The rabbit character from Alice in Wonderland poses next to a mural artwork at entrepreneur Marc Ecko's anti-sundance party, with a Mad Hatter Tea Party theme, during the 2008 Sundance Film Festival in Park City, Utah January 20, 2008. The 20-feet mural depicts paparazzi with actual cameras built into the art. REUTERS/Fred Prouser (UNITED STATES)Seen with a post-bubble eye, securitisation is a bit of a looking glass world. Lewis Carroll would probably have appreciated “synthetic” obligations not built on real assets, near-meaningless credit ratings, and legal documents that fail to do what they are designed for.

So spare a thought for holders of asset-backed bonds who have had to take a trip down the rabbit hole.

Some of the worst-affected bonds are commercial-mortgage backed securities (CMBS), which in Europe have suffered largely because of the plunging value of the property used as security for the debt.

The fate of these bonds is now increasingly in the hands of a small group of secretive administrators, known as “special servicers”, as I wrote earlier.

In the wonderland envisaged by the creators of these deals, the special servicer’s job would amount to little more than a few tweaks here and there. But in reality, the special servicer is confronted by situations with few rules, no precedents and contradictory documents, as well as ranks of competing creditors spread out across multiple tranches. The diagrams explaining the financial structures are works of mind-bending complexity.