Reading this crap reminds me of Nietzsche’s dictum: “Man is more ape than any ape.” Indeed.

I think your postings are well thought out and very informative.

And I don’t mind at all your ‘background’ comments regarding your areas of knowledge.

Keep it up.

Now let’s discuss the merits of the matter.

Yves posited a thesis, as near as I can tell, that one of the issues we face is that our financial system is tightly coupled and that makes regulation much more complicated because of unintended effects. Yves, forgive me if I have mischaracterized your view.

As supporting evidence, she pointed to the glory of the human body, which is not so tightly coupled as to suffer a heart attack when we stub our toe.

I responded by saying that perception, speaking and endocrinology are just three quick examples of extremely tightly coupled systems within the human body.

I stated that what is far more accurate to say is that using logarithmic somatic buffering processes like the Weber-Fechner relation to regulate external shocks among VERY tightly coupled subsystems is a far more accurate description of the human body.

You asked me to confine my discussion to facts.

Along those lines, I am a firm believer in peer-reviewed literature, whether it be in medicine or finance.

I can provide numerous citations to the peer-reviewed medical literature to support my position that the human body is composed of numerous tightly coupled subsystems buffered and regulated by logarithmic processes such as the Weber Fechner relation.

I am unaware of any peer-reviewed work in the medical literature that supports the position that humans do not possess tightly coupled systems.

Are you?

This seems like a perfectly legitimate way to proceed, without acrimony or conceit, but merely by exchanging citations to the professional literature directly on point.

And I do not view this as a trivial discussion. Yves went on at some length about the problems of tightly coupled systems in financial regulation and has drawn repeated analogies over the last month to the human body in that regard.

In closing, I would point out that this notion of regulatory “buffering” was one reason why the Fed chose to abandon targeting the monetary base in the early 1980s, because of the extreme volatility in interest rates that resulted.

This is why, at the urging of the Kansas City Fed, they switched to Fed funds targeting instead, according to Gordon Sellon and others.

I will provide cites to the appropriate pages of the papers demonstrating this, if asked.

Sincerely,

Matt Dubuque

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/02/AR2008100200967.html

Telephone reps at mutual fund companies usually read from a script. Not the fellow I got Monday afternoon on Vanguard's line, name of Irwin. He was a live wire, speaking extemporaneously and with enthusiasm when I asked whether it's true that Vanguard Tax Exempt Money Market Fund (symbol VMSXX) yields more than 5%. In fact, on September 29, the fund's seven-day yield was a fat 5.18%.

"I know, is this a typo?" Irwin said, anticipating my next words by saying he "jumped on that" yield with his own money and got his brother in as well. "I don't know if you'll get this break for three days or three weeks, but that's the seven-day yield," he went on.

>> Interesting take on credit and money flow

P.S. Yves, I like that sidebar that shows most recent posts, it really saves time!!

Anonymous-

It is not clear to me what role personal attacks should play in a blog. The record of this blog does demonstrate that not “all” people choose to ignore me. I have received numerous compliments both publicly and privately. On what basis do you speak for all other persons?

To address your point directly, I hope that the merits of my argument are persuasive.

I’m fully persuaded that people are composed of subsystems that are extremely tightly coupled.

I think the peer-reviewed science demonstrates that.

Matt Dubuque