Things That Go Bump in the Night

Discussion in 'Wall St. News' started by PAPA ROACH, Dec 17, 2007.

  1. You need to read this article.

    http://www.frontlinethoughts.com/pdf/mwo121407.pdf

    here is a snippet-

    "And since GE Asset Management had closed a similar fund a few weeks ago at
    $.94, B of A decided to follow the precedent. Sort of. The large investors in the $21
    billion pool will not actually get the 99.4 cents the smaller investors will get. They are
    actually going to be given their share of the actual assets of the funds, called a
    “distribution in kind.” So some state pension fund is going to be given a collection of SIV
    commercial paper and who knows what else and wished best of luck in getting your
    money. If I was an investor, I would not be very happy. Exactly what trading desk at a
    pension fund is going to sell those assets? And to whom and for what price? Isn’t that the
    reason you gave the money to B of A in the first place? To let them do the management?
    Giving investors their assets back “in kind” is a huge black eye for B of A. Why
    would they do it? My guess is that there is simply no way to value or cash out some of
    the portfolio, as clearly much of the portfolio is illiquid in the short term, and would have
    to be sold at a loss if they had to go to the market in size."