McCain's had his oven chips

Let's look at the big picture of US Presidential history. Obama was a shoe-in it seems, a dead-cert. McCain hadn't any hope remaining based on historical precedent, no chips left in his oven?
This was the 55th US Presidential election. Obama and McCain were competing to be the forty-third individual elected US President (44th Presidency) and to take the helm in leading the Free World out of Global Crisis. In may not be obvious to many, and comforting to some, but, with very few exceptions, all candidates lose who contest a US presidential campaign to succeed a president of the same party, unless the candidate is the outgoing Vice-president (happened 16 times beginning with the seven elected Presidents after the first, George Washington, who each had served as Vice-President or Secretary of State or both). The only exceptions to this that offered hope for McCain were Republicans, William Taft, Rutherford Hayes, his predecessor Ulysses Grant, and Democrat Herbert Hoover. But McCain is no U.S.Grant - for one quality not commonly known, Grant was very well read, a voracious reader of books, novels and histories as well as being a victorious General, which McCain is not, albeit a Vietnam War hero. Hayes lost the popular vote, but was controversially voted in 8/7 by an Electoral Commission of 8 Republicans and 7 Democrats. after a bitter dispute, bribery and fraud in the Electoral College. Could McCain steal the election by some such shenanigans; most probably not? Taft had been Secretary for War and was “a Progressive” and endorsed by the popular outgoing President Roosevelt (T). McCain could not match up to that though he tried to, but given Bush's deep unpopularity this was a losing proposition. Hoover beat a Republican Party divided internally by religion, having nominated a Catholic Candidate, Alfred Smith. McCain did hope (by his team or supporters employing McCarthy-style slurs) that the Democrats could be similarly divided between Clinton (H) and Obama, or divided over Obama’s race, middle name or partial anagram of his last name, or maybe by the fact that he is not obviously of Irish, Scottish, English, Dutch or Scots-Irish stock that are overwhelmingly dominant choices as presidential candidates, successful or otherwise, among whom Scots-Irish are pre-eminent by far, having been elected 18 times! Born in Panama McCain is, of course, Scots-Irish (with some French and Spanish). And, as it turns out, Obama had an ace up his sleeve by virtue of Irish roots on his Mother's side of the family.
There are those who value roots and today after Obama's victory these include Kenyans, Indonesians, and the Irish. McCain traces his line past his famous father and grandfather, both US Admirals, to a long descent from Saint David I, King of Scotland (d.1153 youngest son of King Malcolm Canmore, who killed King Macbeth, and St Margaret, descendent of the Hungarian Agatha) and from David’s grandson William the Lion, King of Scotland (d.1214). And he is also descended from 'Longshanks' the English King Edward I Duke of Aquitaine (d.1307), which does not play well with fans of the moie 'Braveheart', and Eleanor of Provence plus French descent from Louis VII, King of France (d.1180), and Spanish antecedents too from Saint Fernando III, King of Castille (d.1252), though this did not play well with the Hispanic vote who voted 65/35 for Obama. (Kingship is not new among the antecedents of US Presidents and candidates for the post; Clinton is in direct descent from a long line of Scottish gypsy kings). These days Royalty may actually count with Republicans, even bible-belters who voted 76/24, men 52/48, and whites 57/43 for McCain. These popular majorities in important oting segments were countered by first-time voters who voted 75/25, blacks 95/5, women 58/42, Jews 77/27, and American muslims and Red Indians both voting 90/10 for Obama. The Irish vote, worth one sixth of the total, seems to have split evenly, however, between McCain and Obama.
Obama is also blue-green Ulster-Scotch-Irish, if not so blue-blood as McCain, though of Irish and Cherokee and English stock on his Mother's side and having Afro-American and Afro-American and even Jewish antecedents in South Carolina, Illinois and Ohio. His father was a Kenyan Government finance ministry senior economist, and Harvard-educated, which is blue-blood enough for my vote in this financial-technocratic age. Sadly, the Cherokees did not factor highly in Obama's campaign, while full-feathered Indians provided the music after McCain's cncession speech rally in Arizona.
What is most intriguing, if one believes that governing elites tend to favour opportunities for their own, is how well-connected by those somewhat un-modern terms, pedigree and breeding, Barack Obama is by virtue of family connections to 8 US Presidents from Madison to Bush jnr and even Hollywood's aristocracy including Katherine Hepburn, Robert Duvall and Brad Pitt. All this was researched in immense detail by the New England Genological History Society goin back to the 17th century. Less impressive, but heart-warming, on the Irish side, one of Barack Obama's great-great-great-grandfathers was a shoemaker from Moneygall in County Offally. Ancestry.com revealed on March 12, 2007, it found records confirming Obama’s Irish roots (actually only 3.5% Irish and 3.5% Scottish while over 30% English). Canon Stephen Neill, a local Anglican rector, said church documents he found - along with census, immigration and other records tracked down by U.S. genealogists - showing that Obama's great-great-great-grandfather, Fulmouth Kearney (d.1878), a shoe-maker, came from Moneygall in Ireland. On March 20, 1850, a 19-year-old farm hand named Fulmouth Kearney landed in New York Harbor from famine-wrecked Ireland. He went to Ohio to live with relatives, married and had eight children. Three of his daughters married brothers in the Dunham family and one of them eventually produced Ann Dunham (Obama’s mother). The picture is of one of Moneygall's pub which was packed out by 100+ or a full third of the village population for a long caley (céilí or céilídh, meaning party, slender, and of the forest) on election night. Ann Dunham married a Kenyan economics student, whose father was a goat-herder, called Barack Obama and they had Barack Obama Jr. Henry Healy, a 22 years old Moneygall resident says his family records indicate he is distantly related to Obama. Like many Moneygall residents, he followed the U.S. presidential race more closely and rooting for his kinsman. "It would be brilliant if he won ... he is related to me, and also it would be good for the village." Julia Hayes, another Moneygall resident, says "I was hoping Hillary would get in, but now this has come up and I'd love to see ... [Obama] win." According to The Scotsman newspaper (6 Nov. page 9) "A small village is getting ready for an official visit from barack Obama. He had already signalled his desire to see his ancestral home in Moneygall, County Offally (population 299), and his US presidential triumph sent jubilant locals into a tailspin." The piece is titled "These Irish eyes are smiling".
This line of electoral logic reasoning, about McCain's poor chances of winning (substantiated by a 14-point lead in the polls that turned into a 5.5% margin win) may be suspected as just another inconsequential ‘urban legend,’ though such legends need not be dismissed so lightly. The most powerful example of such legends, the most chilling, must be Shawnee Chief Tenskwatawa’s "curse" (upon his military foe General, who later became President, Harrison). Tenskwatawa (or his brother Tecumseh) cursed any US Presidents elected in a year ending with the number zero i.e. every 20 years (which has turned up 8 times so far) electing that they will die in office. This “zero-year curse” “came true” for Harrison (elected 1840) and for the next six zero-year presidents - Lincoln, Garfield, McKinley, Harding, Roosevelt (FDR) and Kennedy. Ronald Reagan (elected 1980), among other accomplishments, “broke the curse” by surviving an assassin’s bullet (by being taken to a private rather than a state hospital), and so too, so far, has George W. Bush (elected 2000). It must nevertheless be a comfort to President Obama (who heard of the chants 'Kill Obama' at a McCain rally and complained about this at the second Presidential debate) that the next zero at the end of the year is 2020 when everything will become much clearer, by virtue of course of 20/20 hindsight, including knowing by then just how bad the curse of our present financial and economic crisis really was!

Financial Culloden!

The humiliation of both the Royal Bank of Scotland (RBS) and Halifax Bank of Scotland (HBoS) is complete. The Scotsman Newspaper (Bill Jamieson's column) posits that "As time passes, we will view it as a financial Culloden" (when the mainly Scottish Jacobin army led by The Pretender, Prince Charles Stewart, was defeated by the mainly English and Scottish Hanoverian army led by the Duke of Cumberland). We hope that the fates of RBS and HBoS will not be decided by today's leaders of these forces, Jacobite First Minister Alex Salmond and Hanoverian Prime Minister Gordon Brown? For an account of the coming battle read this excerpt from an as yet unpublished history of the events of October 2008, 262 years after the first battle of Culloden whose illustrations it employs:
"English poured forth their incessant fire of treasury bills notwithstanding the canon of the Golden Rule, now loaded with political sour grapes at the loss of Scottish Parliamentary majority, that now swept aside the Scottish banks like just so many chips off a gambler's card table, and like a hailstorm notwithstanding the flank-fire of the City of London upon the Edinburgh regimen that led the Bill Jamieson's Scotsman (whose front page on the cold grey morning of the 15th trumpeted the call "Still time to save 'The Bank') and all ranks of Scottish patriots hurtling onward and down the slope, as like to the headlong rush day after day of the banks' share prices, dividend-deprived shareholders now desperately flinging themselves into the stern credit lines of the enemy, which indeed they did not see clearly for smoke 'n mirrors of the death-knelling paperwork of back-room agreements signed as if in blood. All that courage, all that despair, could do was done. It was a moment of dreadful and agonising suspense, but only a moment for the credit crunch whirlwind does not reap the forest of share certificates and annual reports with greater rapidity than short-sellers cleaned out the Scottish banks. Nevertheless, almost every man in the shareholders' ranks, chief and gentleman and gentlewoman, fell before the deadly squeeze which they had braved; and although the enemy gave way at minor points along the line, it was not till every rule of shareholders' rights was bent and screens ran red like so many a bloody knife. When the first lines of equity capital and the SLS credit swaps had been swept aside, the defenders of the independence of Scottish banks continued their impetuous advance till they came near the second line of preference shares, when, being almost annihilated by a profuse and well-directed short-selling and panic dissertions, the shattered remains of what had been ever victorious until barely a few months before, now facing a suddenly much more numerous and confident force, began to give way. Still a few political leaders, institutional shareholders and their journalist comrades rushed on, resolved rather to try negotiating the steely points of the enemy than forfeit their well-acquired and dearly-estimated honour of their fair value portfolios. They rushed on, but not a man ever engaged fully with the main force of the enemy's tactical logic. The proud Scots who had innovated all that was at one time new in world banking such as trustee savings, joint stock banks, paper money, double-sided printed banknotes, colour bank notes, bonds, Adam Smith, mutual funds and much else, now found themselves losing at a global chess game that was no longer theirs to influence or command.

The last survivors of that fatal accounting, at the end of what had been a 300 year drama, their pride, dreams and hopes perished more assuredly than on any battlefield as they reached the points on the London government's agenda where Nationalisation would be temporary until all assets and lines of business of any value remaining were sold off at auction prices or given away to foreign interests. The wailing and moaning in Edinburgh and Glasgow's restaurants, bars and drawing rooms could be heard unremittenced for many years after, though it was many years too before a Labour Party again ruled in Scotland."

Hidden Agendas?: New Bank Note (Turkish) & ringing up Clause 3

The UK Labour Party's public agenda for nearly a century contained Clause 3 (rescinded under the leadership of Tony Blair) that expressed the aim of taking into public ownership the heights of the economy, though after the '50s more observed in the breach than the observation. The crisis of Britain's banks has resuscitated this political corpse as a hidden agenda with the possibility of government taking a commanding ownership share of leading banks (though only if existing shareholders do not take up the bulk or all of the preference shares that 4 UK clearing banks are about to issue)? The reality may be more symbolic than having long term political consequences. So long as UK banks only survive by government guarantees government dilution of existing shareholders' rights seems only fair (and the conditions such as no more "rewards for failure", and banks must not reduce lending to small businesses or first time home-buyers). It's not really fascinating therefore, as many journalists are suggesting, to wonder how Gordon Brown and Alistair Darling square this having long abandoned youthful left wingism. Paradoxically, the same is happening in the USA. In recent decades, it became axiomatic that whatever happens in the USA is copied in the UK afterwards, rarely beforehand. Nonetheless, there is a symbolic change going on in the social dimension of the role of money. In the realm of symbolism, with the popular mind ever seeking after archetypal storylines about the credit crunch, asking who are the good guys and the bad guys, journalists seek out poetic truths for which, for example, the demonic looking image of Richard Fuld (ex-CEO of Lehmans) is very satisfying. It is another sign of the times that in Turkey a secular revolt is splitting the republic over placing the image of a "previously obscure" woman on new banknotes? She is Fatma Aliye (d.1936), Turkey's first female novelist, illustrated without the Islamic headscarf! The integrity of money is at the centre of politics, never more so than today, but rarely as a battleground between religious conservatives and feminism. Aliye was the daughter of a senior Ottoman bureaucrat and historian. New notes are being minted for issuance next January to mark the inauguration of a fresh currency to replace the existing New Turkish Lira. The central bank committee also chose a mathematician, a composer, an architect and a 13th-century Sufi mystic. These are all departures from the established practice of notes carrying political figures. Having women depicted on banknotes other than merely for allegorical purposes is very rare. Other countries have political female figures such as England's Queen, Mrs Bandaranike, Indira Gandhi, and Israel's ex-President Golda Meir (below). Placing non-political women on banknotes is rare. England had Florence Nightingale on the back of a ten pount note. Last year North Korea also for the first time placed a woman on a note (below). The new Turkish note echoes a Chilean note (above) showing Gabriela Mistral, pseudonym of Lucila de María del Perpetuo Socorro Godoy Alcayaga, a Chilean poet, educator, diplomat, feminist, and first Latin American to win the Nobel Prize for Literature, in 1945. My vote for the world's greatest ever banknote is the Clydesdale £10 for reasons I explain below. Scotland has 3 sets of sterling banknotes (issued by 3 banks) and Northern Ireland gloriously has 5 sets. Except for the Hong Kong dollar, these are the only regional banknotes left in the world (all the result of a freedom won by Sir Walter Scot's defence against moves by the Bank of England in the 1820s to impose only its banknotes on the UK). All this is against the background of de-nationalised Euro notes that only show 'bridges' as communitaire symbols, though if the UK does join the Euro zone the Irish and Scottish banks in the UK will gain a unique right to design the back side of their notes.
The Clydesdale note is unique for showing Africans on the reverse and a map of part of eastern Nigeria! Other than its predecessor that had David Livingstone in Africa have there ever been any countries' banknotes that show images from foreign countries? The current note shows Mary Slessor whose story is told in all Nigeria's schools. She was a Scottish presbyterian missionary who went native in Calabar and in time stopped the Nigerian tradition of rejecting twins as a curse, which was an immense age-old tragedy in a country with the highest birth rate of twins in the world. The bank note looks African and has no Scottish references or symbols other than the names Clydesdale and Glasgow. I consider it the Clydesdale note as the greatest medium of exchange. But, who today thinks of money as having symbolically important, educational or political dimension on a par with the most scandalous of contemporary art? There is the story of French PM Lionel Jospin, who on his first meeting with PM Tony Blair objected to the Bank of England note depicting the Duke of Wellington on the reverse of the £5 note with the Battle of Waterloo. This note, like the choice of Waterloo as the terminal for the Chunnel train connection between London and Paris, was a humorous studied insult that coincided with the opening of the Channel Tunnel rail link. After the meeting it was replaced with a subtler points-scoring, with a note depicting George Stephenson and the world's first railway just to remind the French tourists who invented railways. I suppose these themes are capable of expressing hidden agendas, of the sort that nationalisation of banks are being suspected of by died-in-the-wool conservatives, though how hidden can they be when handled by millions? In Turkey, Bedri Baykam, an artist and member of the pro-Atatürk Kemalist Thought Association, says the new Turkish note is part of an AKP-driven hidden agenda. "I have no problem using historical figures on bank notes but I don't trust the motives," he told the Guardian. "They will infiltrate through the currency names or images that at first look harmless but the next step will be to introduce gradually more conservative figures until you get people who negate the values of the republic." Well, for now, anything thought-provoking and culturally radical I can only celebrate, though why except for Golda Meir, the other women depicted should all have to look so glum I have no idea. I'd prefer the image that this blog begins with for Mary Slessor with her adopted twins on the Clydesdale note.

A USA Short Seller's Diary 2

Yippee we're out of the SEC's sin bin, no more timeouts, back in the thirties big game, shorts rule, slam dunk every Morgan Stanley put! Inflation in the nation don’t bother me, cause I’m a scholar with a dollar, as you can plain see. Guess who wrote that song? Shaft - I'm showing my age -. At Dow 14,000 I got laughed outta the dealing room for calling Dow at 9,000 (P/E's at 9) or less as a first stop, now it's below 9,000 and I'm cashing in profits the whole way down. At 5,000 (P/E's will be 5) and would be historical bottom, but now let me shout my call m- Dow 4,000 in two years or sooner in fast market time, every month only a week, week after week, every day a week, day after day, a day is an hour, hour after hour, Bloomberg and CNBC bring it on - their show me market bottom-seers! Jerk after jerk sees a bottom beginning 5,000 points ago. First problem, these fools believe their own propaganda. But, Propaganda's meant for the enemy, the retail schmucks who the market professionals are tsuccessfuly stuffing. Second problem, 99.99 % of experts in this speculate to cremate business think the world is linear. How often do I preach to the trough, pearls before swine, that the linearity coefficient is pure bs, only for future states of the world? Turn on the TV talking heads on the propaganda screens and I bet you’ll hear tomorrow: “after the market falls this far, it will most likely do this or that in so many days.” Arrgh. these idiots savants should be taken off the air because they are contributing to the economic plunder by Wall Street's downhill slalom champeens. I still think there is room in EWG puts (Germany), although who am I to suggest that? I bought Ultrashort SDS and DXW Dec.85 calls (remember to think inverse, calls because this is a short fund) at $3.14 and sold them at $6.40 and was feeling pretty smug about $32 grand smug until they closed next day at $29.50, which means for every contract I left about $2,300 on the table, and I had 100 contracts. I couldn’t help it because I had a big Lehmans party to take my girl to and go pfisching some some insider steers from guys who technically are no longer inside. She had her fourth date with me and I hope she’s gonna commit now, because this dating is costing me a fortune in bar tabs alone. Anyways, next day
I bought Potash puts today POT and they popped $10.00 per contract – that’s $1,000 per put. Not bad at all. I’ll got out because I wouldn’t be around next trading day tomorrow but hey everyone take a look at POT. I warned the guys about Met Life and it dived by ½ in value making me some weekend money. Same happened to Prudential when it dropped $10 in half a day. Take another look at Priceline – no not travel? They got into toxic mortgages and crashed by ½ in 10 trading days, but do not qualify to go to The Fed's Pre-Xmas Santa Claus window. On the positive side, I bought AXA April 35 calls because AXA is one of a few solid companies around that was wise to bail out of the US. Next stop, the Euro at 2 bucks. The only thing with AXA is that the pit trader is a crook and tries to take me by making spread way too wide. I Stayed away from gold. Chumps couldn't understand that when poverty beckons, pawnbrokers make a killing buying in gold cheap. I read this summary, which goes "If you were filled with whiskey for a few weeks and are now sober and someone tells you the current market summary, where do you think gold would be? $5,000?" Think what happened until now?
[1] Eight Fed rate cuts, the last of which was globally coordinated;
[2] creation of two alphabet soup special lending agencies (TAF, TSLF),
[3] nationalization of mortgage giants Fannie/Freddie,
[4] takeover of worlds largest insurance company (AIG),
[5] seizure of 7th largest US mortgage originator (IndyMac),
[6] government bailout ($700 billions + $150 bill.),
[7] loosened Discount Window borrowing parameters worth maybe a $trillion?
[8] paying interest on the Fed's reserves,
[9] direct purchase of commercial paper from private companies.
[10] Dow heading way south of 9,000!
Instead of $3-5,000 Gold iss gonna languish and maybe even fall as poor folk sell to the man at the booth counter. The fact that gold isn’t at maybe even $10,000 – and is still below recent highs – means it AIN'T the refuge “experts” say. When people need cash they’ll sell everything, including gold, in fact gold first, and they sure ain't buying it for a rainy day or Xmas. Short, bay, short, and in the short-term – a new meaning for short-term – even a dead cat can bounce by the half day, sometimes in the half hour. Gotta go back into the dealing asylum, my shorts, CFDs and puts are about to pay hard cash on the nail. People think I'm a derivatives trader, but really I'm strictly cash; cash in and cash out every day, day after day, sometimes hour by hour, doing my bit for Obama's election hopes. Ya gotta be a turkey who votes for Xmas not to!

A is for Assets e.g. Art?

It was announced today that savvy nvestors will from Friday be able to bet on the price of art, when Dublin's Intrade’s The Prediction Market begins trading futures contracts – which can be bought for as little as $30 – based on the art market prices (Mei Moses All Art Index). This is definitely shutting the stable door stuff. How much longer can the art bull market last before turning into the art bs market. But if there is a turning point coming up that makes derivatives a very interesting gamble for bulls and bears and even for collectors to seriously think about hedging their asset risk exposures. How will Intrade fare if it finds itself on one side of a lot of contracts in a one-way market. Spread-betting might be a safer form of derivative speculation in art, but for that to occur art prices would have to be quoted via buy-sell spreads on reputable (regulated) auction based exchanges. The art market is not yet that liquid or the underlying that homogeneous. There are at least a 100 global brand names however where such liquidity may be achievable? But, aggregating any artist's prices across all his works to calculate a single index per artist is a dark art, though one that at least half a dozen information services claim to have cracked and these may all be correlated within Mei Moses All Art Index? This is not about art; it is about money, and therefore I'd have to be convinced that price discovery could not be distorted by any one artist, dealer or collector?
Art has been traded as an investment for years even if never fully accepted by banks as investment grade against which any were prepared to lend money other than in special circumstances a few private banks. This always seemed silly to me as lending up to 25% of the auction house value of works by household name artists always seemed a safe bet to me. High risers other than the creme de la creme of the classics have been post-WWII American Expressionists, Pop Art (e.g. Warhol) and contemporary Pop Art that is often mistakenly called conceptual (e.g. Hirst who sold $178m this year of which $111m at auction) and Kitsch Art (e.g. Koons, $47m this year in sales) and Asian derivatives (e.g. Chinese). Both Hirst and Koons are reputedly $billionaires and they are not the only ones; so too are many collectors and more than a handful of gallerists. For years it has been possible to follow price trends, do charting and detect buy and sell signals for thousands of artists and millions of works of all kinds. The two artists with the biggest number of shows a year (over 350) are Beuys and Warhol (both 20 years dead). In Beuys' case (he being the most complex and multifaceted of all artists since Da Vinci) his total oeuvre is worth some $6bn+ but most of it by value lies in large public and a few private collections. The total capitalisation value of investment grade art is undoubtedly somewhere in the low $trillions with 90% locked up in museum collections. In Switzerland alone this decade some $5bn is being inherited by the next generation of collectors. There is money in them thar hills but only for the most intrepid; not many can become a Saatchi or a Count Panza or a Guggenheim, or a Mrs Richard Fuld.
The Intrade contracts start trading tomorrow. The move is said to be part of the trend, if a bit late in the day, for art to be viewed as an asset class with the development of art funds and art prices indices. Art funds have been around for a long time and some beauties are about to be unloaded in the auction rooms. It is a luxury and illiquid market however that is very sensitive to only the last prices for directly comparable items at the last auction. This is an asset class with a myriad of sub-classes - hard to commoditise and standardise. Like property it tends to be a long term play except in brief periods of market hype - usually when somewhere in the world there is a sudden production of nouveaux riches. When the dot-com bubble burst in 20021, the art market cried collectively as $billions in stock options that would have been converted and spent in the world's art markets suddenly were worthless. The fact is this can also happen to the art if you borrow heavily to buy it and can't afford to wait for years for prices to recover after a fall.
I've often advocated that artists and galleries whose revenues are volatile should issue bonds when they sell artworks offering to buy them back for a certain price in 10 years thereby doing two things, avoiding tax and putting some certainty into the market.
Chad (hanging) Rigetti, VP Bus. Dev. at Intrade, said: “The idea to create a price-transparent, liquid tradable art-based derivative occurred to me after reading about hedge fund billionaire Kenneth Griffin’s purchase of Jasper Johns’ ‘False Start’ for $80m in the fall of 2006 ... Creating a product that would bridge two circles – collectors and financiers – seemed obvious.” Haha - a ptltab deriv. might work since it is not cash market invested which would be beyond most people's wallets. He said investment strategies had become increasingly quantitative, and at the same time high-end art was being bought by people who had made money from such strategies. He thought these people would be natural candidates to buy art futures contracts. Of course, why not; Quantity over quality has got to work every time. “There has been an influx of financially savvy and technically savvy investors, which has led to the demand for this type of instrument,” he said. Yes, but where's the pleasure in hanging a derivative instrument on the wall that is not signed by the artist?

Prez candidates 2nd debate

Scarcely had the 2nd Presidential debate ended than I received an email saying,
"Yes We Can: Voices of a Grassroots Movement is a moving musical tribute featuring the inspirational speeches of Senator Obama interwoven into music created by today's top artists including Sheryl Crow, John Mayer, Kanye West, Stevie Wonder, Jackson Browne, John Legend, Lionel Ritchie, Jill Scott, Los Lonely Boys, Bebe Winans, Yolanda Adams and many more. In a collection as diverse as the campaign, these artists have captured the spirit, themes and ideals at the core of this historic movement for change. This beautiful album is not just fun and inspiring to listen to, it's also a great organizing tool.We hope you enjoy this landmark project." See and hear: http://www.battem.com/
Why am I not remotely shocked or amused by this? The debate might as well have been replaced by a battle of the bands, both teams' pop music brands slugging each other with bubblegum lyrics, for that was the level of the debate, no offence intended; this is the new norm of prime-time politics. What of great import was said, no not said but gleaned by reading between the autocue briefing teams' parrot-puppet lines?
There is a major ideological divide between M and O (and between their respective parties, parties that neither candidate mentioned by name along with not mentioning a lot of other nono words and names.
No mention of the EU, UN, recession, TARP, liquidity, solvency, credit markets, budget balance, GDP, fiscal, monetary, dollar, war on drugs, international cooperation, free trade, free markets, capitalism, socialism, communism, liberals, China, India, trade, Japan, Asia, Mexico, Latin America, Canada, California, New York, Florida, stolen elections, migrants, black, hispanic, white, my executive team, Supreme Court, the Constitution, Sarah Palin, USAAF, the Marines, missile shield, or the G8 - except whether to kick Russia out of it.
They did mention bipartisanship, banks, war on terrorism, Al Qaeda, Taliban & others, growth, Arizona, Delaware, Tennessee, Russia, Georgia, Ukraine, Estonia, ex-Soviet Union, Putin, Korea, Iran, Iraq, Afghanistan, Pakistan, Rwands, Somalia, Congo, Lebanon, democracy, peace, holocaust prevention/ intervention, our troops, navy, medical insurance, education, middle class, which means blue collar, poor people, food stamps, cutting spending programmes, lower taxes, higher taxes, protecting Main Street, my voting record, your voting record, fundamental change, GWBush's 8 years of questionable or failed policies, Ronald Reagon, Teddy Roosevelt, Joe Biden, refundable tax credits, tax credits, veterans, spending freeze on everything except military, energy, oil dependency, nuclear power, off-shore drilling, alternative renewables, Climate Change, future generations, our great country, love, privilege, rich people, small businesses, mandating policies or not, when I am President, toughness, hand on tiller, decisiveness, experience, my wife, all children, tough problems ahead, talking soft, big stick, and Israel.
M believes in not increasing any spending programmes except on the military and veterans and is keen to cancel something called earflaps (incidental items) that O says are only worth $18bn. Refundable tax credits are M's solution for Medical Insurance - note 'refundable' (a word concept that O did not challenge). Economic means $300bn higher rate tax cuts, mainly company taxes. M wants to withdraw from Iraq (and Afghanistan) only with big surge victory and honour. Also, more oil drilling to reduce energy dependency and nuclear power plus alternatives.
O believes in no tax increases for 95% of people and businesses and higher taxes on the richest 5% and big corporations. He wants children's education subsidised more, and medical insurance extended to all currently uninsured paid for by tax credits (voluntary for anyone otherwise insured). O wants managed withdrawel from Iraq and Afghanistan when the war effort can be handed over to local national government. He wants more green energy but is ambiguous on drilling beyond saying it can't solve the problem. He wants fundamental change in Washington but what that means is unknown. He will regain international respect for the US in foreign policy, but will do whatever it takes to get OBL and destroy Al Qaeda etc. and will not tolerate nuclear rocket capability in Iran that threatens Israel's destruction.
That's about it I think?

Talk delivered to the von Poser Society of Edinburgh at the height of the sub-prime crisis

Sub-primus mammonistus inter pares sperate miseri caveat felices sic transit gloria mundi
“We here discuss great matters and one matter contemporaneous our Society can be right proud of, is the absence off our balance sheet of sub-primes, SPV’s, or anything mortgage-wise, and it falls to me being unregulated to tell the unvarnished of it, sub-prime being somewhat the lesser of prime, meaning first among equals, when I am often asked what is it I do, a matter on which The Grand Secretary graciously recently reassured my investors just as I was packing for the Aegean to study the crisis from its earliest beginnings in The High Hellenic when banks were temples, since when as many will agree with me the general laity has roundly embraced secularism, treating assets and liabilities as if day into night phenomena are mere fluxions from trading coal-tar by-products or the high price of vegetables, likening volatilities to fainting-fits caused by corsets or double-entry book-keeping, why depositors finger-wag at salami slicing bankers as Adam Smiths and Physiocrats pun daily in the FT that dead cat bounces are catatonic, and claiming unsanitary conditions are upon us like a lung collapse after a years of wheezing, while I blame buy to lets bankrolled with all the circumspection of ankle-biters in sweetie-shops, or those who covet assets without walking banker’s walk, talking the talk, as in President’s words “Again and again returning to the distances…”, infra-visually speaking, to explain dark matters, usually after teatime when New York opens for the afternoon session and dark pools sweep up fungible losses to sell on to gullible Asians, not really triple or even double A, the 'only drinking straw offered' to use a wry cocktail phrase pertaining to ABS’s in SPV’s that were by definition incombustible until now being consumed daily in flames ignited by defaults that were 0.8% to 2.15%, now rising 3 to 20 times higher, intenser, like luminance in the vacuum of a standard light-bulb or the striking mismatches of credit ratings that all knew to be dodgy as yields & spreads high and low all narrowed to AA+, and the Chief Auditor’s warnings went unheeded, puncturing the cycles of rocket scientists, drive chains coming off and gearing useless, and as I set out for Central Asia banks my solution, to bottle written-down tranches in deepest caves, if only I had not said as the Irish delegate* “this reminds me of old MacPhillemy of Balinrobe, of no NPV to any but himself, coffined after a good day at the Curragh and then passing out in McDaids, who would have remained so had the Mask not burst its banks to flood the churchyard and he found floating on Lough Robe, in sum and in all aspects defining a genuine liquidity crisis,” but then I had been copied in on the Phrygian words of our Midas King Merv, code in clear, I quote, “Darling, sir, as matters stand res cogitans our dark bottlings in bonded warehousing may make little headway in the present headwinds of the sub-primal storms, yours Mervyn” followed shortly, on my return, by my apprehension by officers in the lounge of the Sheepdip, via Regia, during the Northern Rock Run and my own letter to the FT as to how liquidity loss in interbank markets coincides with months of incessant rain flooding millions of homes with effluence and others with cheap credit, explaining** that sub-primes are Greek myth, a taxonomic ploy by Standard & Poors, Moody and Fitch in a pass the parcel scam, though my editor H.Dobbs says the tragic tone is too knowing to be shocking, and he a member of the Speculative, who in the French edition uses 'prêt penoirs hypothécaire à haut risque' to mean 'high risk sub-prime mortgages hypothecated” over a trillion dollars by Connecticut’s Le Shred who, as his share price collapsed, told me “as you know yourself this is so far beyond a banker’s conscience… inasmuch as one being unable to say aught charitable or useful it behooves us to preserve the darkness of it at all costs” and that just about clarifies the whole dark matter!”
Prof. McDowell
* to the Baktrian Monetary Conference in Bukhara
** see my ‘Liquidity Crisis: how they bottled it’Failsafe Press, 2007
(with apologies to the footnotes in Flann O'Brien's The Third Policeman)

Congressional 3rd Degree

Congressional equiry yesterday called in Richard Fuld who headed up Lehman Brothers and sought to paint him as the very face of the greed that caused the whole of the financial crisis. The hearing took place just as stock markets plunged to new historical lows in New York. Q&A snippets include:
Rep. Henry Waxman (D-Calif.), the chairman of the House Oversight Government Reform Committee, "Your company is now bankrupt and our country is in a state of crisis - but you get to keep $480 million! I have a very basic question for you: Is that fair?"
Fuld (66') took off his glasses, squirmed, squinted and looked away for a pause moment before muttering something about stock options. Waxman interrupted him to list highlights of Fuld's high lifestyle that includes a $21m Park Ave. flat, a $14m oceanfront Florida estate, other vacation homes, and his wife's multi-million-dollar art collection (which I have to say shows great taste and fine judgement, the art collection that is, containing superb American expressionist paintings and drawings by Arshile Gorky and de Kooning).
"Is that fair for the CEO of a company that is now bankrupt to have made that kind of money? It's just unimaginable to so many people?" Fuld mulled for a good reply.
"I would say to you the 500 number is not accurate. I believe the amount that I took out of the company is a little bit over $250 million!" Fuld's face sans pancake looked like a Hollywood horror creation and could never betray any suitably redeeming emotions during the 2-hour hearing. He explained his bonuses were in stock and he was left holding 10 million worthless shares when the firm failed.
"I was probably the single largest individual shareholder!...I don't expect you to feel sorry for me." Not a good line, not how he said it, and while he had not asked what his motivation in this scene should be, he was told.
Rep. John Mica (R-Fla.) "If you haven't discovered your role, you're the villain!" This may have been a reference to the fact that when the 158-year-old firm went down (for about the third or fourth time in its history) thousands of shareholders were wiped out and Lehman employees alone lost $10bn in shares never mind unpaid wages and bonuses (possibly another $3.5bn), but then it is uncertain how many of those no-one should feel sorry for either? CNBC had reported earlier that same day that on Sept. 21, Fuld was on a gym treadmill when a weightlifter walked over and knocked him out cold, which may explain why employees said he he was nowhere to be seen at the moment the company collapsed. Fuld insisted Lehman never misrepresented its finances and said the SEC monitored the firm closely, which may mean Christopher Cox should have something to say too about this.

Diary of a US Short Seller

Hey, I bought QQQQ December BL puts at 2 cents and sold them today at 50 cents! But, mostly now I use options, not CFDs, and mostly put options on market indices, sectors and specific companies that are bound to suffer in an economy with broke consumers. My basic view is to look for the truth away from public pronouncements. I think the U.S. unemployment rate is about 3 times the official figures. If you cannot find a job after a few weeks, you are not counted? I made money on Bear, Lehmans, and a bunch of other banks like HBOS, but not just financials. I rode Apple down from 160 to 100. Not in a straight line - I was in and out sometimes within hours. If I had more time and depper funds, I might have risked some of these switchbacks rides with my life's wad, but with lives laying all about here in psycho-anxiety fragments gnawing at dwindling portfolios, I kinda hold back so the other guys in the dealing room don't see me shorting their stocks.
I usually look at the market ex-post, post facto, form an opinion and enter open orders with stops. I also shorted Boeing as there is no new giant orders on the horizon, or anything that would make a difference this quarter. It is beyond me why the stock was up, other than God Save America stoopidity - which is fine with me as I get to fleece the deserving flag-waving sheep. Thursday I read about stocks that will suffer on account of a slowdown in construction and supplies to local builders and contractors. So, Friday I bought puts on Texas Industries for a mere measly few thousand dollars, like ten, and by the end of the day had a profit of $200,295. Not bad for a few hours. I made tons on shorting market indices, and found the QQQQs specially suitable. I also had what we now call BLn puts on the Dow. Old timers used to call them Kamikaze puts. Even the crazy crap shoot BL puts made a heap of money. I also buy the odd call options because if I've committed all my resources and don't have enough left to commit to stocks. Sometimes I am on both sides, such as riding as short-term gold or oil move versus a longer option that will bounce in my direction as soon as the euphoria du jour is over. Currently, I am short Germany and long Russia and Korea. I have a load of Canadian resource stocks that are really in the category of "buy and forget" but there seems to be life in them thar hills, such as First Calgary Even got a German windmill and Vietnamese oil stock - when I was wanting to ease out of anything stateside. When I pick up the next round of funds, I plan to separate pure trading focus from buy and forget and act more decisively. For example, I bought Metchel Steel calls the day before Putin made noises about them - I took it in the shorts on that one and didn't have time to get out because I was analyzing Mittal to short them. Is anyone liking Metchel Steel at these levels? MTL. They are building lots of highways in Russia, more cars on the road, bigger buildings. They just took a big kick in the pants from the Kremlin, and it looks like that is the only kick they are going to get. But, from here out, I see prospects either way. So I said 'what the hell, hold' and they are slowly creeping back tho' I'll prolly still take a hosing on those. I am also taking a monster crap on shipping stocks because I went with near maturities. But despite the bad trades, I was still up over 45% in September. I like agri stocks but it's the wrong time of year unless you are a long term holder - for me long term is 1 month or so. So, I might buy 10,000 or 20,000 shares of something like Vostok or Black Earth and forget about them. I still believe we are headed down sharp until late October before we get a bounce. I've for the longest time predicted first stop for the Dow at 9000 this year - now on the horizon. In 2 - 4 years we'll mebbe see 4,000 unless there's a miracle turnaround?

Bank of America is The One...

see
http://uk.youtube.com/watch?v=wmIObmv2t6M

TARP saviours

To see whose votes counted in passing TARP by switching sides see:
http://www.washingtonwatch.com/blog/2008/10/05/a-bailout-rogues-gallery/

DEAD PARROT

CEO (Banker): Bank's closin' for a clean-up of all its assets 'n liabilities.
Mr. Praline (regulator): Never mind that, my lad. I wish to complain about this 'ere bank what we purchased half of not half a day ago in this very office.
CEO: Oh yes, the, uh, our FN bank...What's,uh...What's wrong with it?
Mr. Praline: I'll tell you what's wrong with it, my lad. The General Ledger, it's insolvent, that's what's wrong with it!
CEO: No, no, 'e's uh,...it's squeezed, gone off-balance, it's the credit crunch.
Mr. Praline: Look, matey, I know a dead bank when I see one, and I'm looking at one right now; it's my job.
CEO: No no it's not dead, er insolvent, it's, it's re-settlin'! Remarkable bank, the FN, isn'it, ay? Beautiful assets!
Mr. Praline: The assets don't enter into it. It's insolvent, stone dead, unable to trade, can't meet obligations.
CEO: Nononono, no, no! We're settling, rebalancing, talking to creditors!
Mr. Praline: All right then, if you're settlin' current liabilities, I'll re-settle some right now, this way up! (finger pointing at the balance sheet) 'Ello, ello, what do we see 'ere for the general ledger! Our generous fresh liquidity injection for you; where is it now, can you show me if you're solvent... (thumps the table)
CEO: There, see that, we've paid for all that with it and proved those estimates!
Mr. Praline: No, you didn't, that's a lie, was you using our cash to make up the collateral figures to be higher!
CEO: I never!!
Mr. Praline: Yes, you did!
CEO: I never, never did anything...
Mr. Praline: (yelling and hitting the accounts ledger repeatedly) 'ELLO 'ELLO THEN WHERE'S THE ACTUAL COLLATERAL!!!!! Testing! Testing! Testing! Testing! are you receiving? This is your audit calling. It's an INSOLVENCY alarm call! (Takes a page out of the ledger and tosses it to the head of the table, up in the air and watches it drift to the floor.) Now that's what I call a dead bank!... You got nothing to say?
CEO: No, no.....No, I'm just stunned!
Mr. Praline: STUNNED?!?
CEO: Yeah! Your remark stunned me, just as we're reviving the business, getting back up again. We're too big to fail! We bankers in these turbulent times are proud of our history and sensitive to criticisms, and yes I'm stunned; we stun easily, Mr Regulator.
Mr. Praline: Um...now look...now look, mate, I've definitely 'ad enough of this. Your bank is definitely insolvent, deceased, and when I purchased half of it not 'alf a day ago, you assured me that its total lack of movement, in fact even reducing liabilities ratio to assets was due only to your accounts people not getting the true figures!
CEO: The new CFO bein' tired and shagged out, we all have, following a prolonged run on the bank's share price. Well, he's...we's, ah...probably pining for the old days, way it was before all this Basel II capital reserve stuff, RWA, PD and all that.
Mr. Praline: PININ' FOR THE OLD DAYS BEFORE BASEL II, YOU DON'T EVEN MEET BASEL I REQUIREMENTS?!?!?!? What kind of talk is that?, look, why did ALL the profit disappear the moment we got the to see the current accounts?
CEO: The Netherlands bank prefers t'keep sweating its assets to the max! Remarkable bank, id'nit, squire? Lovely assets, very valuable!
Mr. Praline: Look you, I took the liberty of examining those accounts when I got the 49% deal signed, and we discovered the only reason that the bank appears profitable in the first place was that you've been LYING there, there, and there! (pause)
CEO: Well, fair value o'course; it was estimated there at fair value! If we hadn't estimated that at fair value, it would have eaten up all our capital, rent the business asunder, and no VROOM VROOM anymore! Faretheeweel bank, bank gone!
Mr. Praline: "VROOM"?!? Mate, this bank wouldn't "vroom" if you put forty billion Euros through it! It's bankrott, bleedin' capital's gone, equity dematerialised!
CEO: No no! It's only a capital reserve thingy; we're refinancing!
Mr. Praline: You're not refinancin'! 'You've bled to death, unpaid debts passed on to us! This bank is no more! It has ceased to be! Your license's expired and gone to meet its granter, us! We've bin stiffed on yesterday's deal! You're bereft of capital totally, the rest, what's of value, is in pieces! If you hadn't misrepresented the accounts, the bank'd be buried, pushing up the daisies already, maybe sold to someone better, safer! Its operations in this country far as you're concerned are now 'istory! You're off our authorised banking list! You've kicked the bucket, shuffled off this mortal coil, it's curtains for you, you've just become a shadow bank, joined the choir invisible!! THIS IS AN EX-BANK!!
Apologies to Fortis - NOT!