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Historical background related to current issues and/or events.

Putting the USCCB and the CCHD in context.

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The ever expanding role of the federal bureaucracy

It is becoming increasingly evident that the founding fathers' vision of the federal government as referee in the area of interstate trade was a valid one, and that it was not in need of substantial improvement. Substantial improvement, however, is the inspiration behind many a progressive drive to change things as they are and to remold them nearer their collective hearts' desire.

Pessimism vs. prudence in economic activity.

Market pessimism, of course, is a contagion spread when a market plummets, as well as a perpetual feature of economic (zero-sum-game) progressives. By contrast, prudence recognizes when investment risk is high, but does so based upon fundamentals, and, by the same fundamentals, recognizes when real opportunities exist.

Three years ago, on May 13, 2007, New York Times business writer Geraldine Fabrikant introduced us to fund management guru Seth Klarman in "Manager Frets Over the Market, but Still Outdoes It." Klarman is a quintessential realist, possessed of great market prudence.

The Law of Moral Hazard

I began looking more closely at the Law of Moral Hazard when I tried to trace the source of a rather delicious quote from John Maynard Keynes:

“A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.” John Maynard Keynes, 1931.

I first encountered this quote in "Who Will Bail Out the Bailer-Outers?" From there, a Google search turned up a Wikipedia article, Credit Crunch. Wikipedia often cites original sources, but not this time. Instead, it pointed to the article that inspired this reflection, "Securitisation: life after death," which analyzed the melt-down of the big investment banks in 2007. The title of the article, itself, points to a deadly financial game: securitization. It's the other side of the coin of common mode failure I wrote about in prior posts.


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