The basic premise for excellence is that no one can be excellent alone.  If we are ever going to achieve anything close to our potential we need the help of others.

We form communities to precipitate the interactions that will help us on our road to excellence.  But not all communities are Excellent.  They need to include five characteristics to bring about excellence in its members.  Security, Courage, Justice, Tolerance, and Celebration.  Today I'd like to focus on Security.

Security in this discussion can be defined as the community members' belief, feeling, and understanding that we are all in this together.  On each other's side and ready to work in each other's behalf.  Especially to see that each of us gets Justice, or receiving what we earn.  If you need an event to illustrate this, just look at what is going on in the greediest of places, the world's stock markets these past few weeks.

The problem in the markets can be traced back to mortgage companies aggressively writing loans that exceeded the borrowers' ability to pay.  They back-ended the costs by opening the contracts at a lower teaser rate than what would ordinarily be appropriate for the amount of risk that borrower represented.  Borrowers were misled to believe they could afford the payments based on the lower beginning rate.  Some time later that rate would balloon to a much higher interest so the overall profitability of the loan was secured if the lender held onto the paper until the payoff thirty years later.  The risk to the lender was that the borrower's ability to pay needed to grow so that, when the escalator rate kicked in, the increased payment would still be affordable.

But the original borrowers realized that they could off-load the risk of repayment by bundling a lot of these loans into securities backed by the promise to pay of thousands of borrowers.  Surely, a small percentage of loans would default, but the overall package had enough diversity to mitigate that threat.  Second tier investors realized that as long as they had a market in place to resell their mortgage backed securities, they could control their exposure to the default risk by dumping it on someone else.

Both the originators and second tier investors ignored the most basic of investment axioms, there can be no return without assuming some risk.  By bundling the over-extended loans into thicker and thicker layers of expected returns the ever increasing threat of default started weighing heavier and heavier until market forces in the real estate sphere stripped away home values and the camel's back just broke.

MAJOR investment firms started writing of bad debt, and CEO's, in droves.  Plus the banks had to tighten their credit belts thus putting a crimp on the system that fuels the expansion of ALL industries in the US.  The world saw this and the chain reaction began. Without the US consumers buying and buying at the same rate as we had been doing the worldwide prospects for profits were downgraded thereby undermining the worldwide stock investment prospects.  

Sell-offs commenced and stock markets plummeted.

Now, to mitigate this affect, the US Administration and Congress have decided that EVERY tax paying American will need to chip in and try to correct the turmoil created by overzealous, greedy mortgage originators.  Whether you sell shoes, or mortgages; build oil rigs, or houses; operate a teller's window at a race track, or a bank; all of us are involved.

We are all in this together. 

Can we do something to prevent this from happening again?  No.  Humans will forever try to feed their appetite of greed by pushing off the risk on others so they can reap the rewards scott free.  But by staying together, thinking on a community level, and chiming in when we perceive injustice, such as this kind of greed, we can make it increasingly difficult for the leeches to suck off too much of our life blood.  

The market will recover from this episode.  There is too much potential for excellence in every human for that not to happen.  Events such as these are the tests we have to pass to develop toward Excellence.