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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (41737)	12/31/1998 1:11:00 PM
From: Jess Beltz	Respond to of 132070

tippet: re:"If the loans go off the banks books then the banks can loan more than if the banks still had those loans on the books -- more loans will be made." true, but it is capital market investors that hold the hold loans through the created securities. the result is that (a) in aggregate, more debt claims are outstanding in the market place, but also (b) the banks do not necessarily hold more debt. re:"From a larger perspective it seems that these asset backed securities allow for the growth of credit outside the fractional reserve requirements which traditionally have limited the banks ability to create credit." I couldn't agree more, and this may have major implications for the Fed's ability to control the money supply through inflating or contracting the level of reserves outstanding. What the ultimate effect to the Fed's control of the economy will or should be remains unknown. About your last statement, I simply do not know. Happy New Year to you and to all on the thread. I have enjoyed some stimulating and thought provoking discussion here the last couple of weeks. This is what I think these threads should be about, and not the endless cheerleading of particular stocks with fantastic claims for future revenues that i have seen on SI. Somebody definitely needs to write a book for amateur investors about the perils of investing based on "knowledge" or information gathered from the Web. Jess.