Excessiveness and balance cannot co-exist.
Balance and equity is indivisible. Inequity is the basis of imbalance.
Morality is obedience to or residence within the boundaries of an unbiased standard.
Goodness is residence within an balanced standard.
It is but behind the bars of limitation that excessiveness presents no danger.
Excessiveness, depression and catastrophe are indivisible.
Struggle and imbalance is indivisible.

Government and limitation is indivisible.
Government is limitation to insure a state of balance.
Minimum and maximum are the criterions of a standard.
Minimum must be a percentage of maximum to insure stability of tolerance.
The criterion of universal balance is universal government.

A state of health or balance without limitation is impossible.
Sickness and deformity is created by patriotism to excessiveness or unrestricted wealth or poverty.
They who support humane or civilized wages and benefits can’t compete against those who don’t.
It is in the competition of gears that progress is discordant.
It is in synchronization of government not competition that insures tranquil progress.

We let Lehman Bros. fail. Do we think we'd be better off today had we bailed them out?

I agree. We should, a least, let one of them fall to see what happens. This may open up opportunities for smaller businesses to break through during these times.

Steve -- Back in October NBR covered exactly what you're saying (see Anatomy of A Financial Crisis

I thought this comment was particularly relevant:

"...PETROU: The regulators had bought into what I call the gee, isn't it cool approach to financial product innovation. They believed that the market had an insight into them. They believed all of these quote innovative products were in fact distributing risk and they did not respect how dependent the entire global financial market had gotten on untested models. ..."

Have you read Atlas Shrugged? The parallels between the reasons Jim Taggart et al bought into the San Sebastian Mines in the book and the reasons banks started making these loans today in the real world are oddly prescient. Hope we don't have to fall as far as they did to finally fix the economy.

1905

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Dad, what 3 things happened during 1905 that prodded people to call it the year of miracles, Annus Mirabilis?
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The Don of Rumsford invented the laws of physics. The inventor of internet decided to run for the Senate. An insignificant and nearly forgotten scientist combination patent examiner wrote 4 unimportant papers. I'll never forget whatshisname who wrote those.
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It was Albert Einstein, inventor of the Special Refrigerator. But can you give me a practical example of his rather academic theory of relativity, the one he was never able to sell to President Roosevelt?
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Although the approaching train sends out constant wavelength from warning horn, it will sound shorter wavelength to hobo whom he approaches but longer wavelength to tramp he is leaving behind.
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But that would cause tramp to feel more danger from larger train receding as hobo feels less danger from smaller train approaching him.
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That paradox suggests the rational for the saying, "the second train claims more victims than the first."
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And the sensation that the market melt down recently passed is more dangerous than the one arriving.
But why a boson reflected off Count Dracula would not also be reflected off government approved mirror?
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For some thoughts on that and other things lets go over and meet tonight's guest, The International Deflater General of the M16 Money Velocity.
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Wie Geht es Ihnen, Herr DefledtorMausMann. Sitzen sie hier, bitte. Let me take your long black cape and your dripping bloody dagger. Relax and take a load off your Wellington Boots.
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Unfortunately for readers of BundesBlog I cannot linger. I have appointment with Doktor Sigmann Ree, my psychiatric health professional.
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But if he is a real doktor why they call him health professional instead?
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He alzo has his doctorate in Suisse.
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What was that blood chilling scream I just heard?
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It was only my personalized ring-tone from alarm clock feature of my shoe-phone. Es tut meir leidt, Tschüss
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Wow, it must be an exciting undeath that he lives with so many things on his spate.
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(fade out studio stage-props -- fade in health professional office with hint of isopropanol flavor)
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You are late for appointment HDH, Herr DefledtorMausMann Himself. That will be extra neun und neunzig Euro on your bill.
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Mere pocket change. I'll see your 99 and raise you 86 for tip.
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Danke HDH. You can go right in now. Lie supine on couch and the Doktor will be right with you.
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So then HDH, let me get this straight; whenever you pull out your first dagger the image of your mother-in-law disappears from the mirror as though she were invisible. The moment you return 1st dagger to sheath, Mother-in-law is visible both directly and through mirror.
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But finally when I draw my second dagger, mother-in-law maintains the duplicity of her image.
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The fearful sight of your second dagger is unrecognizable to her because of what the French know as La Belle Indifference. Memory of first dagger in one hemisphere of her brain causes extinction of opposite hemisphere image of dreaded sharp instrument of deflation.
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Whoah. Then with second dagger she fails to make like a shepherd thus leaving her fully vulnerable to rampart deflation.
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You have nearly as much insight as my wealthier patients.
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But I have gotten a raise.
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You are my most insightful patient. You will not need to come back for a very long interval. My banker will decide when. Don't call him. He will call you. See you later Defledtor.
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Bis Später
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I am not surprised that I am now reading that the VP from CountyWide has started a company (PennyMac)that is profiting from this. This is what I was saying and have written about several months ago to the government about taxpayer and Federal funds should have paid for. Buy the securities at a discount, aka .05 cents on the dollar or less. This would have given the government and taxpayer more power to modify loans and make a profit at the end. No matter what the rate we would have charged people.
This would have been much better than the plan now. Because it would have paid back the money used in a shorter period of time and made (a lot!) money in the end. But no! We had to just give away the billions to banks and make things voluntary for them. The banks (analyst) did this and are making money on both ends yet leave the county they live in (some of them) with a even a deeper debt. Due to their greed.
When dealing with Wall St… always think BUSINESS! How will the taxpayer and government profit!!!
Congress could have purchased all (I mean ALL) the bad debt for less than $26B, which would have freed up bank capital… what are you guys thinking.
Let’s get the USA out of debt.
As a note: one thing no one talks about is that the real reason why banks got involved with subprime (more loan products) was because they seen the government agencies making a profit years ago doing these loans. And that Fannie and Freddie have been successful in doing so. The banks (Wall St) started making their own conditions to creating more exotic loans to take business away from the government agencies, that is the real story… in simple terms.

These company,s that ask for and our gov,t is giving them what they say they need is a joke. If we did nothing they would come about in time. right now there not really making it with this help. keep in mind they say they need to pay big bucks for top people to run things. so if they have these people then they should be able to get out of the trouble there in, that they made for themselfs. I bet you if the funds stop coming they get thing back on track. there be some hurt but they figure a way out of it. right now they do not need to since there gettting by with out doing what is needed an taking money that our gov,t is willing to give them on the facts that things would be worst. trust me they can turn it around when they want to. there just playing us all.

Imagine we stop the music on the musical chairs game of global debt finance. Immediately all debt will come due and likely default.

We would likely survive the ordeal, but I would side with the advice of those advocating hoarding food, guns, and ammo.

I also don't believe we can let these entities shut down. But I don't understand the philosophy of throwing huge amounts of money at companies like AIG and Citi that are being run by the same management teams that ran them into the ground. I read where AIG was looking for a buyer for some of its product lines. Wouldn't it make more sense for the government to force a merger with a profitable insurance company and subsidize that company while it deals with AIG's bad product lines? I can understand how a merger within the auto industry may have design, manufacturing and inventory issues but insurance is insurance and banking is banking. And why can't these giants be split up with parts sold separately?

Isn't that sort of what BofA did with Merrill? We're assisting BofA not because they're part of the problem but because they're part of the solution.

Think of not just the auto company going out of business, but all the plants that are suppliers to those auto companies that will also fail, every bank that has made loans to those auto companies and their suppliers, every city that depends on the taxes from the business and the citizens who work there, think of more homes on the market because hundreds of thousands of people will not be able to make a mortgage payment--think of the services those companies support--and you begin to see the ripple effect through the economy.

The banks are a totally different scenerio and much more complex but suffice it to say, Wall Street is dead in the center and the underlying culprit in the banking crisis. Basically speaking by making a pig look like an eagle, they were able to dress up securities that otherwise would be considered junk bonds and sell them to small banks, pension funds, overseas banks, and the like that otherwise could only invest in government backed bonds and the like where risk of default is considered non-existent. Now if the insurer who put its Triple A rating on the line to enable those sales( AIG for the most part ) is allowed to fail, all the banks, credit unions, pension funds, etc. who possess those dressed up pigs will fail or start wiping peoples life savings off their books.

Fault deregulation as the direct cause. Banks being deregulated allowed them to cross state lines and grow to a point where the only way to save the taxpayer from the banks is to prop them up. It allowed them to get into other businesses that have elements of risk attached that they should not have been allowed to take with taxpayers insured funds. It allowed financial companies to overleverage balance sheets all in the name of fee income to drive stock prices and create massive bonuses for the company management.

This is one time when bigger is not better.

I truly believe though, the problem can be solved without so much pain if only the asset rules of banks are allowed time to heal on their books. In the mark to market accounting rules, no consideration is given that a real estate asset almost always appreciates over time. Give the banks the time to hold the assets through this bad business cycle and the asset value will be able to restore itself and the principal value of the investment restored.

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that much worse than what we've got now?
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Monday Morning Water boy
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Dad, when defensive linebacker dumps barrel of ice onto winning coach is he using movie-prop-ice or live-ammo?
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Depends which is cheaper.
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But with poly-carbonate-cubes how do they get authentic grimace from the coach?
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Coaches mother-in-law always adds dry-ice to the mix.
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But dry-ice sublimates into CO2 green-house-gas.
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With pre-emptive-strike trickle-down-panic initiated market-melt-down, global warming has been de-fanged. You can see this in sudden drop of igloo prices throughout Alaska.
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Has this phenomenon of migration been reflected by rising Floridian Igloo Prices?
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In Florida with comfortable beach sleeping arrangements and plenty crocodiles to manage all expensive funeral details inexpensively, everyone saves money by not buying into real-estate.
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I have heard that some people go to Miami Beach when they die.
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But they still have to pass through Atlanta Air-Port.
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So that is why Atlanta remains busy in spite of decreased money velocity.
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Almost as busy as the Hudson Air-Strip.
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YankeeDoodledom! Next October if Famous Investor mentions in blog that all his personal investments are in T-bonds, is he hinting that small time hoods should also buy T-bonds?
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He will not tell you in time for you to do any front running since he anticipates that you will become restless prematurely thus loosing chance to make fat profit as you sell before bonds top-out.
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What is the key to economic growth?
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For some thoughts on that and other questions let's now go over and meet tonight's guest, The Bond Ghoul, Duchess of Earl, combination consort to Herr DieFledermausmann, The Deflater General of the International M16 Money Supply.
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Wie Geht es Ihnen, Duchess Earlean? Sitzen zie hier bitte! Let me take your long black cape and your dripping bloody dagger. Relax and have a seat Hubscha Fraulein.
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With my x-ray hearing and spider-mädchen ears I have overheard the first question. The actual key to rapid and sustainable economic growth is wide diversity of professional activities & sub-specialties. Our ancient ancestor was farmer, combination soldier, combination hunter, combination fish monger. By contrast, within today's business environment there are literally thousands of civilian occupational specialties and military sub-specialties. As this tendency towards complexity progresses by the hour we are left with the uneasy sensation of Looming Labor Shortage as wages, salaries, and fringe benefits escalate through a helical spiral of inflation that becomes more dangerous each week that we live.
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So then, your life's work and effort to bring deflation to the poor, the hungry, and the fixed income paupers is constantly thwarted by economic growth brought on by the creativity of the Wright Brothers and Devious Sisters who have created so many subspecies of the economic animal.
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Although I have done my best, it is a loosing battle. My father, Count von Down, was in same position and would be appalled to see my situation today. Sniffle
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Don't be sad Duchess. Take my napkin for your tears.
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But you were taking notes on this napkin. Your ink has destroyed the effectiveness of my make-up.
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But you look so much younger without green paint on face. You got a little sister?
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I think Suzanne would like you. Do you like Polka Music?
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MP3 ?
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