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To: Haim R. Branisteanu who wrote (134923)	11/16/2001 9:23:02 PM
From: patron_anejo_por_favor	Respond to of 436258

<<After a second thought it can be that as soon as the securitization is out of the door only the residual liability goes on the bank books and then you are right.>> Exactly. This is the "infinite multiplier" effect of the GSE's...and why the Fed is no longer running the show. If the bottom is in for the 10 year bond (as appears to be the case), quite simply, the credit bubble will bust wide open and take down the entire world economy. Obviously has negative implications for the dollar, and for stocks. It will happen sooner than most people think...

To: Haim R. Branisteanu who wrote (134923)	11/17/2001 7:21:29 AM
From: Oblomov	Read Replies (1) \| Respond to of 436258

Haim, I agree. I think that a blow-up will occur. The only question that I have is regarding the form it will take. On the one hand we have the massive, unstable debt load of consumers and corporations, and on the other hand we have the reckless, relentless monetary stimulus provided since the LTCM disaster of 1998. In my view it will likely manifest in both inflationary and deflationary effects, simultaneously. And so, this economic bust will by necessity end with almost everyone confused. Despite ST rates being at depressionary lows, the economy still appears to be contracting. Yet, fiscal probity and individual liberty are being thrown out the window under the rubric of patriotism. And the fact that the public and media find nothing wrong with it all only shows how endemic corruption has become in our society. Many Americans would apparently rather live in a bubble economy than in a more scrupulous one. As if the bubble was a cure for anything but self reflection. Again, JMHO.