I really enjoyed this; thank you. I work in the markets and have been dealing with this first hand for some time on a more-intimate-than-normal level so it is topic I tend to avoid in my “free time”. I bring this up only to reflect just how much I enjoyed your piece. I have never seen the concepts of reduced money supply velocity and the unwinding of leverage explained so succinctly and effectively that it could be not only understood by a wide spectrum of people but done so without condescension and at the same time avoiding the pitfalls of professional jargon.

There is a move now in foreclosure cases for the person being evicted to ask that the bank produce the original documents. The fact that these mortgages have been sold, resold, combined, divided and magically anointed, means that the banks often have nothing more than a digital reminder to collect some money. Apparently, the approach has at least put significant delays into many proceedings.

It is appropriate that you would send me this today while I am doing my taxes and looking at the $70,000 that my IRA lost. This was one half of my hard earned cash from many years of teaching that I thought could safely be moved from my state retirement account into a market account. How much of that was bubble, was actually my current quest. The bottom line is that I cashed out this year and have to pay taxes on what I suspect is about half of what I put in. The bubble ate the rest, as per your comment that we will have to pay a slight penalty for our exuberance. The way I look at it now is that for teaching 14 years in Washington I get a Smart Car and about $7000 to enjoy as half of my retirement.

Then there’s the issue of the appropriate scale…the linear scale distorts the movements of recent years, while a semi-log representation might show something different.

But the point’s there. Coupled with the re-concentration of wealth in the higher income groups, kind of makes you wonder how long you want to keep pushing the rock.