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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (8508)	12/6/2007 12:33:01 PM
From: Hawkmoon	Read Replies (1) of 33421

On November 26, 2007, HSBC Holdings PLC, Europe's largest bank, announced that it was bailing out two SIVs by taking $45 billion of assets on its balance sheet to prevent a fire sale of the vehicles' assets. Investors in the two entities, Cullinan Finance Ltd. ("Cullinan") and Asscher Finance Ltd. ("Asscher") are being offered the opportunity to exchange their interests for debt issued by a new company backed by loans from HSBC. All of those SIVs are off-balance sheet items and from what I'm understanding, HSBC is putting those liabilities back on their balance sheet. The experiment with SIVs is effectively over and now lending will have to return to some level of sanity (and accountability).. I suspect that this fact may prevent housing prices from soaring too much as the financial condition of banks is weakened. But other than that, very interesting article... Hawk

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