December 5, 2007 (LPAC)--Chip Mason, the CEO of Legg Mason investment firm, one of the world's largest money manager firms, told the December 5 Financial Times that the US Treasury should invest $20 billion into U.S. Treasury Secretary Hank Paulson's deadly scheme, which is called the Master Liquidity Enhancement Conduit, or 'super-conduit.' The task of the M-LEC would be to attempt to bail out the roughly $320 billion-in-assets Structured Investment Vehicles (SIVs), which were set up by the banks and are now collapsing. The way the SIVs work is that they borrow cheap short-term funds, and invest the monies into longer-term instruments that pay a higher rate of return. In imitation of the criminal Enron's practices, the banks hold the SIV vehicles 'off-balance sheet.'

LPAC has long stated that the M-LEC, which Paulson originally conceived as requiring $75 to $80 billion to be provided entirely by the banks themselves, would not rely only on any money that might be provided by banks, but would ultimately request funds from the U.S. government, as part of a hyper-inflationary bail-out. Now, after three months during which the M-LEC scheme has been dead-on-arrival, Mason has publicly called for the U.S. Treasury to invest $20 billion into this insane scheme.

Legg Mason CEO Chip Mason, whose company manages more than $1 trillion in funds, told the Financial Times that the credit market crisis is the worst he has seen in 47 years. "It is a very unusual situation. I have not seen anything like this, where nothing is traded."

To get more of a clinical look at the insanity of these SIV’s, be sure to check out the Leading Bankers Explaining SIV's (Structured Investment Vehicles).