Risk Off—Why It Will Just Keep Coming

Wall Street Alchemy” was transforming risky loans into money-like marketable securities (“Moneyness of Credit”). These securities provided the fuel for aggressive leveraging by the hedge fund community and Wall Street proprietary trading desks. This sophisticated Financial Structure profoundly bolstered Credit Availability and growth, while also fueling pernicious asset inflation, stoking over-consumption and, over time, fundamentally altering the nature of investment, resource allocation and Economic Structure.