August 29, 2007 (LPAC)--Despite the spin, the collapse just will not go away. The latest victim is the London-based hedge fund Cheyne Finance PLC, which may be force to liquidate $6 billion in assets that are backing a commercial paper program, according to Standard & Poor's.

The owner of the fund, Cheyne Capital LLC, with as much as $20 billion in assets, already reported a loss of $92 million for the year ended March 31. Under current conditions Cheyne is expected to have problems rolling it over, according to Bloomberg Finanical News. Cheyne's portfolio is primarily invested in real-estate securitizations, and could begin liquidating assets August 30.

Meanwhile the continuing decline in share price of the British global bank Barclays, which has lost 20% since July 24, has endangered its bid for ABN-Amro, the Netherlands-based banking giant which is a leading mortgage servicing company in the United States.

Barclay's continues to claim that its exposure to so-called SIV lites (structure investment vehicles) is minimal but the "market" obviously does not believe them and their stock price continued heading south. Meanwhile it continues to be in restructuring talks with three SIV lites that Barclays' BarCap help set up. This includes Cairn High Grade Funding I, Mainsail II, and Golden Key.

The London Independent reports speculation that BarCaps' Edward Cahill, who set up all the SIV lites, and who resigned last week, might be the next Nick Leeson, the man who bankrupted Berings Bank, and has not been seen since.

On the other side of the Atlantic, the Bank of Montreal posted lower earnings while issuing a warning that it will have trouble reaching its annual financial targets. Commodity trading losses have reached $829 million, before taxes, most due to natural gas trading involving a brokerage firm, Optionable Inc. Both Bank of Montreal and Optionable are facing scrutiny from regulators and law enforcement officials.