Super SIV hasn't begun buying up SIV assets yet

As of late-November, the superfund [Henry] Paulson helped conceive had not yet begun buying up SIV assets, though bankers working on M-LEC [master liquidity enhancement conduit] at Bank of America's New York offices had settled on a structure for the superfund, according to a person familiar with the talks. Meanwhile, the SIVs were losing value.

There are 30 SIVs that held securities worth $400 billion when the mortgage meltdown began in July, according to Moody's Investors Service. Their net asset value fell more than 30 percent from July to mid-November. As of the first week of November, SIVs had been forced to sell at least $75 billion of assets as investors retreated from all but the safest bets.

~ Bloomberg.com, "Paulson Finds Bush's Treasury No Career Enhancer Like Goldman," November 21, 2007, by Rich Miller, Matthew Benjamin and Kevin Carmichael

Henry Paulson seeking advice from Wall Street's elite

When the markets began to shudder in July, Paulson used the address book he had built up during 32 years at Goldman Sachs to seek information and advice from Wall Street's elite. Among those he called, people familiar with his handling of the crisis say, were former Treasury Secretary and Goldman alumnus Robert Rubin, now chairman of Citigroup, and Jamie Dimon, CEO of JPMorgan Chase.

He was on the phone daily through August and into September with Fed Chairman Ben S. Bernanke and was also in frequent touch with New York Fed President Timothy Geithner, the central bank's eyes and ears on Wall Street.

In mid-September, Paulson and his team summoned bankers to the Treasury building adjacent to the White House. The result was M-LEC [master liquidity enhancement conduit].

The idea -- and Treasury's involvement -- has been controversial from the get-go. Soon after the plan's announcement, former Fed Chairman Alan Greenspan and billionaire investor Warren Buffett questioned its practicality, saying investors would not be fooled by a shuffling around of unpalatable assets.

~ Bloomberg.com, "Paulson Finds Bush's Treasury No Career Enhancer Like Goldman," November 21, 2007, by Rich Miller, Matthew Benjamin and Kevin Carmichael

Henry Paulson on the Super SIV

This is something that is not a savior. Anything at the margin that will speed up liquidity is worth trying.

~ Henry Paulson, Treasury Secretary, "Banks Said to Agree on Credit Backup Fund," New York Times, November 2, 2007

(Paulson expects the fund to begin operating by the end of the year.)

Citi: "SIV accounting is proper"

Citi is confident that its SIV accounting is proper and in thorough accordance with all applicable rules and regulations.

~ Christina Pretto, a bank spokeswoman, Citigroup, "Citigroup CEO Plans to ResignAs Losses Grow," The Wall Street Journal, November 3, 2007, by Robin Sidel, Monica Langley and Gregory Zuckerman