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

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

Net revenue losses, surging oil prices, a weak Euro at a time ofconsiderable European acquisition of American companies andproperties, a possible downturn in the lodging industry andobservations reported by GlobeSt.com yesterday by a multifamilyhousing industry insider that the residential market seems to beloosening, may reflect and contribute to what Ader describes as apossible "souring of the economy."