Tuesday, September 30, 2008
Today, the Dow rose almost 500 because there is confidence that on Thursday there will be a bailout bill that passes through Congress.
If Congress doesn't pass a bill and it fails in the House again, the Dow will fall 1000 points. That is no joke - I am serious.
That said, the current bailout bill is a disaster for American taxpayers. Essentially, the Treasury Secretary will have power to do as he pleases with $250 billion. Another $100 billion will be available if the President requests it by a simple letter to Congress. Then, another $350 billion will be appropriated if there is progress that can be shown to Congress. So at a minimum, $350 billion will be under the control of Bush and Paulson - a terrible idea on the face of it. Paulson will be able to bail out foreign banks - and I guarantee that he will. This bill does virtually nothing for individual taxpayers - it is literally a bailout plan for big institutions (including foreign financial firms).
If we want a real bailout there needs to be a couple of things added in.
1. Bankruptcy laws need to be changed to allow homeowners the option to go into bankruptcy more easily so that judges will have the power to adjust individual home loan mortgage rates. We need to keep more folks into their homes.
2. We need to create a Consumer Protection-type Agency for banking fraud and predatory lenders. We need to create an agency that has the power to prosecute unethical and illegal actions on the part of lenders and mortgage loan firms.
3. We need to regulate the mortgage backed securities and credit default swaps. These are largely unregulated derivative finacial products that were created by "smart" bankers and Wall Street investment houses to pump up profits. This is the root cause for the possible destruction of the worldwide banking institutions.
4. We need to recapitalize (i.e., appropriate more money) for the FDIC. There are going to be banking failures and we need to make sure that the FDIC has money.
5. Obama's proposal to increase the FDIC insured amount from $100,000 to $250,000 should be passed. This will allow investors to put more money into banks which will allow them to have more cash reserves to meet required reserve amounts.
6. Finally, we need to create a tax on all Wall Street transactions. Putting a 1/4 percent tax on all transactions would bring tens of billions of dollars into the U.S. treasury. This money is the money that will be needed to fund FDIC and other funds that will be used to bailout Wall Street firms.
That's it! We have to allow market forces to squeeze out the weakest financial institutions. Then, for the surviving firms it is likely that there will continue to be tight capital and credit will be tough to come by. The government may very well have to recapitalize smaller and mid-size banks to pick up the credit slack. For any recapitalization, the U.S. government should pump cash in exchange for equity in the form of preferred stock. This way, in 5-10 years, that equity can be sold on the open market for a profit (hopefully).
In reality, Congress is going to pass a slightly modified version of the current bailout bill - it is a mistake but it will likely be passed. Then, next year, we will be trying to figure out how to solve the same problems but we will be hundreds of billions of dollars poorer.
Monday, September 29, 2008
Now, I'm waiting for McCain to put the country first, suspend his campaign, and get back to Washington to work his "maverick magic." I won't hold my breath.
It was a political stunt last week - now it is just more obvious.
That said, the Dow fell by 700 points as it became clear that the bailout would fail, and it is about 520 points down now (2:30 pm). Politically, this probably hurts Republicans. You had the President, the Treasury Secretary, the Fed Chair, the SEC Chair, both McCain and Obama, and the leaders of both parties in the House and the Senate largely arguing that this bailout had to pass to save the American economy. The reality is that the economy is going to suffer for some extended period of time - but now, the Republicans in the House are likely to be the ones who will be blamed.
I've done a fair amount of reading on the subject the last few days. It should be crystal clear to anyone who tries to understand the problem that this mess was created by simple greed on Wall Street. They created ridiculously complex, and poorly-thought out mortgage-backed securities and credit default swaps. These were derivative financial instruments that took hundreds of billions of dollars of mortgages and turned them into trillions of dollars of investment vehicles for speculators. The problem is that the assets (i.e., the mortgages) are nowhere near valueable enough to provide collateral for the actual investment vehicles.
The end result is that these Wall Street and financial firms literally sold worthless paper for years.
I have read two very good descriptions of the enormous problem with credit default swaps that put the problem into perspective:
Article 1 - This piece explain the problem and calls for all CDS's to be canceled worldwide.
Article 2 - Newsweek has a very clear explanation of the issue.
People who think this problem is because of Fannie Mae or Freddie Mac, or that it is caused by some foreclosures simply do not understand the depth of the problem. Wall Street firms made billions in profits using a Ponzi scheme that sold off worthless paper. The Ponzi scheme was allowed to get really, really, REALLY large, because there was no regulation of the MBS or CDS instruments and now the financial system is collapsing.
Sunday, September 28, 2008
I loved the game - intense, close, hard-hitting - just awesome.
The Bears could easily be 4-0, but they are deserving of their 2-2 record. The end result is that they are in first in the North. Their next two games are at Detroit and at Atlanta. They then play Minnesota at home and play Detroit at home (after a bye week). After the tough 4 game start, the next 4 look easier.
It is funny. Our local high school lost its game. My two college teams (UVA and Morgan State) got roughed up. My two fantasy teams lost. But all is well in the world because the Bears won. I have come to realize that football is all about the Bears for me. When they win, it doesn't matter what else happened over the weekend.
The Electoral College poll of polls have significantly moved into Obama's favor. He is now projected to win 301-237. With Nevada, Indiana, and Ohio moving toward Obama, things look great right now for the Dems.
Saturday, September 27, 2008
Cavs - Must game if they are going to have a decent season. They play on the road at Duke. The Cavs dismissed starting QB Peter Lalich for violating probation (actually, I think it had more to do with lying to the coach and athletic director). But I think the team will rally around Mark Verica and there will be a steady diet of runs by Pearman and Simpson. It will come down to the young UVA D. In the end, I think the Cavs will win 20-13.
Bears - This is really a must win also. They play Philly in Chicago. The Bears have squandered double digit fourth quarter leads the last two weeks. They have to find a way to win and I think they will. Bears D rises and shuts down the high flying Eagles offense. Bears 21 - Eagles 10.
I don't think either man really took command, and I thought both were solid at points but also have some work to do before the next debate.
McCain - I think he kept trying to hammer home the experience card. He talked about all of the places he has visited and he did a lot of name dropping of world leaders. There were two problems. First, this is a change election and hammering home long-time experience is a strange choice of strategy. It didn't work for Hillary and the whole choice of Sarah Palin as VP flies in the face of that strategy. Second, he made a number of factual errors. For example, he couldn't say the name of Iran's president, he didn't have the right name for Pakistan's new president, and he claimed that Pakistan was a failed state before Musharaff took power in a military coup. If you are going to claim the mantle of experience you cannot afford to make these kinds of mistakes. Aside from content/strategy, I think McCain looked angry - it is not a good look for him. He needs to try to change his body language before the next debate.
Obama - I thought he held his own and he demonstrated the very clear differences between the two men in their approach to the world. It was clear he knows about world affairs, but where I think Obama needs to work is to be more crisp in his answers. For example, the Iraq war debate went back and forth. Was it a good idea? Did the surge work? etc. There were clear points of departure for both men and frankly I think the country is on Obama's side in this. If I were Obama, I would have said, "What the American people have to decide now is whether we should stay and continue to spend $10 billion/month in an endless occupation or if we want to have a responsible phased withdrawal. I believe we have completed the mission successfully and John believes we haven't and must continue on."
In the end, I think Obama came out on top because he held his own. At worst it was a tie, but that is effectively a win for Obama because it means that he convinced folks that he can be President. If I were betting, I would say that Obama's lead in the polls will rise over the next couple of days.
Friday, September 26, 2008
If we look at what he has done over the last 2 weeks we can see a man who is lost and just shooting in the dark.
On Monday last week he claimed the fundamentals of the economy are strong. What!? I am going to assume that it was a talking point. By the end of the day (the Dow fell 500 points) he had changed his mind.
On Tuesday last week he called for a 9-11 type commission to examine the economy. Laughable. Anyone who understands the economy knows that mortgage backed securities are the problem. We don't need a commission to understand the obvious. By that evening he had stopped talking about it.
On Wednesday last week he called for the firing of the head of the Securities and Exchange Commission (SEC). People had no idea why and he never explained why. It was an effort to create an oversimplified scapegoat for the problem.
Last Friday, Treasury Secretary Paulson sent his two and a half page proposal to end American capitalism. On this past Wednesday, McCain decided to suspend his campaign to go to Washington to "solve" the problem. However, when he was asked if he agreed with the Bush/Paulson plan, he said he hadn't read it. WTF!!!!! I read the plan - it was less than 3 pages. WHY SUSPEND HIS CAMPAIGN?
Whatever, he said he would stop campaigning and not debate until a deal was struck. So he swooped in yesterday, didn't actually do anything, had some photos taken and still now deal. It is still not clear what he believes about the plan. Now, without a deal, he is going to debate. That is not steady leadership, it is panic and frantic political posturing that is making him look even more foolish than ever.
In the end, the polls are reflecting greater support for Obama.
WTF is she talking about?
"We have trade missions back and forth, we, we do. It's very important when, when you consider even national security issues with Russia as Putin rears his head and comes into the airspace of the United States of America, where, where do they go? It's Alaska, it's just right over the border. It is from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation - Russia - because they are right there. They are right next to our state."
In this case, she seems to get lost in her talking points about national security and foreign policy.
The Bears have a zero tolerance policy and Benson had become toxic with fans - it is too bad that he was wrongly arrested.
Thursday, September 25, 2008
"IIIIIII'll try to find ya some and bring it ta ya." Are you kidding me!?
Good Lord - this woman is clearly clueless and is an utter embarrassment as a candidate for VP.
It is clear that the McCain folks want to keep her out of the limelight. They have taken her off the big donor circuit, they are limiting questions by the press, and they probably cringe every time she gets out and gives an interview.
The polls are only conducted on land line phones. However, 16 percent of households now only have cell phones (no land lines). This group is overwhelmingly younger and overwhelmingly Democratic. The actual poll numbers may be 1-3 percent more in favor of Obama than we are currently seeing.
Wednesday, September 24, 2008
RealtyTrac states that only 1 in 416 homes is actually going into foreclosure right now (0.2 percent).
Here is a good source for foreclosure information for those who want to read more.
Whichever number you want to use, 99 percent of all homes are not in foreclosure. If we assume that about 6 percent of homes are late on payments, we can still see that 93 percent of homeowners are making their payments. Given that figure, there is no need to force this 93 percent to take on the financial burden of saving Wall Street firms.
Let me try to take a crack at the problem. There is a good explanation at Slate, but I will try to make it even more simple.
The "smart folks" at some of Wall Street's biggest firms (e.g., Bear Stearns, Lehman Brothers, AIG, Merrill Lynch) created what are known as "mortgage backed securities (MBS)" when the housing market started booming. These firms essentially bundled up hundreds and even thousands of individual home and commercial mortgages into these MBS's. They were essentially investment "products" that they sold to investors around the world.
The banks that originally held the mortgages loved MBS products because they allowed these banks to sell the mortgages for cash (at a profit) and then use the cash to issue out even more loans to more borrowers. In fact, they used teaser rates, ARMs, and loose credit terms to get more buyers into the system to sell them off to Wall Street. The Wall Street investment houses loved the products because they made money from the monthly mortgage payments and they could get investors to invest (at a profit) into the MBS's. The investors loved MBS's because they gave a monthly dividend (a portion of the the monthly mortage payments) payment. The basic idea was that investors would make back their principal plus significant interest.
Everybody makes money, right? So what is the problem? Well, this scheme only works as long as housing value continue to rise. Once housing prices fall, the value of the mortgages slip. Foreclosures are only a small part of the problem. When the housing values end in negative equity situations homeowners walk away from their homes and stop making payments. Then, the MBS's cannot provide investors with their return and they try to pull their money. They create a run on the investment house that brings them crashing down.
Investment firms made billions in profit from this scheme for years, but now they are stuck with increasingly worthess MBS's and investors want out. This is what the problem is.
Smaller community banks and credit unions, as well as the bigger banks that didn't buy into the MBS's are just fine. They have resources and will continue to issue credit and make loans. We don't need to bail out these investment firms who made bad bets. We need to let them die - that is what happens in a capitalist system.
He can see that he is quickly losing ground to Obama and he doesn't want a knockout punch. The country deserves to see the differences between these two candidates. We have to decide on who will lead this nation for the next 4 years.
This week it is the "financial crisis" next week it will be a windstorm in Wisconsin.
Tuesday, September 23, 2008
Here is exactly what I said on September 10:
". . . there are plenty of federal land and coastal waters that have been leased but are not being developed. I suspect that the Dems in Congress will remove drilling as a political football by passing a bill that opens up more lands/waters within the next month. They know that nothing will actually happen because the Big Oil companies don't have the rigs to actually drill. If they did, they would have already opened up more drilling operations."
Here is the end result. States can decide if they want to allow drilling. But even if they decide to allow drilling nothing is going to happen. There isn't an oil supply problem so there is no way private, for profit oil companies are going to cut into their profits by flooding the market with more oil. That is completely at odds with basic capitalism.
At least all the ignorant DRILL, BABY DRILL idiots should now shut up.
Singapore is a tiny nation with less than 5 million people. They already have a significant ownership stake in Citigroup and with their cash they are going to buy up other financial services firms.
They also hold $31 billion of our U.S. national debt. So essentially, the U.S. owes every man, woman, and child in Singapore about $6800.
Still think Bushinomics is a good idea?
I cannot believe there are still people who think Bushie is a good president.
But a new analysis by famout political analyst Stuart Rothenberg puts the number much higher - perhaps as high as nine.
The real problem is that Wall Street geniuses created overly complex and completely inane derivative securities products that bundled up home mortages and sold them to investors. These derivative products were basically mutual funds that promised good returns. As home values have sunk, Wall Street investors and investment houses realized that they had oversold these products and started losing money.
While foreclosures are going up and people are struggling with their home payments, the fact is that the overwhelming majority of homeowners are making their payments. Only 1 in 416 homes is actually going into foreclosure right now (0.2 percent). This means that 99.8 percent of homes are still solvent. If we assume that there is a good group of folks who are in danger of falling behind and losing their homes, but who have not yet gone into foreclosure, we can still assume that 95-97 percent of homeowners are fine.
This whole bailout scheme is a ruse to protect wealthy Wall Street folks. Treasury Secretary Hank Paulson is the former CEO of Goldman Sachs - what do you want to bet that if the bailout is approved Goldman get a huge infustion of free cash?
The other secondary reason for the bailout is that foreign investors who took equity positions (i.e., bought stock) in these troubled financial firms that sold these derivatives want their money. So the federal government is going to ensure that foreign investors don't lose their shirts. We need foreign investors to continue to pour money into this country and fund the astronomical budget deficits and to finance our sickeningly high national debt.
Monday, September 22, 2008
Don't believe all of the nonsense about 1950s era laws and confusion about who should regulate. I've heard Treasury Secretary Paulson and Republicans claiming that the laws need to be updated. Those are just excuses to try to cover up the complete ineptitude of the Treasury Department, the Securities and Exchange Commission, and the Fed. Adjustments in laws are always needed, but this is a much, much bigger problem that would have been caught had Executive Branch regulators done their job.
Presumably, the $700 billion is needed to take bad mortgages off of the books for banks, give failing financial firms flexibility, and to allow for the orderly dissolution of assets. I have a better idea - just allow the firms to go into bankruptcy. Bankruptcy laws will force the companies to deal with their bad assets by requiring an orderly dissolution of the firm to pay back creditors. If they made bad decisions, they should pay for them. They certainly made money for a long period of time with their decisions. It shouldn't be the case that they are allowed to make money but then force taxpayers to pay for their losses.
Saturday, September 20, 2008
Friday, September 19, 2008
Make no mistake that this is a Bushie-driven proposal and the problem was largely caused by the de-regulatory efforts of the Republicans. However, I will also blame Congress for capitulation if they just go along with it.
Don't be excited by the big gains on Wall Street on Thursday and Friday. That was the market makers just manipulating the markets and getting out of their positions while suckers stayed in.
The dollar will slide because of all of the new liquidity and debt the U.S. government is taking on. Foreign investors will hold far more U.S. debt than ever before. I would expect that by the end of the year, foreigners will hold more than $3.5 trillion in U.S. government debt.
Here is my immediate suggestions for your personal finances:
1. Buy gold - the dollar is worthless.
2. Convert dollars into foreign currencies like the Canadian dollar and the euro. You can go to Bank of America and just do that. Then, just sit on those currencies for a few months while the dollar slides. I expect that in a year you can then re-convert them back to dollars and you will make a 20% profit.
3. If you must buy stocks or funds, buy foreign stocks and funds that focus on foreign markets.
4. If you have the stomach for it, buy oil futures because as the dollar collapses, oil prices will rise again. Don't worry about the "DRILL, BABY DRILL" nonsense. This isn't a supply problem and even if the government approved drilling anywhere and everywhere, the Big Oil companies are not going to increase oil drilling.
On Monday, he made the ludicrous claim that "the fundamentals of the economy were strong."
That day, Merrill and Lehman Brother essentially collapsed and by the end of the day he was backtracking on his morning comment about the "strong fundamentals."
On Tuesday, his solution to the economic train wreck was to call for a "9-11 type" economic commission to look into the problems and figure out what went wrong.
By Tuesday night he stopped saying that because he was roundly criticized.
On Wednesday he had fully reversed course from the time-consuming commission idea and began calling for strong action in the way of heavy regulation. This of course comes after a career of rabid deregulation. He has been against regulation for more than 25 years, but somehow he had an epiphany and became a re-born regulatory proponent (RIIIIIIGHT!!!).
Then, yesterday he claimed he would fire SEC Chairman Chris Cox if he were President. Aside from it being illegal for the President to fire an SEC Chairman, what the Hell is that supposed to do? All it would do would be to create even more uncertainty with a rash decision like that. President McCain would have to nominate a new chairman and the Senate would have to hold confirmation hearings.
The guy should just be shut up and let people who know something about economic issues do their thing. Every day he makes himself look more and more foolish every day.
Let's get real. McCain and Obama are not the President and while I'm sure they are being briefed, they don't have all the details. I like Obama's more measured approach. He isn't running the risk of throwing more uncertainty into an already bad situation and making it even worse.
I understand the rationale behind the bailouts - they will help to contain the mess and keep all of the dominoes from falling in the financial system. But, it is just flat out bad policy. Let me explain why.
First, it is not clear how the government is going to select "winners" and "losers." Bear Stearns got a bailout, but Lehman Brothers did not. Why? It is arbitrary which automatically gives me great concern.
Second, the Treasury Department is working with the Fed to throw more liquidity (cash) into the credit markets. The Fed is printing more money (which will further devalue the dollar), and the Treasury Department is selling U.S. treasuries, which have to be disproportionately being bought up by foreign investors (the only folks who have cash). All of this additional capital is then thrown back into the already over-leveraged credit markets (financial firms are borrowing Fed dollars and the money the Treasury Department has raised from the Fed). They are then using this money to make more loans - THIS IS THE PROBLEM. We cannot borrow and loan more money to get out of this mess.
Third, the proposal that is being offered right now is for the government to take on the bad mortgages (and probably the foreclosed homes) that banks have increasingly taken on. Never mind that the it is the bank's fault for extending loans to people who weren't qualified, the government will now take those problem loans off banks' balance sheets. This is being done so that, again, banks can extend our more money in the credit markets (i.e., more loans).
We need to let some banks fail and deal with the consequences. Instead, American taxpayers are taking on the billions (and quite possibly trillions) of dollars of bad debt, so that banks can continue to function. All that is going to happen is foreigners will buy up more of this country and taxpayers will end up owing them.
What is so infuriating is that Bushie and Paulson are going to ram through a trillion dollars in debt that will be owed by American taxpayers over a 48 hour period. That is not enough time to consider the dangers. It seems to me that Bushie and his Administration is running around like a chicken with its head cut off and have created a panic situation which is enveloping Congress and the nation.
The "smart" money managers - the geniuses on Wall Street - are going to use the big gains in the market as an opportunity to quietly dump their positions in the market. Then, when people realize how utterly stupid the Bushie plan was, the market will collapse even faster.
Thursday, September 18, 2008
On top of that, all of the lies about Palin are being exposed.
The end result is that Obama is starting to take command.
It is clear, straightforward, and sensible. Go to his website and see the details of his plan.
Or, take your chances with McCain and his belief in the Bush economic plan and his even more hawkish war stance on Iraq.
Unlike some elections, there are dramatic policy differences and radically different political ideologies that voters must choose between this election.
Basically, if you like the way things are, go with McCain. If you don't, Obama is your choice.
Wednesday, September 17, 2008
"She doesn't have any foreign policy credentials. You get a passport for the first time in your life last year? I mean, I don't know what you can say. You can't say anything. I think they ought to be just honest about it and stop the nonsense about, 'I look out my window and I see Russia and so therefore I know something about Russia. That kind of thing is insulting to the American people."
Fiorina is one of McCain's top economic advisors and she doesn't think that he is qualified to run a major American corporation.
Thanks for playing Carly, I'm sure McCain has now stashed you on the bench for the rest of the campaign.
The poll numbers have steadily been moving back to Obama. There are three main reasons - (1) Americans are recognizing that Palin, the packaged product is not as advertised. She is not the great reformer who stopped earmarks and saved Alaska. (2) Both McCain and Palin have been lying constantly about everything from inventing BlackBerries, to supporting the Bridge to Nowhere, to Obama's record. But most importan, is (3) the Republicans and the ideology of unregulated markets has destroyed the American financial system. This, in turn, is destroying the economy. People may not understand the intricacies but they can smell out a rat. McCain has been responsible to eliminating regulatory safeguards over the past three decades, but he thinks the fundamentals of the economy are fine. Americans know better.
I'm going to take a first crack at the outcome of the election. I'll try to update it each week. I believe the national popular vote totals will show a 4% margin of victory for Obama. This takes into account the millions of newly registered voters who are supporting Obama and the hundreds of thousands of Americans who say they will vote for Obama, but won't vote for him simply because he is Black (to think there is no hidden racism in the country is to be naive).
Most people know that the President is not elected by popular vote, it is the Electoral College that determines the President. The EC essentially requires presidential candidates to win enough states to become elected. Contrary to what folks are saying right now, I don't think this will even be close. I am going to guess that Obama will get 302 EC votes to McCain's 236. Obama will get most of the Democratic states, but he is going to turn Nevada, Colorado, New Mexico, Indiana, and Virginia blue (I am least confident about Indiana). I'm going to leave Ohio and Florida to McCain for now, but even those states are in play - especially Ohio. I am inclined to move Ohio to Obama, but will wait for another week or two to pass to see what happens.
In Congress, the Dems will net out at least another 12 seats in the House, and at least 4 seats in the Senate. This will be a major victory for Dems, and it will be a result of the utter disgust with George W. Bush.
ESPN has the Bears at #15 and the Redskins at #19.
Fox Sports has the Bears #13, Redskins at #14.
CBS Sportsline and Pete Prisco have the Bears #14 and the Redskins #23.
Dr. Z at SI has the Bears at #11 and the Redskins at #13.
American taxpayers can thank Bushie for having a Treasury Secretary who is "courageous" enough to commit $85 billion to essentially buy up largely worthless assets held by AIG.
AIG issued billions of dollars of risky insurance policies and billions of dollars in risky loans. It made the top management of AIG rich, but now that it has all collapsed, those same AIG executives begged Bush's henchmen to save them with taxpayer money. It is absolutely pathetic.
The news this morning is rocking the global financial community. Not surprisingly, the market does not like the news. Yet again, we have a clear example of the excesses of unregulated markets (thanks to Bush and the Republicans), and contrary to what McCain believes - THE FUNDAMENTALS OF THE U.S. ECONOMY ARE ANYTHING BUT STRONG.
Tuesday, September 16, 2008
But now it turns out there is yet another example of her excess and wasteful spending of earmark federal money. Turns out that she is supporting a $600 million bridge to connect Anchorage to her hometown of 7000 people. That means she is spending more than $85,000 per person to hook up her friends with a nice new shiny bridge. WASTE PURE AND SIMPLE.
In 2005, when the funding was appropriated for the two bridges, McCain called it "WASTEFUL." He specifically referred to the earmarked money as a "MONSTROSITY."
Then he picked Palin - who supported the "Bridge to Nowhere" and currently supports the Wasilla Bridge project as his running mate. That is fine, but it is obvious she is not a reformer. She has requested more federal earmark dollars on a per capita basis (i.e., dollars per person) than any other governor in the country.
She is the Queen of Pork, and McCain is just making himself look foolish by arguing she is a reformer.
Bears - #8 scoring defense (16.5 pts/game, no change), #6 defense in terms of yardage/game (255 yds/game, up 6 slots). Ranked #8 in rushing defense (84 yards/game, down 4 slots).
Redskins - #13 scoring defense (20.0 pts/game, down 1 slot), #14 defense in terms of yardage/game (302 yds/game, up 10 slots). Ranked #17 in rushing defense (105 yds/game, up 9 slots).
Bears - #14 scoring 0ffense (23.0 pts/game, down 8 slots), #24 offense in terms of yardage/game (288 yds/game, down 11 slots). Ranked #9 in rushing offense (149 yards/game, down 4 slots).
Redskins - #20 scoring offense (18.0 pts/game, up 11 slots), #11 offense in terms of yardage/game (332 yds/game, up 17 slots). Ranked #15 in rushing offense (117 yds/game, up 10 slots).
So the guy who cannot use a computer and does not know how to send email is one of the founders of the BlackBerry. Puuhhh-Leeeeeeeease!
I suppose they want people to think that he is tech savvy, but it is ridiculous to try to tell people that a guy who doesn't know how to send an email was one of the creators of the BlackBerry.
Actually, given the depth of the fiscal crisis that is enveloping the nation's banking industry, I would not be surprised to see the Dow fall below 10,000 before the end of the year. Unlike what Bushie and McCain believe, the fundamentals of the economy are not solid. We are teetering on a complete collapse of the American banking system as we know it. That is not a sign of strong fundamentals.
The real problem right now is uncertainty. We simply don't know where the bottom really is. Are there going to be a rash of failures or is this it. Given where we are, I think it is fair to assume that more failures are on the way. More immediately, if AIG collapses - which will happen if the government doesn't bail them out - we will see another 500 point loss immediately. AIG is a financial/insurance titan that has interests around the world. The problem is that another government bailout adds further debt to the nation and only stalls the day of reckoning for the mistakes made by these private financial firms.
I understand the reason - they want to prevent other major banks from collapsing. But essentially this is a band aid approach to a bad and ever worsening problem. The country is awash in debt; the policies of the Fed should be to encourage savings by holding the line on interest rates (and even raising them slightly), not to extend out more cheap cash.
I am utterly disgusted by all those free traders and free market folks who now want the governmeht to bail them out. They took the risk and got financial rewards for years, now that their decisions aren't working out, they should suffer the same consequences of every individual consumer, mortgage holder, pension holder, or everyday American who has been negatively affected by their decisions.
Monday, September 15, 2008
The Palin effect is wearing off.
However, on a more important front, the economic conditions in the country have significantly worsened. In fact, the entire U.S. financial and banking system is at risk as my last couple of posts point out. McBush thinks all is well, Obama understands the need for real regulatory reform and strength.
I expect Americans to understand the depth of the problems in coming weeks and I don't see any reason it will help McBush - his party has pushed for deregulation time and again and now we are seeing the "benefits."
I said it last week, and I'll say it again, by the end of this week, Obama will again be on top in the polls.
Here is Biden's response today to McCain's nonsense.
This guy needs to tell the American people the truth - the fundamentals are not strong. We are looking at a serious economic disaster of epic proportions. This looming disaster is a direct result of the failures of the Bush administration and Republicans like Phil Gramm (McCain's top economic advisor) to eliminate oversight.
Either these guys are completely delusional or they are willfully lying. Americans need their leaders to actually give them some "Straight Talk." We are looking at the complete collapse of the American financial system. We are in uncharted territory with the government takeovers of Freddie and Fannie, but the shocking speed with which the venerable Wall Street giants, Bear Stearns, Lehman Brothers, and Merrill Lynch have collapsed is truly scary. AIG, the enormous insurance firm, is on the verge of collapse and needs $40 to $50 billion to stay solvent.
Palin gave a speech and said we need more regulatory oversight - no SH*T! The Republicans dismantled all types of regulatory oversight in their rush to let capitalism "flourish" without intrusion by the big, bad government. Now they want to fix it - RIIIIIIIIIGHT!
For long-time readers of this blog, you should know that I have been forcasting this fiscal disaster for some time. There is a very real risk to the complete collapse of the American banking system - including individual bank accounts.
Here is the straight dope - foreign investors will be required to save the American banking system. They will further infiltrate the American financial markets and banking system. BUSH HAS BANKRUPTED OUR GOVERNMENT AND THERE IS NO AMERICAN WEALTH TO BAIL OUT OUR FINANCIAL INSTITUTIONS. Better brush up on Chinese, because "USA, Inc." will soon be a wholly-owned subsidiary of that nation.
This weekend Merrill Lynch was bought by Bank of America and Lehman Brothers officially collapsed. These are two of America's most powerful financial companies and they have been destroyed by the subprime mortgage mess. People can say whatever they want, but the bottom line is this - Bush and the Republican rule in the House during his first 6 years and the 4 years of Republican rule from 2003-2007 in the Senate removed all regulatory oversight from the housing/mortgage markets. This allowed the enormous bubble and leverage risk to build in the housing market.
Now that reality is setting in and the bubble is popping, it is flushing America's very financial institutions down the toilet with the collapse.
What I find completely offensive is that for years financial firms lobbied Republicans in Congress and the President to remove regulatory rules. The Republicans complied and let the market work its "magic." Now that it has all blown up, these same "free market" folks are crying, "Government, please help us and bail us out!!!"
The very people who got rich off of their greed and who are directly responsible for destroying America's financial systems now want protection for their own wealth. I'm sorry, but we should let the market continue to work its "magic."
Bush is the "gift" that keeps on giving. It will be painful for all of us for years - get used to it.
Look, there may be merit in the U.S. drilling its own oil, but that would require the federal government to nationalize oil. Big Oil companies are not beholden to the U.S., they are beholden to shareholders. They are not going to drill for more oil and flood the market with more oil when there is no supply problem and oil prices are falling.
Friday, September 12, 2008
The issues are on Obama's side, the lies of McCain are becoming ever more exposed, and he cannot keep Palin hidden much longer. Her interview with Gibson did not put her in a great light. It was clear she was not completely up to speed.
We'll see if Americans are gullible fools who are easily manipulated by lies, or if substance matters.
Virginia makes a trip to UConn without their starting QB, Peter Lalich. I don't actually see that as much of a loss. I don't have all that much confidence in him anyway. Last year, the game in Charlottesville was extremely tight and UVA pulled it out in the final minutes. I like the UVA D, they have a great running game, and if they get some QB play they should be fine. I'll go with my heart. Cavs 17 - UConn 13.
We have a choice this election in terms of real differences in public policies. However, we have an even more important choice. Do we want to elect a man who so obviously and consistently lies about his opponent's record? If we do, then the politics of deception not only work, but are acceptable. It is not like these ads have not been discreditted.
The McCain campaign is saying that she never banned books, but only asked "hypothetical questions" about how one could ban books. They would have us believe that Palin never had any intention of banning any books. That is absolutely ludicrous. Why would someone ask how to do it if they weren't interested in actually banning books? It is not exactly a common question to ask a librarian in a free society.
I watched the first two parts of the Palin interview with Charlie Gibson on ABC - I was not impressed. In fact, you could see that she had been coached to say certain lines. The one that was most obvious was "we cannot second guess the steps that Israel feels it needs to take to defend itself." She said it 2-3 times.
She did not know what the Bush Doctrine is (i.e., pre-emptive war). Watch her confusion at 7:54 of the video. Her answer was clearly irrelevant and then Gibson had to basically explain the Bush Doctrine to her. Not exactly what you want from a VP.
Thursday, September 11, 2008
Hilarious - this guy is a complete moron. I know this is old, but I came across this and had to post it.
I heard a caller to a right wing radio program say that she was a Hillary voter who will now go McCain because of Palin. The host asked why and she said that she shares Hillary's values. She then proceeded to say that she appreciated that Palin and McCain were pro-choice. THEY OBVIOUSLY ARE PRO-LIFE. In fact, McCain would make exceptions for women who become pregnant as a result of rape or incest - Palin wouldn't. The thing that irritated me about the call was (1) how uninformed the caller was, but (2) the fact that the host didn't actually correct her. It showed me that this Republican nut couldn't actually stand up for a principled position that he might hold - he would rather allow the misconception to continue to fester.
Here are two final thoughts. There is an ad that McCain actually approved that says that Obama pushed for sex education for toddlers in public schools. If you haven't seen the ad, you can link to it here. This is a gross distortion of a bill that Obama voted for when he was in the Illinois Senate. The point of the bill was to fund awareness programs for elementary school kids to be better able to identify and report sexual predators. It was age appropriate content (e.g., "STRANGER DANGER", bad touching, etc.) to help kids. McCain is slime for his distortion and voters should ask why he wants to defend pedophiles.
One final thought, I am sure that you have heard all about McCain and the Republicans' phony outrage about Obama saying "lipstick on a pig." I won't go into the details, but it is uttern nonsense. McCain has used that very common term on numerous occasions, but now he is claiming Obama is sexist. What a crock.
For his part, Obama has handled it well. He keeps pointing out that because McCain cannot defend his positions, he and his folks are just trying to distract.
Wednesday, September 10, 2008
All of the "Drill Baby Drill" crowd who are worried about supply problems should take notice of the falling oil prices and OPEC's decision today to cut production by a million barrels a day. THERE IS NO SUPPLY PROBLEM.
The real reason for the explosion in oil prices was the collapse of the dollar and rampant speculation on the unregulated commodities markets. The dollar is still fairly weak but it has been strengthening. However, today a report was released that found that large investors had purchased $60 billion in oil futures causing the run-up and they have sold off $39 million of it which has sent oil prices tumbling.
All that said, there is plenty of federal land and coastal waters that have been leased but are not being developed. I suspect that the Dems in Congress will remove drilling as a political football by passing a bill that opens up more lands/waters within the next month. They know that nothing will actually happen because the Big Oil companies don't have the rigs to actually drill. If they did, they would have already opened up more drilling operations.
The choice is more of the same (McCain) or a real change in direction through repeals of tax breaks to oil companies and increasing taxes back to the marginal rates during the Clinton administration for people making $250,000 or more (Obama).
At least there is one serious candidate on the economy and the budget problems.
One thing to keep in mind is that polling is usually done with "likely voters." For the most part, likely voters are people who have been registered for a while and who have voted in prior elections. If it is true that Obama's ground game has registered millions of new voters and that younger voters - who are voting for the first time - are in fact energized to vote, then the poll numbers should be discounting Obama's true level of support. We'll see if this is true on election day.
Obama needs to completely avoid discussing Palin. He is not in a race against Palin - he is in a race against McCain. Don't elevate her. She has been an effective diversion but that simply won't last if he stays focused on McCain. The bottom line is that McCain has voted with Bush more than 90 percent of the time - he has been proud of that fact. McCain admits to not understanding economic issues and to make matters even worse for himself, he things the economy is fundamentally strong and that Bush's economic policies should be continued.
Obama needs to just stay focused and the momentum will continue to shift toward him.
ESPN has the Bears at #15 and the Redskins at #23.
Fox Sports has the Bears #13, Redskins at #19.
CBS Sportsline and Pete Prisco have the Bears #8 and the Redskins #26.
Dr. Z at SI puts the Bears at #8, Redskins at #23.
I have not seen the Yahoo! rankings; I will add them to the weekly summary when they come out (if they come out).
Tuesday, September 09, 2008
I don't really know if it was appropriate or not, but it certainly smells fishy.
I purposely did not post anything yesterday because I wanted to learn more about it. After reading, listening to, and seeing what many different experts think about it, I will make a couple of points.
First, the problem is a direct result of the poor oversight and lax rules set up by a Republican President and his Republican Congress. The encouragement by the President to get everyone and anyone into their own homes - a worthy goal, but economically and practically unfeasable - contributed to the problem Specifically, as the mortgage industry began to unravel and credit terms became tighter by private banks, the Bush Administration allowed Freddie and Fannie to take on more and more risky loans that are now sure to fail. This was not just bad management, it was government-sponsored bad management.
Now that it has all hit the fan - the Bushies are going to bail them out and pass on the debt from these firms, and most certainly hundreds of billions of dollars in bad debt that will never be paid back, to taxpayers. It is the single worst financial collapse in this nation's history.
Of course, most Americans are not paying attention, but the collapse of Freddie and Fannie are perfect examples of why we need firm regulatory agencies to oversee some of the critical aspects of the nation's economy - including private entities.
There are now no good options for what to do. If you let these entities collapse, the nation's already faltering housing industry will collapse. By taking over the companies, the idea is to prevent utter ruin of the nation's economy, but it seems to me that we are only forestalling the collapse and putting the entire government and the broader economy in real peril of utter collapse.
Take your pick. But either way you can thank George W. Bush.
Bears - #8 scoring defense (13.0 pts/game), #12 defense in terms of yardage/game (293 yds/game). Ranked #4 in rushing defense (53 yards/game).
Redskins - #12 scoring defense (16.0 pts/game, up 5 slots), #24 defense in terms of yardage/game (354 yds/game). Ranked #26 in rushing defense (154 yds/game).
Bears - #6 scoring 0ffense (29.0 pts/game), #13 offense in terms of yardage/game (319 yds/game). Ranked #5 in rushing offense (183 yards/game).
Redskins - #31 scoring offense (7.0 pts/game), #28 offense in terms of yardage/game (209 yds/game). Ranked #25 in rushing offense (84 yds/game).
NOTE - I am not going to update the weekly picks stats here each week. JKD can post them if he likes. I am just going to post up these stats each Tuesday. On Wednesdays I will post up the NFL power rankings for each team from the various sources.
She constantly claims she was against the Bridge to Nowhere - does she not know about video recording devices?
It is true that once the negative reaction to the Bridge rose to a deafening level she did stop the project. But she didn't return the money which had already been appropriated. So she spent the $250 million on other road projects including building a "Road to Nowhere." She built a road to where the Bridge was supposed to be, but it just ends.
Monday, September 08, 2008
The Seahawks and Cowboys also have gone 32-17 over that period.
People can say what they want, but the Bears are one of the best teams in the NFL, and while I was pleasantly surprised by their win last night over the Colts, I am not shocked.
FYI, the Redskins are 24-25 over that stretch.
Frankly, I'd rather have people smarter than me running the country. Obama fits that bill. Harvard Law grad and former President of the Harvard Law Review. That indicates to me that he is intellectually curious and has the intelligence to be an effective President.
I mean, Sarah Palin didn't know that the founding fathers did not establish the Pledge of Allegiance.
McCain clearly has trouble understanding basic economic facts. Here is a video that gives me little comfort.
After 8 years of Bush - people should want more. Certainly a guy like McCain who is quoted as saying he really doesn't understand the economy is not the man to lead at this time.
There is the obvious contradiction of complaining about Obama and then in the same breath praising Palin as a great executive ready to lead; it is just flat out ridiculous. But beyond the hypocrisy of the argument, it has no real merit.
Here is a link that breaks down the experience of past presidents.
The bottom line is this - Obama has appropriate experience and he offers the real opportunity for change. McCain's positions on the economy (he agrees with Bush's policies), Iraq (he is pushing to stay even though we are on our way out), Georgia (prepare for war against Russia if he is President), health care (health savings accounts over health care), Social Security (private savings accounts), etc. are at complete odds with Obama's policies.
That said, the key for the Obama campaign is to stay disciplined. There is no reason to panic or change strategy right now. People are definitely interested in the election and over the next two months Obama needs to focus on McCain and explaining the policy differences. He has to also demonstrate passion and the level of quiet intensity that he captured in his acceptance speech.
Frankly, he needs to largely ignore Palin. Let Biden and female surrogates debate her and point out policy differences.
As October rolls in, we will start to get a much better sense about whose message and positions the American people are behind. And, unlike most election cycles, I think the debates really will count for something.
Sunday, September 07, 2008
Impressive win for the Chicago Bears. They went on the road to play Indy in a Super Bowl rematch. The D was great. Matt Forte looks like the real deal (I know it is only one game, but he has looked good all preseason). Kyle Orton was efficient. The Special Teams were solid. It was Lovie-ball at its best.
Friday, September 05, 2008
But, Cindy McCain's outfit at the RNC convention cost more than most people's homes. And they try to paint Obama as an elitist. Yeah, right!
Thursday, September 04, 2008
At a higher level, I think his call for bi-partisanship and working together was admirable. I really think it would have worked better if he hadn't had Palin rip Obama throughout his speech. Rudy's jokes and the constant attacks on Obama and Dems throughout the convention was at complete odds with the goals and tone of McCain's speech.
McCain is an interesting guy, but his choice of Palin and the hyper-partisanship of his Republican attack dogs take away from his maverick image.
As just one example of how ineffective Palin's speech was, Obama raised $10 million over the last 24 hours. Republicans donated $1 million to McCain.
Money talks. Bullsh*t walks.
On Tuesday we saw Fred Thompson and Joe LIEberman. It was an odd pair. Thompson dealt out "red meat" in his folksy style, but then LIEberman was weak and boring. Last night there was another serving of "red meat" from Rudy and then Palin dealt even more. Now tonight we have McCain and I have no idea what he is going to offer.
The fact remains that Republicans are highly unpopular relative to Dems, because people are mostly fed up with Bush. The greatest appeal of McCain is his "maverick image." But, instead of softening the image of the Republicans and having speakers who are moderate and who reach across party lines, we have mostly been giving servings of red meat ravings that have attacked Obama and Dems.
I would have organized the convention totally different. I would have had red meat night on Tuesday - Thompson/Rudy. That would fire up the delegates and give them what they want to hear.
I would have then had Huckabee give his more folksy talk as a precursor to Palin. He is stronger with evangelicals than many other speaker and he would have helped send a signal to those voters that they should be on board with McCain. But then, I would have had Palin give a more uplifting speech that was light on red meat and more appealing to a broader audience. This would help try to get crossover voters.
Then, I would have had LIEberman introduce McCain (to highlight bi-partisanship) and then have McCain give his vision for the country. The whole theme would be to play up change in Wsshington through he maverick image.
Instead, they have presented an angry, sarcastic, anti-Dem convention that offers little. This would be fine if the Republican brand was strong - but it is not.
I will say this. On the tax issue that affects most Americans there is a clear choice. McCain - more of the same with tax cuts that primarily benefit the very rich with little benefit for the lower and middle class. Obama - raising taxes on people making more than $250,000 and cuts for everyone else. There is just a fundamental difference in philosophy that is better tied to the ideas pushed by Robert Rubing and Larry Summers (Clinton's Treasury Secretaries) vs. the trickle down economics of Reagan.
With respect to executive experience - I think this is a ridiculous point that McCainiacs are trying to push. John McCain has no executive experience. If you buy that B.S. then Palin is more qualified than McCain.
But when we actually look at how the national campaign organization have been run by Obama and McCain we see clear differences. These are large organization with sophisticated systems. National campaigns have a couple of thousand paid employees, spend $20-$50 million per month in operating expenses. Raise about an equal amount each month. They are complicated operations to manage. Obama's campaign has been well organized, strategically sound, fiscally responsible, and just flat out better. On the other hand, McCain's campaign has been riddled with issues, from financial challenges, to changes in strategic direction, to staff turnover, to the questionable vetting process used to pick Palin. It demonstrates a helter skelter process. That tells me what I need to know about who runs a tighter ship, is surrounded by better people, and who demonstrates better executive qualities.
Wednesday, September 03, 2008
That said, I thought the tone of the speech was all about how Obama wasn't the right guy, but it was short on any details about what McCain would do.
Two observations about the night:
1. The Republlicans did not run the Palin intro video. I think Rudy went too long and they didn't want to push the networks so far past 11:00 (they did go over).
2. After her speech her family came out and then McCain popped out. He should have stayed out her way. It was odd to see him come out and just sputter out a couple of lines about how she did a great job and how she had a nice family. Then, he just stood there. There was a long awkward pause while they waited for the music to come on.
Republican strategist Mike Murphy and the great Peggy Noonan (I disagree with most of what she writes but she is an excellent writer and her columns in the WSJ are must reading for me) were caught with an open mike saying what they really thought about Palin - it was not flattering.
Just by comparison, Obama got more than 18.5 million votes in the Democratic primaries. He got over 85,000 votes in little, tiny Washington DC.
It is not like Palin has ever demonstrated a strong base of voter support.
He is now a prominent speaker for the Republican Party and John McCain.
Last night in his speech to the Republican convention he asked, "What, after all, is a Democrat like me doing at a Republican convention like this?"
The answer is simple. Democrats like him are called Republicans. What is so surprising about a Republican addressing the RNC Convention? He is a pariah in the Democratic Party and he will never be fully accepted by the Republicans. Basically he neutered himself and is now a man with no Party.
There is no demand problem, the problem is mostly tied to market manipulation and the falling dollar. Take those out and oil should be at $70-$80/barrel.
Laura Bush was clearly reading from a teleprompter and it seemed like she phoned it in. It was obvious that she had not practiced the speech. She is usually a good speaker, but her stutters and awkward pauses showed how little she cared about what she was told to say.
President Bush appeared by video from the White House. He was alotted 7 minutes and it was a rather mundane speech that offered nothing. He isn't a great speaker to begin with, but trying to time his pauses to applause in the audience was challenging and did not work well on TV.
Fred Thompson gave a good speech for the Republicans. It talked about McCain's background, but he literally cleared his throat 70 times. "I love John McCain (ahem). He is the greatest (ahem). He is a hero (ahem). He puts America first (ahem). Man, was that tedious to listen to.
Ohhhhh, but the keynote address was given by Joe LIEberman (zzzzzzzzz). It was BORING! Anyone who has ever heard LIEberman speak knows he sounds like Perry Como on valium. There was polite applause by the Republicans, but it was clear that he was out of place in front of the Republican audience. I am sure it will soon be forgotten - frankly there weren't any memorable lines and pointing out McCain's positions on global warming, comprehensive immigration reform (i.e., amnesty), and campaign finance reform was foolish in front of that audience.
I cannot wait to see Palin tonight. That will be interesting - it will probably be the most watched speech of the week.
He is going to make an appearance at the Republican National Convention. What a great set of role model kids the VP offers the nation. Her 17 year old unwed, pregnant daughter and her 18 year old high school dropout boyfriend. Nice.
Tuesday, September 02, 2008
The $200+ million project was killed, but Palin still got the money and still kept it. She didn't return the money. The earmark money (i.e. bacon) still came for the indicted Senator Ted Stevens and is being used to build roads in Alaska. She isn't a reformer, and people should stop trying to create a "Bridge to Nowhere" myth about her supposed fiscal discipline.
Ultimately, that is what will drive most of the voters.
Today we find out that there Palin's young, mom-to-be daughter appears to have an underage drining problem. We know that she is 17 and pregnant, and we are being told that she is going to marry the father of her child. But, Palin's soon-to-be son-in-law does not sound like the serious, family-oriented guy. He sounds like an average teenager.
Politics is messy and running for national office requires a squeaky clean personal life. Fair or unfair, like it or not, that is a reality. Palin obviously has some troubles in the personal life area. People who whine about it should stop wasting their breath. That is politics today.
Besides, getting pregnant out of wedlock and having a shotgun wedding didn't stop Sarah from becoming Mayor of Wasilla, Governor of Alaska, and the selected as the Republican nominee for VP.
She sounds more like a Ron Paul Republican than a McCain Republican. You can go to YouTube and see the entire clip. This comes from an interview she did with MTV a couple of months ago. The full clip runs about three and a half minutes. It is clear that she likes Ron Paul and Mitt Romney.
John McCain sold out to the Religious Right and they delivered a highly-flawed fringe candidate. He is trying to sell it, calling her his "soulmate" (which Cindy might have had something to say about), but he looks uncomfortable with her.
Monday, September 01, 2008
My personal feeling is that Sarah Palin and her husband should take better care of their family. They have an infant son with Down Syndrome and a 17-year old daughter who is about to become a mother (and get married sometime before the baby is born). If it were me, I wouldn't be seeking higher office I would be concentrating on my family.
What I do care about is that Palin's troopergate problem is an issue and the fact that her husband, Todd, seems to involved himself in that issue, plus other issues that should be the purview of the governor - not her husband.
None of this is surprising. The Alaska press and political environment is nothing like seeking national elective office and facing the national press. What is shocking to me is that McCain put her on the ticket knowing these things were going to blow up (I have to assume he actually vetted her - although I have my doubts about how well they did vet her).