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The volume of new issuances in secondary loan markets fluctuatesover time and falls when collateral values fall. We develop a modelwith adverse selection and reputation that is consistent with suchfluctuations. Adverse selection ensures that the volume of trade fallswhen collateral values fall. Without reputation, the equilibrium hasseparation, adverse selection is quickly resolved, and trade volume isindependent of collateral value. With reputation, the equilibrium haspooling and adverse selection persists over time. The equilibriumis efficient unless collateral values are low and originators' reputationallevels are low. We describe policies that can implement efficientoutcomes. (JEL D82, G11, G21, G28)