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James Brody
October 9th, 2008, 01:45 PM
Garas et al (2008) tell us that emergent networks - characterized by a few large hubs and zillions of small nodes - are stabilized by weak links, yes/no connections between small nodes, more than was previously thought. Earlier thoughts were that death to a big player destroys an organization but Garas found that financial networks continue surprisingly intact in such crises.
I have four examples:

1) The Old Maple, grand enough that caps are earned, leaned toward a corner of my house and rot near its base hinted of limits to the tree's future resilience.
I cut it down with a chainsaw and several ropes tied to the tree's upper branches, ropes that pivoted the falling tree away from my house.
She was still full of green leaves, leaves that kept their luster for several weeks afterwards. Neither I nor God told them they were dead.

2) American International Group (AIG) supplied insurance for nearly anything that no one else would insure, including subprime mortgages. Their loss of $18.5 billion led to replacement of that amount by you and me and our handing them another $38 billion. (http://online.wsj.com/article/SB122348485787515823.html?mod=special_page_campaig n2008_mostpop) Meanwhile, AIG leadership still needed their trip to a spa. According to the Chicago Tribune:

"AIG, party on! October 9, 2008

"Here's the tab: $139,375.30 for rooms. $147, 301.71 for "banquets." $1,488 for the Vogue Salon, which features manicures, pedicures and hairstyling. $6,939.09 on golf. $2,949 for tips. $5,016.32 at the Stonehill Tavern. $3,064.71 for in-room dining and the lobby lounge. That's part of the $440,000 bill from a recent weekend bash that an American International Group Inc. subsidiary threw for its top performers at the posh St. Regis resort, on a bluff overlooking the Pacific Ocean. Sounds like they had fun.

"Their timing was exquisite. The AIG folks and their guests hit the spa just days after the insurance behemoth grabbed an $85 billion bailout package from U.S. taxpayers. They needed it because AIG piled up net losses of $18.5 billion in the past three quarters on write-downs tied to the collapse of the U.S. subprime mortgage market."
(http://www.chicagotribune.com/news/opinion/chi-1009edit2oct09,0,4386282.story)

3) My Local Township
There are three supervisors, the second of them strongly committed to restoring a local tavern where no one famous slept, manipulating a property so the township, after a century, would have access to a river that no one particularly wants to access, and completion of bicycle and walking trails that research indicates will probably not be used. Number One supervisor is open to her projects, even to the extent of donating $5000 to her election campaign. Number Three appears skeptical but knows that he is outnumbered and newer to the game.

Number Two also wants to attend a banquet - one observing the 50th anniversary of the Parks and Rec Commission, in the south end of the county, one with a ticket of $55. Numbers two and three agreed to pay her way. Such cost her a smile and a flutter of lashes: I wrote part of the check.

Meanwhile, the police chief noted, in a different part of the meeting, that gasoline bills for his cruisers have doubled. He and Number One will meet. I'm scared.

Might the $55 have better filled a police car's gas tank rather than to Number Two's stomach. Would the car have gone further and might she drop a pound or two? And what happens when the school district also wants to charge me for gas for the band or football team?

Our national economy, an emergent, living entity itself, plays in the crapper while locals fret about the same projects that concerned them a month ago. God will have to refer everyone to Garas and his partners explain why these three things are possible and also explain that yesterday's dreams are crippled or dead.

Meanwhile, if you need a laugh, see Mike Ramirez at Investors Business Daily: Http://www.ibdeditorials.com/Cartoons.aspx#cartoon301518638486894

JimB

References:
Garas, Antonios, Panos Argyrakis, and Shlomo Havlin (2008) The structural role of strong and weak links in a financial network. arXiv 0805.2477v1 [Physics.soc.ph], May 16.
Hayek Friedrich A (1944/1994) The Road to Serfdom. Chicago: Univ. Chicago Press. (About how thugs find opportunities in failed dreams. Elegant prose by a former Austrian trooper and later Nobel winner in economics. See also Sowell, T. (2002) A Conflict of Visions: Ideological Origins of Political Struggles. NY: Basic Books.)
Ramirez, Michael (2008) Everyone Has the Right to My Opinion. Ramirez has a Pulitzer: His new book, http://www.ibdeditorials.com/ramirezbook/?src=TOPBOOK