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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Andrew G. who wrote (59129)1/18/2001 9:40:54 AM
From: pater tenebrarum  Read Replies (1) of 436258
 
no, it can't continue indefinitely. otherwise, no bubble would ever have burst, and yet they ALL have. the economic slowdown will bring the house of cards down, as even with the economy growing at 6%, default rates in junk bond land (proxy for weak borrowers) were reaching almost record highs last year. in a slowdown, the speed at which new defaults will occur will begin to outpace the growth in new credit. the fact that the up cycle has lasted an extraordinarily long time only means that the collapse will be all the more stunning and long lasting too.
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