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Why doesn't my Audio cards software mixer control the levels that my programs record  ?

OK a bit of ole digital theory. If u decrease the level before hitting the
AD convertors and the level is too low, then what u are esstenualy doing is
recording in 8 bit since the signal never gets loud enough to use the next 8
bits. Think of bits like the vertical Y axis on a graph since thats pretty
much what a Bit is used for in turning Analog audio into 0's and 1's....
Sure u can Normalise the signal but u still have an 8 BIT signal thats in 16
BIT file format. Thats about as easy as i can make my explaination. A preamp
is essential to boost a level to the correct level for the AD convertors.

What if the signal is too high before the AD ?

well then u will get digital
distortion since the AD stops at 0 DB whatever that happens to be calibrated
for that input.

How does that anwer the above questions ??

well if manufactors put a level
control (preamp) before the AD convertors then the signal path would be
degraded by the quality of the cheap preamp. On the other hand if they put
the preamp in the Digital domain or in other words after the AD convertors
then u would get distortion if the level was too high at the input and also
if it was too low u would essential be recording in a lower bit rate than the card is set at. maybe even 8 Bit.

What if the signal I want to record is too loud and ends up digitally
distorted in Cubase/logic?

You will need to get one of the following

3. PAD

What is a PAD ??? it is an array of resistors that split/devide the voltage.
PADS are very cheap, All good music/recording stores will have them. You can
buy them in adaptor form for about $10 each, they have a set DB drop..
eg -10Db ....-20 Db...and so on.
You can also make your own pads but for 10 bucks why bother unless u need an
exact Db drop that isn't premade.

place a pad inline with the input and it will decrease the signal going into
the input.