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To: nextrade! who wrote (13068)	8/23/2003 6:02:52 PM
From: nextrade!	Respond to of 306849

Way Behind the Curve August 22, 2003 Credit Bubble Bulletin, by Doug Noland prudentbear.com Today’s dilemma – our system’s Achilles heel – is that the financial sector has no alternative than to aggressively expand holdings of risky assets (securities and mortgages). The Fed is on a futile crusade to sustain an unsustainable Bubble that must be financed by a ballooning financial system. There is simply no way around this fact of life. This brings us to the issue of Fed credibility. To read and listen to what our central bankers are thinking these days is not comforting (ok, it’s disturbing). They simply could not be more lost in flawed analysis and oblivious to critical issues. It certainly appears to me that the Greenspan Fed is today the proverbial deer caught in the headlights. I would expect this to be a seething issue for the vulnerable bond market over the coming weeks. As always, the risk of being Behind the Curve is that, after waiting too long, more drastic measures are necessary to get things under control. While comfortable that they have the Fed in their back pocket, the Credit market will nonetheless be haunted by nightmares of an unchecked Credit boom and an endless flood of risky loans and securities.