Does this sound odd to you? HSBC never mentioned anything about HSBC structured investment vehicles, or SIVs. However, in a report found here on Household – HSBC Watch on Thursday, November 8th, 2007 at 10:00 am, Moodys said that it would look at two of HSBC’s SIV’s (and three belonging to Citigroup.) By Monday, November 26th, HSBC said it would pump $35 billion into the HSBC SIVs. Later in the day Bloomberg revised that amount upward to $45 billion. The amount was required to avoid a firesale on assets.
Without Moodys, what would have been done? Who knew about the problems before that? What will happen at Citigroup? Everyone generally agrees that investor confidence has been shaken, but followup reports like this one really show you why. If credit card holders begin to default will credit card receivables and asset backed securities suffer, or will that matter be hidden from the public and shareholders until it explodes like the subprime disaster? Answer will be forthcoming.