good handle” on how those borrowings have been invested.

Some key sentences, translated:

The preliminary estimates show 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 as of June 30 2007.

Translation: You’re screwed.

At this time approximately $1.4 billion remains outstanding on this [$1.6 billion] line and we continue to believe there are sufficient assets available in the High-Grade fund to fully collateralize the repo facility.

Translation: We’re not..

Sequoia Capital's Mike Moritz, the uber-VC who earned his reputation backing Google, Yahoo, eBay, Cisco and Apple, was pessimistic about the future of the venture capital industry at a Fortune-sponsored conference Friday. "People would be far better off investing in an index fund," rather than putting their money into a VC fund, Moritz claimed, estimating that fewer than 20% of VC funds outperform the S&P 500.

Chopped cardboard, softened with an industrial chemical and flavored with fatty pork and powdered seasoning, is a main ingredient in batches of steamed buns sold in one Beijing neighborhood, state television said.

The hidden camera follows the man, whose face is not shown, into a ramshackle building where steamers are filled with the fluffy white buns, traditionally stuffed with minced pork.

The surroundings are filthy, with water puddles and piles of old furniture and cardboard on the ground.

"What's in the recipe?" the reporter asks. "Six to four," the man says.

"You mean 60 percent cardboard? What is the other 40 percent?" asks the reporter. "Fatty meat," the man replies.

The bun maker and his assistants then give a demonstration on how the product is made.

Squares of cardboard picked from the ground are first soaked to a pulp in a plastic basin of caustic soda — a chemical base commonly used in manufacturing paper and soap — then chopped into tiny morsels with a cleaver. Fatty pork and powdered seasoning are stirred in.

"Anything at all that comes from China that's edible we are not going to eat now," said Ms. Wood, a retired secretary in Lac-des-Îles, Que. She's even nervous about putting leftovers in made-in-China plastic containers.

She's not alone. More consumers are taking a hard look at "Made in China" labels after a string of recalls and publicity over deplorable safety standards in China. But it's nearly impossible to get out of the supermarket without food from China in your cart.

The good news is that avoiding products labelled "Made in China" won't crimp your grocery list, unless you really like frozen seafood - including shrimp, pollock, sole, haddock and salmon.

The bad news is that food labels don't tell the whole story. A host of Chinese imports are hiding behind "Made in Canada" labels, from the freeze-dried strawberries in your cereal to the wheat gluten in your hamburger buns.

"Made in Canada" simply means that 51 per cent of the production cost was incurred in Canada; the ingredients could come from anywhere, and increasingly they come from China. For example, manufacturers can import apple juice concentrate from China - for about one-fifth the cost of Canadian concentrate - add water to it in Canada, and mark it "Made in Canada."

The General Administration of Quality Supervision, Inspection and Quarantine said the survey, conducted in the first half of this year, showed quality and safety improvements compared with conditions in the period a year earlier. But the announcement also suggested that Chinese consumers are at serious risk of being harmed by purchasing tainted foods, substandard goods and suspect or defective equipment.

Regulators said, in effect, that goods sold in China were far more hazardous than the exports that were driving the country’s economic growth and now partly the subject of safety and quality debates.

During the last month, regulators and quality inspectors say they have discovered candied fruit with 63 times the permitted amount of sweetener; excessive additives and preservatives in nearly 40 percent of the children’s snacks surveyed in western Guangxi province; fake human blood protein at hospitals; and food tainted with formaldehyde, illegal dyes and industrial wax.

Experts say aggressive and opportunistic entrepreneurs continue to take advantage of the country’s chronically weak enforcement of regulations, choosing to blend fake ingredients into products; to sign contracts agreeing to sell one product only to later switch the raw materials for something cheaper; and to doctor, adulterate or even color foods to make them look fresher or more appetizing, when in fact they might be old and stale.

In its report released on Wednesday, the government said 80.9 percent of the food and other products checked in a nationwide survey met safety standards, and that this rate was higher than a year earlier, when about 78 percent of the good surveyed were deemed safe.

It’s called T-Mobile HotSpot @Home, and it’s absolutely ingenious. It could save you hundreds or thousands of dollars a year, and yet enrich T-Mobile at the same time. In the cellphone world, win-win plays like that are extremely rare.

Here’s the basic idea. If you’re willing to pay $10 a month on top of a regular T-Mobile voice plan, you get a special cellphone. When you’re out and about, it works like any other phone; calls eat up your monthly minutes as usual.

But when it’s in a Wi-Fi wireless Internet hot spot, this phone offers a huge bargain: all your calls are free. You use it and dial it the same as always — you still get call hold, caller ID, three-way calling and all the other features — but now your voice is carried by the Internet rather than the cellular airwaves.

These phones hand off your calls from Wi-Fi network to cell network seamlessly and automatically, without a single crackle or pop to punctuate the switch. As you walk out of a hot spot, fewer and fewer Wi-Fi signal bars appear on the screen, until — blink! — the T-Mobile network bars replace them. (The handoff as you move in the opposite direction, from the cell network into a hot spot, is also seamless, but takes slightly longer, about a minute.)


SAVING NO. 1 It’s not just your calls at home that are free; you may also get free calls at your office, friends’ houses, library, coffee shops and so on — wherever Wi-Fi is available. You can access both unprotected and password-protected Wi-Fi networks (you just enter the password on the phone’s keypad).

There’s one big limitation to all this freeness: these phones can’t get onto any hot spot that require you to log in on a Web page (to enter a credit card number, for example). Unfortunately, this restriction rules out most airports and many hotel rooms.

There’s one exception — or, rather, 8,500 of them: T-Mobile’s archipelago of hot spots at Starbucks, Borders and other public places. In these places you encounter neither the fee nor the Web-page sign-in that you would encounter if you were using a laptop; the words “T-Mobile Hot Spot” simply appear at the top of your screen, and you can start making free calls.

SAVING NO. 2 T-Mobile’s billing system isn’t smart enough to notice handoffs between Wi-Fi and cellular networks. So each call is billed according to where it begins. You can start a call at home, get in your car, drive away and talk for free until the battery’s dead.

The opposite is also true, however; if you begin a call on T-Mobile’s cell network and later enter a Wi-Fi hot spot, the call continues to eat up minutes. If HotSpot @Home catches on, therefore, the airwaves will reverberate with people coming home and saying, “Hey, can I call you right back?”

SAVING NO. 3 When you’re in a hot spot, T-Mobile has no idea where you are in the world. You could be in Des Moines, Denmark or Djibouti. So this is a big one for travelers: When you’re in a hot spot overseas, all calls to United States numbers are free.

SAVING NO. 4 T-Mobile’s hope is that you’ll cancel your home phone line altogether. You’ll be all cellphone, all the time. And why not, since you’ll now get great cell reception at home and have only one phone number and voicemail? Ka-ching: there’s an additional $500 a year saved.