The warning comes amid Bear Stern's own decrease in net income for the third-quarter of 5.7%. While the company's revenue rose 6% and its earnings per share also rose, the company had 9% fewer shares than last year's third-quarter because of stock buyouts, and its investment banking revenues decreased 11%. Stock shares, however, have gone up 41% since late July. Bear Stearns is becoming one of an increasingly shrinking number of mid-size firms here in New York, as the trend in takeovers grows.

Ader says of the lodging industry that, while he had upgraded the lodging sector in January and the Bear Stearns Large Cap Hotel Index has risen more than 25% since then, the industry may top out. He explains, "The lodging industry is very dependent on the overall economy and if there is any slow down it won't be long before it trickles down to the hotels' bottom line."

Net revenue losses, surging oil prices, a weak Euro at a time of considerable European acquisition of American companies and properties, a possible downturn in the lodging industry and observations reported by GlobeSt.com yesterday by a multifamily housing industry insider that the residential market seems to be loosening, may reflect and contribute to what Ader describes as a possible "souring of the economy."