Managers throw up their hands, mark to model and
smooth out returns; are they all attempts to avoid the
By Julie Dalla-Costa
When JPMorgan Chase, Citigroup and Bank of
America last month announced a plan to bail out the structured
investment vehicles that are at the core of the credit freeze,
one might have expected the markets to take heart. After all,
the $400 billion in SIV assets are possibly the biggest weight
on the credit markets. If the banks weren't forced to sell
these assets into the secondary market or write them down
substantially, could life return to normal?
But almost as soon as the plan was leaked, the limits of
this latest bit of financial engineering became obvious. "As
several leading hedge funds have halted investor transactions
because assets of this type cannot be valued by anyone, how can
these SIVs fairly transfer assets to this new...