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To: Jimbo who wrote (62799)	1/29/2001 8:24:52 PM
From: Mark Adams	Respond to of 436258

I think he merely admonished bankers to continue lending where decent prospects existed for the proposed funding. What Heinz refers to is probably related to the tendancy for asset quality to degrade, as companies which are shut out of junk draw down their bank credit lines. The banks, in effect, become lenders of last resort. Recent examples include PCG/Eix and Xrx. There was a pretty good write up on this recently, but of course I don't remember where. Probably Doug Nolan.

To: Jimbo who wrote (62799)	1/30/2001 10:02:41 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

he didn't say THAT...he said 'banks should not get restrictive in their lending at this juncture', more or less. he didn't mention enterprises that are not creditworthy outright. fact remains though that bad debt is piling up, and they will eventually have to choose between getting restrictive, or sinking along with their borrowers. i have never been enamored with this incarnation of the Fed...i believe that they have been instrumental in the fomenting of the bubble, and by piling bail-out upon bail-out have created an atmosphere of moral hazard and recklessness in the financial world that we all will have to pay for eventually. you are witnessing just such a systemic bail-out RIGHT NOW, with nearly 180 billion in fresh money printed over the past seven weeks...an unprecedented pace of monetary inflation (MZM is growing at 13% annualized at the moment), as they fear the entire system will collapse otherwise. too much debt needs to be rolled over....