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To: Dave-in-MarinCa who wrote (15641)	9/1/2000 3:31:28 PM
From: LLCF	Respond to of 436258

< heck, maybe he is printing money like crazy just to compete with WS!! > No american worth his salt is going to lose market share! DAK

To: Dave-in-MarinCa who wrote (15641)	9/1/2000 3:52:50 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

Dave, there's a bit of a debate going on as to whether non-Fed entities like the GSE's can actually increase the money supply or not. i have long argued that they can not, their activities merely increase the velocity of money. in a sense that's true, but the securitization business means basically that the Fed is simply co-opted in the credit and money creation process. simply put, by securitizing bundles of sub-prime loans and magically transforming them into investment grade paper for money market funds, the institutions involved can increase their lending again due to the securitized stuff not being subjected to reserve requirements anymore. so while the Fed is part of the pyramid, it is certainly not in control of the process anymore.