Post-Enron, Structured Finance Addiction Hasn't Ebbed
TheStreet.com 07/29/04
By Matthew Goldstein

It's perfectly reasonable for companies to assess the state of their balance sheets when they begin preparing their earnings reports, this camp says. The last month is a natural time for a credit card lender or manufacturer to package together loans or accounts receivable into a bond that can be sold to investors and recorded as a gain on the company's income statement.

"Managing your balance sheet at quarter-end seems reasonable," says Janet Tavakoli, a structured finance consultant. A company has "accumulated assets and wants to take a gain and get them off balance sheet. It makes sense to do it later in the quarter, because that's when you've accumulated the most assets."

Whether or not the volume of these deals and their timing indicate anything nefarious, Enron's legacy might be about to catch up with the structured finance market.


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Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008).

Janet Tavakoli's book on the global financial meltdown is Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (Wiley 2009).

Clients of Tavakoli Structured Finance have the benefit of proprietary consultation, which is not available in any other paid or public forum. Clients also commission proprietary research and analysis.

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