They have a loan insurance pool available to handle those situations. If you take the insurance then the exchange will make you whole if the market drops before margin positions can be liquidated. They charge 30% of your interest payments for that service (2/3 of which go towards building up the insurance pool).

fyi
bitfinex market stats page:
https://www.bitfinex.com/pages/stats

1.7 million USD loaned out currently

At bitfinex you borrow USD to go long BTC and you borrow BTC to go short.
Everything that is borrowed stays on the exchange. You certainly could borrow money from the bank for any kind of investment. It's not usually recommended.
The challenge with USD lending during "normal" times is that you can't keep your loans out. I guess if you lent it really low (e.g. 12% apr) you would have takers most of the time. But the exchange takes 10% of your interest payment, 30% if you want them to guarantee your loan (which if you were borrowing the money in the first place would be a good idea). SO it ends up being a tough way to make a few points of interest.

I've done a lot of trading at bitfinex. I've lent and borrowed USD, gone long and short BTC. It's a good exchange. The people that run it are very responsive.
I've never had a problem with them.

I just read your essay in response to "My Diagnosis."
I think you hit your stride as you go along. But the poster above who quips about run-on sentences has a point.
Sometimes you use too many clauses. Since French literature is full of long sentences and your account name is a French phrase, perhaps you are a student of the language?
Also, I had to laugh when reading the gender critique of the DSM in your essay since all of the replies here have used the third person masculine form when referring to your work.

How would this work? By issuing a market order? across both exchanges?
I like how the current system works. Unless you specifically sell your coins, a loan will be there to cover your position (assuming USD is available).

closing a loan =! closing a margin position

Remember that Bitcoin is an internet based protocol. We have seen time and time again a protocol emerge that consolidates, superceeds and becomes a standard.
Yes, people can still use uucp, telnet, gopher and ftp, but http/https has come along and now THAT is the Internet.
Bitcoin is THE money protocol. It may not last forever, but it is the best by far right now. It has a long climb ahead.

and everyone keeps waiting for their real estate market to crash, too.

LOL. I feel ya' brother

But how do you get fiat out of BTCChina?

When half of the world's economic activity is transacted in something less than 21 million whole currency units, the value of each whole currency unit will be quite quite high.

I don't! But somebody who thinks the price is going up 1% a day does.

Loans at those rates don't last long. At best you might get a day or two

I locked in 20k for 60 days at 36% just a day and a half ago at bitfinex.
It's costing me $19/day to hold 139 btc for the next 2 months.
Awesome platform.

And 115% PPS! Did that really happen? I wasn't around then. Given that history your story is even more plausible.

In the general case, your story is about the take over by a small group of larger revolutionary movements. There are many historical examples: jacobins during the French Revolution , Lenin's Vanguardism during the Russian Revolution.
Maybe your example could be structured more as a leveraged buy out, (or a leveraged 'opt-in')

I agree with you about the Foundation, especially in the context your "takeover from within" thought experiment. The Foundation plays to the outside powers that be as The Adults In The Room.

The Foundation's board, 4 or 5 core developers, 3 or 4 key exchanges, 6 to 8 big mining pools. 20 people, give or take, have massive influence over this 1.6 Billion $ ship.

Look how quickly consensus was reached on the hard fork. It was over in a few hours. Of course that was a good thing. My point is that there are points of control and it is possible for the network to change drastically and quickly. Even before techniques like feather forking.

My God will someday we be having to advocate for 'network neutrality' on the blockchain?
"Well, yes." will say our political adversaries, "All transactions are equal. But some are more equal than others. It's really all about efficiencies and scale. The white lists are there to help us."

I did the survey.

I hear that.
I'm getting old now. Imagine trying to find out about strange lone wolf kinds of things back before the Internet, before cable TV, before DVD and VHS. That was some work. Used book stores, used record stores, late night AM radio shows, sending money orders to PO boxes, reading foreign newspapers at the library, traveling to other cities to check out their book stores, record stores and libraries.
And on and on.

"The only real freedom you have is to figure things out for yourself"

I just sold my BFL preorder 2 days ago (a 60 gh/s unit) for 9 btc.  It should ship in a few days.
It was an upgrade for an Fpga unit that had just barely given ROI. I only needed to clear about $750 usd to break even, and I figured I still could. My price on the BFL classifieds page was below average and I got several offers. I think of the sale as a kind of 'pre-mine'. I figure I can use the coins now to buy bonds or a CD on coin traders and be better off with interest income. So after mining for 8 months and planning on ramping up for the next year, I'm now totally out of the mining game. I'll take a look at it again in the Spring.
Always an interesting ride with bitcoin....