Suppose there was a financial trick that protected a financial asset from exposure to random risk while concentrating exposure to systemic risk. And suppose that regulatory authorities allowed systemic risk to be systematically under-estimated.

Why, then you could apply that trick and turn risky assets into low (random) risk assets. If they qualified for AAA, "investment grade" rating, pension funds and insurance companies could hold those assets.

Except, the types of firms that we restrict to holding investment grade assets, why, that's because the economy cannot afford them to be exposed to a lot of risk on their balance sheets.

And, yes, this is the story of how regulatory authorities asleep at the wheel allowed pension funds and insurance companies to collects piles of chicken-shit and call them baskets of eggs.

As an Edwards supporter (I presume this is not a secret) I thought it would be fun to put together a YouTube playlist where the recent 10 second ads from Edwards are placed like ads between longer clips ... which themselves are 30 second and 1 minute ads, a 1 minute clip from debate appearances, and and ending with the original campaign announcement, which still today remains an effective means of bringing people to JohnEdwards.com and OneCorps ... and also because Tomorrow Always Begins Today.

I'd appeal to Edwards supporters to consider emailing this playlist to friends who are not regulars on the site.

Link to playlist

Sometime in late November or early December, on my long ride to work in the warehouse, I listened to a speech by Paul Krugman, to the California Commonwealth Club, podcast by the Australia Broadcasting Company's Radio National (mp3).

One part of the speech that struck me was:

A bigger issue, which I do worry about, is if we do have a Democratic President, will he or she actually follow through? During the gilded age, and we are living in a second gilded age, the only Democrats who got anywhere near the White House tended to be what were called at the time Bourbon Democrats. They were Democrats who were very nearly as much in the pocket of the robber barons as the Republicans of the time. Not quite, but very nearly. And so I sometimes say that we hope we're about to elect another FDR. We might be about to elect another Grover Cleveland, which would be deeply disappointing if that's what happens.

This is something other than a Lazy Quote Diary (though I sometimes greatly appreciate a good LQD) ... so some quotes, but also some ruminations, below the fold.

The Friday before Christmas, I did something different ...

... I decided that I would Take the Long Way Home

... as that Tom Waite^{NB} lyric says at the beginning:

Well I stumbled in the darkness
I'm lost and alone
Though I said I'd go before us
And show the way back home
There a light up ahead
I can't hold onto her arm
Forgive me pretty baby but I always take the long way home

Now, I wasn't literally lost. What I did was decide that, with four days off coming up, I could take the long way home, which ought to be very pretty this time of year. Instead of going down the county highway to turn left onto the township highway to turn right onto the main county highway that goes straight to my (current) home town ...

... I decided to turn right to go past the Quarry, then cross the state route to go along the Lake road then the bike trail that runs to my home town.

And I was glad I did, because it was a terrible route, and I set me thinking about bikeways versus freedom to ride.

I was in the Senate that day, and was about to vote "no" on this legislation because it had language that President Bush could have used to justify military action against Iran. Working together, Senate Democrats reached across party lines to remove these sections. Only then did I and a lot of other Democrats vote for the resolution in order to pressure Iran by clearing the way for sanctions and pushing the President to get them to the negotiating table.

full copy of the mailing

The topic of this diary is the specific question of whether the phrase that is emphasized above holds water.

What would happen?

Well, I reckon it would end up looking something like this:

Notice that I do not show you the map of the US, but I bet you can guess most of the details (point to Chicago ... point to Dallas ... point to LA/Riverside ... point to Florida). Where does this come from? From setting up some rules, and then following them. No master plan, just some basic ground rules. The details, under the fold.

Cross-posted from the Daily Kos