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If we are to learn anything from this sordid episode in our nation's economic history one lesson must come through: It is the presence of these "under the covers" backstops that cause asset bubbles to be blown to the degree that we saw occur, because without them nobody in their right mind ever allows a commitment of money to dodgy assets to the degree that is necessary for a bubble of the magnitude we saw in housing to occur. Between those "side letters" (or their moral equivalents) and accounting fraud you have a recipe for disaster. We have now seen two bubbles - The Internet and Housing - occur due almost entirely to these factors. ENRON occurred due to the ability of the firm to run off-balance sheet deals that turned out to be an outright scam, and the housing bubble occurred due to what amounted to the same thing: massive off-balance-sheet exposures and vehicles that were effectively financed the same way (that is, sans disclosure.) We sorely need

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