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To: patron_anejo_por_favor who wrote (14658)	8/29/2000 10:54:13 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

i didn't see it...but it's nice to find confirmation there...i think Noland is a great analyst. it struck me that this must be the logical progression of a credit bubble: it comes under ever more stress the longer it persists, and in order to relieve the stresses when they threaten to topple the markets (as was the case during the NAZ crash period: unnoticed by most, a little credit crunch developed slightly ahead of and parallel to it), the agencies involved are forced to take steps that amount to the issuance of even more credit to restore disappearing liquidity. however, like with every other Ponzi scheme, the continued expansion needs to be geometric...every single chart of the growth in various credit related measures shows this type of progression - it is not linear. however, at the margin, the weaker credits already fail to honor their obligations, and perforce the reliquefication has to concentrate on the most creditworthy borrowers...who in turn take on ever more risk, which lessens their creditworthiness. consequently, with every renewed push to re-inflate the bubble to keep it from imploding, the heightened risks tend to get priced in in the form of larger spreads, as money gravitates towards the safest havens. the whole pyramid could get tipped over anytime...like i mentioned before, i am surprised it has held up so well thus far.