Credit revulsions are a response to real credit losses resulting from real failures of borrowers to pay. Most of the credit revulsions of the pre war period and the credit revulsion of 1989-1992 took a considerable time to repair. In some cases they set the stage for deep economic contractions and a compounding of the credit crisis.
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The Wondrous Alchemical Structured Finance Sausage Machine The U.S. Credit Crunch Not A Transitory Event
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