NEW YORK - In a panel on the effect of CDOs on the fixed-income market, Bear Stearns traders said mortgage issuers and CDO managers are playing off one another. While one group provides the fuel - borrowers induced by new mortgage products to buy a new home or refinance - the other supplies the structure as well as the investors, replenishing liquidity through securitization. Whether that cycle is a so-called "shell game" was a bone of contention among the traders, but all seemed to agree that as long as investors are willing to pay, there will be managers willing to do deals.

"Until there are credit issues, we're going to continue to push the envelope," said Tim Koltermann, managing director principal in Bear Stearns' credit derivatives group, at the investment bank's Global Credit Conference held here this week.

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