I really like the discussion on the financial crisis, but I would like to see a future article that further explores how to loose weight while doing the internal martial arts.

The financial system invents new ways to make money, to bend money, to twist money. That’s what it does. And that’s a good thing. Often these new inventions work, like credit cards. There seems to be a growing concensus that many of the money products invented over the last 20 years don’t work, for instance, variable rate loans (which go up/down with inflation).

Historically, financial instability made people really conservative. The reasonable fear that the whole market would collapse made people reluctant to invest/loan. But even if you kept your money as cash, it’s value could crash, so conservative strategies aren’t actually better for the individual, and they certainly aren’t better for the world market.
If when people make money, they can turn around and invest it, it helps other people make money too.
The purpose of the “government bailout” and all financial regulatory action is to stablize the market so that people who have money will give it to other people so that they can use it to make more money. The “bail out” is just a tool calculated to have a stabilizing effect. (I’m skeptical of the assumption that it will actually cost the government anything in the long run, since, among other things, an improvement in the economy will mean more tax revenue.)

Chris, the simple answer is yes. Cheap oil keeps costs down; which is the definition of industrial commerce.
Industrial commerce has been so successful that the world has more money than it/we know what to do with. It has to go back into the markets, where else could it go? Much riskier markets have recovered.
The Daodejing says:
“Trust the trustworthy, but also trust the untrustworthy, by this the nature of trust is understood.”

Yes, have to agree 100%. Instead of “eating within my means”, what if I buy a 2 million dollar house that I can’t afford? Now I go bankrupt. Should the government bail me out? What if I bet on stocks and won a lot but when I lose, should they bail me out? That does seem totally ludicrous. I don’t have a great grasp of it, either, but a few moves seemed sensible:

1. the government let Lehman fall – these guys are fat cats who made billions then lost, as in my above rhetorical questions, no one need help them.
2. the government bailed out AIG – there was too much “systemic” (chain reaction) risk to ordinary people such as us here.
3. the FDIC and others stepped in to try to get buyers for WaMu and Wachovia. Obviously runs on those banks would hurt ordinary people and other parts of the economy. Good move.

Beyond that, there is so much politics to follow, it’s hard to assess…

Scott,
Would lowering the price of oil restore trust in the system?

A friendly government in Iran wouldn’t hurt either.

I think it’s also worth noting that the rest of the world economy seem totally reliant on America to drive it and keep it stable.

I did not realize this. Interesting. I guess I am extremely successful then. LOL… Seriously – there are worse things than being fat – as long as one is healthy.