More on the banking backdrop, they have never had so many loans

``At the same time the banks increased the pace of asset retention, the debt service ratio of the lending products backing the securities started climbing very quickly. Thus, not only were the banks increasing risk from a concentration perspective, they were increasing risk from a credit quality perspective simultaneously. This was all occurring during the near peak of a bubble. Unfortunately, for most of those involved in bubbles, it is nigh impossible to see the bubble until after it is too late! With debt service ratios so high, levels will trend down to the mean, either through increased income or decreased debts (charge offs).''