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SIV Back on Balance Sheets



April 05, 2008 – Comments (4)

I have the best sources... 

Market Ticker has a post that SIV are supposed to go back onto balance sheets for 2009.

It appears that the FASB has removed the concept of QSPEs, which is the enabling "piece" to make off-balance-sheet securitizations possible, from the FASB set of regulations, specifically, FAS 140.

This appears to have happened TODAY.

As such it appears that all financial institutions will have to reclaim all SIVs back onto their balance sheets no later than the start of 2009.

This is a watershed event, in that these vehicles, when they are reclaimed onto bank balance sheets, is likely to lead to the P/Es of these firms skyrocketing north, and consequently, a far more realistic view of both share price AND capitalization.

So, how many years late is this?  About 10? 

I wrote "The Glory of Ignorance" last December.  Hmmm, looking back, in just 3-4 months here I now know that Canadian pensions are likely in for a $10 billion hit from the ABCP.

4 Comments – Post Your Own

#1) On April 05, 2008 at 8:00 AM, FleaBagger (27.52) wrote:

Ha ha, dwot. SIV's are investments. SUV's are vehicles! Need a proofreader?

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#2) On April 05, 2008 at 8:33 AM, dwot (29.11) wrote:


Maybe I do because I don't see SUV anywhere, just SIV, (structured investment vehicle).

I sure wish the blockquote tag worked properly on fool.  The enlarged type is taken from Market Ticker. 


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#3) On April 05, 2008 at 2:41 PM, Tastylunch (28.65) wrote:

oh joy,let's extend the misery into 2010 shall we?

You know this blog entry is probably going to be a big "i told you so" that you can reference in a year from now. 

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#4) On April 05, 2008 at 5:42 PM, dwot (29.11) wrote:

Tastylunch, you mean like:

Panic first

I'm a Banking Bear

Why aren't you saving?

I predict 




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