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To: Knighty Tin who wrote (218242)	2/1/2003 3:56:33 PM
From: marginmike	Read Replies (1) \| Respond to of 436258

you forget the securitize that debt and sell it, so the real victim is the bag holder, pension funds, MM funds etc. In the end the banks will be OK because they sold all the debt to others. In this way the banking system wont recreate a Japan scenario. HOWEVER everyone else from pensioner's to the individual with cash in MM will get anhilated as all those Securitised mortgages go "pooof". The whole Idea of derivetives is taking risk of banks and pushing them on YOU-ng-

To: Knighty Tin who wrote (218242)	2/2/2003 12:59:17 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 436258

KT, You know me long enough to know that I have been as bearish as anyone since the late 90s. I understand the excess credit, foreign indebtedness issues etc.. and remain bearish.(including the risks related to derivatives). I am taking issue with "one part" of his analysis related to private sector credit growth and the asset backed markets. I believe he is double counting there. When I first started looking at the Fed Flow of Funds reports in the mid to late 90s, I almost had a heart attack as I started compiling and tracking debt growth and debt to GDP ratios. Then I realized that the financial sector credit growth was a double count of other areas. The heart attack is now a serious murmur. :-)