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To: Mark Adams who wrote (178441)	7/9/2002 3:33:57 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

<<I read PIMCO as warning that ultimately the economic pie will be smaller as a result of creative destruction being taken to excess.>> Sure, that's exactly what they're saying (and I don't disagree)...but the manner it was said was what I object to. Frankly, the Fed has been pumping for all it's worth for the last 18 months plus. The banksters will act if and only if they perceive some benefit to their own self-interest, and with loans blowing up daily, it's pretty hard to justify loans to customers without stellar credit (and those are becoming few and far between). My main gauge for whether the cure was taking was and is C&I lending. The signals on lending activity there are less distorted by securitization and syndication, since the lender is less buffered by the consequences of making bad loans (which is the real point of securitization...remove the risk, ie bad loan from the lender and dump it on someone else). They've been pointing down more or less continuously all along. research.stlouisfed.org The Fed continues to push on a string, and until the malinvestment and bad debt is recognized and purged, no amount of cajoling (and whining, in Gross/Mcauley's case) will help.