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To: John Vosilla who wrote (94064)	9/15/2010 8:56:06 PM
From: Crossy	Read Replies (2) \| Respond to of 118717

John, your narrative fits with the facts but other narratives do as well. The evolution of structured finance made the building boom possible. And many of t hese loans, actually most of it were not "subprime". Always referring to "bubbles" if demand actually realizes is imho somewhat misplaced. Without these bubbles, we would never have any progress, just the same static "equilibrium" forever forward. Investment is a discovery process. First by analysts and specialists and more shrewd people, later by the herd. Once the herd finds out they are way too late it's a game of musical chairs and occasional a crash or a meltdown. Without the excesses, started in 2007, and some balance on the short side of credit derivatives available before the final forced unwinding, the sub-prime loan debacle would have likely remained relatively contianed. There was another, less followed subprime debacle during the late 1990ies where firms like CTYS (Cityscape financial) and Southern Pacific Financing were busted. they already used pass-through certificates but couldnt yet create CDO structures. So I just refuse to rant about bubbles - quite the contrary - I'm trying to figure out the "next trend". One is now in place - a continuation from the (financial crisis interrupted) BRIC story. The "automation boom" dictated by the jobless recovery is another, more emerging theme. After all, without a PERCEIVED SCARCITY there would never be capacity builds. Once the build is under way, some fellows talk about a "bubble". They always do. In the end there is progress and actually capital goods. Some may be stranded or in the wrong hands but there is progress - despite a bubble or lack of it. Imagine - after the "Railroad bubble" - suddenly there were railtracks plentiful - with affordable transportation after the "telecom bubble" - even the ILECs had to provide data service for the masses on acceptable terms after the "housing bubble" - now the housing stock is replenished and modernized and affordable again so these "bubbles" equaled investment and the building of finished infrastructure, capital equipment or real estate - in a mirror image. In all cases TANGIBLE goods have been created. I don't say that is bad. there was a demand, people build it, some couldn't afford it and went bust .... next cycle please I once read that bubbles are only unproductive if NOTHING is produced by the massive capex. Such as the south sea bubble or the Tulip-mania. We are certainly better off this time. jmho CROSSY