SMLEC

That isn't one of the easier acronyms to pronounce. Usually the financial geniuses come up with better names that roll off the tongue like REMIC, Iboxx, or ToPrs, the more complex the structure, the easier it is to pronounce. For example, the raison d'etre for SMLEC (or M-LEC if you read the Wall Street Journal) is to create a orderly (aka not free-falling, not unpriced) market for SIVs and SIVs-lite, which, as can be surmised, is easy to pronounce, yet all the kings horses and all the quants on Wall Street can't get a handle on their value. My thinking is that this came up so suddenly, that the marketing teams didn't have time to produce something catchier.

Just so no one trips over themselves, SIV stands for Structured Investment Vehicle and SMLEC means Single-Master Liquidity Enhancement Conduit. Personally, my choice would be BOSTONS-Buyer Of SIVs That Others Nevertheless Spurned. It is a little more accurate and definitely more descriptive. On the face of it, if this "buyer of last resort" helps liquidity in the front end of the market, it will be a success. The Wall Street Journal seemed to be somewhat in a snit that the Treasury was involved in this in some way. As long as they aren't putting up tax money to finance it, this is the kind of action they should be doing to get markets moving.

The other concern is that is just another way for the big banks to keep this stuff off balance sheet. This maybe true, but these items are already off balance sheet. I seriously doubt that J.P Morgan and B of A are going to create a fund for the sole purpose of bailing out Citi, the most heavily involved bank. It must kept in mind that this is a work in process. It also must be remembered that this isn't the RTC, the entity set up to restructure S & L's and their assets/liabilities. The very existence of this fund maybe enough to stabilize this market, without much of the fund being used. The should help the cream rise to the top, leaving SMLEC to unwind the rest, at a tidy profit for its investors.