9 For '09

Here are my 9 economic predictions for '09:

Please no ridicule if my batting average is pathetic with regards to these predictions. Considering the fact that 70 to 80% of all professional mutual fund managers underperform the market each year, my rationale is that even if I go zero for nine, I will have plenty of company...


1) The most beaten down asset classes from '08 (housing, financials, emerging markets) will be some of the best performing in '09.

2) Oil prices, which have plummeted from $147 a barrel to just around $35 a barrel, will reverse course and revisit the $70 to $80 range in '09.

3) The unemployment rate which currently sits at around 7%, will top out at 11% in '09.

4) The stock market bottomed on November 21st @ 7,392 on the DOW. Although the real economy will not start to see recovery until late '09 the stock market lows of late 2008 will hold.

5) The big three automakers will be back in Washington asking for additional aid in '09. As time progresses it will become increasingly clear that although the company is weak, Ford is the strongest of the three companies. The electric car will dominate the discussion in '09 and will become a sustainable reality in 2010.

6) The Obama administration will hit the ground running with a massive stimulus package that attempts to address unemployment and the stalling economy. By the end of '09 talk will heat up about how the government has become too involved in the economy and calls for the "uncanny" power of free markets will return.

7) It will become increasingly clear next year that our world's most precious resource is not oil, but water. Today, almost one in eight people in the world do not have access to clean drinking water. By 2025, more than two billion people are expected to live in countries that find it difficult or impossible to mobilize the water resources needed to meet the needs of agriculture, industry and households. Going green will no longer be a buzzword, it will become our generation's race to the moon.

8) This amazing influx of government intervention will result in the inevitable uncovering of scandals and bribery with relation to the financial crisis. The programs have been thrown together, and oversight has been lacking, a recipe for disaster anywhere, especially in Washington.

9) The stock market volatility in '09 will pale in comparison to the volatility in '08. In the end the market will be positive for '09 in the realm of a 10-12% return on the Dow for the year.

Well there you go, 9 for '09. Feel free to add your own, economic or not.

This is my last post of 2008. Thanks to everyone who takes the time to read and comment. Keep the suggestions for the blog coming and have a Happy Holidays.

What A Guy

276 years ago, a 26 year old Bostonian transplant, living in Philadelphia
published a helpful calendar and counselor, which he called "Poor Richard's
Almanac." The publication, containing pithy wisdoms like - "Early to bed early to rise
makes a man healthy, wealthy and wise" - or "A penny
saved is a penny earned" - became an instant success in the colonies.

The revenues allowed Benjamin Franklin to retire at age 42. Since golf was not
available in the neighborhood, he squandered his remaining years by discovering
electricity, inventing the lightning rod, the iron stove, bifocals and the glass
harmonica. The next week he developed still-standing theories on meteorology, heat
absorption, electricity, and ocean currents.

In his spare time he founded the first insurance company, fire department, public
hospital, public library, night patrol and first militia. Seeking a break he became
colonial postmaster and civil defense chief for the French and Indian War. Tiring, he
was chief delegate at the Albany conference, which organized the colonies and then
was appointed chief negotiator with the British crown in London.

When negotiations failed, he returned home to help draft, and then pass the
Declaration of Independence. He was then sent to Paris where he won the support of
the French which eventually helped win the Revolution for the colonies. He returned
home and helped draft and again pass the Constitution of the new nation. After that
he did little that was important aside from a few inventions and a couple of immortal
publications.

(From Art Cashin's Morning Comments)

......................................

As a follow up to the 12 Days of Christmas: http://www.youtube.com/watch?v=2Fe11OlMiz8

9 Predictions for '09 coming tomorrow.........

Daily Links & Crisis Cocktails

Madoff's 17th Floor: http://www.nytimes.com/2008/12/15/business/15madoff.html?_r=1&em

Goverment Ponzi Scheme: http://curiouscapitalist.blogs.time.com/2008/12/16/whats-the-difference-between-a-good-ponzi-scheme-and-a-bad-ponzi-scheme/

Library Christmas Tree: http://www.flickr.com/photos/donaldist/1803976340/sizes/l/


Wall Street Crisis Cocktail Menu:

CosmoPaulson - A generous bailout of vodka, triple sec, cranberry and lime juices

TARPatini - An instant balance sheet cleaner, with Captain Morgan, Malibu and Myers rum

Wall Street Bonus - a glass of water which is, like the Street itself, on the rocks

(From PR Firm Cognito)

12 Days of Christmas...Inflation Style

Ever wondered how the price of two turtles doves changes over time. Well here you go:
http://www.pncchristmaspriceindex.com/CPI/charts.html


For 24 years, PNC has calculated the cost of the items in the song “The Twelve Days of Christmas” if purchased at current prices. Here is the Wikipedia article detailing the "Christmas Price Index":
http://en.wikipedia.org/wiki/Christmas_Price_Index

Recession, The Green Movement & Household Debt

"Is the economic crisis going to be the end of green? Or, could green be the way to end the economic crisis?"
-David Rothkopf


"We need the next president to be an energy efficiency trendsetter, starting by reinventing the inaugural parade. Get rid of the black stretch limos and double-plated armored Chevy Tahoes inching down Pennsylvania Avenue. Instead, let the next president announce that he will use no vehicles on inauguration day that get less than 30 miles per gallon. He could invite all car companies to participate in the historic drive with their best available American-made, fuel-efficient, innovative vehicle."
-Thomas Friedman


The American economy must be rescued, not by the service sector, but by the manufacturing sector associated with clean energy. The Obama team has articulated their desire to pave the way for a green commitment from Washington and it is vital that they deliver on that promise.

............................

In what could become a silver lining of this economic turmoil...

"Stung by the loss of $2.81 trillion in their net wealth, U.S. households paid down their debts in the third quarter for the first time since the Federal Reserve began reporting this figure in 1952."

I don't know what is scarier, the fact that this is the first time since at least 1952 that this has happened or that this now leaves household outstanding debt at $13.91 trillion compared to the $13.94 trillion it was in the second quarter.

On the other hand our friends in Washington are not shy about debt, the third quarter saw a record 39% increase in the debt taken on by the federal government.

Funny Videos

Transition to Digital TV: http://www.youtube.com/watch?v=7w34nNux4Xw

Prop 8 Musical(must see): http://www.funnyordie.com/videos/c0cf508ff8/prop-8-the-musical-starring-jack-black-john-c-reilly-and-many-more-from-fod-team-jack-black-craig-robinson-john-c-reilly-and-rashida-jones

How to Fold a Shirt: http://www.youtube.com/watch?v=xOHHQMQBd5s

Clap On, Clap Off Capitalism: http://www.markfiore.com/clapper_0

Obama House Meeting

Here is the message that President Elect Obama's team sent to supporter concerning the house meetings that are happening this weekend....

Friend --

Exactly one month ago, you made history by giving all Americans a real opportunity for change.

Now it's time to start preparing and working for change in our communities.

On December 13th and 14th, supporters are coming together in every part of the country to reflect on what we've accomplished and plan the future of this movement. Your ideas and feedback will be collected and used to guide this movement in the months and years ahead.

Join your friends and neighbors -- sign up to host or attend a Change is Coming house meeting near you.

Since the election, the challenges we face -- and our responsibility to take action -- have only gotten more urgent.

You can connect with fellow supporters, make progress on the issues you care about, and help shape the future of your community and our country.Learn what you can do now to support President-elect Obama's agenda for change and continue to make a difference in your community.

Take the first important step by hosting or attending a Change is Coming house meeting. Sign up right now:
http://my.barackobama.com/changeiscoming

To get our country back on track, it will take all of us working together. Barack and Joe have a clear agenda and an unprecedented opportunity for change. But they can't do it alone.

Will you join us at a house meeting and help plan the next steps for this movement?

Thanks,
David Plouffe
Campaign Manager
Obama for America

Bailout Articles

The two best articles I have read concerning the proposed bailout of the Big 3 are listed below:

$73 An Hour: http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?em

While Detroit Slept: http://www.nytimes.com/2008/12/10/opinion/10friedman.html?em

Cartoons

Hank Paulson's Party

This Thursday, Treasury Secretary Henry Paulson will host the annual Treasury Departments Christmas party. We may be in the worst financial crisis since the Great Depression, and executives may be taking heat for excessive compensation, but nothing will stop Hank from throwing a party.

And if you thought the whole idea of a party for the Treasury Department was ironic amidst this financial crisis, wait until you hear where they are throwing the party....

The annual gala is being held in the "Cash Room" at the Treasury Department. I guess the "Taxpayer Funded" room was booked for the evening.

....................

Here's a follow up to the ExxonMobil post surrounding the market cap of financial firms.

A little more than 1 year ago Royal Bank of Scotland paid $100 billion for ABN Amro.

For this amount today, RBS could buy:

Citibank $22.5 billion / Morgan Stanley $10.5 billion / Goldman Sachs $21 billion / Merrill Lynch $12.3 billion / Deutsche Bank $13 billion / Barclays $12.7 billion

And still have $8 billion in change for an automaker or three….

Thanks to Noah for the heads up

The Cost of College

As the recession take holds and talk of deflation heats up, it is important to note that inflation is still running rampant in certain areas, most notably in the cost of attending college.





College tuition increased 439 percent from 1982 to 2007 while median family income rose 147 percent. Not to be lost in the graph is the fact that medical costs have risen about 250% during that period and the Consumer Price Index (the government's measure of inflation!!!!) has risen only 100%.

With regards to the cost of higher education in this country, at some point we reach a breaking point, and with the continued strain in the student loan arena, I believe that point may be in the near future. Whether this leads to lower costs, or a mass increase in enrollments at State Universities and Community Colleges is anyone's guess, but the future for soaring tuition at private institutions is certainly in jeopardy.

ExxonMobil

Something amazing happened Wednesday....

During the trading day on the New York Stock Exchange, ExxonMobil by itself became a larger company than Citigroup, Bank of America, JP Morgan, Wells Fargo, Goldman Sachs, Morgan Stanley and Bank of New York COMBINED!!!!!

Exxon market cap: $400 billion. All the above financial companies combined: $390 billion.

ExxonMobil is the largest stock in the S&P 500. Wal-Mart, its nearest competitor, is a little more than half of Exxon's size.

Even with the recent drop in oil prices, the behemoth that is Exxon, continues to grow.

Wall Street Journal CEO Council

The Wall Street Journal recently brought together 100 of the most influential CEO's in American and asked them to formulate a list of five main priorities for the incoming Obama administration:

Fiscal Stimulus

Quickly craft fiscal stimulus for the US, in cooperation with parallel efforts by G20 countries, particularly cash-rich economies with capacity to increase domestic demand. For the US, a stimulus package should exceed $300 billion. It also should emphasize investment in infrastructure, including environmental, education and low-carbon energy, but should not worsen the long-term budget deficit.


Educated Work Force

President-elect Obama should ask businesses to lead in the actions necessary to build a competitive work force for the immediate and long term. Emphasis should be placed on improved K-12 education and intellectual-capital creation. Enact national education standards and assessments, devote funds to teacher excellence and improve teacher education.


Economic Vision

President-elect Obama should announce his economic team soon and convene a conference with broad representation to recommend both immediate priorities and long-term policy direction. He should communicate a clear message about the direction of policy, including a program for long-term fiscal responsibility.


Comprehensive Energy And Environment Policy

Put national legislation in place that starts us on the road to decarbonize our economy and to create the most energy-efficient economy in the world. Level with the American people that ensuring an adequate and diverse energy supply in a low-carbon world will not be cheap or easy. But make the case that the transition must be transparent and fair to all Americans, and that linking the economy, the environment and energy policy bolsters security for all three.


Tax Policy

Change the tax code to encourage employment, job creation and investment and enhance global competitiveness in the short term. Consider raising taxes on gasoline and broadening the corporate tax base to lower rates.

Merriam-Webster’s Word of the Year

The word “bailout” which shot to prominence amid the financial meltdown, was looked up so often at Merriam-Webster’s online dictionary that the publisher says it was an easy choice as its 2008 Word of the Year.

The rest of the word of the year choices Merriam-Webster considered do not necessary instill confidence:

trepidation
precipice
turmoil

So as we close out 2008, here's to the hope that 2009's word of the year will be a heated contest between "recovery", "profits", "revitalization", and "earnings".

Daily Links

Honk, Honk: http://www.slate.com/id/2204988/?GT1=38001

The End of OPEC??? http://articles.moneycentral.msn.com/Investing/JubaksJournal/are-we-watching-the-death-of-opec.aspx

Venice Floods: http://www.boston.com/news/world/europe/articles/2008/12/02/highest_tides_in_22_years_flood_venice/?p1=Well_MostPop_Emailed4

Beyond the Initial $700 Billion

Barry Ritholtz, of Fusion IQ, is one of the most well respected financial bloggers in the world (http://www.ritholtz.com/blog/). One of his most recent posts took what he estimated to be the total cost of the credit crisis bailout (including the new Citigroup bailout) and compared it to major outlays in our governments history.

Credit Crisis = $4,600,000,000,000

Marshall Plan +
Louisiana Purchase +
Race to the Moon +
Savings and Loan Crisis +
Korean War +
New Deal +
Invasion of Iraq +
Vietnam War +
NASA =
$3,920,000,000,000

According to Ritholz, the 9 items listed above cost in total 2008 inflation adjusted dollars a full $686 billion less than what the credit crisis has cost up to this point.

He goes on to point out that if we didn't spend another dime on the credit crisis it would still be almost $1 trillion dollars more than the entire cost of World War II(adjusted for inflation).

He estimates that by 2010 the total cost of the credit crisis will exceed $10 trillion!!!

To put this exorbitant amount into perspective, the total cost thus far of the bailout could have provided a stimulus check for every American over 18 years of age in the amount of $19,000 with money to spare.

The Market

Two interesting graphics for today. The first represents the fact that we are now in the midst of the most volatile stock market EVER (in case you didn't know). Over the last 50 trading days, the average absolute daily percentage change of the S&P 500 has been 3.82%!!!!!

http://www.ritholtz.com/blog/wp-content/uploads/2008/11/vix-abs-change.png



Here is an very appropriate look at how we got into this mess. Be sure to enlarge the image.

http://www.ritholtz.com/blog/wp-content/uploads/2008/11/visualguidecrisis2.jpg

Daily Links

A CEO to Learn From: http://www.cnn.com/video/#/video/business/2008/11/02/lah.japan.ceo.pay.cut.cnn

Beware of these Gift Cards: http://www.forbes.com/2008/11/21/retail-giftcards-bankruptcy-biz-commerce-cx_lm_1121giftcards.html?feed=rss_news

Buy One, Get One Free (TRUCKS!!!!): http://www.local10.com/automotive/18022569/detail.html

Speed Golf

The average round of 18 holes of golf takes between 4 and 5 hours. It is not uncommon for the average Tiger Woods want-to-be to spend 5 hours plus on the links. Well we all could learn something from Christopher Smith.

In May 2005 Mr. Smith set the world speed-golf record by shooting a 6-UNDER PAR 65 IN 44 MINUTES AND 6 SECONDS!

The scoring system in speed golf adds strokes taken to the number of minutes consumed, a formula that places greater value on golf ability than on speed. It's far easier to lower your total score by saving a shot around the green than it is by running the course (typically five to eight miles) one minute faster.

Players may carry any number of clubs, up to the normally allowed maximum of 14. Some competitors use only two, but Mr. Smith has settled on six: a driver, a four wood, a five iron, an eight iron, a 52-degree gap wedge and a putter.

Christopher spends from five to ten seconds on each shot and completes par-four holes in about three minutes. Before he starts a round Christopher needs 15 empty holes in front of him .

As Mr. Smith puts it, "Speed golf proves what most of us know intuitively, thinking is the ruin of good golf."

If only it were that easy.

Comparing the Cost of the Bailout

All of the costs are expressed in 2008 inflation adjusted dollars...

Hoover Dam: $782 million

Panama Canal: $7.9 billion

Gulf War I: $98 billion

Marshall Plan (the strategy for rebuilding Western Europe after WWII): $115.3 billion

The Louisiana Purchase (the purchase of 829,000 square miles of land from France): $217 billion

Korean War: $454 billion

The New Deal: $500 billion

Gulf War II/War on Terror: $597 billion

Vietnam War: $698 billion

Wall Street Bailout: $700 billion (initial)

NASA (Cumulative 50 years of Spending): $851 billion

WWII: $3.6 trillion

Funny Links

Assault with Sandwich: http://www.msnbc.msn.com/id/27793459/?GT1=43001

Library Book Returned After 61 Years: http://funnynewsstories.org/overdue-library-book-returned-after-61-years/

Man Breaks Out of Prison, Then Returns: http://news.yahoo.com/s/ap/20081118/ap_on_fe_st/odd_escapee_returns;_ylt=Aq40HTWTvP25pZkffQtwAC7tiBIF

NY Times Spoof- Obama Edition July 4, 2009: http://www.nytimes-se.com/

Time's Person of The Year

Time's annual Person of The Year edition comes out next month and journalists are already speculating as to who will receive the distinction.

The award, "features and profiles a man, woman, couple, group, idea, place, or machine that "for better or for worse, ...has done the most to influence the events of the year"

Here are the past winners:

2000- George W. Bush
2001- Rudolph Giuliani
2002- The Whistleblowers (Cynthia Cooper, WorldCom; Coleen Rowley, FBI; and Sherron Watkins, Enron)
2003- The American Soldier
2004- George W. Bush
2005- The Good Samaritans (Bono, Bill Gates, and Melinda Gates)
2006- You
2007- Vladimir Putin


The early indications are that Time is debating between Barack Obama and Sarah Palin.

Here are my suggestions beyond these two obvious choices:

Henry Paulson
The American Homeowner
The American Consumer


What are your thoughts and who do you think deserves the distinction?

Daily Links

Thomas Friedman and his 20 Pulitzer Prizes Visit the Daily Daily Show: http://www.thedailyshow.com/video/index.jhtml?videoId=210159&title=thomas-friedman

How Famous Products Got Their Names: http://www.cio.com/special/slideshows/famous_tech_names/index#slideshow

History of the Bagel: http://www.slate.com/id/2204140/pagenum/all/#p2

Answers

With regards to the quiz the fame goes to Megan who answered 4 correct. Here are all the correct answers:


1) What company in the US spent the most on advertising in 2007?

Proctor & Gamble $5.1 Billion
AT&T: $3.2 Billion
Anheuser-Busch: $1.3 Billion
Apple: $490 Million


2) The most expensive movie ever made was (in 2008 dollars)?

Pirates of the Caribbean: At World’s End (2006) $316.6m
Cleopatra (1963) $314.6m
Titanic (1997)$272.6m
Quantum of Solace (2008) $230m


3) Wal- Mart is far and away the largest employer with over 2 million employees. Who is second with 425,000 employees?

UPS 425,000 employees
McDonald's 390,000 employees
General Electric 327,000 employees
Starbucks 172,000 employees



4) Which of these movies is not one of the 15 highest grossing movies of all time?

Forrest Gump $329,693,974
Finding Nemo $339,714,978
Passion of the Christ $370,773,867
Spider Man $407,681,000




5) The Dow Jones Industrial Average consists of 30 of the largest and most widely held public companies in the United States. Which company below is not included in the index?

Goodyear: It was removed in 1999

6) Which of these presidential elections resulted in the greatest margin of victory in the electoral college:

Reagan defeats Mondale (1984) 525 to 13

Nixon defeats McGovern (1972) 520 to 17
Clinton defeats Dole (1996) 379 to 159
Obama defeats McCain (2008) 365 to 173

7) The greatest selling album of all time is?

Michael Jackson - Thriller 108 million

Back in Black - AC/DC 42 million
The Eagles - Their Greatest Hits (1971–1975) 41 million
The Dark Side of the Moon - Pink Floyd 40 million

8) What fast food chain came first?

KFC 1952
Burger King 1954
Pizza Hut 1958
Wendy's 1969

9) The winner for "word of the year" in 2008 as recognized by the Oxford American Dictionary was:

Hypermiling- to maximizes gas mileage by making fuel-conserving adjustments to one's driving techniques

The rest were all finalists in the 2008 search for Word of the Year

10) What was the most watched television series finale ever?

M*A*S*H 105 million
Cheers 80 million
Seinfeld 76 million
Friends 52 million

Update

Answers and results from the quiz to come Monday.

Be Sure to Post Your Guesses.

Good Luck.

In Honor of 50 Posts

This is the 50th post on the blog. I want to start off by thanking everyone for taking the time to read and comment. All of your suggestions and insight have been appreciated. In honor of this momentous occasion its quiz time:

Answer without the support of Google, Yahoo, Ask Jeeves, AltaVista(I used to LOVE Altavista, Who Didn't???), or any other internet tool.

Use a number 2 pencil and work alone. Good luck. Answers to Come Tomorrow.

Post your guesses in the comments section and the person with the highest score will receive fame but unfortunately no fortune.

1) What company in the US spent the most on advertising in 2007?

a: Apple
b: Anheuser-Busch

c: Procter & Gamble

d: AT&T

2) The most expensive movie ever made was (in 2008 dollars)?

a: Titanic (1997)
b: Pirates of the Caribbean: At World’s End (2006)
c: Quantum of Solace (2008)
d: Cleopatra (1963)

3) Wal- Mart is far and away the largest employer with over 2 million employees. Who is second with 425,000 employees?

a: McDonald's
b: UPS

c: General Electric

d: Starbucks

4) Which of these movies is not one of the 15 highest grossing movies of all time?

a: Forrest Gump
b: Finding Nemo
c: Passion of the Christ
d: Spider Man

5) The Dow Jones Industrial Average consists of 30 of the largest and most widely held public companies in the United States. Which company below is not included in the index?

a: Verizon
b: Home Depot
c: Goodyear
d: Bank of America

6) Which of these presidential elections resulted in the greatest margin of victory in the electoral college:

a: Nixon defeats McGovern (1972)
b: Obama defeats McCain (2008)
c: Reagan defeats Mondale (1984)
d: Clinton defeats Dole (1996)


7) The greatest selling album of all time is?

a: Back in Black - AC/DC
b: Michael Jackson - Thriller
c: The Dark Side of the Moon - Pink Floyd
d: The Eagles - Their Greatest Hits (1971–1975)

8) What fast food chain came first

a: Burger King
b: Pizza Hut
c: KFC
d: Wendy's

9) The winner for "word of the year" in 2008 as recognized by the Oxford American Dictionary was:

a: Moofer- A mobile out-of-office worker

b: Frugalista- Person who leads a frugal lifestyle but stays fashionable and healthy

c: Hypermiling- to maximizes gas mileage by making fuel-conserving adjustments to one's driving techniques

d: Topless meeting- A meeting in which the participants are barred from using their laptops, BlackBerries or cellphones.

10) What was the most watched television series finale ever?

a: Cheers 1993
b: M*A*S*H 1983
c: Friends 2004

d: Seinfeld 1998

Good Luck

Notables

Here are some notable quotes from the past couple of weeks. As this marks the 49th post of the blog I have prepared a surprise for tomorrow's 50th post. Please try to contain your excitement.

"With the world in turmoil and doubt, the American people, faithful to the values that have always defined America's identity, have expressed with force their faith in progress and the future. At a time when we must face huge challenges together, your election has raised enormous hope in France, in Europe and beyond."

- Nicolas Sarkozy

"Unfortunately, never ever has a generation spent so much of our children's wealth in such a short period of time with so little to show for it"

-Doug Kass

Keith Olbermann's Rant Surrounding Proposition 8 in California: http://www.huffingtonpost.com/2008/11/10/keith-olbermanns-prop-8-s_n_142862.html

Secret Service Code Names:

Barack Obama - Renegade

Michelle Obama -Renaissance

Malia Obama - Radiance

Sasha Obama - Rosebud

Joe Biden - Celtic

Jill Biden - Capri

The Message of Change

Here are the Word Cloud's I created from the three most prolific speeches Barack Obama gave during this election season. His acceptance speech at the Democratic National Convention in Denver, his speech on the state of race in America following the Jeremiah Wright controversy, and finally his speech last Tuesday in Grant Park:

Democratic National Convention "The American Promise"

Speech On Race in America: "A More Perfect Union"

November 4th Grant Park: "Victory"

Daily Links

Could You Outspell an 8th Grader? http://encarta.msn.com/quiz_310/could_you_out-spell_an_eighth_grader_quiz.html

Less Skippy????http://www.latimes.com/business/la-fi-shrink9-2008nov09,0,4372443.story

Tiger Woods' New Course: http://www.cnbc.com/id/15840232?video=924186047&play=1


Did you know...

President-Elect Obama received full secret service protection in May 2007, much earlier than most presidential candidates. His secret service codename is "renegade".

According to polls, Americans are approximately as likely to believe in flying saucers as in evolution, and one-fifth of Americans believe that the sun orbits the Earth.

Lingering Questions

After 21 months of campaigning and one historic Tuesday in November...

They were written in advance, so what did the other speeches sound like? How does change fit into an Obama concession speech, and what would have been McCain's oratory path to unite the country?

How would the race have been different if McCain had chosen from his list of potential VPs:
Former Governor Tom Ridge (Pennsylvania) or
Former Representative Rob Portman (Ohio) or
Governor Charlie Crist (Florida) or
Governor Tim Pawlenty (Minnesota) or
Senator Joe Lieberman (Connecticut)????

E-Mail From Barack

Here is the e-mail President-Elect Obama sent to supporters before taking the stage in Chicago after his historic victory:

Friend --

I'm about to head to Grant Park to talk to everyone gathered there, but I wanted to write to you first.

We just made history.

And I don't want you to forget how we did it.

You made history every single day during this campaign -- every day you knocked on doors, made a donation, or talked to your family, friends, and neighbors about why you believe it's time for change.

I want to thank all of you who gave your time, talent, and passion to this campaign.

We have a lot of work to do to get our country back on track, and I'll be in touch soon about what comes next.

But I want to be very clear about one thing...

All of this happened because of you.

Thank you,
Barack

Grant Park

"In this country, we rise or fall as one nation, as one people."

"Tonight we proved once more that the true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity and unyielding hope."

"That's the true genius of America: that America can change. Our union can be perfected. What we've already achieved gives us hope for what we can and must achieve tomorrow."

Election Day

Some thoughts on this historic election:

-Voting Online: We pay bills online, pay our taxes online, yet we wait in line for hours on end to vote on a paper ballet. Why don't they just provide typewriters and we will vote by candlelight.

-At times it is impossible not to take America for granted. Then you wake up and see that people have been lined up since 4am ready to cast their ballot. Democracy is a concept that never ceases to amaze.

-At the conclusion of this election we will have elected either the first African-American or the first female to one of the nation's two highest offices. We also have the opportunity to have the first president who was not born inside the boarders of the United States. John McCain was born in the Panama Canal Zone.

The NY Times Guide To Election Night: http://www.nytimes.com/2008/11/04/us/politics/04guide.html?_r=1&hp&oref=slogin

Daily Links

An Air-Powered Car? http://finance.yahoo.com/family-home/article/106040/Air-Cars:-A-New-Wind-for-America's-Roads

McCain on SNL: http://www.hulu.com/watch/41829/saturday-night-live-mccain-qvc-open

$2,500 Tricycle: http://www.bornrich.org/entry/2500-titanium-tricycle-is-worth-its-mettle/

Diamond-Studded Credit Cards: http://www.bornrich.org/entry/what-credit-crunch-mastercard-bringing-diamond-studded-cards/

"The West Wing"

The New York Post called it one of the top 5 shows of all time. Its 26 Emmy's are the most ever for a drama series. For four straight years it was recognized as the greatest drama on television by the Screen Actors Guild.

The seven seasons were some of the best content television has ever seen. Now, over two years after the series finale, the show has returned to prominence due to the uncanny way seasons 6 and 7 contain striking similarities to the current presidential election. For anyone who has never experienced The West Wing, it comes highly recommended. Here is the New York Times account of the similarities:
http://www.nytimes.com/2008/10/30/arts/television/30wing.html?_r=1&oref=slogin

Happy Halloween

Synchronized Debating

At least they stick to their stump speeches:
http://www.236.com/video/2008/watch_synchronized_presidentia_9857.php

Credit Crisis Dictionary

Want to know why this crisis is so hard for even the professionals to get their heads around:

Derivative- Financial contracts whose values are derived from value of an underlying asset. The underlying asset on which derivatives are based can be commodities, equities, residential mortgages, commercial real estate loans, bonds, interest rates, exchange rates, or stock market indexes.

Collateralized Debt Obligation- An unregulated type of asset-backed security and structured credit product. Collateralized debt obligation are constructed from a portfolio of fixed-income assets.

Securitization- A structured finance process, which involves pooling and repackaging of cash flow producing financial assets into securities that are then sold to investors. All assets can be securitized so long as they are associated with cash flow.

Mortgage-Backed Security- An asset-backed security whose cash flows are backed by the principal and interest payments of a set of mortgage loans. However not all securities backed by mortgages are considered mortgage-backed security. Housing Bonds (Mortgage Revenue Bonds) are backed by the mortgages which they fund, but aren't classified as mortgage-backed security.

Credit Default Swap- A credit derivative contract between two counterparties, whereby the buyer makes periodic payments to the seller in exchange for the right to a payoff if there is a default or credit event in respect of a third party or reference entity.

"Hey Sarah Palin"

Right up there with the McCain/Obama dance off as the greatest videos of the election season thus far.

3 amazing and creative videos by the same group:

Set to the tune of "Hey Delilah"
http://www.youtube.com/watch?v=7DIc8jdra0o

Set to the tune of "Bubbly"
http://www.youtube.com/watch?v=8gQdCHDuags&feature=related

"Vote Barack"
http://www.youtube.com/watch?v=C2Lg1myJmyc&feature=iv&annotation_id=event_956260

Poll Update:

National Polls (10.3.08 - 10.6.08)

Reuters: Obama +5%
ABC News: Obama +7%
FOX News: Obama +9%
Gallup: Obama +5%


Battleground States (Poll Average)

Ohio: Obama +6%
Florida: Obama +2%
Colorado: Obama +6%
North Carolina: Obama +2%
Missouri: Obama +1%
Nevada: Obama +3%


Political Betting Market (Intrade.com)

Obama: 88%
McCain: 12%

Daily Links

Barack O'Lantern: http://www.flickr.com/photos/aidenag/2956314276/

Hedge Fund Gains 866%, Manager Abruptly Closes Fund: http://www.cnbc.com/id/27239479

Stock Market Performance by Political Party: http://www.nytimes.com/interactive/2008/10/14/opinion/20081014_OPCHART.html

Unbelievable McCain Vs. Obama Dance-Off

Potentially the greatest video thus far created surrounding the campaign:
http://www.break.com/index/unbelievable-mccain-vs-obama-dance-off.html

Re-Thinking Palin??

Ohhh how quickly things can change. It was only 7 short weeks ago that the Republican base was invigorated by the selection of Sarah Palin as Vice President.

Interview ineptitude, questions about her past in Alaska, and a general sense that she is not fit to lead surely has the McCain camp questioning their selection.

Since last month, Palin's unfavorable rating has jumped 12 points, to 41 percent, in a New York Times/CBS News poll. Palin's unfavorable rating is now the highest ever for a VP candidate as measured by that poll.

The news at the top of the ticket is not much better for Republicans. A new NBC News/Wall Street Journal poll shows that Obama leads McCain 52 to 42 percent among registered voters nationwide. This is up from 49 to 43 percent two weeks ago. Here is the kicker from the survey:

When voters were asked about their top concern surrounding McCain they no longer say a continuation of the failed policies of President Bush. You guessed it, they say Palin and her qualification to be president.

By choosing Palin, McCain relinquished his strongest argument against Obama, the inexperience question. Palin's ineptitude has forced McCain to run a campaign of "changing Washington". This has been the Obama mantra from the start and McCain has gone further right rather then to middle leaving him without a "bridge" to stand on.

Global Internet Usage

- 19% of internet users worldwide are Americans

- 35% of internet users worldwide are Asian

- The amount of internet users in Asia (389,392,280 mil) is 11 times the entire population of Australia

- In Africa less than 3% of people use the internet

- In the United States over 72% of people use the internet

A Test To Vote?

Should we make people pass a test to vote?

Would it surprise you that over 55% of Americans failed to identify just one Supreme Court Justice. The scariest part is what the most common answers were: George W. Bush, Hillary Clinton, Thurgood Marshall and Arnold Schwarzenegger.

Hypothetically if you had to get at least 6 of the 10 questions below correct to vote this November, how would you fare?

1) What do we call the first 10 amendments to the Constitution?
2) We elect a U.S. representative for how many years?
3) How many justices are on the Supreme Court?
4) Name one U.S. territory.
5) What is one right or freedom from the First Amendment?
6) Who is the Chief Justice of the Supreme Court?
7) What territory did the United States buy from France in 1803?
8) Who were the three main Axis Powers in World War II?
9) During the Cold War, what was the main concern of the United States?
10) What is the last day you can send in Federal Income Tax Forms?

"Why not test people about the basic functions of government? A voting test would point the arrow of civic engagement up, instead of down, sending the signal that becoming an informed citizen is a valued accomplishment."
-Jonah Goldberg
Los Angeles Times 1997




Answers
1) Bill of Rights
2) 2 years
3) 9
4) Puerto Rico, US Virgin Island, American Samoa, Northern Marina Island, Guam
5) Speech, Religion, Assembly, Press, Petition the Government
6) John Roberts
7) Louisiana
8) Japan, Germany, Italy
9) Communism
10) April 15th

Daily Links

700 Billion Dollar Man: http://www.time.com/time/business/article/0,8599,1848055,00.html

Palin as President(Click on Objects Around the Office): http://www.palinaspresident.com/

Is $250,000 Rich?? http://biz.yahoo.com/usnews/081014/14_how_to_tell_if_youre_rich.html?.&.pf=banking-budgeting

Best TV Shows Ever?http://www.nypost.com/seven/04272008/tv/the_best_shows_on_tv__ever_108106.htm?page=0

Campaign Time(Hilarious Video): http://www.peteyandpetunia.com/VoteHere/VoteHere.htm

Political Awareness

Here are 3 questions posed to a random sample of 3,612 of American Adults:

1) Who is the controlling party in the U.S. House of Representatives?

2) Who is the Secretary of State?

3) Who is the Prime Minister of Britain?


Did you get all three? Would it surprise you that only 18% of individuals received a perfect score. The Pew Research Center compiled a breakdown of the results by the different news audiences that respondents most closely identified with. For the record, no one was given the Sarah Palin option of saying she utilized all news sources.


- National Public Radio: 73 percent (correctly identified Democrats as the majority in the House), 72 percent (correctly identified Condeleeza Rice), 57 percent (correctly identified Gordon Brown)

- New Yorker/Atlantic Monthly: 71 percent , 71 percent, 59 percent

- Colbert Report: 73 percent, 65 percent, 49 percent

- O'Reilly Factor: 70 percent, 60 percent, 41 percent

- Daily Show: 65 percent, 48 percent, 36 percent

- CNN: 59 percent, 48 percent, 29 percent

- National Enquirer: 44 percent, 32 percent, 22 percent

Should We Trust Paulson?

Here are some quotes from Henry Paulson that seem very appropriate given the recent developments:

April 20, 2007 / Dow Close = 12,961
"I don't see subprime mortgage market troubles imposing a serious problem. I think it's going to be largely contained."

July 12, 2007 / Dow Close = 13,861
"This is far and away the strongest global economy I've seen in my business lifetime.”

May 7, 2008 / Dow Close = 12,814
'The worst is likely to be behind us. .There's no doubt that things feel better today than they did in March.'

August 10, 2008 / Dow Close = 11,782
"We have no plans to insert money into either of those two institutions [FNM and FRE]."

September 7, 2008 / Dow Close = 11,510
"In July, Congress granted the Treasury, the Federal Reserve and FHFA new authorities with respect to the GSEs, Fannie Mae and Freddie Mac."

September 19, 2008 / Dow Close = 11,388
"We're talking hundreds of billions of dollars...I am convinced that this bold approach will cost American families far less than the alternative - a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion."

October 8, 2008 / Dow Close = 9,258
"One thing we must recognize - even with the new Treasury authorities, some financial institutions will fail...But patience is also needed because the turmoil will not end quickly and significant challenges remain ahead."

The Speech I Want to See

The last presidential debate is tonight. Here are some things I would like to see mentioned:

-Our world is global, flat, and grows more inter-connected by the second. This demands that we respect the opinions of both our friends and our allies. America is an amazing place to live, it is not the only place to live, and we must stop acting like it.

-The reason politicians talk about the amazing spirit of the American people is because it is true. However, we are falling farther behind in educating our youth and protecting our planet. Our future growth and sustainablity depends on our commitment to our future leaders and our conservation of natural resources.

-Any energy solution that involves crude oil is not a solution, it is a continuation of the problem. It is estimated that over 9 billion people will inhabit the Earth by 2040. We are in need of drastic investments and most importantly an unwavering commitment to change the way we power our planet.

-I will lead this country under the belief that American citizens live in more diverse locations than Main Street and Wall Street. I will govern on the basis that some of you may live on parkways, some on roads, and even a few on avenues. America is a diverse place that requires diverse solutions. The continued greatness of America lies in our ability to adapt to change, not in our refusal to accept it.

The Inequality Gap

The Congressional Budget Office recently reported that income inequality is at its highest level since 1979. In 2006 the average individual in the top .1% of wage earners made $2.1 million. This correlates to 77 times as much as the average individual in the bottom 90%. It took that top earner just 3 days and 3 hours worth of work to make what the average bottom 90% worker earned ALL YEAR! In 1979 it took 12 whole days for the top .1% earner to accomplish the same feat.

In 2004 if you grabbed a random group of 100 American families:
- Only 5 family would have had annual income over $157,000
- 20 families would have had incomes over $88,000
- 40 families would have had annual incomes UNDER $18,500

Capitalism is unequivocally the greatest economic system(although recent events put this notion in jeopardy). However, statistics like these make me wonder if parts of the system are in need of repair. These are not problems that are solved overnight, nor is complete income equality the goal. The goal is fairness and it is only possible when we realize that growth and prosperity for our country is dependent on all income classes, not just the privileged few. Our economy faces many challenges, this is without a doubt one of the most pressing.

Daily Links

Friedman’s Take on Palin’s Patriotism: http://www.nytimes.com/2008/10/08/opinion/08friedman.html?_r=1&em&oref=slogin

Outrageous Dubai Construction Projects: http://www.askmen.com/top_10/travel/top-10-outrageous-dubai-construction-projects.html

Super Bowl Halftime = Springsteen: http://nbcsports.msnbc.com/id/26931640/

Debate Analysis from Wasilla: http://www.thedailyshow.com/video/index.jhtml?videoId=186790&title=debate-analysis-from-wasilla


“The Bush Administration, which took office as social conservatives, is now leaving as conservative socialists.”
-Allan Mendelowitz

Video Links

I Think He Can Dance: http://www.break.com/index/i-think-he-can-dance.html?mrr=we

George Bush Blunders: http://www.youtube.com/watch?v=KBm5ZSWbD14&feature=related

Debt Too Big For Clock: http://www.youtube.com/watch?v=A7MvXUDrZ0Q

Yes We Can: http://www.youtube.com/watch?v=jjXyqcx-mYY

Quick Change: http://www.youtube.com/watch?v=RB-wUgnyGv0

VP Pick

A little over a month ago, all the buzz surrounded the selection of Vice Presidents. We wondered if Obama would work to shore up the question of inexperience and we mulled over McCain's opportunity to either pander to the far right, or attempt to appeal to the middle. In the end we were given Joe Biden and Sarah Palin.

Imagine for a second that either candidate used this momentous selection to make their pick on the basis of economic expertise. Although unlikely, what would a pick of Micheal Bloomberg, Henry Paulson, or even Warren Buffet have meant in the current environment. A central theme of the presidential election thus far has been what candidate can Americans trust to make difficult and vital decisions. With the economy now the number one concern of over 65% of voters, both candidates dropped the ball with their choices for Vice President.

This financial crisis is the greatest since 1987, maybe since the Great Depression, and the four candidates we must choose between received their college degrees in Political Science(Obama), a General Bachelors of Science(McCain), History(Biden), and Communications(Palin). Advanced degrees for these candidate's yield, two law degree (Obama and Biden), and a third place finish in the Miss Alaska beauty pageant (Palin not McCain). We are drowning in a sea of Credit Default Swaps, Mortgage Backed Securities, and Collateralized Debt Obligations, and our presidential candidates need policy briefings on the basics of supply and demand.

The election is less than a month away so any change to the ticket is unlikely. I am also not assuming that an economist would make a spectacular Vice President. However if it truly "is the economy stupid" I wonder how much either ticket would have been bolstered by a Vice Presidential pick based on economic aptitude.

The Start of Subprime

Here is an article that was forwarded to me from September 30, 1999 in the New York Times. It depicts the moves Fannie Mae made in order to extend lending to individuals "whose credit is generally not good enough to qualify for conventional loans." In essence it represents the begining of subprime.

Here is the key paragraph:

"In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."

The full article is well worth the read: http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

Thanks for the heads up Noah.

Update on the Polls

We are less than one month away from the election and tonight represents the second presidential debate between Obama and McCain. Here is a consolidated view of the major polls as of yesterday.

National Polls (10.3.08 - 10.6.08)
Reuters: Obama +3%
NBC/WSJ: Obama +6%
CNN: Obama +8%
Gallup: Obama +8%

Battleground States (Poll Average)
Ohio: Obama +3.5%
Florida: Obama +4%
Indiana: McCain +2.2%
North Carolina: Obama +1.5%
Missouri: Even
Virgina: Obama +4.8%

Political Betting Market (Intrade.com)
Obama: 68%
McCain: 32%

Debate Flow Chart

Thanks to http://www.dailykos.com/ for this hilarious Flow Chart(click for the larger version):

Daily Links - Wall Street Edition

As a prelude to the vote in the House of Representatives today:

The World is Flat Author on the Bailout: http://www.nytimes.com/2008/10/01/opinion/01friedman.html?em

$55 Trillion Dollar Potential Disaster: http://money.cnn.com/2008/09/30/magazines/fortune/varchaver_derivatives_short.fortune/index.htm?postversion=2008093012

$19 million for 3 Weeks @ WaMu!!!!!: http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/30/the-best-temp-gig-in-history.aspx

Daily Links - Palin Edition

In honor of what is sure to be an exhilarating and entertaining debate tonight:

Unbelievable Part of Interview With Couric That Wasn't Shown on TV: http://www.youtube.com/watch?v=quhbzGoOaX0

Is Palin Prepared? http://www.newsweek.com/id/161204

Tips For Next Time: http://www.slate.com/id/2200937/

Palin's Facebook Page: http://www.holytaco.com/details/?image-path=http://cdn.holytaco.com/www/wp-content/uploads/2008/09/palin-facebook-2.jpg

September Madness

Amazing job on this website. It may not be March but college basketball does provides quite an analogy:
http://www.techcrunch.com/wp-content/uploads/2008/09/septembermadnessb.jpg

Bailout Cartoons