Remember last summer, when everybody got very excited about SIVs? (SIV, if you don’t recall, stands for "borrow short, lend long, move everything off-balance-sheet, and pray liquidity doesn’t dry up".) There was a lot of smoke and noise, and eventually the banks took the assets onto their balance sheets, ate large write-downs, and moved on. Today, the SIV is a thing of the past… um, hang on. According to Paul Davies and Gillian Tett, there’s still $5 trillion in "off-balance sheet vehicles" waiting to be brought back onto banks’ balance sheets. Is this all SIVs? They don’t say. But that’s a ridiculous amount of money.
Meanwhile, it seems Treasury is interested in resuscitating its old "super-SIV" idea in an attempt to unblock the student-loan-backed auction-rate-security market. Please let us not be headed for the Second Summer of SIV. The first was bad enough, the second would surely be worse.