Just two weeks after a Nobel Prize highlighted theoretical work on subatomic particles, physicists are announcing a startling discovery about a much more familiar form of matter: Scotch tape. It turns out that if you peel the popular adhesive tape off its roll in a vacuum chamber, it emits X-rays. The researchers even made an X-ray image of one of their fingers. -- Associated Press, Oct. 22, 2008

Just two weeks after a Nobel Prize highlighted another set of incomprehensible science stuff, researchers are trumpeting a startling discovery involving some stuff that even undecided voters can understand: old tree stumps. It turns out that if you leave a mortgage-backed security in a hollow stump for two weeks, it turns into Scotch tape. The researchers even used several blue spruce stumps to fashion a magically transparent financial rescue for Iceland.

The implications of the discovery could reach deeply into the global economy. For one thing, financial institutions will have an easier time placing a value on their mortgage assets. Each one is now worth $1.29, or $1.09 if the stump is in a Costco parking lot.

In fact, this latest scientific advance could be the most significant development since a group of researchers from Arizona State University managed to create a vice-presidential candidate by burying an Elmo Live doll under $150,000 worth of clothing and accessories.

The biggest issue now, of course, is whether and under what conditions tree stump transmogrification can be repeated. Derivatives traders have suspected for years that some of their most exotic instruments could, theoretically, be transformed into common household items through some combination of magic, voodoo and impersonations of Rep. Barney Frank (D-Mass.). Thus the question of the appropriate incantations looms large, as do the partisan leanings of the erstwhile tree. What that means is simply this: The future of the global economy may depend on whether the chairman of the House Financial Services Committee is deciduous or coniferous.

So far, efforts to reproduce the original results have not been successful. According to Securities and Exchange Commission filings and local police reports, a number of attempts have ended in the production of generic masking tape, duct tape, electrical tape and, in one horribly tragic mishap, a cassette tape containing a bootleg recording of a Céline Dion concert in Saskatoon. We can only hope the poor blighters who absorbed such a concentrated dose of vileness never knew what hit them.

Most recently, the outcomes have strayed even further from the intended results. For example, scientists at the University of Michigan nearly caused a run on several commercial banks by turning an MBS portfolio into General Motors common stock. It never fails -- when investors are expecting Scotch tape and instead get shares in one of the Big Three, panic ensues. In this case, only an emergency trip to Office Depot in the lab's minivan prevented a global financial meltdown.

Clearly, some refinements to the formula will be necessary. At the very least, safeguards must be developed that will prevent the creation of toxic stock and virulent greatest hits compilations.

Therefore, assuming that the results can be replicated, the entire U.S. financial regulatory regime will have to be overhauled. After all, tree stumps are currently unregulated ("My bad" -- A. Greenspan), and that status is jealously protected by the powerful Congressional Deadwood Caucus. Because this group's 535 members favor a hands-off approach to stump-tape derivatives trading, they want the soon-to-be-combined SEC-CFTC to be the lead regulator. Critics, however, favor a split approach, with the Consumer Product Safety Commission handling tree stumps and the Forest Service regulating Scotch tape. A recently floated compromise would merge all the relevant agencies -- SEC, CFTC, CPSC, Ranger Rick -- into one über-regulator, which would then be abolished. This idea has the virtue of being a two-step process, which would alleviate the public's well-founded suspicion of processes consisting of only one step.

But no matter how the government responds, it is clear that the discovery will breathe new life into the previously moribund tree-stump-utilization sector. Until now, most analysts believed hollow stump fermentation could be employed only to transform Goldman Sachs bankers into Treasury officials.