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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (76670)	12/26/2006 4:42:04 PM
From: jimmg	Read Replies (2) \| Respond to of 110194

<Ultimately, if you offer silly credit to just about anybody, enough will take it regardless of ability to service and pay back. That gives cart before horse observers like you the impression it's the natural order of things. It's not, as all it takes to change the dynamics are somewhat tighter credit conditions. One cause could be when FCBs, Downey, FNM, et al get caught holding a bunch of defaulting ABS crap that had been trading at par.> In your world, why would any debt ever default when a borrower can just easily get more silly debt to pay off the old debt "regardless of ability to service and pay back"? The fact is that in your fantasy land, a borrower is not irresponsible for borrowing more than he can afford to pay back. He's the victim of a global conspiracy to enable him to borrow more than he should have. Also, the alcoholic is not responsible for his drinking problem because he's the victim of a global conspiracy of alcohol producers that enticed and enabled him to consume more alcohol than he otherwise would have naturally wanted to consume. If you believe this nonsense, I don't know why you would waste your money on xlf put options. Silly debt can just keep getting piled on top of silly debt forever while bank stocks never go down.