Declaration of Independence: n-Crisis: n-CDO and n-([B][B])

1. Surely, July 4th, 2011, 235 years after the signing of the Declaration of Independence by 50 wealthy revolutionaries may give us pause as to how those words affect us today. See: http://www.archives.gov/exhibits/charters/declaration_transcript.html

2. Freedom is responsibility. Yet, our entanglements today in the worlds of personal and governmental responsibilities appear to enslave us in systematic bureaucratic multipliers and enchain us in the fears of unpaid contagions. The resilience of a global system of financial trades is susceptible to the collapse of belief. Belief that trades on reputation and authorities.

3. Money. Billions and billions of individual bilateral trades occur each day using a symbolic code for value. These transactions are aggregated to greater and greater volumes and values by what might be called 'hard transactions' evidenced by contracts and aggregated in a weak sense through the media as comments on the value of a nation's currency and 'bought' by news hungry consumers. Money is not just what you have in hand at the shop for candies and drink, or electronic media that allow you to make or receive monthly payments. Money is the meeting of billions of minds and how those minds are herded, controlled and set into motion all form substantial parts of what might be called the 'theological impertinence of money.' Note how our beliefs as to the value of money appear directly related to edicts or 'ratings' pronounced by agencies beyond the importunities of elected officialdom. Money therefore at the heights of its global social influence and impact is a phenomenon unto itself and contains its own structural integrity, a de facto oligarchic elite are naturally nodes of excessive symbolic power while the masses are fed panem et circenses.

4. CDOs Do Not Create Rights and Duties, rather they generate false Privileges and Immunities. Contractual rights and duties involve the individuals qua individuals, that is, those who can naturally identify each other, set in definable time and space. But to whom does one collect from, plead, negotiate, and most importantly, make a claim against when the very purpose of the transaction is to legally bow out of existence and avoid bankruptcy? Suddenly the signatories to the CDO feel they are above the wherewithal of the law. The CDO sets out a disability against a constitutional freedom, and in this extreme sense is rendered unconstitutional.

5. The Credit Crisis of 2008 evidenced the Invariance of Default, with Default as the dividing line between financial Innovation [I] and government Bailout [B]. In the Great Cycles of Default, we have the following weak rotational symmetry (permutations) in category theory notation:

A = [I][I]
B = [I][B]
C = [B][B]
D = [B][I]

Important note: we have left out the morphism from the left [ ] to the right [ ], although this morphism is 'default.' Default as we know acts as a reset button for the subsystem of private contracts. Default can also be thought of as the 'Men in Black' button that not only resets but also formally re-writes social memory. In category theory terms, there is a forgetful functor from all the trades with and without default to trades without default. Given the primacy of default, one would expect the stickiest object to [B][B].

6. What do we mean by the Invariance of default? It means that there is an appreciable, greater than infinitesimal, and therefore actual actuality of default given any arbitrary period of time. Another way of putting this is that time itself in its discrete essence is demarked in the many billions of discrete transactions between objects A, B, C and D. The structure of A, B, C and D comes from the invariance of default.

7. What is financial stability in the face of the four stage cycle of default? All we can hope for is building shortcuts to the desired state. The Orderly Liquidation Authority in Dodd Frank is a morphism from B to C. And the Whistleblower Incentives and Protection provisions of Dodd Frank are a morphism from D to A. We leave the exercise of determining why these morphisms are so for the reader.

8. Final hypothesis. Note the potential interaction between OLA and WIP. What could this morphism mean? Trial court where these two issues are conjoined.