For policy makers it means that taking smaller hits sooner is better.
That is kind of what I took out of it, when reading through the Market Oracle article (http://www.marketoracle.co.uk/Article541.html). It would also tend to match what we already know. If the lending standards were not loosened to allow easier financing in an already tight environment (close to critical slope), we would not be looking at this kind of meltdown in the future.
Going back to the sand, it would be like changing the grains to be grains that were slightly ‘stickier’ when a significant amount of the slopes are approaching critical. This may help hold these new grains to the surface, but the underlying sand is still weak. The resulting ‘cascades’ end up being much larger (because they will also involve more of the underlying sand).
