c smith

Be Happy About the Lack of Securitization

Let's see what is the best analogy here. We're going backwards from the jet age (securitization, which - even with all of its flaws - permitted gargantuan amounts of credit to be created) to the ox cart (direct, linear, one-to-one bank lending). That won't hurt too much, will it?

How long before we're back to reasonable levels of credit creation, say equivalent to the mid 1990s? Try another 10 to 15 years. Hope the Fed gets used to owning junk assets for the next decade or so!

seekingalpha.com/artic...