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	<title>工商法 &#187; Self-correcting Systems</title>
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		<title>On Any Human Sanitation Day</title>
		<link>http://www.gongshangfa.com/law/on-any-human-sanitation-day/</link>
		<comments>http://www.gongshangfa.com/law/on-any-human-sanitation-day/#comments</comments>
		<pubDate>Fri, 18 Dec 2009 19:15:55 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Law]]></category>
		<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[amuse.ment]]></category>
		<category><![CDATA[china.frauds]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=2227</guid>
		<description><![CDATA[Your Web Content From: &#8220;Chris Devonshire Ellis&#8221; To: &#8220;rhodozeb@yahoo.com&#8221; Cc: &#8220;Andy Scott&#8221; (andy.scott@china-briefing.com), &#8220;Richard Hoffmann&#8221; (richard.Hoffmann@dezshira.com) Dear Mr. Zeb; I have noticed your comment on your website here: http://www.gongshangfa.com/2009/03/20/chris-devonshire-ellis-fake-lawyer-fake-quitter-just-fake/http://www.gongshangfa.com/2009/03/20/chris-devonshire-ellis-fake-lawyer-fake-quitter-just-fake/ I would like to point out to you that the story &#8230; <a href="http://www.gongshangfa.com/law/on-any-human-sanitation-day/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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<h3>Your Web Content</h3>
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From:<br />
&#8220;Chris Devonshire Ellis&#8221; <chris @dezshira.com><br />
To:<br />
&#8220;rhodozeb@yahoo.com&#8221; <rhodozeb @yahoo.com><br />
Cc:<br />
&#8220;Andy Scott&#8221; (andy.scott@china-briefing.com), &#8220;Richard Hoffmann&#8221; (richard.Hoffmann@dezshira.com)</p>
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Dear Mr. Zeb;</p>
<p>  I have noticed your comment on your website here:</p>
<p>http://www.gongshangfa.com/2009/03/20/chris-devonshire-ellis-fake-lawyer-fake-quitter-just-fake/http://www.gongshangfa.com/2009/03/20/chris-devonshire-ellis-fake-lawyer-fake-quitter-just-fake/</p>
<p>I would like to point out to you that the story you have run is inaccurate, was not clarified concerning content by you with me, and is libelous. Accordingly, I request that you kindly remove the content in its entirety. I regret that failure to do so within the next seven days will result in me taking the matter further, including with the following organizations:</p>
<p>Legal Committee of the American Chamber of Commerce in China ;</p>
<p>Your pertinent bar association in the United States ;</p>
<p>Legal action for redress and financial compensation for damages as may be necessary, either in Shanghai or in the United States .</p>
<p>I have deployed a US based specialist internet abuse legal team in New York to track down the protagonists of the online campaign against me and to seek prosecution and closure of offending sites. This includes your commentary. I trust it will not be necessary for me to involve them in this matter and that we can put the issue behind us as a matter of enthusiastic, yet ill informed gossip. Your cooperation in removing your content would be appreciated.</p>
<p>Yours sincerely;</p>
<p>Chris Devonshire-Ellis</p>
<p>Founding Partner</p>
<p>Dezan Shira &#038; Associates</p></div>
<p></rhodozeb></chris></div>
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<p>I love it.  &#8220;US based specialist internet abuse legal team&#8221;??  How many pints do you need to have in you before you write that?  Let me see:</p>
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US-based, specialist, internet-abuse legal team?  No.</p>
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US based specialist internet-abuse legal-team?  No.</p>
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It just doesn&#8217;t scan. The gift that keeps on giving, this one.  I bet he has put the <a href="http://www.sadlyno.com/archives/001591.html">New York Law Firm</a> on retainer to handle this matter and close offending sites.</p>
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Anyway, this was sent five days ago.  My posts on this fraud are staying up.</p>
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		<title>What was Handed Down to Me</title>
		<link>http://www.gongshangfa.com/law/what-was-handed-down-to-me/</link>
		<comments>http://www.gongshangfa.com/law/what-was-handed-down-to-me/#comments</comments>
		<pubDate>Sun, 22 Nov 2009 16:59:16 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Law]]></category>
		<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[human.behavior]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=2167</guid>
		<description><![CDATA[Checks and Balances, the vaunted US system of distribution of power between the three branches of government, is fundamentally, at its heart, about oversight and about accountability. The entire system is based on a simple theory: Men in position of &#8230; <a href="http://www.gongshangfa.com/law/what-was-handed-down-to-me/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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Checks and Balances, the vaunted US system of distribution of power between the three branches of government, is fundamentally, at its heart, about oversight and about accountability.</p>
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The entire system is based on a simple theory: Men in position of power without effective oversight will abuse that power.  That understanding may be couched in different terms or spun in different directions, but it comes down to two lines: Men with power sans accountability are likely to abuse their power, and accountability is the best remedy for such abuses, in order to limit the damage of the abuses, if not to prevent such abuses by the threat of effective oversight.</p>
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So we built a system with three branches, each with, you guessed it, oversight capabilities.  And we built a Federal and State system with similar accountability and limitation on power features.</p>
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I wonder what those guys were trying to do?  It all just seems so&#8230;haphazard, don&#8217;t you think?</p>
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Now we may say that human nature is good, or that it is bad, but this fundamental understanding of human nature is clear: Social environments have consequences, and environments filled with accountability are less oppressive and less unjust, because powerful figures are kept in check.</p>
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George W. Bush doesn&#8217;t believe in law, and he doesn&#8217;t believe in <a href="http://www.harpers.org/archive/2009/11/hbc-90006115">accountability for his friends</a>. We all know about he and Cheney together, locked together by their common ideological flag, ushered in a period of utter lawlessness.  This is why they will be punished, in the fullness of time, and it is why so many are viscerally angry about the crimes of that administration.</p>
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But, looking forward, what of the Obama Administration?</p>
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President Barrack Obama arrived in Shanghai just after an unusually-severe cold front descended upon the city.  The entire week was bone-numbingly cold a good six weeks before anyone expected to see such temperatures.</p>
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The <a href="http://jamesfallows.theatlantic.com/archives/2009/11/manufactured_failure_3_inside.php">Administration fought</a> for <a href="http://www.huffingtonpost.com/elizabeth-lynch/obamas-town-hall-in-shang_b_362024.html">access to a group</a> of people, and that&#8217;s good, I think, in that we are engaging at a high level directly with a wide audience, both at micro level within the echelons of government and the macro level through mass media.</p>
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But there is one thing that confuses me.  You see, Obama apparently said this in <a href="http://www.mcclatchydc.com/310/story/78911.html">Shanghai on a cold, rainy day</a> in November:</p>
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I think that the more freely information flows, the stronger the society becomes, because then citizens of countries around the world can then hold their own governments accountable.</p>
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Because I thought the official policy of the Obama Administration was that the <a href="http://www.salon.com/news/opinion/glenn_greenwald/2009/11/01/state_secrets/index.html">past is the past</a> and accountability no longer matters.</p>
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		<title>My Thoughts are a Gas</title>
		<link>http://www.gongshangfa.com/international-justice/my-thoughts-are-a-gas-2/</link>
		<comments>http://www.gongshangfa.com/international-justice/my-thoughts-are-a-gas-2/#comments</comments>
		<pubDate>Wed, 09 Sep 2009 14:31:36 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[International Justice]]></category>
		<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[工商法]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=1956</guid>
		<description><![CDATA[A &#8216;civilized&#8217; government doesn&#8217;t imprison people without evidence or fair trials, and develops and follows clear guidelines to ensure fairness and justice. A &#8216;civilized&#8217; government doesn&#8217;t beat up reporters and then lie about the incident. A &#8216;civilized&#8217; government punishes government &#8230; <a href="http://www.gongshangfa.com/international-justice/my-thoughts-are-a-gas-2/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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A &#8216;civilized&#8217; government doesn&#8217;t imprison people without evidence or fair trials, and develops and follows clear guidelines to ensure fairness and justice.</p>
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A &#8216;civilized&#8217; government doesn&#8217;t <a href="http://www.zonaeuropa.com/20090909_1.htm">beat up reporters and then lie</a> about the incident.</p>
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A &#8216;civilized&#8217; government punishes government actors who violate the law, by, for instance, beating up on reporters or failing to stop a large-scale fight as soon as practicable.</p>
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A &#8216;civilized&#8217; government understands that there will always be failings and wrong actions, and therefore creates tough oversight bodies to quickly right wrongs.</p>
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If only such a &#8216;civilized&#8217; government existed in this world&#8230;</p>
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		<title>Wow!</title>
		<link>http://www.gongshangfa.com/self-correcting-systems/wow/</link>
		<comments>http://www.gongshangfa.com/self-correcting-systems/wow/#comments</comments>
		<pubDate>Sat, 27 Jun 2009 14:39:09 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[Shanghai]]></category>
		<category><![CDATA[china.realities]]></category>
		<category><![CDATA[real.ity]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=1525</guid>
		<description><![CDATA[[singlepic id=67 w=450 h=330 float=center] Honest inspections. Controlling corruption. These issues come to mind. Shanghai has traditionally done pretty well, but this should scare apartment buyers. A lot. Hope to see some firings based on this. Minxing? Where the heck &#8230; <a href="http://www.gongshangfa.com/self-correcting-systems/wow/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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Honest inspections.  Controlling corruption.  These issues come to mind.</p>
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Shanghai has traditionally done pretty well, but this should scare apartment buyers.  A lot.</p>
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Hope to see some firings based on this.  Minxing?  Where the heck is that?</p>
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		<title>Bloodshed</title>
		<link>http://www.gongshangfa.com/self-correcting-systems/bloodshed/</link>
		<comments>http://www.gongshangfa.com/self-correcting-systems/bloodshed/#comments</comments>
		<pubDate>Mon, 15 Jun 2009 17:10:34 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[cultural.development]]></category>
		<category><![CDATA[human.behavior]]></category>

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		<description><![CDATA[Shots fired at banned Mousavi rally, &#8216;several dead&#8217;. I am very worried this will get out of hand. Somebody else, is too, I would wager, as every proxy known to man is down right now. [Update] Oops, already too late. &#8230; <a href="http://www.gongshangfa.com/self-correcting-systems/bloodshed/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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Shots fired at banned Mousavi rally, <a href="http://www.msnbc.msn.com/id/31365097/ns/world_news-mideastn_africa/">&#8216;several dead&#8217;</a>.</p>
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I am very worried this will get out of hand.  Somebody else, is too, I would wager, as every proxy known to man is down right now.</p>
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[Update]<br />
Oops, already too late. From the same report:</p>
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Overnight, police and hard-line militia stormed the campus at the city&#8217;s biggest university, ransacking dormitories and arresting dozens of students angry over what they say was mass election fraud.</p>
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<p>Based on that provacation, it is going to get uglier still in the next couple days.</p>
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		<title>Background and Food for Thought</title>
		<link>http://www.gongshangfa.com/self-correcting-systems/background-and-food-for-thought/</link>
		<comments>http://www.gongshangfa.com/self-correcting-systems/background-and-food-for-thought/#comments</comments>
		<pubDate>Tue, 09 Jun 2009 10:45:45 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[us.politics]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=1344</guid>
		<description><![CDATA[From a comment on a humorous* blog, but I do believe the information contained herein to be accurate: The Founding Fathers supported the view that (in the words of the Declaration of Independence) “Men … are endowed by their Creator &#8230; <a href="http://www.gongshangfa.com/self-correcting-systems/background-and-food-for-thought/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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From a <a href="http://www.sadlyno.com/archives/22083.html#comment-933466">comment</a> on a humorous* blog, but I do believe the information contained herein to be accurate:</p>
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The Founding Fathers supported the view that (in the words of the Declaration of Independence) “Men … are endowed by their Creator with certain unalienable Rights.” <b>They recognized that such rights should not be violated by an unrestrained majority any more than they should be violated by an unrestrained king or monarch. In fact, they recognized that majority rule would quickly degenerate into mobocracy and then into tyranny. They had studied the history of both the Greek democracies and the Roman republic. They had a clear understanding of the relative freedom and stability that had characterized the latter, and of the strife and turmoil — quickly followed by despotism — that had characterized the former. In drafting the Constitution, they created a government of law and not of men, a republic and not a democracy.</b></p>
<p>&#8230;</p>
<p>• Virginia’s Edmund Randolph participated in the 1787 convention. Demonstrating a clear grasp of democracy’s inherent dangers, he reminded his colleagues during the early weeks of the Constitutional Convention that the purpose for which they had gathered was “to provide a cure for the evils under which the United States labored; that in tracing these evils to their origin every man had found it in the turbulence and trials of democracy….”</p>
<p>• Samuel Adams, a signer of the Declaration of Independence, championed the new Constitution in his state precisely because it would not create a democracy. “Democracy never lasts long,” he noted. “It soon wastes, exhausts and murders itself.” He insisted, “There was never a democracy that ‘did not commit suicide.’”</p>
<p>• New York’s Alexander Hamilton, in a June 21, 1788 speech urging ratification of the Constitution in his state, thundered: “It has been observed that a pure democracy if it were practicable would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity.” Earlier, at the Constitutional Convention, Hamilton stated: “We are a Republican Government. Real liberty is never found in despotism or in the extremes of Democracy.”</p>
<p>• James Madison, who is rightly known as the “Father of the Constitution,” wrote in The Federalist, No. 10: “… democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security, or the rights of property; and have in general been as short in their lives as they are violent in their deaths.” The Federalist Papers, recall, were written during the time of the ratification debate to encourage the citizens of New York to support the new Constitution.</p>
<p>• George Washington, who had presided over the Constitutional Convention and later accepted the honor of being chosen as the first President of the United States under its new Constitution, indicated during his inaugural address on April 30, 1789, that he would dedicate himself to “the preservation … of the republican model of government.”</p>
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<p>*Alleged as such by the well-known New York Law Firm.</p>
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		<title>The Night is Long, and Cold as Ice</title>
		<link>http://www.gongshangfa.com/self-correcting-systems/the-night-is-long-and-cold-as-ice/</link>
		<comments>http://www.gongshangfa.com/self-correcting-systems/the-night-is-long-and-cold-as-ice/#comments</comments>
		<pubDate>Thu, 04 Jun 2009 07:49:25 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[china.politics]]></category>
		<category><![CDATA[china.traditions]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=1306</guid>
		<description><![CDATA[Are we there yet? Oh. I see. It has been a sober (metaphorically) time for many, I believe, although as we know, most of those around us have no idea what is going on. And I wonder whether it is &#8230; <a href="http://www.gongshangfa.com/self-correcting-systems/the-night-is-long-and-cold-as-ice/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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<a href="http://foarp.blogspot.com/2009/06/self-pwnage-redux.html">Are we there yet?</a>  Oh.  I see.</p>
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It has been a sober (metaphorically) time for many, I believe, although as we know, most of those around us have no idea what is going on.  And I wonder whether it is even important to tell anyone.</p>
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If the system fails to take every source of real political power into consideration, then its just a matter of time, unless adjustments can be made.</p>
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Frankly, no one knows if this system is sufficiently <a href="http://www.gongshangfa.com/category/self-correcting-systems/">self-correcting</a> or not.</p>
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If you look at the numerous <a href="http://english.caijing.com.cn/2009-06-01/110173946.html">environmental disasters</a>, you may well guess that there is no self-correction.</p>
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On the other hand, I do see some <a href="http://www.gongshangfa.com/2009/06/03/grotesque-and-arrogant/">signs of improvement</a>,  in j peg format, which is originally from <a href="http://www.harpers.org/archive/2009/05/hbc-90004993">Scott Horton</a> (sorry I should have put up the link earlier).</p>
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But I tend to be fairly optimistic in general.  Maybe I will talk more of my optimism at a more appropriate time.</p>
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		<title>Grotesque; and Arrogant</title>
		<link>http://www.gongshangfa.com/self-correcting-systems/grotesque-and-arrogant/</link>
		<comments>http://www.gongshangfa.com/self-correcting-systems/grotesque-and-arrogant/#comments</comments>
		<pubDate>Tue, 02 Jun 2009 21:18:41 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[house.keeping]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=1275</guid>
		<description><![CDATA[[singlepic id=55 w=320 h=240 float=none] Apparently I have to do everything around here. Apologies to Serolf, sincerely, for the thread high-jack. If anyone is confused, yes, I am Thers, plus punctuation. Dig it, ghost man. Or not, as the case &#8230; <a href="http://www.gongshangfa.com/self-correcting-systems/grotesque-and-arrogant/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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Apparently I have to <a href="http://www.gbvdb.com/track.asp?track=Pivotal+Film&#038;version=&#038;live=False">do everything</a> around here. Apologies to Serolf, <a href="http://www.stinque.com/2009/06/02/a-war-of-choice-part-xvii/">sincerely, for the thread high-jack.</a></p>
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If anyone is confused, yes, I am <a href="http://whiskeyfire.typepad.com/">Thers</a>, plus punctuation. Dig it, ghost man.  Or not, as the case may be.</p>
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On to the <a href="http://www.harpers.org/archive/2009/05/hbc-90004993">topic at hand</a>.  <a href="http://kdka.com/national/abortion.doctor.george.2.1026519.html">Political violence</a>, I guess its called.  I personally want to see a reduction in political violence.  In fact, in China, I have seen signals of a kinder, gentler party.</p>
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Its damn good to see.  Let&#8217;s ratchet it all down a couple notches, shall we?</p>
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I have already seen some signals of improvement, and I look forward to further advances.</p>
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Let&#8217;s show respect for one another, shall we?  Now that&#8217;s just right.</p>
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[Update]  Totally forgot the obligatory link, to freedom!： <a href="http://bdr.typepad.com/blckdgrd/2009/06/090601.html">Into thin air, yeah into thin air!</a></p>
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		<title>The Lessons We&#039;ve Botched</title>
		<link>http://www.gongshangfa.com/self-correcting-systems/the-lessons-weve-botched/</link>
		<comments>http://www.gongshangfa.com/self-correcting-systems/the-lessons-weve-botched/#comments</comments>
		<pubDate>Thu, 28 May 2009 07:24:22 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[us.culcha]]></category>
		<category><![CDATA[us.housing]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=1224</guid>
		<description><![CDATA[I am not going to lie to you: When I saw that Brad Delong, by any account an &#8216;A&#8217; list blogger and one of my daily reads, defended Megan McArdle right after (or maybe even before) I attacked her, well &#8230; <a href="http://www.gongshangfa.com/self-correcting-systems/the-lessons-weve-botched/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
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I am not going to lie to you: When I saw that Brad Delong, by any account an &#8216;A&#8217; list blogger and one of my daily reads, <a href="http://delong.typepad.com/sdj/2009/05/new-york-times-crashed-and-burned-and-smoking-watch-ombudsman-clark-hoyt-edition.html">defended Megan McArdle</a> right after (or maybe even before) <a href="http://www.gongshangfa.com/2009/05/24/double-standards-honey/">I attacked her</a>, well I wasn&#8217;t too happy.  This is still my first year blogging, and I am well aware that I have <a href="http://www.gongshangfa.com/2009/05/25/broken-in-firefox/comment-page-1/#comment-111">a lot to learn</a>.</p>
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So I wrote <a href="http://www.gongshangfa.com/2009/05/26/time-lost-at-all-cost/">another post</a> to try and re-focus on the key issue in this particular dust-up, which is that some in our national discourse very much want to focus the blame for the sub-prime meltdown on a bunch of &#8216;greedy people&#8217;, or some variation thereof.</p>
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I am not going to go into detail about why that analysis is wrong at this time; sooner or later I will write a post about behavioral engineering.</p>
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For now, my purpose is a simple one: <a href="http://delong.typepad.com/sdj/2009/05/refocusing-the-discussion-of-the-mortgage-boom.html">Vindication!</a></p>
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I agree: that Edmund Andrews acted somewhat like a moonstruck idiot is not especially interesting&#8211;save perhaps in the hands of F. Scott Fitzgerald. That American Home Mortgage and company were willing to finance his acting like an idiot and so drag themselves down as well is somewhat more interesting.</p>
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The feelings and motivations of the borrowers is of no consequence in this analysis.  The fact that banks were making these bargains, on the other hand, is very much a first-order issue.</p>
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		<title>Mortgage Mess</title>
		<link>http://www.gongshangfa.com/macro-economics/mortgage-mess/</link>
		<comments>http://www.gongshangfa.com/macro-economics/mortgage-mess/#comments</comments>
		<pubDate>Fri, 08 May 2009 19:25:31 +0000</pubDate>
		<dc:creator>Rhodo Zeb</dc:creator>
				<category><![CDATA[Macro-economics]]></category>
		<category><![CDATA[Self-correcting Systems]]></category>
		<category><![CDATA[basic.economics]]></category>
		<category><![CDATA[us.politics]]></category>

		<guid isPermaLink="false">http://www.gongshangfa.com/?p=784</guid>
		<description><![CDATA[In a roundabout (and curmudgeonly) way, I encouraged everyone to visit Calculated Risk regularly some time ago. And, even though apparently I got someone&#8217;s attention, it bears repeating: Calculated Risk is the best spot to be in if you dare &#8230; <a href="http://www.gongshangfa.com/macro-economics/mortgage-mess/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<div id="attachment_971" class="wp-caption alignright" style="width: 310px"><a href="http://www.gongshangfa.com/wp-content/uploads/2009/05/csselectedcitiesfeb2009.jpg"><img src="http://www.gongshangfa.com/wp-content/uploads/2009/05/csselectedcitiesfeb2009-300x208.jpg" alt="Who is going to eat this freaking haircut?" title="csselectedcitiesfeb2009" width="300" height="208" class="size-medium wp-image-971" /></a><p class="wp-caption-text">Who is going to eat this freaking haircut?</p></div>
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In a roundabout (and curmudgeonly) way, I <a href="http://www.gongshangfa.com/2009/03/05/gfc-youtube-and-futility/">encouraged everyone</a> to visit <a href="http://www.calculatedriskblog.com/">Calculated Risk</a> regularly some time ago.  And, even though apparently I got someone&#8217;s attention, it bears repeating:  Calculated Risk is the best spot to be in if you dare to watch the economic meltdown in the US.  CR started out only focused on the mortgage crisis, and that turned out to be a front-row seat for almost the whole show.</p>
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The related <a href="http://www.calculatedriskblog.com/2008/12/in-memoriam-doris-tanta-dungey.html">story of Tanta</a> is a bitter-sweet but uplifting tale.  And its all true.  She taught probably hundreds of people about housing economics over the course of her time at CR.</p>
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The US Congress made a <a href="http://www.harpers.org/archive/2009/05/hbc-90004890">huge mistake this week</a>, and it needs to be reviewed immediately.  In exchange for a <a href="http://www.huffingtonpost.com/2009/04/30/cramdown-vote-banks-bough_n_193674.html">paltry amount of campaign contributions</a>, the bill, which would have allowed bankruptcy judges to &#8216;cramdown&#8217; mortgages, <a href="http://www.bloomberg.com/apps/news?pid=20601087&#038;sid=aZgoZUJbGqpQ&#038;refer=home">has failed</a>.</p>
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It is really hard to express just how dumb this is. Look at the chart: Prices are way down all over.  People who bought in 2003-2007 are getting killed now. <a href="http://www.calculatedriskblog.com/2009/05/homeowners-underwater.html">You want to keep them underwater?</a>  What do you think is going to happen if you do?  You are going to force them into bankruptcy and watch <a href="http://www.democratandchronicle.com/article/20090507/NEWS01/905070372/1002/rss01">housing prices continue</a> to decline.  Precisely which consumers are going to buy up the over-built housing stock?  Is a huge influx of young buyers coming down the pipe?  Or are we entering a death-spiral of falling prices, increased foreclosures and vacant lots?</p>
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Legislation that would have allowed bankruptcy judges to modify mortgages died in the Senate yesterday, handing the Obama administration a significant defeat in its plans to mitigate the foreclosure crisis.</p>
<p>Supporters argued that <b>the measure would have kept 1.7 million borrowers in their homes.</b></p>
<p>The measure would have allowed bankruptcy judges to <b>modify troubled mortgages, lowering the interest rate or principal balance</b> through a process known as a cramdown.</p>
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The finance industry is showing precisely how ignorant of simple economics they are.  Currently, <a href="http://www.zillow.com/blog/national-market-continues-to-drop-some-markets-showing-first-signs-of-slowing-decline/2009/05/05/">housing prices are still falling</a>.  That means more people are going underwater, every day, because the mortgage industry got overheated and overinflated and everyone paid too much for their property, and because the economy overall is tanking and unemployment is high.  If you ask individuals to bear this, you will create a huge drag on <a href="http://www.calculatedriskblog.com/2009/05/foreclosures-2nd-wave.html">economic growth going forward</a>.  You will destroy a lot of people&#8217;s credit, to the point where it will be hard for them to become buyers again.  We have overbuilding and so who precisely will buy, after, that is, the current homeowners suck up the current losses.  Which, honestly speaking, should fall directly on the banks.</p>
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Sigh.  I just don&#8217;t know what to say sometimes.  I left the US and sometimes it seems like reason and sense abandoned the country just after.  Coincidence or correlation, you decide.  Theo Francis at BusinessWeek <a href="http://www.businessweek.com/blogs/money_politics/archives/2009/03/the_hangup_with.html">lays out the legal processes involved</a>:</p>
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<div>Often called cramdown – from bankruptcy-court jargon for judicially reduced debts generally – the concept is simple: Give judges the same power over primary-residence mortgages that they have over virtually all other debts, including mortgages on vacation homes and multi-family housing.</p>
<p>Briefly, proponents say it’s a way to cut through legal tangles and address the foreclosure crisis directly. Opponents, who staved off a similar measure several times before the financial crisis mushroomed, say it could ultimately raise mortgage costs for everyone.
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You might be able to discern which side I am on.  They are <a href="http://www.calculatedriskblog.com/2009/05/more-on-demolished-homes-in-victorville.html">already demolishing houses</a>, and that will not stop.  There is going to be a lot of consolidation, in fact.  So demand is fast retracting, without a doubt.</p>
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But I repeat myself.</p>
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