Prodded by Treasury Secretary, major banks along with PIMCO and Fidelity are planning to raise 80-100 billion for a Save-The-SIV superfund. SIV’s (Structured Investment Vehicles) are yet another of the exotic, highly leveraged Wall Street “investments” that have gone seriously south these past few months.
This budding crisis appears to have the powers-that-be seriously worried, hence the calling in of the Big Dogs to create a bailout fund. Could the Big Dogs make big bucks buying SIVs on the cheap? Maybe. More to the point, if the superfund buys SIVs, the investment banks won’t have to sell theirs at fire sale prices. Even if they in effect would be selling them to themselves via the superfund. Confused? Ya. I bet they are too. And desperately trying to buy time.