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To: Joan Osland Graffius who wrote (253700)	8/2/2003 12:24:32 PM
From: orkrious	Read Replies (1) \| Respond to of 436258

Noland's closing today prudentbear.com All facets of the Credit system have been firing on all cylinders, with resulting massive Credit growth barely sustaining the Bubbles. The banking system, the GSEs, the Wall Street firms, the REITS and the hedge funds have all ballooned over the past few years. Who, then, today has the capacity to take risk from the scores of speculators looking and needing to offload? Well, the explosion of the interest rate derivative market has never made much sense. Somehow the GSE and mortgage securities are apparently able to balloon forever, with players enjoying the capability to easily and inexpensively hedge interest rate risk. But to whom? Who is going to take the other side of the interest rate trade - a “trade” that is ballooning in size and must continue to balloon to ward off a serious risk of Credit collapse? That is the question. One thing appears clear today, the Fed has lost control of the interest rate market, with ominous portents for the highly leveraged and speculation-rife U.S. Credit system.