Following up on a story I’ve blogged quite a bit about, the Wall Street Journal is reporting that Bear Stearns has siezed assets out of one of its own troubled hedge funds after it became clear that no additional cash or collateral would materialize to repay the $1.6 billion line of credit the Wall Street investment bank had extended to its own fund.

Putting another nail in the coffin of the troubled High-Grade Structured Credit Strategies hedge fund, lenders at Bear Stearns Cos. have seized most of the fund’s collateral following its failure to meet a recent margin call … Bear is now saddled with some of the same troubled securities that hobbled the hedge fund. Bear is in the process of unwinding the more leveraged fund, known as the High-Grade Structured Credit Strategies Enhanced Leverage Fund, and plans to do the same with the less-leveraged fund in light of yesterday’s news.

Sort of like eating your own children, I guess. But it’s also a quiet way to avoid publicly fueling a complete CDO meltdown, which is a fire that nobody on Wall Street — and I mean nobody — wants to throw more gasoline on right now. According to the article, Bear says the assets will not have a material impact on its financial exposure. Perhaps, but something tells me that every senior executive at Bear wishes those “assets” were burning a hole on someone else’s balance sheet.