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Wednesday, October 17, 2007

PS: Your SIV Is Working Like A Sieve

To set the tone, a rather good WaPo article on the Great SIV Caper.

Remember everyone talking about "panic" and "hysteria" back in August? The assets were fine, we were told by the financial cowboys. It's just that a surge of irrationality has hit the investor herd (somebody flapped an umbrella or something), and when they all calm down everything will be fine again.

Not exactly Prozac for the investing masses:
Cheyne Finance Plc, the structured investment vehicle managed by hedge fund Cheyne Capital Management Ltd., may not be able to pay its debts, receiver Deloitte & Touche LLP said today.

The receiver declared an ``insolvency event,'' it said today in an e-mailed statement.
Next up, Shiva makes an appearance in SIV form. This is not the third event, but it moves us closer to the brink. There's a surge of commercial construction loan defaults beginning, and it is going to be very hard to get savvy investors back in the ABCP corral without guarantees of performance. Super SIV ain't gonna do it.

I think more like a shiv

As in someone is going to get sived over this.
And swived.

E-Trade wrote some of its lovelies down 50%.
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