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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (30117)	2/20/2008 12:46:52 PM
From: Madharry	Read Replies (1) \| Respond to of 78705

I think caution and patience are called for when wading into the financial quagmire, as I expect lots more announcements like these: -- Standard Chartered said Wednesday it has dropped a plan to bail out its $7 billion Whistlejacket fund, which could now default on some of its debt as early as Thursday. The fund -- a structured investment vehicle that issues short-term debt backed by investments in longer-term securities -- went into receivership earlier in February after the value of its assets fell below a key trigger level. Standard Chartered (UK:STAN: news, chart, profile) , a U.K.-listed bank that focuses on emerging markets, had proposed a potential rescue to the receiver Deloitte & Touche. But on Wednesday the bank said the continued deterioration in the market for the fund's assets has left it unable to cobble together a workable rescue. "Standard Chartered is disappointed that it has been unable to find a viable solution to ensure flexibility for Whistlejacket due to these changes in circumstances," the bank said in a brief statement. Chart of UK:STAN Another complicating factor was a decision by the receivers not to pay the holders of certain debt that matured at the end of last week. A grace-period on those repayments is about to run out and means the fund could officially default on the payments on Thursday, according to analysts at Standard & Poor's. Shares in Standard Chartered fell 2.4% in midday London trading, outstripping a broader decline in the U.K. market. See London Markets. Structured investment vehicles have been struggling to find buyers for their debt, which must be renewed every couple of months, since the credit crisis began to accelerate over the summer. have moved their SIV's assets onto their balance sheets or promised to provide funding if investors stopped buying their debt. Standard Chartered initially made a similar promise to provide liquidity to the fund. See archived story. But that deal collapsed earlier February when the fund's assets fell further, requiring that receivers be called in. Standard Chartered said at the time that it didn't expect the appointment of receivers, or any future arrangements for the fund, to have a material impact on its profit for 2008. trying to remember the words of Baruch who said he became wealthy by buying too late and selling too early.