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To me, CDOs and SIVs are banks. They may not look like a bank but they sure smell like one.

Indeed.

And what I really, really don't understand is how banks managed to keep off their balance sheets contingent lines like many of the SIVs and conduits seemed to have (ie, the banks had no legal choice but to refinance, if all else failed and the conduit chose to exercise it) - and for pretty damn huge amounts. A contingent commitment is still a commitment. How on earth did these disappear?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Dec 17th, 2007 at 10:39:17 AM EST
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