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The Domino Model Revisited

The theory of dominos is that the ratio of the thickness to the height of the tablet is such that it is inherently unstable when acted upon by a nudge. A single domino when nudged will topple and fall into a highly stable orientation from which only physical intervention will restore its vertical importance.

When the domino is isolated in space because there are no other dominos on the field or they are sufficiently distanced from it, there is no opportunity for interaction that places other dominos in jeopardy. A single domino falling over is of little consequence in the greater scheme of the entire field of dominos.

It is when dominos are close together in some regular order that mass toppling events occur. In this first diagram, a sample of dominos have become arranged in a generally linear orientation and are primed for Imminent Collapse. Depending on which domino initiates the toppling event, more or less dominos will succumb to the first one. The square near the center of the field is actually composed of three closely spaced dominos. The sum of their thickness in close proximity actually makes the three act as a single tablet of thickness = 3 and is able to resist a significantly higher toppling force than any of the other single dominos.

This orientation is nicknamed "Wall Street." Hundreds of banks and investment houses in the United States and around the world all organized themselves in regular linear fashion by practicing the same paradigm of money management and unregulated folly.

The dominos in this second field are more highly random in their orientations. The are not set up to create a major toppling event. Several tablets actually protect others by their diversity of position. If when a small toppling event takes place and the magic hand acts to reset the toppled tablets over time there will be no major toppling events and most of the dominos will always be standing.

Freddie Mac and Fannie Mae both aligned themselves in the same orientation (along with hundreds of other institutions). Some partisan pundits fix blame on liassez-faire US Federal government of the Conservative Republicans as the root cause of the debacle. Others blame the liberal politics of the Democrats for trying to engineer a larger middle class out of people who were inherently unqualified to be home owners. If either of those causes were the root cause, then the hundreds of other banks and finance institutions around the world would not be in the exact same position, laying on their sided moaning after being toppled by adjacent dominos.

In this third field of tablets, there are regions of relative strength and weakness. The lattice oriented tablets are strong and resist toppling events as does the region of boxes and herringbone patterns. Several tablets are isolated enough that when a subset of tablets topple they remain upright.

If the field were sufficiently large, then while large portions of the field may suffer a toppling event, the entire field would not be destroyed.

The tendency to create vulnerable grouping like these runs rampant in an unregulated and necessarily unplanned industry. Engineers do not allow just anyone to erect a bridge or a dam where ever they choose. Federal judges do not allow legislators to enact any old law they choose. Each new law must be consistent with all pre-existing laws or either or both must be rewritten to remove the conflict.

The medical profession doesn’t allow just anybody practice medicine and call himself a doctor. Well that is a poor example. Each construction project must file a plan for electrical wiring, plumbing and structural integrity. Each phase of construction must be inspected and approved. The system is not perfect, but it does minimize the incidence of failures that injure and kill people.

Financial industry is one of the few that claims that self regulation is the only way to go and that outside scrutiny is both unnecessary and inherently damaging to the operation of the business. The finance institutions equate themselves with being the economy that needs to be left to its own “natural” checks and balances. Even though they have a long run, not one without its detractors, the end is at hand. What many constituencies who were not a beneficiary of the booming wealth production have been saying has now come to be.

The Domino model of the Principle of Imminent Collapse is brilliant in its own simplicity. The Principle of Imminent Collapse needs no regulation or outsider scrutiny. It is perfect in its performance measures. Whereas the financial industry measured its performance purely in percentages of profit, the Principle of Imminent Collapse measures its performance in magnitudes of devastation.

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