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September 17, 2008

Unconventionality, Going on Tilt, and Winning Weird, Part II

"We must walk without rhythm."
    -- Paul Atreides (from Dune (1975))

People are falling out of trees saying that with AIG the Paulson team at Treasury have crossed a line. First we weren't going to assist, then we were, and now we have. Markets want certainty, so this argument goes, so we need to have hard and fast rules about what we're going to do, how companies meet that criteria, and how.

What naive bullshit. Predictability at a time like this is the kiss of death. If you tell the markets how far it needs to bend something before it breaks, it will bend things that far and break them. Period. At the same time, you can't take a hands-off stance and say you will assist with nothing, because the market will push you until you break that one rule too -- or until you become culpable in causing a systemic financial market collapse.

No, you have to walk without rhythm, like you're trying to avoid sand worms on Dune. John Carney makes a similar case here.

(My original "winning weird" post is here.)

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