November 26, 2007

HSBC, in desperate (and obvious) attempt to prevent a $45 billion SIV mortgage cancer firesale, moves the sludge to their balance sheet today

Ah, as the SIV turns...

It's fun to watch these investment banks and their ENRON-like off-balance-sheet shell games. These banks simply got caught holding the bag when the Housing Ponzi Scheme collapsed, and now they're trying to sweep the carnage under the rug. Good luck with that.

First you had Hank Paulson's hilarious "super-SIV", and now you have HSBC doing their own thing today.

It's all a bit complicated, but all you have to know is that the value of this paper has crashed, the banks don't want to "mark to market" or sell on the open market (or else they may simply fail), so they're doing ANYTHING they can to prevent this cancer from being valued. ANYTHING they can.

Of course, in the end, this sludge will have to have values assigned. These are public companies after all. Ones that have auditors I'd imagine. Right?

Even ENRON was able to hide the salami for awhile. But we all know how that turned out... Note I'm now short HSBC via March '08 puts.

HSBC backs SIVs with $35 billion to prevent fire sale

HSBC Holdings Plc, Europe's biggest bank, has stepped in to support its two structured investment vehicles -- Cullinan and Asscher -- with funding of up to $35 billion to prevent forced sales of assets.

HSBC one of the biggest players in the structured investment vehicle (SIV) market, will consolidate $45 billion of assets and related funding from Cullinan and Asscher onto its $2.1 trillion balance sheet and set up new debt-issuing vehicles, it said on Monday.

Their woes have led to fears of fire sales of many billions of dollars worth of securities, further hitting prices and sentiment.

39 comments:

Anonymous said...

Remember

Warren Buffett:

"There's never just one cockroach in the kitchen"

Anonymous said...

What's that smell?

Anonymous said...

Serves them right. These idiotic greedy bankers were a huge part of the problem.

Batman said...

"It's beginning to look a lot like Christmas..."

I'm buying coal miner shares. There just won't be enough of the black stuff to go around to fill the stockings this year.

Still long on collection agency shares. Looking for a way to invest in shopping carts, cardboard boxes and used urine soaked trenchcoats - those babies are gonna be in short supply soon too.

Anonymous said...

WALL STREET GRIFTERS

Mighty Mouse Mortgage Company said...

This is funny if not totally unrelated to the crisis at hand. At least it's good for a belly laugh.

Sung to the tune of Feist's "1 2 3 4 "


1 2 3 4 went down to the apple store
bought myself an iPod that I paid 400 dollars for.

And just after my purchase was done,
those apple bastards in-tro-duced a
new one.

Oh oh oh, they keep changin the iPod
Oh oh oh, I keep blowin my wad.

http://www.youtube.com/watch?v=-rmF69shDcY

Anonymous said...

Have you noticed a difference in the CNBC people today? It seems like the bad news is starting to get to them.

Anonymous said...

My SIV doesn't work...My SIV doesn't work!!

Of course....it is a leaky SIV.

-dcandout

Anonymous said...

>> Sung to the tune of Feist's "1 2 3 4"

What's a Feist?

ApleAnee said...
This comment has been removed by the author.
Anonymous said...

For as much as everyone hates Cheney, it seems like he is the only fair government official we have. Old the ultra lib dems want free money for homedebtors and banks where as cheney says this.

"The fact is, the markets work, and they are working," said Cheney in an interview in his White House office. "And people - some of the big companies obviously - have taken risks. Risk means risk. And there's an upside as well as a downside in some of the choices they've made. We have to be careful not to have this set of developments lead us to significantly expand the role of government in ways that may do damage long-term for the economy."

Bob (ps. dont believe the liberal spin machine that cheney is the devil)

Anonymous said...

*Just* covered my puts on KBH and CFC. Just realized a $13,500 gain. NICE!

brokersleaveyoubroke said...

It must piss off Paulson to no end when Greenspan says his "Super SIV" plan is a bad idea. Nobody in Washington has the balls to say anything bad about Greenspan so Hank has to just grin and bear it. Time to make some more popcorn.

Anonymous said...

Have you noticed a difference in the CNBC people today? It seems like the bad news is starting to get to them.

That's impossible because theyre robots.

Anonymous said...

Lee wrote:

The Bears are having their day, err - Year.

Short the usual suspects.

At least HSBC admitted that they will have to book that 45b sometime.

The banks in North America haven't even gotten that far to honestly admit where this is headed.

bfh

Nick said...

The American government should act quickly and do the following: 1. Lower interest rates to 0. 2. Print more money. 3. Use that money to bail out banks and mortgage borrowers.

All of this will work out because the U.S.A. is the epicenter of the financial world. Do you really believe that the Chinese, Europeans, Saudis, etc... want America to fail? If we fail then they all fail. If we suffer, they will suffer even more. Thus they will go along with the game plan.

Anonymous said...

Nick- were you in Bachelor Party? Because you sure are a dick- bail out the banks and mortgage borrowers?! FU

I'm not a doctor but I play one on TV said...

man cut off own arm to escape fire

http://tinyurl.com/227qgg

In this case though it wan't an ARM but a real arm.

Feeling sorry for people who can't cut off the arm that signed the ARM.

It was just a stupid mistake they made, just like this guy.

Anonymous said...

What's a Feist?

An overrated band for a stupid teen audience. Call it a fad.

Anonymous said...

For as much as everyone hates Cheney, it seems like he is the only fair government official we have.

Bwahahahahaha....Funniest thing I've heard today. Oh boy, your brain should be discarded as toxic waste.

Edgar said...

The California con-men and con-women will never suffer as much as they should. Hell is too good for them.

Budvar said...

I bank with HSBC, should I be worried?
I've thought for a long time that HSBC were ripe for some STHTF, with all the islamic mortgage and sub-prime crap.

I've been thinking of changing banks for a while now, but to which one? They all have some exposure to this kind of crap to a greater or lesser extent.

Dariusz said...

Keith,
more,
more,
more,
we wont more,
all the best,
Dariusz

Anonymous said...

.
.
.
"hide the salami"
.
. ... they are trying to hide a anaconda!

Malcolm said...

FYI:

For those who say that the problem is isolated to the housing industry, I would remind you that 2+2 is still equal to 4.

Housing Collapse + Uncle Ben = Currency Trashed
Currency Trashed = this…

http://biz.yahoo.com/ap/071126/novagold_and_teck_cominco_metals_project.html?.v=1

Due to the weak $, this company can’t build their new mine. Because of this, the stock dropped 50%

http://finance.yahoo.com/q?s=NG

Anonymous said...

Feist is not a band, she's a person. Nor is she for a teen audience; she writes highly sophisticated, cleverly arranged, melodically creative songs.

She is also a member of Broken Social Scene, an experimental Toronto band.

Anonymous said...

HSBC is the worlds leading drug bank.

Anonymous said...

Anonymous said...
*Just* covered my puts on KBH and CFC. Just realized a $13,500 gain. NICE!

November 26, 2007 9:09 PM

You are like the guy on the Titanic who refused to get on the first life boats because you were winning the poker game."Just one more hand"!

This is a systemic collapse. Winning, losing dont mean a thing. The whole system is gone.

Anonymous said...

But ipods are still selling!!!!11

Anonymous said...

Go to Veribanc for alternative banks. This is financial musical chairs, a few banks are going to pay (meaning fall) and it's hard to say who right now. Get out of HSBC...I deposit with Citi and move my $ quickly to other banks....I feel at risk too. The only thing I can add is that many of us on this blog are investors/savers - hey this could screw us all. I have to say bank bailouts aren't necessarily bad - I am thinking selfishly - I got lots of cash in various places - brokerages and banks and god help me if I get screwed for being savvy! It could infect many of us in unexpected ways.

I personally don't want neighborhoods full of squatters, homeless families and my bank running to the FDIC. And fuck - what about my 401k? If there is a cash out- where does that leave me (us on this blog?)

Princess Mononoke said...

Anonymous said...
>>If there is a cash out- where does that leave me (us on this blog?)
November 27, 2007 4:54 AM

That HPer is the $1 trizillion dollar question...

Since we are all aware of the situation, thank goodness. We need to start thinking how to secure our home's (ie; get together with neighbors and start neighborhood watch 1 blk or 2 blks, include local police in meetings, safeguard home, etc.), stash cash, move investments to safer ground that will withstand the coming onslaught).

That's all I can think of right now. Does anyone have any other ideas???

Princess Mononoke said...

Anonymous said...
>>We have to be careful not to have this set of developments lead us to significantly expand the role of government in ways that may do damage long-term for the economy."
November 26, 2007 9:04 PM

Bob, I'm not a liberal. But you need to read this paragraph again very carefully. Since when does Cheney or Bush care about "the long-term damage for the economy?" I'm not condoning bailing out the rampant organized crime at all levels. Nevertheless, if you seriously look at their record for the past seven years objectively you will discover that this Administration has been the BEST role model these crooks could have ever had...

Corruption begets more corruption.

Anonymous said...

Princess Mononoke, excellent comment. I would differ on one point. I believe Clinton was the best role model for the corrupt organizations. Bush and Cheney might be second, but they are definitely behind clinton as far as corruption goes. Enron, etc.
My whole point, was that with all the dems asking for bailouts, he is not for a bailout. This aligns with the HPers motto. So, basically, cheney (at least publicly) agrees with us.
Bob

westwest888 said...

apleanee said..."Than again maybe she found her dollars couldn't touch those Dubai Gucci Bags."

They have a dollar peg, you moron.

Anonymous said...

SIV's is just a place where these banks hid all their "toxic paper'.

If that paper goes "on balance sheet" they are doomed anyway.

Anonymous said...

Princess Mononoke, excellent comment. I would differ on one point. I believe Clinton was the best role model for the corrupt organizations. Bush and Cheney might be second, but they are definitely behind clinton as far as corruption goes. Enron, etc.
My whole point, was that with all the dems asking for bailouts, he is not for a bailout. This aligns with the HPers motto. So, basically, cheney (at least publicly) agrees with us.
Bob

November 27, 2007 12:44 PM

What did Bill Clinton have to do with Enron? In 2001 when California was begging the Bush admin for some help VP Cheney told them to go f@ck themself.

ApleAnee said...
This comment has been removed by the author.
ApleAnee said...

Just a little price comparison for inquiring minds for the same room in Dubai vs. Manhattan:

Dubai

490.87 USD TWIN HILTON EXECUTIVE ROOM - FLEXIBLE RATE
518.14 USD KING HILTON EXECUTIVE PLUS - FLEXIBLE RATE
518.14 USD TWIN HILTON EXECUTIVE PLUS - FLEXIBLE RATE
668.13 USD KING EXECUTIVE SUITE - FLEXIBLE RATE

Manhattan:

1 KING BED 379.00 USD

2 DOUBLE BEDS 409.00 USD

1 KING BED DELUXE ROOM 429.00 USD

2 DOUBLE BEDS DELUXE ROOM
459.00 USD

Everything in Dubai is expensive peg or no. My daughter works for Hilton and went to Dubai 2 years ago for a marketing trip.

Perhaps you should stick with real estate.

Anonymous said...

Rock & Roll rulz forever!

Highly sophisticated, cleverly arranged, melodically creative songs....with and edge....are most entertaining that actually take talent and are quite difficult and challanging to write an compose.

A happy and tune worthy soundtrack to housing panic.