State Street Double Whammy

--The Boston Globe reported that the State Street Limited Duration bond Fund lost about 37 percent of its value during the first three weeks of August. --These conduits – packages of retail and commercial loans financed by short-term debt raised in the commercial paper market – have become of increasing concern to investors amid fears that banks will have to fund the debt from their own balance sheets if these vehicles are unable to sell on their maturing paper. --Times of London woke everyone up early this morning with a report that State Street has $22 billion of exposure to asset-backed commercial paper conduits --STT is just liquidity and credit enhancement providers to these conduits, but it takes the risk when underlying asset performance deteriorates or as conduits draw upon the backup facilities from us. http://www.securitization.net/pdf/bankone_abcp_Jan04.pdf