UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-Q

             QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANY

                  Investment Company Act file number 811-21129
                                                     ---------

   Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
--------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

                      301 E. Colorado Boulevard, Suite 720
                               Pasadena, CA 91101
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)

                               Donald F. Crumrine
                        Flaherty & Crumrine Incorporated
                      301 E. Colorado Boulevard, Suite 720
                               Pasadena, CA 91101
--------------------------------------------------------------------------------
                     (Name and address of agent for service)

        Registrant's telephone number, including area code: 626-795-7300
                                                            ------------

                      Date of fiscal year end: November 30
                                               -----------

                   Date of reporting period: February 29, 2008
                                             -----------------

Form N-Q is to be used by  management  investment  companies,  other  than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters,  pursuant to rule 30b1-5 under
the Investment  Company Act of 1940 (17 CFR 270.30b1-5).  The Commission may use
the  information  provided  on Form N-Q in its  regulatory,  disclosure  review,
inspection, and policymaking roles.

A registrant is required to disclose the information  specified by Form N-Q, and
the Commission will make this  information  public. A registrant is not required
to respond to the  collection  of  information  contained in Form N-Q unless the
Form displays a currently  valid Office of Management and Budget ("OMB") control
number.  Please  direct  comments  concerning  the  accuracy of the  information
collection  burden  estimate and any  suggestions for reducing the burden to the
Secretary,  Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549.  The OMB has reviewed this collection of information  under the clearance
requirements of 44 U.S.C. ss. 3507.





ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.


FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND

To the  Shareholders of the Flaherty &  Crumrine/Claymore  Preferred  Securities
Income Fund:

      The Fund's  performance  during the first  fiscal  quarter of 2008,  which
ended on February 29th, is summarized below:

            Total Return on Net Asset Value 1:       - 1.3%
            Total Return on Market Value 2:          - 2.1%

      While  these  returns  were not  impressive  on an  absolute  basis,  they
actually  were quite good given the turbulent  securities  markets we saw during
the quarter.  We believe the Fund's  portfolio of investments  remains sound and
will continue to provide common stock shareholders with high current income.

      Conditions  in the  financial  markets  remain  difficult  as  many of the
adverse  trends that surfaced in the second half of 2007 have  persisted  during
the first few months of 2008.  The  dramatic  downturn in the housing  market is
clearly at the root of our current economic problems. The housing bubble, fueled
by lenders willing to fund anyone who could fog a mirror,  is correcting  itself
at a jarring  pace.  In  addition,  the impact has been  magnified  because  the
alchemists of Wall Street,  with an assist from the rating agencies,  took these
leaden mortgages and turned them not into gold, but rather into an alphabet soup
of mortgage-backed securities, some of which turned out to be toxic waste.

      The Fund never invested in these structured mortgage products,  but we did
underestimate  the impact they would have on many of the companies we own. Since
the beginning of the credit crisis last year,  financial  companies have written
off more than $200  billion  of bad  loans and  investments,  and they have lost
about 27.4% 3 of their equity  market value.  While common  equity  holders will
ultimately  bear the brunt of these  losses,  the  preferred  securities of many
financial  companies  have fallen sharply in market price.  Financial  companies
comprise  more  than 75% of the  preferred  security  universe,  and,  given the
mandate of the Fund,  the  portfolio  will  always own a lot of these  financial
issues.

      As of February  29th,  61.3% of the  portfolio  was  invested in preferred
securities of the financial sector.  Commercial banks comprised 33% of the total
portfolio,  along with 9% in finance companies  (including  investment banks and
brokers),  19% in insurance  companies and 0.3% in the housing  agencies Freddie
Mac and Fannie Mae. The  remainder of the portfolio is mostly  utilities,  other
energy companies, and cash.

      Another  topic in the news  recently is the  collapse of the auction  rate
preferred  market.  A wide range of entities  have issued this type of security,
and for years it was an effective  way to borrow money.  Last fall,  the auction
process began to break down. In February the auction market  suddenly  collapsed
and the long-term viability of the product became in doubt.

      Many  closed-end  funds have issued  auction rate  preferred as a means to
enhance income for the common shareholders. Historically, rates PAID by the Fund
(on the  preferred  stock)  have  been  well  below  what the Fund  EARNS on its
investments.

----------

1     Based on monthly data provided by Lipper Inc. in each calendar month
      during the quarter. Distributions are assumed to be reinvested at NAV in
      accordance with Lipper's practice, which may differ from other methodology
      used elsewhere in this report.
2     Based on Bloomberg data; distributions are assumed to be reinvested at
      market price.
3     The return on the Standard and Poor's 500 Financial index for the period
      6/30/07 through 2/29/08, price change only.



      As you know,  FFC  employs  leverage  and  therefore  has two  classes  of
shareholders--common stock and auction market preferred stock. Both share in the
income generated by the investment portfolio, but in a different way. The amount
paid to holders of the preferred  stock is determined  periodically  via a Dutch
auction  process.  These  auctions  are  designed to  determine a rate that will
"clear" the market, i.e., attract enough buyers to absorb any shares being sold.
There is,  however,  a maximum rate at each auction  based on a formula.  If the
maximum rate is not sufficient to attract enough buyers,  the auction is said to
"fail" and holders wishing to sell cannot.  The  terminology is  unfortunate:  a
"failed"  auction means  sellers  can't sell,  but it has nothing to do with the
Fund's ability to distribute income.

      The dividend paid to common stock  shareholders  is simply the income left
over after paying  preferred  stock  dividends  and other  expenses of the Fund.
Thus,  the higher the rates paid by the Fund on its  preferred  stock,  the less
income available for common shareholders.  Under current market conditions, even
with  preferred  stock  dividends  being at the current  maximum rate, THE YIELD
EARNED ON THE PORTFOLIO REMAINS WELL ABOVE THE COST OF LEVERAGE.

      The  breakdown  of the  auction  market  is a symptom  of a larger  malady
affecting  financial  markets--illiquidity.  Just as banks and other traditional
lenders have  dramatically cut back on making certain types of loans,  investors
have become much less willing to part with cash.  Since July 2007,  additions to
money market funds (a substitute for cash) have increased by nearly one trillion
dollars.

      And while many are hoarding cash, others are scrambling to raise it. It is
clear that as a nation we had  purchased  too many things with  borrowed  money.
This was obviously the case in the housing  market,  and now many homeowners are
being forced to sell. In the  securities  markets,  it has become  apparent that
many hedge funds and other  investment firms were operating  without  sufficient
capital and are also being forced to sell assets.  There is ample  evidence that
in aggregate,  hedge funds have been shrinking their investment portfolios,  and
we have observed several of our trading partners at brokerage firms aggressively
trying to reduce their trading positions.

      Another  source of selling  pressure has come from a steady  supply of new
issues,  as companies  have sought to shore up their balance sheets after taking
big write  downs.  It wasn't  long ago that the  decision  to issue new  equity,
whether common or preferred,  was based on strategic or  opportunistic  factors.
Now, many  companies are being forced to issue to rebuild  capital for defensive
reasons,  and they are paying rates that are  historically  high (in relation to
risk-free U.S. Treasury securities).

      Every  financial  bubble  eventually  bursts  and  asset  prices  fall  to
sustainable  levels.  Tulips and dot-com  companies are one thing,  but the U.S.
housing market is a whole different ballgame in terms of its economic impact. In
order for the U.S.  economy to avoid a deep and lasting  recession,  the housing
sector will need to  stabilize.  For this to happen,  the glut of homes for sale
must  shrink.  This in turn will likely  require  some relief for  over-extended
borrowers and a return to more normal mortgage markets. For that to happen, home
prices  will need to fall to a  "clearing"  level that  certainly  is lower than
today's prices. However, lower home prices, while necessary, may amplify current
economic weakness.  Needless to say, the path to economic recovery will be bumpy
and hard to navigate.

      We are cautiously  optimistic  that the  extraordinary  steps taken by the
Federal Reserve Bank will be effective in avoiding a severe  economic  downturn.
The Fed's objective is to make certain that capital markets in general,  and the
banking system in particular,  are functioning  properly and providing  adequate
liquidity  to  businesses  and  individuals.  The  financial  system is far more
complex  today  than  just a few  years  ago,  making  the  Fed's  job much more
difficult.  We encourage you to read our Quarterly Economic Update on the Fund's
website for a more  detailed  discussion  of current  conditions  in the housing
sector and our thoughts on the economy in general.


                                        2



      Our job remains the same--research each and every credit in the portfolio,
and try to construct the best portfolio of securities  that will enable the Fund
to meet its  objectives.  While market  sentiment is certainly  depressed at the
moment,  we see tremendous  long-term  value in preferred  securities at today's
prices.

      During  periods of unusual  market  volatility,  these  letters  provide a
welcome  opportunity to step back and discuss a wide variety of items  affecting
your Fund.  Some of these deserve more  attention than space here allows and are
covered  in greater  depth on the Fund's  website.  Other  situations,  like the
status of our auction preferred stock, are rapidly  changing,  and we'll post to
the website as much up-to-date information as possible.

      We may  never  know  the  origins  of the  old  curse  "may  you  live  in
interesting times," but whoever coined it certainly got his wish.

           Sincerely,

           /s/ Donald F. Crumrine            /s/ Robert M. Ettinger

           Donald F. Crumrine                Robert M. Ettinger
           Chairman of the Board             President

April 9, 2008


                                        3



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OVERVIEW
FEBRUARY 29, 2008 (UNAUDITED)
--------------------------------------------------------------------------

FUND STATISTICS ON 02/29/08
--------------------------------------------------------------------------------
Net Asset Value                                                   $       18.62
Market Price                                                      $       16.42
Discount                                                                  11.82%
Yield on Market Price                                                      9.68%
Common Stock Shares Outstanding                                      42,601,719

MOODY'S RATINGS                                                   % OF PORTFOLIO
--------------------------------------------------------------------------------
AAA                                                                         0.2%
AA                                                                          6.0%
A                                                                          17.8%
BBB                                                                        50.5%
BB                                                                         16.3%
Below "BB"                                                                  2.2%
Not Rated                                                                   3.5%
--------------------------------------------------------------------------------
Below Investment Grade*                                                    15.3%

*     BELOW INVESTMENT GRADE BY BOTH MOODY'S AND S&P.

 [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]

INDUSTRY CATEGORIES                                               % OF PORTFOLIO
--------------------------------------------------------------------------------
Banking                                                                      33%
Utilities                                                                    26%
Insurance                                                                    19%
Financial Services                                                            9%
Energy                                                                        5%
REITs                                                                         3%
Other                                                                         5%

TOP 10 HOLDINGS BY ISSUER                                         % OF PORTFOLIO
--------------------------------------------------------------------------------
Midamerican Energy                                                          4.9%
Banco Santander                                                             4.7%
Wachovia Corp                                                               4.4%
Liberty Mutual Group                                                        3.4%
ACE Ltd                                                                     3.2%
Dominion Resources                                                          2.7%
AON Corp                                                                    2.4%
Enterprise Products Partners                                                2.3%
Wisconsin Energy                                                            2.3%
HBOS Plc                                                                    2.3%

                                                                % OF PORTFOLIO**
--------------------------------------------------------------------------------
Holdings Generating Qualified Dividend Income (QDI) for Individuals          28%

Holdings Generating Income Eligible for the Corporate Dividend
   Received Deduction (DRD)                                                  15%
--------------------------------------------------------------------------------

**    THIS DOES NOT REFLECT YEAR-END RESULTS OR ACTUAL TAX CATEGORIZATION OF
      FUND DISTRIBUTIONS. THESE PERCENTAGES CAN, AND DO, CHANGE, PERHAPS
      SIGNIFICANTLY, DEPENDING ON MARKET CONDITIONS. INVESTORS SHOULD CONSULT
      THEIR TAX ADVISOR REGARDING THEIR PERSONAL SITUATION.


                                        4



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                                                        PORTFOLIO OF INVESTMENTS
                                                   FEBRUARY 29, 2008 (UNAUDITED)
      --------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
PREFERRED SECURITIES -- 86.4%
                  BANKING -- 32.5%
------------------------------------------------------------------------------------------------------------------------------------
$    19,000,000   Astoria Capital Trust I, 9.75% 11/01/29, Series B .......................................   $     20,261,600
                  Banco Santander:
      1,646,000      6.50% Pfd. ...........................................................................         36,366,395*(1)
      1,141,600      6.80% Pfd. ...........................................................................         26,292,532**(1)
                  Bank of America Corp.:
         85,000      6.204% Pfd., Series D ................................................................          1,957,661*
$     5,000,000      8.00% ................................................................................          5,186,000*
$    36,981,000   Capital One Capital III, 7.686% 08/15/36 ................................................         28,257,182
$    27,600,000   CBG Florida REIT Corporation, 7.114%, 144A**** ..........................................         20,727,600
        128,000   Citigroup Capital VIII, 6.95% Pfd. 09/15/31 .............................................          3,068,006
        500,000   Citigroup, Inc., 8.125% Pfd., Series AA .................................................         12,745,000*
        112,000   Citizens Funding Trust I, 7.50% Pfd. 09/15/66 ...........................................          2,439,506
        105,000   Cobank, ACB, 7.00% Pfd., 144A**** .......................................................          5,252,100*
         13,000   Colonial Capital Trust IV, 7.875% Pfd. ..................................................            312,000(2)
$    25,740,000   Comerica Capital Trust II, 6.576% 02/20/37 ..............................................         18,298,566
         28,800   FBOP Corporation, Adj. Rate Pfd., 144A**** ..............................................         26,928,000*
$     2,635,000   First Midwest Capital Trust I, 6.95% 12/01/33 ...........................................          2,386,519
$     1,950,000   First Tennessee Capital I, 8.07% 01/06/27, Series A .....................................          2,031,490
              6   FT Real Estate Securities Company, 9.50% Pfd., 144A**** .................................          6,738,991
$    38,000,000   HBOS PLC, 6.657%, 144A**** ..............................................................         30,263,200**(1)
          7,500   HSBC Series II, Variable Inverse Pfd., Pvt. .............................................          4,582,500*
$     3,898,000   JPMorgan Chase Capital XXIII, Adj. Rate 05/15/47 ........................................          2,962,480
         23,800   Keycorp Capital V, 5.875% Pfd., Series A ................................................            473,770
         20,000   Keycorp Capital VIII, 7.00% Pfd. 06/15/66 ...............................................            475,000
        617,000   Keycorp Capital IX, 6.75% Pfd. 12/15/66 .................................................         13,766,813
         85,285   National City Capital Trust II, 6.625% Pfd. 11/15/36 ....................................          1,780,324
        116,800   National City Corporation, 9.875% Pfd. ..................................................          3,146,592*
$    15,000,000   National City Preferred Capital Trust I, 12.00% .........................................         15,496,500
        295,000   PFGI Capital Corporation, 7.75% Pfd. ....................................................          6,460,500
$     6,500,000   PNC Preferred Funding Trust III, 8.70%, 144A**** ........................................          6,499,350
$     3,300,000   Regions Financing Trust II, 6.625% 05/15/47 .............................................          2,580,442
                  Roslyn Real Estate:
             40      8.95% Pfd., Series C, 144A**** .......................................................          4,165,442
            135      Adj. Rate Pfd., Series D, 144A**** ...................................................         13,609,688
         63,700   Sovereign Bancorp, 7.30% Pfd., Series C .................................................          1,469,081*
        248,100   Sovereign Capital Trust V, 7.75% Pfd. 05/22/36 ..........................................          5,736,692
$    18,435,000   Sovereign Capital Trust VI, 7.908% 06/13/36 .............................................         15,218,092
             60   Union Planters Preferred Funding, 7.75% Pfd., Series 144A**** ...........................          6,035,848



                                        5



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 29, 2008 (UNAUDITED)
--------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
PREFERRED SECURITIES -- (CONTINUED)
                  BANKING -- (CONTINUED)
---------------------------------------------------------------------------------------------------------------------------------
                  U.S. Bancorp, Auction Pass-Through Trust, Cl. B:
             65      Series 2006-5, Variable Rate Pfd., 144A**** ..........................................   $         32,500*+
             65      Series 2006-6, Variable Rate Pfd., 144A**** ..........................................             32,500*+
         70,903   USB Capital VIII, 6.35% Pfd. 12/29/65 ...................................................          1,677,303
         18,800   VNB Capital Trust I, 7.75% Pfd. .........................................................            471,763
                  Wachovia Corporation:
$     6,400,000      7.98% ................................................................................          6,667,245*
        158,300      8.00% Pfd., Series J .................................................................          4,058,812*
      1,890,000   Wachovia Preferred Funding, 7.25% Pfd., Series A ........................................         48,195,000
                  Washington Mutual:
$    10,050,000      Preferred Funding, 6.534%, 144A**** ..................................................          6,427,980
$     5,100,000      Preferred Funding IV, 9.75%, 144A**** ................................................          4,392,518
$    11,067,000   Webster Capital Trust IV, 7.65% 06/15/37 ................................................          8,614,553
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   434,541,636
                                                                                                              ----------------
                  FINANCIAL SERVICES -- 7.6%
---------------------------------------------------------------------------------------------------------------------------------
                  CIT Group, Inc.:
         30,000      5.189% Pfd., Series B ................................................................          2,058,750*
$    13,000,000      6.10% 03/15/67 .......................................................................          9,244,300
        373,712      6.35% Pfd., Series A .................................................................          7,649,436*
        729,995   Countrywide Capital IV, 6.75% Pfd. ......................................................         12,774,913(2)
         46,305   Countrywide Capital V, 7.00% Pfd., 11/01/36 .............................................            800,266
         30,000   First Republic Bank, 7.25% Pfd. .........................................................            679,689
          7,850   First Republic Preferred Capital Corporation, 10.50% Pfd., 144A**** .....................          8,506,339
                  Goldman Sachs:
        157,450      Cabco Trust Capital I, Adj. Rate Pfd. 02/15/34 .......................................          2,976,797
          3,600      STRIPES Custodial Receipts, Pvt. .....................................................          1,818,000*
$     7,000,000   Gulf Stream-Compass 2005 Composite Notes, 144A**** ......................................          6,018,390
        556,500   Lehman Brothers Holdings, Inc., 7.95% Pfd. ..............................................         13,873,545*
                  Merrill Lynch:
        400,000      6.25% Pfd. ...........................................................................          9,320,000*
        143,920      Adj. Rate Pfd., Series G .............................................................          2,464,630*
        172,000      Adj. Rate Pfd., Series 5 .............................................................          2,918,634*
         76,000      Fixed Income Pass-Through 2007-A, Cl. B, Adj. Rate Pfd., 144A**** ....................                760*+
          4,000      Series II STRIPES Custodial Receipts, Pvt. ...........................................            340,000*+
          9,000   Morgan Stanley Capital Trust V, 5.75% Pfd. ..............................................            184,219
         83,900   Morgan Stanley Capital Trust VI, 6.60% Pfd. .............................................          1,969,032
$    10,000,000   RACERS(R) Series 2005 AMMC V Trust, 144A**** ............................................          7,393,152



                                        6



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                                            PORTFOLIO OF INVESTMENTS (CONTINUED)
                                                   FEBRUARY 29, 2008 (UNAUDITED)
      --------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
PREFERRED SECURITIES -- (CONTINUED)
                  FINANCIAL SERVICES -- (CONTINUED)
-----------------------------------------------------------------------------------------------------------------------------------
                  SLM Corporation:
        160,000      6.97% Pfd., Series A .................................................................   $      7,585,600*
         48,500      Adj. Rate Pfd., Series B .............................................................          2,849,375*
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   101,425,827
                                                                                                              ----------------
                  INSURANCE -- 17.3%
-----------------------------------------------------------------------------------------------------------------------------------
      1,703,580   ACE Ltd., 7.80% Pfd., Series C ..........................................................         42,483,026**(1)
$     7,000,000   AMBAC Financial Group, Inc., 6.15% 02/15/37 .............................................          4,141,900
                  AON:
$    25,650,000      Capital Trust A, 8.205% 01/01/27 .....................................................         26,440,943
        106,000      Corts-Capital, 8.205% Pfd. ...........................................................          2,775,875
         94,900      Saturns-2003-3, 8.00% Pfd., Series AON Corp. .........................................          2,396,225(2)
                  Arch Capital Group Ltd.:
        167,650      7.875% Pfd., Series B ................................................................          4,222,684**(1)
         94,321      8.00% Pfd., Series A .................................................................          2,431,718**(1)
$    11,300,000   AXA SA, 6.379%, 144A**** ................................................................          9,156,672**(1)
                  Axis Capital Holdings:
        273,800      7.25% Pfd., Series A .................................................................          6,670,452**(1)
        241,505      7.50% Pfd., Series B .................................................................         23,454,966(1)
         65,500   Berkley W.R. Capital Trust II, 6.75% Pfd. 07/26/45 ......................................          1,531,063
        558,000   Delphi Financial Group, 7.376% Pfd. 05/15/37 ............................................         12,432,240
$    14,816,000   Everest Re Holdings, 6.60% 05/15/37 .....................................................         12,612,861
$    26,200,000   Liberty Mutual Group, 7.80% 03/15/37, 144A**** ..........................................         21,819,360
$     5,000,000   PartnerRe Finance II, 6.44% 12/01/66 ....................................................          4,234,510(1)
         37,000   Provident Financing Trust I, Corts-Unum, 8.50% Pfd. .....................................            949,283
                  Renaissancere Holdings Ltd.:
        106,400      6.08% Pfd., Series C .................................................................          2,149,280**(1)
        372,300      6.60% Pfd., Series D .................................................................          8,190,600**(1)
         96,835      7.30% Pfd., Series B .................................................................          2,314,967**(1)
        407,200   Scottish Re Group Ltd., 7.25% Pfd. ......................................................          4,072,000**(1)
$     7,425,000   USF&G Capital, 8.312% 07/01/46, 144A**** ................................................          8,202,397
$    13,000,000   USF&G Capital I, 8.50% 12/15/45, 144A**** ...............................................         14,662,700
$    10,000,000   XL Capital Ltd., Mangrove Bay Passthru Trust, 6.102% 07/15/33, 144A**** .................          7,629,000(1)
$     6,400,000   ZFS Finance USA Trust V, 6.50% 05/09/37, 144A**** .......................................          5,800,582(1)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   230,775,304
                                                                                                              ----------------



                                        7



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 29, 2008 (UNAUDITED)
--------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
PREFERRED SECURITIES -- (CONTINUED)
                  UTILITIES -- 22.3%
---------------------------------------------------------------------------------------------------------------------------------
                  Baltimore Gas & Electric Company:
         10,000      6.70% Pfd., Series 1993 ..............................................................   $        979,200*
         50,000      7.125% Pfd., Series 1993 .............................................................          5,063,500*
      1,355,359   Calenergy Capital Trust III, 6.50% Pfd. 09/01/27 ........................................         65,667,144
         35,000   Central Maine Power, 5.25% Pfd., Pvt. ...................................................          3,194,100*
$     2,600,000   COMED Financing II, 8.50% 01/15/27, Series B ............................................          2,699,320
$    17,645,000   COMED Financing III, 6.35% 03/15/33 .....................................................         13,997,778
$    25,175,000   Dominion Resources Capital Trust I, 7.83% 12/01/27 ......................................         26,010,810
$    11,000,000   Dominion Resources, Inc., 7.50% .........................................................         10,565,500
        625,000   Entergy Arkansas, Inc., 6.45% Pfd. ......................................................         15,656,250*
         85,000   Entergy Louisiana, Inc., 6.95% Pfd. .....................................................          8,457,500*
        140,600   FPC Capital I, 7.10% Pfd., Series A .....................................................          3,453,488
                  FPL Group Capital, Inc.:
$     3,400,000      6.35% 10/01/66 .......................................................................          3,134,576
$     4,100,000      6.65% 06/15/67 .......................................................................          3,842,114
          6,000   Georgia Power Company, 6.50% Pfd., Series 07-A ..........................................            597,000*
          5,000   Indiana Michigan Power, 4.56% Pfd. ......................................................            414,000*
        119,805   Indianapolis Power & Light Company, 5.65% Pfd. ..........................................         10,423,035*
                  Interstate Power & Light Company:
        110,000      7.10% Pfd., Series C .................................................................          2,822,600*
         11,000      8.375% Pfd., Series B ................................................................            327,140*
         30,000   Laclede Capital Trust I, 7.70% Pfd. .....................................................            778,125(2)
                  Pacific Enterprises:
          4,550      $4.40 Pfd. ...........................................................................            357,266*
          4,510      $4.50 Pfd. ...........................................................................            362,198*
$     2,386,000   PECO Energy Capital Trust III, 7.38% 04/06/28, Series D .................................          2,295,809
$    27,000,000   PECO Energy Capital Trust IV, 5.75% 06/15/33 ............................................         21,670,200
$    27,925,000   Puget Sound Energy, Inc., 6.974% 06/01/67 ...............................................         24,844,872
        200,000   San Diego Gas & Electric Company, $1.70 Pfd. ............................................          5,250,000*
                  Southern California Edison:
         45,000      6.00% Pfd. ...........................................................................          4,211,100*
         27,640      6.125% Pfd. ..........................................................................          2,653,993*
                  Southern Union Company:
$     5,100,000      7.20% 11/01/66 .......................................................................          4,598,670
        228,700      7.55% Pfd. ...........................................................................          5,790,684*
$     4,200,000   Union Electric Company, 7.69% 12/15/36, Series A ........................................          4,354,980



                                        8



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                                            PORTFOLIO OF INVESTMENTS (CONTINUED)
                                                   FEBRUARY 29, 2008 (UNAUDITED)
      --------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
PREFERRED SECURITIES -- (CONTINUED)
                  UTILITIES -- (CONTINUED)
---------------------------------------------------------------------------------------------------------------------------------
                  Virginia Electric & Power Company:
         14,985      $4.12 Pfd. ...........................................................................   $      1,127,471*
         21,684      $4.80 Pfd. ...........................................................................          1,900,603*
         35,000      $6.98 Pfd. ...........................................................................          3,563,700*
        342,500   Virginia Power Capital Trust, 7.375% Pfd. 07/30/42 ......................................          8,648,125(3)
$    27,125,000   Wisconsin Energy Corporation, 6.25% 05/15/67 ............................................         24,721,454
                  Xcel Energy, Inc.:
        100,000      7.60%, Pfd. ..........................................................................          2,531,250
         10,210      $4.11 Pfd., Series D .................................................................            756,561*
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   297,722,116
                                                                                                              ----------------
                  ENERGY -- 2.9%
---------------------------------------------------------------------------------------------------------------------------------
$     5,000,000   Enbridge Energy Partners LP, 8.05% 10/01/37 .............................................          4,758,650
                  Enterprise Products Partners:
$    22,000,000      7.034% 01/15/68 ......................................................................         19,085,088
$    12,500,000      8.375% 08/01/66 ......................................................................         12,292,300
$     3,650,000   KN Capital Trust III, 7.63% 04/15/28 ....................................................          3,376,250
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    39,512,288
                                                                                                              ----------------
                  REAL ESTATE INVESTMENT TRUST (REIT) -- 2.7%
---------------------------------------------------------------------------------------------------------------------------------
         38,400   BRE Properties, Inc., 6.75% Pfd., Series C ..............................................            848,402(2)
        239,500   Duke Realty Corporation, 8.375% Pfd., Series O ..........................................          5,977,920
          4,980   Prologis Trust, 8.54% Pfd., Series C ....................................................            263,785
                  PS Business Parks, Inc.:
         45,500      6.70% Pfd., Series P .................................................................            954,080
          5,200      6.875% Pfd., Series I ................................................................            113,425
          6,100      7.00% Pfd., Series H .................................................................            134,010
         56,200      7.20% Pfd., Series M .................................................................          1,271,525
         18,700      7.375% Pfd., Series O ................................................................            430,685
        178,000      7.60% Pfd., Series L .................................................................          4,099,571
         54,800      7.95% Pfd., Series K .................................................................          1,358,015
                  Public Storage, Inc.:
          9,000      6.18% Pfd., Series D .................................................................            189,282
        196,070      6.45% Pfd., Series F .................................................................          4,338,049
        345,000      6.625% Pfd., Series M ................................................................          7,794,861
         82,000      6.75% Pfd., Series E .................................................................          1,875,750
         30,000      6.85% Pfd., Series Y .................................................................            673,800
        166,800      7.25% Pfd., Series K .................................................................          4,123,096
         70,000   Realty Income Corp., 6.75% Pfd., Series E ...............................................          1,577,191
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    36,023,447
                                                                                                              ----------------



                                        9



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 29, 2008 (UNAUDITED)
--------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
PREFERRED SECURITIES -- (CONTINUED)
                  MISCELLANEOUS INDUSTRIES -- 1.0%
-------------------------------------------------------------------------------------------------------------------------------
          2,245   Centaur Funding Corporation, 9.08% Pfd. 04/21/20, 144A**** ..............................   $      2,333,318
        112,750   Ocean Spray Cranberries, Inc., 6.25% Pfd., 144A**** .....................................         10,704,485*
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    13,037,803
                                                                                                              ----------------
                  U.S. GOVERNMENT SECURITIES -- 0.1%
-------------------------------------------------------------------------------------------------------------------------------
         31,500   Fannie Mae, 8.25% Pfd. ..................................................................            809,235*
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       809,235
                                                                                                              ----------------
                     TOTAL PREFERRED SECURITIES
                     (Cost $1,272,466,331) ................................................................      1,153,847,656
                                                                                                              ----------------
CORPORATE DEBT SECURITIES -- 10.2%
                  FINANCIAL SERVICES -- 2.1%
-------------------------------------------------------------------------------------------------------------------------------
        200,000   Ford Motor Credit Company, 7.375% 10/15/31 ..............................................          3,522,500
$    25,000,000   General Motors Acceptance Corporation, 8.00% 11/01/31, Senior Bonds .....................         18,941,650
         45,000   HSBC Finance Corporation, 6.875% 01/30/33 ...............................................          1,112,346
$     4,812,159   Lehman Brothers, Guaranteed Note, Variable Rate, 12/16/16, 144A**** .....................          4,294,371
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    27,870,867
                                                                                                              ----------------
                  INSURANCE -- 1.8%
-------------------------------------------------------------------------------------------------------------------------------
$    24,921,000   Liberty Mutual Insurance, 7.697% 10/15/97, 144A**** .....................................         23,319,028
$     1,000,000   UnumProvident Corporation, 7.25% 03/15/28, Senior Notes .................................            985,860
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    24,304,888
                                                                                                              ----------------
                  UTILITIES -- 3.8%
-------------------------------------------------------------------------------------------------------------------------------
$     6,315,000   Duke Capital Corporation, 8.00% 10/01/19, Senior Notes ..................................          7,257,356
$     5,000,000   Entergy Gulf States, Inc., 6.20% 07/01/33, 1st Mortgage .................................          4,649,845
                  Entergy Louisiana LLC:
$    11,458,000      6.30% 09/01/35, 1st Mortgage .........................................................         10,809,248
          5,750      7.60% 04/01/32, 1st Mortgage .........................................................            146,446
                  Oncor Electric Delivery Company:
$     2,000,000      7.00% 09/01/22 .......................................................................          1,972,600
$     7,070,000      7.25% 01/15/33 .......................................................................          7,066,465
                  Southern Union Company:
$     5,300,000      7.60% 02/01/24, Senior Notes .........................................................          5,404,553
$     6,047,000      8.25% 11/15/29, Senior Notes .........................................................          6,537,750
$     6,020,000   Wisconsin Electric Power Company, 6.875% 12/01/95 .......................................          6,313,776
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    50,158,039
                                                                                                              ----------------



                                       10



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                                            PORTFOLIO OF INVESTMENTS (CONTINUED)
                                                   FEBRUARY 29, 2008 (UNAUDITED)
      --------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                        
CORPORATE DEBT SECURITIES -- (CONTINUED)
                  ENERGY -- 1.9%
---------------------------------------------------------------------------------------------------------------------------------
$    10,350,000   KN Energy, Inc., 7.45% 03/01/98 .........................................................   $      9,470,250
        296,911   Nexen, Inc., 7.35% Subordinated Notes ...................................................          7,144,421(1)
$     8,500,000   Noble Energy, Inc., 7.25% 08/01/97 ......................................................          8,613,900
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    25,228,571
                                                                                                              ----------------
                  REAL ESTATE INVESTMENT TRUST (REIT) -- 0.2%
---------------------------------------------------------------------------------------------------------------------------------
$     3,500,000   Realty Income Corporation, 5.875% 03/15/35 ..............................................          2,801,750
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     2,801,750
                                                                                                              ----------------
                  MISCELLANEOUS INDUSTRIES -- 0.4%
---------------------------------------------------------------------------------------------------------------------------------
         26,000   CBS Corporation, 6.75% 03/27/56 .........................................................            612,625
          3,450   Comcast Corp., 6.625%, 05/15/56 .........................................................             81,399
         16,500   Corp-Backed Trust Certificates, 7.00% 11/15/28, Series Sprint ...........................            317,625
                  Pulte Homes, Inc.:
         58,240      7.375% 06/01/46 ......................................................................          1,152,063(2)
$     3,550,000      7.875% 06/15/32 ......................................................................          3,196,775
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     5,360,487
                                                                                                              ----------------
                     TOTAL CORPORATE DEBT SECURITIES
                     (Cost $147,800,172) ..................................................................        135,724,602
                                                                                                              ----------------
OPTION CONTRACTS -- 0.2%
---------------------------------------------------------------------------------------------------------------------------------
            450   April Call Options on June U.S. Treasury Bond Futures, Expiring 03/20/08 ................             84,375+
            900   June Call Options on June U.S. Treasury Bond Futures, Expiring 05/23/08 .................          1,560,937+
          2,605   June Put Options on June U.S. Treasury Bond Futures, Expiring 05/23/08 ..................            569,844+
------------------------------------------------------------------------------------------------------------------------------
                     TOTAL OPTION CONTRACTS
                     (Cost $1,790,596) ....................................................................          2,215,156
                                                                                                              ----------------



                                       11



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 29, 2008 (UNAUDITED)
--------------------------------------------------------------------------



SHARES/$ PAR                                                                                                        VALUE
---------------                                                                                               ----------------
                                                                                                     
MONEY MARKET FUND -- 1.9%
-------------------------------------------------------------------------------------------------------------------------------
     24,989,411   BlackRock Provident Institutional, TempFund .............................................   $     24,989,411
------------------------------------------------------------------------------------------------------------------------------
                     TOTAL MONEY MARKET FUND
                     (Cost $24,989,411) ...................................................................         24,989,411
                                                                                                              ----------------
SECURITIES LENDING COLLATERAL -- 0.5%
-------------------------------------------------------------------------------------------------------------------------------
      7,207,320   BlackRock Institutional Money Market Trust ..............................................          7,207,320
------------------------------------------------------------------------------------------------------------------------------
                     TOTAL SECURITIES LENDING COLLATERAL
                     (Cost $7,207,320) ....................................................................          7,207,320
                                                                                                              ----------------

TOTAL INVESTMENTS (Cost $1,454,253,830***) ....................................................     99.2%        1,323,984,145
OTHER ASSETS AND LIABILITIES (Net) ............................................................      0.8%           11,234,294
                                                                                                   -----      ----------------
TOTAL NET ASSETS AVAILABLE TO COMMON STOCK AND PREFERRED STOCK ................................    100.0%++   $  1,335,218,439
                                                                                                   -----      ----------------
AUCTION MARKET PREFERRED STOCK (AMPS) REDEMPTION VALUE ....................................................       (542,000,000)
                                                                                                              ----------------
TOTAL NET ASSETS AVAILABLE TO COMMON STOCK ................................................................   $    793,218,439
                                                                                                              ================


*     Securities eligible for the Dividends Received Deduction and distributing
      Qualified Dividend Income.
**    Securities distributing Qualified Dividend Income only.
***   Aggregate cost of securities held.
****  Securities exempt from registration under Rule 144A of the Securities Act
      of 1933. These securities may be resold in transactions exempt from
      registration to qualified institutional buyers. These securities have been
      determined to be liquid under the guidelines established by the Board of
      Directors.
(1)   Foreign Issuer.
(2)   A portion of this security is on loan.
(3)   A portion of this security has been pledged as collateral for written
      option positions.
+     Non-income producing.
++    The percentage shown for each investment category is the total value of
      that category as a percentage of net assets available to Common and
      Preferred Stock.

         ABBREVIATIONS:
PFD.  -- Preferred Securities
PVT.  -- Private Placement Securities

OPEN OPTION CONTRACTS WRITTEN



CONTRACTS                    CONTRACT DESCRIPTION                                                                   VALUE
---------------   -----------------------------------------------------------------------------------------   ----------------
                                                                                                        
            450   April Call Options on June U.S. Treasury Bond Futures,
                     Expiring 03/20/08, Strike Price 120 ..................................................   $       (464,062)+
            900   June Call Options on June U.S. Treasury Bond Futures,
                     Expiring 05/23/08, Strike Price 118 ..................................................         (3,079,688)+
------------------------------------------------------------------------------------------------------------------------------
                  TOTAL OPEN OPTION CONTRACTS WRITTEN (premiums received: $2,426,405) .....................         (3,543,750)



                                       12



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE TO COMMON STOCK(1)
      FOR THE PERIOD FROM DECEMBER 1, 2007 THROUGH FEBRUARY 29, 2008 (UNAUDITED)
      --------------------------------------------------------------------------



                                                                                                           VALUE
                                                                                                       -------------
                                                                                                    
OPERATIONS:
   Net investment income ...........................................................................   $  23,831,036
   Net realized gain/(loss) on investments sold during the period ..................................      (8,270,640)
   Change in net unrealized appreciation/depreciation of investments ...............................     (19,501,428)
   Distributions to AMPS* Shareholders from net investment income, including changes
     in accumulated undeclared distributions .......................................................      (7,083,398)
                                                                                                       -------------
   NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................     (11,024,430)

DISTRIBUTIONS:
   Dividends paid from net investment income to Common Stock Shareholders(2) .......................     (16,934,184)
                                                                                                       -------------
   TOTAL DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS ................................................     (16,934,184)

FUND SHARE TRANSACTIONS:
   Increase from shares issued under the Dividend Reinvestment and Cash Purchase Plan ..............              --
                                                                                                       -------------
   NET INCREASE IN NET ASSETS AVAILABLE TO COMMON STOCK RESULTING FROM FUND SHARE TRANSACTIONS .....              --
                                                                                                       -------------
NET DECREASE IN NET ASSETS AVAILABLE TO COMMON STOCK FOR THE PERIOD ................................   $ (27,958,614)
                                                                                                       =============

--------------------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE TO COMMON STOCK:
   Beginning of period .............................................................................   $ 821,177,053
   Net decrease in net assets during the period ....................................................     (27,958,614)
                                                                                                       -------------
   End of period ...................................................................................   $ 793,218,439
                                                                                                       =============


------------------
*     Auction Market Preferred Stock.
(1)   These tables summarize the three months ended February 29, 2008 and should
      be read in conjunction with the Fund's audited financial statements,
      including footnotes, in its Annual Report dated November 30, 2007.
(2)   May include income earned, but not paid out, in prior fiscal year.


                                       13



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
FINANCIAL HIGHLIGHTS(1)
FOR THE PERIOD FROM DECEMBER 1, 2007 THROUGH FEBRUARY 29, 2008 (UNAUDITED)
FOR A COMMON STOCK SHARE OUTSTANDING THROUGHOUT THE PERIOD.
--------------------------------------------------------------------------


                                                                                                    
PER SHARE OPERATING PERFORMANCE:
   Net asset value, beginning of period ............................................................   $       19.28
                                                                                                       -------------
INVESTMENT OPERATIONS:
   Net investment income ...........................................................................            0.56
   Net realized and unrealized gain/(loss) on investments ..........................................           (0.65)

DISTRIBUTIONS TO AMPS* SHAREHOLDERS:
   From net investment income ......................................................................           (0.17)
                                                                                                       -------------
   Total from investment operations ................................................................           (0.26)
                                                                                                       -------------
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
   From net investment income ......................................................................           (0.40)
                                                                                                       -------------
   Total distributions to Common Stock Shareholders ................................................           (0.40)
                                                                                                       -------------
   Net asset value, end of period ..................................................................   $       18.62
                                                                                                       =============
   Market value, end of period .....................................................................   $       16.42
                                                                                                       =============
   Common Stock shares outstanding, end of period ..................................................      42,601,719
                                                                                                       =============
RATIOS TO AVERAGE NET ASSETS AVAILABLE TO COMMON STOCK SHAREHOLDERS:
   Net investment income+ ..........................................................................            8.38%**
   Operating expenses ..............................................................................            1.33%**

   ------------------------------------------------------------------

SUPPLEMENTAL DATA:++
   Portfolio turnover rate .........................................................................              13%***
   Total net assets available to Common and Preferred Stock, end of period (in 000's) ..............   $   1,335,218
   Ratio of operating expenses to total average net assets available to Common and
     Preferred Stock ...............................................................................            0.79%**


(1)   These tables summarize the three months ended February 29, 2008 and should
      be read in conjunction with the Fund's audited financial statements,
      including footnotes, in its Annual Report dated November 30, 2007.
*     Auction Market Preferred Stock.
**    Annualized.
***   Not annualized.
+     The net investment income ratios reflect income net of operating expenses
      and payments to AMPS* Shareholders.
++    Information presented under heading Supplemental Data includes AMPS*.


                                       14



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                                                FINANCIAL HIGHLIGHTS (CONTINUED)
                                           PER SHARE OF COMMON STOCK (UNAUDITED)
      --------------------------------------------------------------------------

                              TOTAL                                   DIVIDEND
                            DIVIDENDS   NET ASSET        NYSE       REINVESTMENT
                               PAID       VALUE     CLOSING PRICE     PRICE (1)
                            ---------   ---------   -------------   ------------
December 31, 2007 .......   $  0.1325    $ 18.51       $ 16.16        $ 16.48
January 31, 2008 ........      0.1325      19.09         17.84          17.93
February 29, 2008 .......      0.1325      18.62         16.42          16.61

-------------
(1)   Whenever the net asset value per share of the Fund's Common Stock is less
      than or equal to the market price per share on the reinvestment date, new
      shares issued will be valued at the higher of net asset value or 95% of
      the then current market price. Otherwise, the reinvestment shares of
      Common Stock will be purchased in the open market.


                                       15



--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------

1.    AGGREGATE INFORMATION FOR FEDERAL INCOME TAX PURPOSES

      At February 29, 2008 the aggregate  cost of securities  for federal income
tax purposes was $1,455,919,364, the aggregate gross unrealized appreciation for
all securities in which there is an excess of value over tax cost was $8,695,416
and the aggregate  gross  unrealized  depreciation  for all  securities in which
there is an excess of tax cost over value was $140,630,635

2.    ADDITIONAL ACCOUNTING STANDARDS

      ADOPTION OF  STATEMENT  OF FINANCIAL  ACCOUNTING  STANDARDS  NO. 157 "FAIR
VALUE  MEASUREMENTS"  ("FAS 157")

      In September 2006, the Financial Accounting Standards Board issued FAS 157
effective  for fiscal years  beginning  after  November 15, 2007.  This standard
clarifies the  definition of fair value for financial  reporting,  establishes a
framework for measuring fair value and requires additional disclosures about the
use of fair value  measurements.  The Fund has adopted FAS 157 as of December 1,
2007. The three levels of the fair value  hierarchy  under FAS 157 are described
below:

   o  Level 1 - quoted prices in active markets for identical securities
   o  Level 2 - other significant observable inputs (including quoted prices for
      similar securities, interest rates, prepayment speeds, credit risk, etc.)
   o  Level 3 -  significant  unobservable  inputs  (including  the  Fund's  own
      assumptions in determining the fair value of investments)

      The inputs or methodology used for valuing  securities are not necessarily
an indication  of the risk  associated  with  investing in those  securities.  A
summary of the inputs  used to value the  Funds' net assets as of  February  29,
2008 is as follows:



                                                                      OTHER FINANCIAL
                                                                        INSTRUMENTS
                                                      INVESTMENTS       (UNREALIZED
                                                     IN SECURITIES     APPRECIATION/
VALUATION INPUTS                                    (MARKET VALUE)     DEPRECIATION)*
--------------------------------------------------------------------------------------
                                                                
Level 1 - Quoted Prices- Investments ...........   $    373,396,434   $            --
Level 1 - Quoted Prices - Written Options ......         (3,543,750)               --
Level 2 - Other Significant Observable Inputs ..        925,674,478                --
Level 3 - Significant Unobservable Inputs ......         17,705,913                --
--------------------------------------------------------------------------------------
TOTAL ..........................................   $  1,313,233,075   $            --


      * Other financial instruments are derivative  instruments not reflected in
the  Schedule  of  Investments,  such as futures,  forwards  and swaps which are
valued at the  unrealized  appreciation/depreciation  on the  investment.  As of
February 29, 2008 the Fund does not have any other financial instruments.


                                       16



--------------------------------------------------------------------------------
      Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
                           NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
      --------------------------------------------------------------------------

      Following is a reconciliation of Level 3 investments for which significant
unobservable inputs were used to determine fair value:



                                                                        OTHER FINANCIAL
                                                                          INSTRUMENTS
                                                        INVESTMENTS       (UNREALIZED
                                                       IN SECURITIES     APPRECIATION/
                                                      (MARKET VALUE)     DEPRECIATION)
----------------------------------------------------------------------------------------
                                                                  
BALANCE AS OF 11/30/07 ............................   $    18,329,730   $            --
Accrued discounts/premiums ........................            42,076                --
Realized gain (loss) ..............................                --                --
Change in unrealized appreciation (depreciation) ..          (665,893)               --
Net purchases (sales) .............................                --                --
Transfers in and/or out of Level 3 ................                --                --
----------------------------------------------------------------------------------------
BALANCE AS OF 2/29/08 .............................   $    17,705,913   $            --



                                       17



                      [This page intentionally left blank]



                      [This page intentionally left blank]



DIRECTORS
  Donald F. Crumrine, CFA
     Chairman of the Board
  David Gale
  Morgan Gust
  Karen H. Hogan
  Robert F. Wulf, CFA

OFFICERS
  Donald F. Crumrine, CFA
     Chief Executive Officer
  Robert M. Ettinger, CFA
     President
  R. Eric Chadwick, CFA
     Chief Financial Officer,
     Vice President and Treasurer
  Chad C. Conwell
     Chief Compliance Officer,
     Vice President and Secretary
  Bradford S. Stone
     Vice President and
     Assistant Treasurer
  Nicholas Dalmaso
     Vice President and Assistant Secretary
  Laurie C. Lodolo
     Assistant Compliance Officer,
     Assistant Treasurer and
     Assistant Secretary

INVESTMENT ADVISER
  Flaherty & Crumrine Incorporated
  e-mail: flaherty@pfdincome.com

SERVICING AGENT
  Claymore Securities, Inc.
  1-866-233-4001

QUESTIONS CONCERNING YOUR SHARES OF FLAHERTY & CRUMRINE/CLAYMORE PREFERRED
  SECURITIES INCOME FUND?
      o     If your shares are held in a Brokerage Account, contact your Broker.
      o     If you have physical  possession of your shares in certificate form,
            contact the Fund's Transfer Agent --

                            PFPC Inc. 1-800-331-1710

THIS REPORT IS SENT TO  SHAREHOLDERS OF FLAHERTY &  CRUMRINE/CLAYMORE  PREFERRED
SECURITIES  INCOME  FUND  INCORPORATED  FOR  THEIR  INFORMATION.  IT  IS  NOT  A
PROSPECTUS,  CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE
OF SHARES OF THE FUND OR OF ANY SECURITIES MENTIONED IN THIS REPORT.

                       [LOGO] Flaherty & Crumrine/Claymore
                              ============================
                              PREFERRED SECURITIES
                              INCOME FUND

                                    Quarterly
                                     Report

                               February 29, 2008

                               www.fcclaymore.com



ITEM 2. CONTROLS AND PROCEDURES.

     (a)  The registrant's principal executive and principal financial officers,
          or persons  performing  similar  functions,  have  concluded  that the
          registrant's  disclosure  controls and  procedures (as defined in Rule
          30a-3(c)  under the  Investment  Company Act of 1940,  as amended (the
          "1940 Act") (17 CFR 270.30a-3(c))) are effective,  as of a date within
          90 days of the filing date of the report that includes the  disclosure
          required  by this  paragraph,  based  on  their  evaluation  of  these
          controls and  procedures  required by Rule 30a-3(b) under the 1940 Act
          (17 CFR  270.30a-3(b))  and Rules  13a-15(b)  or  15d-15(b)  under the
          Securities  Exchange Act of 1934, as amended (17 CFR  240.13a-15(b) or
          240.15d-15(b)).

     (b)  There  were no  changes  in the  registrant's  internal  control  over
          financial  reporting (as defined in Rule  30a-3(d)  under the 1940 Act
          (17 CFR  270.30a-3(d))  that  occurred  during the  registrant's  last
          fiscal quarter that have materially affected, or are reasonably likely
          to materially affect, the registrant's internal control over financial
          reporting.

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 are attached hereto.





                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Flaherty & Crumrine/Claymore Preferred Securities Income Fund
             Incorporated
             -------------------------------------------------------------------

By (Signature and Title)*  /s/ Donald F. Crumrine
                         -------------------------------------------------------
                         Donald F. Crumrine, Director, Chairman of the Board and
                         Chief Executive Officer
                         (principal executive officer)

Date                     April 18, 2008
    ----------------------------------------------------------------------------

Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment  Company  Act of  1940,  this  report  has been  signed  below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


By (Signature and Title)*  /s/ Donald F. Crumrine
                         -------------------------------------------------------
                         Donald F. Crumrine, Director, Chairman of the Board and
                         Chief Executive Officer
                         (principal executive officer)

Date                     April 18, 2008
    ----------------------------------------------------------------------------


By (Signature and Title)*  /s/ R. Eric Chadwick
                         -------------------------------------------------------
                         R. Eric Chadwick, Chief Financial Officer,
                         Treasurer and Vice President (principal
                         financial officer)

Date                     April 18, 2008
    ----------------------------------------------------------------------------




* Print the name and title of each signing officer under his or her signature.