Reading — Funding the Entity

Reading Robin Sidel writes of the ongoing plan to finance “The Entity,” the super-SIV that will rescue bank balance sheets from bad positions, cure cancer, and accurately determine which is butter and “I Can’t Believe It’s Not Butter” in a blind taste test. “If the rescue plan failed and buyers continued to stay away from the commercial-paper market, the bank might feel pressure to pony up cash to backstop the SIVs to preserve its reputation with the vehicles’ investors, who would otherwise incur the bulk of the losses,” she writes. “But that prospect has raised the issue among accounting professionals about whether the bank shares in potential losses to such an extent that it should consolidate the SIVs onto its own books.”

Geoff Colvin of Fortune says investors need to change their thinking when it comes to oil. “The bigger picture shows that the relation between oil and the economy is changing, and we’ll have to rewire our brains to understand what’s happening,” he writes. “Watching oil prices rise and fall is no longer enough; the key now is understanding why they’re moving.”

Joe Mysak of Bloomberg takes a look at the gang of investors with torches headed for the door of the ratings agencies. “Why couldn’t they foresee the housing collapse and the subprime mortgage mess? Why did they keep top ratings on securities made up of collections of mortgages for so long? One week the things were AAA, and the next they weren’t,” he writes. “It’s all their fault. If they had taken a harder line with the bankers who were putting together things such as collateralized debt obligations and structured investment vehicles, none of this would have happened! Or so goes the current thinking.”