palmer, great article and post. Where is this going to end? Please comment.
It ends when credit unwinds from 350% of GDP to a more sustainable amount (think about how much of GDP goes into paying interest on debt at 5% interest). The remaining source of relatively cheap credit will end up being the federal government because their borrowing costs are the lowest, so expect the next president to run major deficits.
Ultimately interest rates are going to rise substantially to reflect the risk and inevitable inflation and the sooner that happens the less inflation there will be, but that will create a major recession like the early 80's (Probably worse since we have a lot more debt now). The only other alternative is to postpone the pain by creating more debt, but as has been pointed out over and over, that only makes it worse in the end.
Any other goobledygook and theories are just folks trying to justify themselves for paychecks.
So, in essence, it's a lousy business to be in. The current players just skimmed fake profits and made assurances that they never expected to keep.