Citi swallows the SIVs

Citigroup’s new CEO  announced today they will put their toxic waste SIVs back on the books. While this was hyped as a “rescue”, it was nothing of the sort. The SIVs had been downgraded and would have had to be sold or liquidated had the CEO not done so.

What was different was the reaction of the market. Had this happened a month ago, traders would had popped the champagne corks and driven Citi sharply upwards in a bout euphoria, because all the bad news must be out by now, right? Well, no. But that hasn’t stopped the market from acting manic.

Until now that it. The mania is most definitely wearing off. The party is over.