As I read through the Amity Shlaes book "The Forgotten Man: A New History of the Great Depression," a question keeps running through my mind: "How could they make every mistake in the book?"
I'm not talking about Hoover and Roosevelt. I'm talking about Obama. How could he and his advisers fall for the same pile of hooey that made Americans feel small in the 1930s?
Shlaes is meticulous in documentng the provenance of the urge toward government intervention, from Mussolini and Stalin via the admiring naifs of the American "intellectual" left. Why is it happening all over again? The trade barriers, the public works projects, the urge to "save jobs," the stacking of the deck against the small businessman.
I would cry, except tha I start laughing every time I read about how making Hillary the secretary of state will restore America's standing abroad.
Sunday, November 30, 2008
Tuesday, November 25, 2008
Joe the Plumber Gets a New Job
Joe the Plumber was the guy everybody wanted to do something for in the last election, and now it seems that somebody has. Joe will now be a banker! He will be a risk-taker, shouldering toxic assets right alongside the big boys at Citigroup.
And so will I, and so will you, fellow U.S. taxpayer. It seems that we have just set a guaranteed limit on Citi's potential losses from overly exuberant loans. Consumer loans, mortgage loans, emerging market loans -- who knows what? I do know one thing: I'm now a banker now. Me and Joe.
I only got one question.
Is America too big to fail?
And so will I, and so will you, fellow U.S. taxpayer. It seems that we have just set a guaranteed limit on Citi's potential losses from overly exuberant loans. Consumer loans, mortgage loans, emerging market loans -- who knows what? I do know one thing: I'm now a banker now. Me and Joe.
I only got one question.
Is America too big to fail?
Thursday, November 13, 2008
Is the Free Market Over?
France's ultracool president says it's so "over" -- the view that ``everything could be solved by deregulation, free competition and the market." Bien sur, Mr. Sarkozy, tout le monde knows France has been over the free market depuis longtemps, and that's why your economy has been, ah, over, for a long time.
The worst is not that such betises are taken at face value these days -- no, the worst is that the mortgage-based securities that are no strangling the world economy were never about the free market to begin with. They NEVER TRADED; they were not MEANT to trade. Those securities were created to be SOLD, not to trade. That's why the inventories of them piled up to the spilling point.
At first, I saw the subprime crisis as a merely termporary liquidity glitch caused by a panic. Given time, the securities would start to trade again. Suspend "mark-to-market" requirements to ease the temporary pressure on margins, and all would be well.
I was mistaken. From the start, the mortgage securities represented an opting-out of public trade. Yes, they should have been regulated. But the free market shouldn't be punished for the sins of a non-market.
The worst is not that such betises are taken at face value these days -- no, the worst is that the mortgage-based securities that are no strangling the world economy were never about the free market to begin with. They NEVER TRADED; they were not MEANT to trade. Those securities were created to be SOLD, not to trade. That's why the inventories of them piled up to the spilling point.
At first, I saw the subprime crisis as a merely termporary liquidity glitch caused by a panic. Given time, the securities would start to trade again. Suspend "mark-to-market" requirements to ease the temporary pressure on margins, and all would be well.
I was mistaken. From the start, the mortgage securities represented an opting-out of public trade. Yes, they should have been regulated. But the free market shouldn't be punished for the sins of a non-market.
Sunday, November 9, 2008
Stimulus
"Stimulus" is on everyone's lips today. The best compliment one pundit could think of to pay Barack Obama is that he "understands economic stimulus." The economy, it is said, needs stimulus. Congress, ablaze with self-importance and the righteous desire to punish the wealthy, is afire to set the stimulating dollars going.
I hate the word stimulus. It's one of those too-many-syllabled, overdone Latinate words like "consumer" (OED: (perh. through F.) L. consum-ere to take up completely, make away with, eat up, devour, waste, destroy, spend, bestow, etc.) with horrible resonances.
Stimulus! OED says it's originally a mod.L. use (in medical books) of L. stimulus --
goad, of doubtful origin; perh. f. root *sti- in stilus:see stylus.
The first definition is:
1. Phys. Something that acts as a 'goad' or 'spur' to a languid bodily organ; an agency or influence that stimulates, increases, or quickens organic activity.
Yech. Sounds like torture. And that's what they're doing to the economy.
Here's what I personally find stimulating, in the sense of invigorating: Let me keep my money and make more without penalty.
Doesn't anybody remember how it was before taxes were cut? Wasn't anybody around in the 70s? In 1978, I had just dropped out of Cal Arts after my first year of grad school (quarter-time, all I could afford). I worked in a big Century City corporate law office to pay the bills, across from a woman who lived in the same building I did. It was on Navy Street in Venice, a dilapidated old brick apartment down the corner from the Davy Jones Locker Liquor Store. Drunks would sleep on our landing, and cockroaches had taken over long ago. I remember how she worked a lotof overtime one month, and was almost in tears when the paycheck arrived because taxes had taken all the extra money she had earned.
My parents were forced to sell the house where I grew up around the same time because of ever-increasing property taxes. Prop. 13 came too late. My father, a mortgage banker, had got himself fired for refusing to inflate property valuations to allow bigger loans and more revenue for his firm.
Our new President doesn't remember those days...born in 1961, he was just a teen-ager then. Too young to know how hurtful a "progressive" tax code is.
I've already complained about the use of "injection" in reference to the multiple bailouts of 2008, and "toolkit." Let's hope that the economy is still alive after the govenrment is finished doctoring it, if the patient is ever allowed to leave the hospital.
I hate the word stimulus. It's one of those too-many-syllabled, overdone Latinate words like "consumer" (OED: (perh. through F.) L. consum-ere to take up completely, make away with, eat up, devour, waste, destroy, spend, bestow, etc.) with horrible resonances.
Stimulus! OED says it's originally a mod.L. use (in medical books) of L. stimulus --
goad, of doubtful origin; perh. f. root *sti- in stilus:see stylus.
The first definition is:
1. Phys. Something that acts as a 'goad' or 'spur' to a languid bodily organ; an agency or influence that stimulates, increases, or quickens organic activity.
Yech. Sounds like torture. And that's what they're doing to the economy.
Here's what I personally find stimulating, in the sense of invigorating: Let me keep my money and make more without penalty.
Doesn't anybody remember how it was before taxes were cut? Wasn't anybody around in the 70s? In 1978, I had just dropped out of Cal Arts after my first year of grad school (quarter-time, all I could afford). I worked in a big Century City corporate law office to pay the bills, across from a woman who lived in the same building I did. It was on Navy Street in Venice, a dilapidated old brick apartment down the corner from the Davy Jones Locker Liquor Store. Drunks would sleep on our landing, and cockroaches had taken over long ago. I remember how she worked a lotof overtime one month, and was almost in tears when the paycheck arrived because taxes had taken all the extra money she had earned.
My parents were forced to sell the house where I grew up around the same time because of ever-increasing property taxes. Prop. 13 came too late. My father, a mortgage banker, had got himself fired for refusing to inflate property valuations to allow bigger loans and more revenue for his firm.
Our new President doesn't remember those days...born in 1961, he was just a teen-ager then. Too young to know how hurtful a "progressive" tax code is.
I've already complained about the use of "injection" in reference to the multiple bailouts of 2008, and "toolkit." Let's hope that the economy is still alive after the govenrment is finished doctoring it, if the patient is ever allowed to leave the hospital.
The 2008 Prophecies: Laurel Kenner's Bloomberg Blog
From January through October 2008, I wrote a blog on Bloomberg. This Web site takes the Bloomberg blog's place. My forecasts turned out to be so accurate that I am pleased to reproduce them here.
1/25/2008 22:29:31 -- 2008 Forecast.
The truth about the credit crisis is both better and worse than generally believed. To look at the surface moves in the world's stock markets this month, one would think that the solution will come from Washington -- witness the 200- and 300-point moves in the Dow that occur on every rumor of government intervention. Unfortunately, neither Fed rate cuts nor temporary tax rebates will clear the opaque loan packaging that is befuddling the markets. The good news is that the market has overreacted, and that the value of the suspect financial securities is greater than feared. Bottom fishers are looking to make a killing, and as they do their work in coming months, the markets will find their way back to the business of expansion. Until then, we're going to see bad times. Nobody should wait for the authorities to pronounce, months after the fact, that the economy has entered a recession.
Earnings, job growth and manufacturing activity already tell the tale. People lost a lot of wealth in the last three months. The massive declines in the stock market became a cascade as margin limits were hit. Those who counted themselves comfortable thanks to timely home purchases during the era of 1 percent Fed funds are not so rich on paper now; and if they should be forced to sell, they could well find that the mortgage exceeds the diminished market value of their home. Let's not even mention the loan originators/lenders/packagers, the risk managers, the construction workers, the basis-point takers, the dealmakers who are suddenly finding that their services are no longer required. No one should cry crocodile tears over the failure of regulators to have anticipated the problem. It is in the nature of things that regulators will always be years behind the curve, and that when they do act it will be to befuddle things in unintended ways, for the main imperative of when they do act it will be to befuddle things in unintended ways, for the main imperative of
government is to expand its own power, not to solve problems. The main thing I worry when they do act it will be to befuddle things in unintended ways, for the main imperative of government is to expand its own power, not to solve problems. The main thing I worry about is the ever-increasing calls for government intervention emanating from Washington, the media and the presidential campaign jets. Provided that such pleadings for 20th-century style government planning go largely unanswered, the economy will begin to recover next year. Between now and then, there will be bargains in the stock market. Don't be in a hurry to buy; there is plenty of time for research. **What I'm holding: Stericycle (SRCL), S&P 500 futures. **What I'm avoiding: Hong Kong stocks, European stocks, infrastructure stocks. **What I'm eying: Amazon (AMZN), Genentech (DNA), Microsoft (MSFT). Laurel Kenner is an active trader and can be expected to change her positions frequently without notice. Her views are entirely her own, and her trading positions in no way reflect those of Manchester Trading.
1/27/2008 0:08:49 - The Boom That Went Boom.
Here's the latest haha from Bloomberg News: " The U.S. economy may be heading for recession after a drop in house prices prompted a collapse in the subprime mortgage market that's roiled financial markets around the world." Did housing prices just drop of their own accord, like some perversely animated creatures? Heck no. They dropped because builders built so many homes that supply ranneth over. Here in Manhattan, who knows how many long-established, profitable businesses lost their leases over the past couple of years because the landlords wanted to tear everything down and build condos. Bye-bye, Lincoln Stationers, Fauchon, Columbus Bakery. For awhile, it looked like Manhattan would become a bedroom community (to what? Connecticut?) Entire blocks were covered with scaffolding. I was shopping around, and I couldn't find an apartment that wasn't next to a construction site or about to be. Who's getting bridge loans now? Now, I'm having a hard time renting out my lovely river-view apartment. My broker suggests that I cut the price 20% and hard time renting out my lovely river-view apartment. My broker suggests that I cut the price 20% and put it on Craigslist. Yikes, that was supposed to pay the bills; guess I won't be buying much. Just one more disgruntled consumer on recession watch.
1/28/2008 15:35:49 - Coal in the Overnight Stocking.
My online broker just suspended the lenient intraday margin limits that made it possible to lay on more leverage during the day than would be tolerated overnight, "due to exceptional volatility." First thing I thought: "Sign of a market bottom." Second thing I thought: "Rats, just when I had enough margin to start to think of good intraday trades." Third thing: "Maybe they know something I don't....time to crawl into the cellar again?" *** I swear I will never buy Chinese coal company shares again. I had Shenhua awhile ago, seemed like a good trade , all of China relies on coal, etc., but "it turned out to be just one more of Tom Sawyer's lies." It dawned on me that Chinese coal companies are locked up by regulations, held back by price ceilings, not to mention aged and inefficient. Hell will freeze before they expand their multiples in any significant way, notwithstanding their franchise. So why did I buy Yanzhou on news of a snowstorm? I really didn't want any more Chinese stocks anyway.
1/31/2008 14:20:15 - The Candidates and the Economy.
If you're planning to stay alive for the scheduled reinstatement of the estate tax in 2010, I suggest perusing the economic policy statements on the presidential candidates' Web sites. Mitt Romney is the only one who would repeal this most unfair tax. As he points out, people are taxed three times on their money: When they make it, when they invest it, and when they try to pass it on to their families. The best thing President Bush did was to cut taxes on dividends, capital gains and death. McCain, the other viable Republican in the race, would keep the status quo. Obama's sophomoric proposal would give $500 rebates to the poorest taxpayers (and a chicken in every pot?) The best that might be said for Hillary is that she might bring back Bob Rubin as a twofer with the First Man. Romney is the only candidate to demonstrate a grip on fiscal issues.
2/13/2008 10:14:45 - No J.P. Buffett for this Market.
For a moment yesterday, I almost thought Warren B was the 21st century's answer to J.P. Morgan. Would he really rescue the market with his billions, the way J.P. brokered an end to the 1907 market collapse? Would he become sort of a private branch of the government? Naw, he was just trying to pick up some more low-risk assets. Back to the ground for the market. Smith & Wesson (SWHC) put on a few pennies, though, maybe on the hope that municipal police will be able to afford guns if Warren is guaranteeing the muni bonds. It's a renter's market in Manhattan! The wait list for three-bedroom apartments in my bulding has disappeared, and four have been vacant for months. Yesterday, a prospective renter canceled a viewing because he decided he wanted a four-bedroom! More supply is coming. My friend Kevin Depew at Minyanville says many new boomtime condos are being transformed into rental buildings.
It's looking like it will be Obama and McCain in November, so HRC will be spared the embarrassment of claiming she is more experienced than McCain. Neither McCain nor Obama offers any deep thinking on policies that would affect the market for the better. I do wonder if a pre-election Islamic terrorist attack a la Madrid 2004 and London 2005 would tilt Americans into voting for Obama or goad them into electing McCain. One hopes that oil prices will stay high enough to displace thoughts of the next world with material comforts in this one among prospective suicide personnel. I take the recent use of the mentally dim as a sign that recruitment is becoming more difficult.
2/16/2008 2:36:13 - A Trader, Not an Investor. When I opened up WEIS and saw that only 15 of 90 indexes are up year to date, and that the top 10 are Mauritius, Nigeria, Kuwait, Muscat, Ecuador, Abu Dhabi, Jamaica, Doha, Slovakia and Ghana, well, I felt quite the outsider. But those are just sideshows to the real boomtowns in Australia and the U.S. Midwest. Check out AS51, the Aussie stock market, using IRR. If 2008 has a resonance with the mid-'70s -- stagflation, real estate turbulence -- it makes sense to get some brief exposure to coal and ethanol and maybe even South African metals, now that the Atlas Shrugged script is playing on there to the lights-out denouement. I'm thinking ADM US, CEY AU, AQP AU, IPL AU, XTA LN, CSAN BZ. Naturally, it hurts to even say the names, since commods will eventually go back to their normal 0% return. What little enthusiasm I had for China Mobile (941 HK/CHL US) is gone. The company had been able to charge 0.8 yuan a minute for prepaid customers and 0.6 yuan for contract customers, but on Feb. 13 government regulators cut that amount to 0.4 yuan a minute starting March. What big feet you have, Comrade Regulator. What makes a $5 stock go up a buck in a day, and then, bang, fall 60 cents in the next three days, on no news at all? Smith & Wesson, are you dead or just resting there in the dust? I didn't stick around to find out. Citi at 25: Is this finally another Alwaleed trade? The value boys are jumping in, and I say, "Go get 'em, fellas." Think I'll wait until Citi has closed all its hedge funds and the stock is at 8.
2/16/2008 22:23:08 - The Recession is Here.
Of course we are already in a recession, and figuring that one out doesn't take much fast thinking. How are people going to maintain spending if they can't make their mortgage payments and they're losing in the stock market? Pretty soon, we'll have the requisite two down quarters, and then I will perhaps write a blog noting that AS PREDICTED (as my former partner and I used to jokingly write) the recession was already under way in January, when I said so in my first blog post here. I hope that all 31 of the lucky readers who read that post made a lot of money, or at least avoided losing more than they were apt to. But I doubt it. So why am I writing? Well, it's like this. After so many years of working with my former partner, I needed the challenge of independently articulating ideas before an audience more knowledgeable than I am. Furthermore, I wanted to write posts that did not proffer systems, old or new, and I did not want to attempt to be "fair" by making disclosures that would ultimately benefit no one. Here, no disclosures are demanded, and no editor insists that I make a ultimately benefit no one. Here, no disclosures are demanded, and no editor insists that I make a particular kind of sense that makes sense mainly to the editor. Truth is, I find that I have a moral problem with financial journalism. From what I've seen in my years on both sides of the editorial fence, it's just not possible for a writer to connect with a reader in a fashion timely enough to give the reader the full benefit of the writer's knowledge, or luck. No playing fields are level in this park. If I tell you what I'm going to trade before I trade it, what good does that do me? If I let you in on my trades after the fact, what good does that do you? Sure, some smart traders write, but they keep the best for themselves. Other smart traders won't ever write anything for public consumption, because their clients demand discretion. Personally, I would rather have clients than not. I don't take seriously the writers who don't trade, or the writers who once traded but now regard themselves as being in the entertainment business. And so I am adopting as my slogan, a French saying that I understand was formerly cited in the matter of women's knees: "Pour vivre heureux, vivons caches."
7/1/2008 1:04:57 - Power Grab.
The biggest political story today is the global ascendancy of state economic power and the fading of the free market as the world's big economic idea. Even here in New York City, former center of the financial universe, the subprime mess has supposedly discredited the philosophy that less regulation is better.This is all rot; the anti-free market trend will mainly serve, as it always has, to help ambitious would-be power-wielders to reach their career goals. Lack of regulation didn't do the financial system in. Plenty of blame has to go to the regulators themselves. A series of power grabs and subsequent attempts to control unintended consequences led to even more unintended consequences, until the threads were too tangled to follow. Begin, for the sake of beginning somewhere, with Greenspan's attempts to be a hero for all seasons by turning the spigot off and on again and again, and proceed to the subsequent heavyhanded attempts to eliminate all risk from pension fund portfolios after the Nasdaq crash and earnings/Enron/WorldCom frauds. Pension funds pension fund portfolios after the Nasdaq crash and earnings/Enron/WorldCom frauds. Pension funds
couldn't invest in stocks the way they had been doing -- too risky! What could they do to meet their payout obligations? Wall Street had a wonderful new invention -- top-rated mortgage and asset-backed securities. Unfortunately, they weren't exactly risk-free. Was lack of regulation the problem? No. And neither was the desire to get rich. The problem is that the bright minds of Wall Street can come up with contorted solutions when they have to satisfy their customers while dealing with regulations designed to eliminate risk. The whole debacle may become the excuse for a massive power shift to the federal government. Larry Summers had a piece in the FT today calling for the government to save the economy with infrastructure spending. Sure, let's get the Army Corps of Engineers back to work redesigning natural waterways so they never work properly again. Back in the '80s, Reagan was attacked for his supposed simplemindedness, but in the '90s, his basic ideas had become the consensus. So much that as VP, Al Gore's main hobbyhorse was cost-cutting. Nowadays, it's hip in Manhattan to trash the free market. Our leadership abdication comes at a bad time, because the money nowadays is in the hands of people who care nothing for economic freedom. Nobody is aspiring to avoid the Road to Serfdom. China's free market is largely an illusion; prices for commodities are set by the government, not the market, the currency is still not freely convertible, the government still has a tight grip on far too much. The aspiring Mideast financial centers are being thrown up with royal-family money and control. Russia -- let's not even go there; the replacement of democratic aspirations with a systemic corruption is too sad to contemplate. Nobody can block people who want to be free forever. But there is no political freedom without economic freedom. Those psuedo-Socialist Realist posters of Obama that look like Che give me the shivers. (I freedom. Those psuedo-Socialist Realist posters of Obama that look like Che give me the shivers. (I am indebted to the brilliant Louis Gave for some of the ideas set forth here, any errors, overreachings, misunderstandings or misapplications are mine alone.)
7/12/2008 8:32:37 - The Case for Massive Bullishness.
I could have sworn that global financial Armageddon had arrived last week. The 11:30 pm Thursday NYT headline about a potential government takeover of Fannie and Freddie had visions of disaster dancing in my head -- half of $12 trillion in mortgages guaranteed by Fannie and Freddie down the drain? Fannie shares at zero, meaning no recapitalization in the equity market? Here's a Reuters headline saying the Fed has opened the discount window to Fannie and Freddie. Late Friday afternoon, nobody wants to be long over the weekend when Israel might be bombing Iran, but nobody wants to be short either, if the Fed is in the game…oh, here’s the Fed denying the Reuters headline. So the market ends with a 1% loss, a squib, really, which is just what it wanted to do in the first place despite the Maenad dance from here to yonder and back again. What did it all mean? Supposedly safe investment houses like Capital Research of LA, Axa/Sanford Bernstein, Fidelity and Barclays will be hurting, as they owned truly massive positions in Fannie for supposedly conservative investment houses -- 20%, 13.5%, 4.7% and 4.2% respectively, according to their last public filings. But the bondholders are happy as hogs with the bailout talk. Beyond that, financial capitalism is due for a retrenchment. Too many bright people have been writing headlines about financial matters they don’t really understand, and too many other bright people have been spending too much time overleveraging the financial world. Now, they're quitting and getting fired, right and left, and the world is deleveraging. I am reminded of the collapse of the defense industry in Southern California, for which I had a catbird seat as aerospace reporter at one of the local news-sausage makers. The Cold War was over, half the L.A. aerospace people lost their jobs, and guess what? In the next few years, Los Angeles boomed. All those very, very, bright aerospace people went somewhere, just as the very bright financial people are going to go somewhere. And because they're smart and creative and accustomed to dealing with risk, they're going to create new companies and new software and new things that are going to re-energize the world. And that's why it doesn't matter whether Obama has a clue about finance, which he clearly does not – judging by his Web site statements, he seems to believe that the answer is a crackdown on mortgage fraud. While the smart people are going their ways, reregulation of the financial industry will come. Fannie and Freddie will survive and do their semi-socialistic duty for years to come. Those remaining in finance will think of new ways to overleverage themselves. But I'm getting ready for a giant New Thing.
8/12/2008 0:15:52 - Credit Card Debt, the New Subprime.
HDS gives the holders of the trusts backed by credit-card debt. The question is whether the huge spreads will cover the losses. Look for losses among the holders of the debt trusts issued by the companies that send out weekly balance-transfer come-ons. These invitations are purely scams of the most egregious sort, comparable to the "You Have Won $1 Million" letters that used to be sent out by Publishers Clearinghouse and the like to the older gentry. Less than a decade ago, a consumer could manage to stay ahead of the game by transferring balances to cards offering low introductory rates. It was great. Hello 1%, Bob's your uncle. The banks got wise and started to charge a 3% balance transfer fee. Of course, the fee is well hidden in the fine print. Now, 3% is a huge chunk of change for an unwary debtor who's already struggling to pay off his balance. The trusts issued by these scamsters -- and Bank of America, Capital One and Washington Mutual are the big players in this nasty game -- will be the first to crumble. The prospect of more write-off makes me want to hibernate while the market works off the euphoria over lower commodities prices. Sure, oil is down more than 20%; but it's still $114 a barrel. Are we suffering from summer electricity bill shock yet? The utilities are just now getting around to requesting rate increases. May your winter be merry and globally warmed.
9/12/2008 22:59:35 - The End of the Stock Market.
I hear talk about how the panic level indicates a market bottom similar to 2002. I don't think we're anywhere near a bottom. The crash of 2000-2002 was caused by the Fed's blundering in to pop the tech bubble (exceeding its mandate by a mile) and getting the timing wrong to boot. After causing a needless recession and destroying the wealth and confidence of countless small stockholders and mutual-fund savers, the Fed started pumping money into the real estate market. Everybody benefited until the bubble burst. Problem is, it was a way bigger bubble than the Nasdaq; think Hurricane Ike or Katrina vs. Gustav. I wonder how much household wealth will have evaporated by the end of next year. Treasury's nationalizations of Fannie & Freddie, and the shameless begging for taxpayer money by GM and perhaps Chase (was "give us money or we won't buy Washington Mutual" an unspoken part of the negotiations that weren't?), provide Exhibits A and B of the Moral Hazard. If this country doesn't find its compass again and fast, we'll be looking not at just the after-effects of a bubble pop, but the end of the stock market as we know it. We'll have a rigged, semi-capitalist market like China or Japan, or, heaven forbid, a blatantly anti-capitalist one like Venezuela. Nobody will be able to invest rationally knowing that government could change the rules of the game at will. Paulson belatedly realized this after helping Chase buy Bear Stearns, and that's why he is trying to keep his finger in the dike now by refusing federal funds for a Lehman solution. I think the market knows this and that's why it's shimmering like a mirage. Great for speculators, impossible for ordinary investors. People were putting money into CDs at Washington Mutual last week to get 5%, despite all the warning signs, thinking that at least they'll get their money back from the FDIC.
Paulson referenced "Speak Softly and Carry a Big Stick" when he initially pledged money to shore up Fannie and Freddie. It didn't work. Maybe Teddy Roosevelt's metaphor only works in military strategy. The recent actions were more worthy of that other Roosevelt, the one who created the New Deal that made the stock market irrelevant for a good 20 years. I'm heartsick over the craven calls for bailouts and handouts and swaddling, and very afraid that our beggars are going to get the government they deserve. That will be a Bad Deal for everybody.
1/25/2008 22:29:31 -- 2008 Forecast.
The truth about the credit crisis is both better and worse than generally believed. To look at the surface moves in the world's stock markets this month, one would think that the solution will come from Washington -- witness the 200- and 300-point moves in the Dow that occur on every rumor of government intervention. Unfortunately, neither Fed rate cuts nor temporary tax rebates will clear the opaque loan packaging that is befuddling the markets. The good news is that the market has overreacted, and that the value of the suspect financial securities is greater than feared. Bottom fishers are looking to make a killing, and as they do their work in coming months, the markets will find their way back to the business of expansion. Until then, we're going to see bad times. Nobody should wait for the authorities to pronounce, months after the fact, that the economy has entered a recession.
Earnings, job growth and manufacturing activity already tell the tale. People lost a lot of wealth in the last three months. The massive declines in the stock market became a cascade as margin limits were hit. Those who counted themselves comfortable thanks to timely home purchases during the era of 1 percent Fed funds are not so rich on paper now; and if they should be forced to sell, they could well find that the mortgage exceeds the diminished market value of their home. Let's not even mention the loan originators/lenders/packagers, the risk managers, the construction workers, the basis-point takers, the dealmakers who are suddenly finding that their services are no longer required. No one should cry crocodile tears over the failure of regulators to have anticipated the problem. It is in the nature of things that regulators will always be years behind the curve, and that when they do act it will be to befuddle things in unintended ways, for the main imperative of when they do act it will be to befuddle things in unintended ways, for the main imperative of
government is to expand its own power, not to solve problems. The main thing I worry when they do act it will be to befuddle things in unintended ways, for the main imperative of government is to expand its own power, not to solve problems. The main thing I worry about is the ever-increasing calls for government intervention emanating from Washington, the media and the presidential campaign jets. Provided that such pleadings for 20th-century style government planning go largely unanswered, the economy will begin to recover next year. Between now and then, there will be bargains in the stock market. Don't be in a hurry to buy; there is plenty of time for research. **What I'm holding: Stericycle (SRCL), S&P 500 futures. **What I'm avoiding: Hong Kong stocks, European stocks, infrastructure stocks. **What I'm eying: Amazon (AMZN), Genentech (DNA), Microsoft (MSFT). Laurel Kenner is an active trader and can be expected to change her positions frequently without notice. Her views are entirely her own, and her trading positions in no way reflect those of Manchester Trading.
1/27/2008 0:08:49 - The Boom That Went Boom.
Here's the latest haha from Bloomberg News: " The U.S. economy may be heading for recession after a drop in house prices prompted a collapse in the subprime mortgage market that's roiled financial markets around the world." Did housing prices just drop of their own accord, like some perversely animated creatures? Heck no. They dropped because builders built so many homes that supply ranneth over. Here in Manhattan, who knows how many long-established, profitable businesses lost their leases over the past couple of years because the landlords wanted to tear everything down and build condos. Bye-bye, Lincoln Stationers, Fauchon, Columbus Bakery. For awhile, it looked like Manhattan would become a bedroom community (to what? Connecticut?) Entire blocks were covered with scaffolding. I was shopping around, and I couldn't find an apartment that wasn't next to a construction site or about to be. Who's getting bridge loans now? Now, I'm having a hard time renting out my lovely river-view apartment. My broker suggests that I cut the price 20% and hard time renting out my lovely river-view apartment. My broker suggests that I cut the price 20% and put it on Craigslist. Yikes, that was supposed to pay the bills; guess I won't be buying much. Just one more disgruntled consumer on recession watch.
1/28/2008 15:35:49 - Coal in the Overnight Stocking.
My online broker just suspended the lenient intraday margin limits that made it possible to lay on more leverage during the day than would be tolerated overnight, "due to exceptional volatility." First thing I thought: "Sign of a market bottom." Second thing I thought: "Rats, just when I had enough margin to start to think of good intraday trades." Third thing: "Maybe they know something I don't....time to crawl into the cellar again?" *** I swear I will never buy Chinese coal company shares again. I had Shenhua awhile ago, seemed like a good trade , all of China relies on coal, etc., but "it turned out to be just one more of Tom Sawyer's lies." It dawned on me that Chinese coal companies are locked up by regulations, held back by price ceilings, not to mention aged and inefficient. Hell will freeze before they expand their multiples in any significant way, notwithstanding their franchise. So why did I buy Yanzhou on news of a snowstorm? I really didn't want any more Chinese stocks anyway.
1/31/2008 14:20:15 - The Candidates and the Economy.
If you're planning to stay alive for the scheduled reinstatement of the estate tax in 2010, I suggest perusing the economic policy statements on the presidential candidates' Web sites. Mitt Romney is the only one who would repeal this most unfair tax. As he points out, people are taxed three times on their money: When they make it, when they invest it, and when they try to pass it on to their families. The best thing President Bush did was to cut taxes on dividends, capital gains and death. McCain, the other viable Republican in the race, would keep the status quo. Obama's sophomoric proposal would give $500 rebates to the poorest taxpayers (and a chicken in every pot?) The best that might be said for Hillary is that she might bring back Bob Rubin as a twofer with the First Man. Romney is the only candidate to demonstrate a grip on fiscal issues.
2/13/2008 10:14:45 - No J.P. Buffett for this Market.
For a moment yesterday, I almost thought Warren B was the 21st century's answer to J.P. Morgan. Would he really rescue the market with his billions, the way J.P. brokered an end to the 1907 market collapse? Would he become sort of a private branch of the government? Naw, he was just trying to pick up some more low-risk assets. Back to the ground for the market. Smith & Wesson (SWHC) put on a few pennies, though, maybe on the hope that municipal police will be able to afford guns if Warren is guaranteeing the muni bonds. It's a renter's market in Manhattan! The wait list for three-bedroom apartments in my bulding has disappeared, and four have been vacant for months. Yesterday, a prospective renter canceled a viewing because he decided he wanted a four-bedroom! More supply is coming. My friend Kevin Depew at Minyanville says many new boomtime condos are being transformed into rental buildings.
It's looking like it will be Obama and McCain in November, so HRC will be spared the embarrassment of claiming she is more experienced than McCain. Neither McCain nor Obama offers any deep thinking on policies that would affect the market for the better. I do wonder if a pre-election Islamic terrorist attack a la Madrid 2004 and London 2005 would tilt Americans into voting for Obama or goad them into electing McCain. One hopes that oil prices will stay high enough to displace thoughts of the next world with material comforts in this one among prospective suicide personnel. I take the recent use of the mentally dim as a sign that recruitment is becoming more difficult.
2/16/2008 2:36:13 - A Trader, Not an Investor. When I opened up WEIS and saw that only 15 of 90 indexes are up year to date, and that the top 10 are Mauritius, Nigeria, Kuwait, Muscat, Ecuador, Abu Dhabi, Jamaica, Doha, Slovakia and Ghana, well, I felt quite the outsider. But those are just sideshows to the real boomtowns in Australia and the U.S. Midwest. Check out AS51, the Aussie stock market, using IRR. If 2008 has a resonance with the mid-'70s -- stagflation, real estate turbulence -- it makes sense to get some brief exposure to coal and ethanol and maybe even South African metals, now that the Atlas Shrugged script is playing on there to the lights-out denouement. I'm thinking ADM US, CEY AU, AQP AU, IPL AU, XTA LN, CSAN BZ. Naturally, it hurts to even say the names, since commods will eventually go back to their normal 0% return. What little enthusiasm I had for China Mobile (941 HK/CHL US) is gone. The company had been able to charge 0.8 yuan a minute for prepaid customers and 0.6 yuan for contract customers, but on Feb. 13 government regulators cut that amount to 0.4 yuan a minute starting March. What big feet you have, Comrade Regulator. What makes a $5 stock go up a buck in a day, and then, bang, fall 60 cents in the next three days, on no news at all? Smith & Wesson, are you dead or just resting there in the dust? I didn't stick around to find out. Citi at 25: Is this finally another Alwaleed trade? The value boys are jumping in, and I say, "Go get 'em, fellas." Think I'll wait until Citi has closed all its hedge funds and the stock is at 8.
2/16/2008 22:23:08 - The Recession is Here.
Of course we are already in a recession, and figuring that one out doesn't take much fast thinking. How are people going to maintain spending if they can't make their mortgage payments and they're losing in the stock market? Pretty soon, we'll have the requisite two down quarters, and then I will perhaps write a blog noting that AS PREDICTED (as my former partner and I used to jokingly write) the recession was already under way in January, when I said so in my first blog post here. I hope that all 31 of the lucky readers who read that post made a lot of money, or at least avoided losing more than they were apt to. But I doubt it. So why am I writing? Well, it's like this. After so many years of working with my former partner, I needed the challenge of independently articulating ideas before an audience more knowledgeable than I am. Furthermore, I wanted to write posts that did not proffer systems, old or new, and I did not want to attempt to be "fair" by making disclosures that would ultimately benefit no one. Here, no disclosures are demanded, and no editor insists that I make a ultimately benefit no one. Here, no disclosures are demanded, and no editor insists that I make a particular kind of sense that makes sense mainly to the editor. Truth is, I find that I have a moral problem with financial journalism. From what I've seen in my years on both sides of the editorial fence, it's just not possible for a writer to connect with a reader in a fashion timely enough to give the reader the full benefit of the writer's knowledge, or luck. No playing fields are level in this park. If I tell you what I'm going to trade before I trade it, what good does that do me? If I let you in on my trades after the fact, what good does that do you? Sure, some smart traders write, but they keep the best for themselves. Other smart traders won't ever write anything for public consumption, because their clients demand discretion. Personally, I would rather have clients than not. I don't take seriously the writers who don't trade, or the writers who once traded but now regard themselves as being in the entertainment business. And so I am adopting as my slogan, a French saying that I understand was formerly cited in the matter of women's knees: "Pour vivre heureux, vivons caches."
7/1/2008 1:04:57 - Power Grab.
The biggest political story today is the global ascendancy of state economic power and the fading of the free market as the world's big economic idea. Even here in New York City, former center of the financial universe, the subprime mess has supposedly discredited the philosophy that less regulation is better.This is all rot; the anti-free market trend will mainly serve, as it always has, to help ambitious would-be power-wielders to reach their career goals. Lack of regulation didn't do the financial system in. Plenty of blame has to go to the regulators themselves. A series of power grabs and subsequent attempts to control unintended consequences led to even more unintended consequences, until the threads were too tangled to follow. Begin, for the sake of beginning somewhere, with Greenspan's attempts to be a hero for all seasons by turning the spigot off and on again and again, and proceed to the subsequent heavyhanded attempts to eliminate all risk from pension fund portfolios after the Nasdaq crash and earnings/Enron/WorldCom frauds. Pension funds pension fund portfolios after the Nasdaq crash and earnings/Enron/WorldCom frauds. Pension funds
couldn't invest in stocks the way they had been doing -- too risky! What could they do to meet their payout obligations? Wall Street had a wonderful new invention -- top-rated mortgage and asset-backed securities. Unfortunately, they weren't exactly risk-free. Was lack of regulation the problem? No. And neither was the desire to get rich. The problem is that the bright minds of Wall Street can come up with contorted solutions when they have to satisfy their customers while dealing with regulations designed to eliminate risk. The whole debacle may become the excuse for a massive power shift to the federal government. Larry Summers had a piece in the FT today calling for the government to save the economy with infrastructure spending. Sure, let's get the Army Corps of Engineers back to work redesigning natural waterways so they never work properly again. Back in the '80s, Reagan was attacked for his supposed simplemindedness, but in the '90s, his basic ideas had become the consensus. So much that as VP, Al Gore's main hobbyhorse was cost-cutting. Nowadays, it's hip in Manhattan to trash the free market. Our leadership abdication comes at a bad time, because the money nowadays is in the hands of people who care nothing for economic freedom. Nobody is aspiring to avoid the Road to Serfdom. China's free market is largely an illusion; prices for commodities are set by the government, not the market, the currency is still not freely convertible, the government still has a tight grip on far too much. The aspiring Mideast financial centers are being thrown up with royal-family money and control. Russia -- let's not even go there; the replacement of democratic aspirations with a systemic corruption is too sad to contemplate. Nobody can block people who want to be free forever. But there is no political freedom without economic freedom. Those psuedo-Socialist Realist posters of Obama that look like Che give me the shivers. (I freedom. Those psuedo-Socialist Realist posters of Obama that look like Che give me the shivers. (I am indebted to the brilliant Louis Gave for some of the ideas set forth here, any errors, overreachings, misunderstandings or misapplications are mine alone.)
7/12/2008 8:32:37 - The Case for Massive Bullishness.
I could have sworn that global financial Armageddon had arrived last week. The 11:30 pm Thursday NYT headline about a potential government takeover of Fannie and Freddie had visions of disaster dancing in my head -- half of $12 trillion in mortgages guaranteed by Fannie and Freddie down the drain? Fannie shares at zero, meaning no recapitalization in the equity market? Here's a Reuters headline saying the Fed has opened the discount window to Fannie and Freddie. Late Friday afternoon, nobody wants to be long over the weekend when Israel might be bombing Iran, but nobody wants to be short either, if the Fed is in the game…oh, here’s the Fed denying the Reuters headline. So the market ends with a 1% loss, a squib, really, which is just what it wanted to do in the first place despite the Maenad dance from here to yonder and back again. What did it all mean? Supposedly safe investment houses like Capital Research of LA, Axa/Sanford Bernstein, Fidelity and Barclays will be hurting, as they owned truly massive positions in Fannie for supposedly conservative investment houses -- 20%, 13.5%, 4.7% and 4.2% respectively, according to their last public filings. But the bondholders are happy as hogs with the bailout talk. Beyond that, financial capitalism is due for a retrenchment. Too many bright people have been writing headlines about financial matters they don’t really understand, and too many other bright people have been spending too much time overleveraging the financial world. Now, they're quitting and getting fired, right and left, and the world is deleveraging. I am reminded of the collapse of the defense industry in Southern California, for which I had a catbird seat as aerospace reporter at one of the local news-sausage makers. The Cold War was over, half the L.A. aerospace people lost their jobs, and guess what? In the next few years, Los Angeles boomed. All those very, very, bright aerospace people went somewhere, just as the very bright financial people are going to go somewhere. And because they're smart and creative and accustomed to dealing with risk, they're going to create new companies and new software and new things that are going to re-energize the world. And that's why it doesn't matter whether Obama has a clue about finance, which he clearly does not – judging by his Web site statements, he seems to believe that the answer is a crackdown on mortgage fraud. While the smart people are going their ways, reregulation of the financial industry will come. Fannie and Freddie will survive and do their semi-socialistic duty for years to come. Those remaining in finance will think of new ways to overleverage themselves. But I'm getting ready for a giant New Thing.
8/12/2008 0:15:52 - Credit Card Debt, the New Subprime.
HDS gives the holders of the trusts backed by credit-card debt. The question is whether the huge spreads will cover the losses. Look for losses among the holders of the debt trusts issued by the companies that send out weekly balance-transfer come-ons. These invitations are purely scams of the most egregious sort, comparable to the "You Have Won $1 Million" letters that used to be sent out by Publishers Clearinghouse and the like to the older gentry. Less than a decade ago, a consumer could manage to stay ahead of the game by transferring balances to cards offering low introductory rates. It was great. Hello 1%, Bob's your uncle. The banks got wise and started to charge a 3% balance transfer fee. Of course, the fee is well hidden in the fine print. Now, 3% is a huge chunk of change for an unwary debtor who's already struggling to pay off his balance. The trusts issued by these scamsters -- and Bank of America, Capital One and Washington Mutual are the big players in this nasty game -- will be the first to crumble. The prospect of more write-off makes me want to hibernate while the market works off the euphoria over lower commodities prices. Sure, oil is down more than 20%; but it's still $114 a barrel. Are we suffering from summer electricity bill shock yet? The utilities are just now getting around to requesting rate increases. May your winter be merry and globally warmed.
9/12/2008 22:59:35 - The End of the Stock Market.
I hear talk about how the panic level indicates a market bottom similar to 2002. I don't think we're anywhere near a bottom. The crash of 2000-2002 was caused by the Fed's blundering in to pop the tech bubble (exceeding its mandate by a mile) and getting the timing wrong to boot. After causing a needless recession and destroying the wealth and confidence of countless small stockholders and mutual-fund savers, the Fed started pumping money into the real estate market. Everybody benefited until the bubble burst. Problem is, it was a way bigger bubble than the Nasdaq; think Hurricane Ike or Katrina vs. Gustav. I wonder how much household wealth will have evaporated by the end of next year. Treasury's nationalizations of Fannie & Freddie, and the shameless begging for taxpayer money by GM and perhaps Chase (was "give us money or we won't buy Washington Mutual" an unspoken part of the negotiations that weren't?), provide Exhibits A and B of the Moral Hazard. If this country doesn't find its compass again and fast, we'll be looking not at just the after-effects of a bubble pop, but the end of the stock market as we know it. We'll have a rigged, semi-capitalist market like China or Japan, or, heaven forbid, a blatantly anti-capitalist one like Venezuela. Nobody will be able to invest rationally knowing that government could change the rules of the game at will. Paulson belatedly realized this after helping Chase buy Bear Stearns, and that's why he is trying to keep his finger in the dike now by refusing federal funds for a Lehman solution. I think the market knows this and that's why it's shimmering like a mirage. Great for speculators, impossible for ordinary investors. People were putting money into CDs at Washington Mutual last week to get 5%, despite all the warning signs, thinking that at least they'll get their money back from the FDIC.
Paulson referenced "Speak Softly and Carry a Big Stick" when he initially pledged money to shore up Fannie and Freddie. It didn't work. Maybe Teddy Roosevelt's metaphor only works in military strategy. The recent actions were more worthy of that other Roosevelt, the one who created the New Deal that made the stock market irrelevant for a good 20 years. I'm heartsick over the craven calls for bailouts and handouts and swaddling, and very afraid that our beggars are going to get the government they deserve. That will be a Bad Deal for everybody.
Wednesday, November 5, 2008
The Art of Character
My former partner Victor Niederhoffer often jokes that he only reads 100-year-old books. This is just part of his schtick, but he does own a remarkable number of old Wall Street books, some of which he occasionally passes along to me. When the market confounds me, I often turn the yellowed pages of these relics. As I read about the exploits of past speculators, I always come away with the cheerful feeling that the panics of the past were equally as terrifying as today’s, and that the booms were no less astounding.
This year’s credit crisis sent me once more to the old books for the comforts of déjà vu. In a 1878 book, “Bulls and Bears of New York,” I found a beautiful illustration of what ethics used to mean in banking. The author, Matthew Hale Smith, relates the story of Mr. Stout, founder of the Shoe and Leather Bank. Mr. Stout earned his own living from the age of 12. “He started out life with a fixed purpose, to not only get a living, but a fortune. Self-reliant, enthusiastic and ambitious, he seized every opening and mastered everything he undertook.”
Mr. Stout’s first great setback came when he endorsed a $5,000 note issued on behalf of a builder. (Voila the déjà vu!) “To save the $5,000, the notes swelled up till they reached $23,000. Then came a crash.” The builder failed. Sitting at his breakfast one morning, Mr. Stout was notified that the builder had made no provision for the paper, and that the bank would look to him for payment.”
Mr. Stout was then worth $17,000, “which he had earned by nights of toil, by economy, and by daily earnest attention to business. To pay the notes would have taken every penny he had and put him $6,000 in debt. He was not yet of age, and could have repudiated his debts as an infant. Confiding in no one, he thoughtfully considered what he should do and came to a decision. “Having become bankrupt in money, he concluded he would not become bankrupt in character.”
He borrowed the $6,000 from a reluctant friend. His colleagues at the bank wondered how young Stout would meet the blow, and were ready to extend the term. “Had he proposed to compromise the matter by paying one half, the bank would have accepted it…. Had he offered his $17,000, on condition that he was released from all liability, the notes would have been cancelled with alacrity.”
Mr. Stout did neither. He proposed no compromise, asked no extension, and attempted to negotiate no settlement. “When the first note became due, he paid it. He did the same with the second and third.” The bank president called him into the office and told him the bank was ready to renew the notes and to give him any accommodation that he might ask. “Mr. Stout simply replied that the blow was a heavy one, but that, having assumed the obligation, he should discharge; that he asked no favors, and as the notes matured he should take them up.”
Mr. Stout paid every note due. “His manliness, pluck, and integrity, which carried him through that crisis, became the sure foundation-stone on which his great fortune was laid. He took the front rank among successful financers, and his honorable course in that crisis established his fame as an honest man, in whom it would be safe to confide.”
This year’s credit crisis sent me once more to the old books for the comforts of déjà vu. In a 1878 book, “Bulls and Bears of New York,” I found a beautiful illustration of what ethics used to mean in banking. The author, Matthew Hale Smith, relates the story of Mr. Stout, founder of the Shoe and Leather Bank. Mr. Stout earned his own living from the age of 12. “He started out life with a fixed purpose, to not only get a living, but a fortune. Self-reliant, enthusiastic and ambitious, he seized every opening and mastered everything he undertook.”
Mr. Stout’s first great setback came when he endorsed a $5,000 note issued on behalf of a builder. (Voila the déjà vu!) “To save the $5,000, the notes swelled up till they reached $23,000. Then came a crash.” The builder failed. Sitting at his breakfast one morning, Mr. Stout was notified that the builder had made no provision for the paper, and that the bank would look to him for payment.”
Mr. Stout was then worth $17,000, “which he had earned by nights of toil, by economy, and by daily earnest attention to business. To pay the notes would have taken every penny he had and put him $6,000 in debt. He was not yet of age, and could have repudiated his debts as an infant. Confiding in no one, he thoughtfully considered what he should do and came to a decision. “Having become bankrupt in money, he concluded he would not become bankrupt in character.”
He borrowed the $6,000 from a reluctant friend. His colleagues at the bank wondered how young Stout would meet the blow, and were ready to extend the term. “Had he proposed to compromise the matter by paying one half, the bank would have accepted it…. Had he offered his $17,000, on condition that he was released from all liability, the notes would have been cancelled with alacrity.”
Mr. Stout did neither. He proposed no compromise, asked no extension, and attempted to negotiate no settlement. “When the first note became due, he paid it. He did the same with the second and third.” The bank president called him into the office and told him the bank was ready to renew the notes and to give him any accommodation that he might ask. “Mr. Stout simply replied that the blow was a heavy one, but that, having assumed the obligation, he should discharge; that he asked no favors, and as the notes matured he should take them up.”
Mr. Stout paid every note due. “His manliness, pluck, and integrity, which carried him through that crisis, became the sure foundation-stone on which his great fortune was laid. He took the front rank among successful financers, and his honorable course in that crisis established his fame as an honest man, in whom it would be safe to confide.”
Election 2008: Winners, Losers
Best Speech: McCain, hands down. Obama came out late, ran on long, and laid on the cliches so thick I couldn't breathe. (Why couldn't McCain have sounded as cogent during the election?)
Persons Most Oddly Out: Women. Once more, a talented woman gets to be...First Lady.
Most Curious Election-Day Market Moves: Gold up 5.5%, more than the 3.5% gain in S&P futures.
Worst media coverage: MSNBC, for over-the-top sentimentality about the Obama win. "If this doesn't move you, you can't be moved," said one commentator, to footage of an Obama rally.
Best moment in Obama's speech: Telling his daughters they'd "earned the puppy they'll be taking to the White House." Writing Rule No. 1: Always put the puppy first when you write a story (or a speech)!
Best overall coverage: The Daily Show's "Indecision 2008."
Coolest techie development: Huge touch screen TVs giving instant county-by-county results, current and for the last two elections.
Biggest tipoff that Obama would win: The terrible weariness on Peggy Noonan's face.
Most curious clothing: Michelle Obama's red-and-black dress, seemingly designed to draw attention to her belly.
Most hopeful sign: Democrats failing (as of midnight) to win the 60-seat "super-majority" in the Senate. Long live gridlock!
Biggest change a'coming: The U.S. economy. Obama, writes Bloomberg's Matthew Benjamin and Rich Miller, "intends to shift the tax burden back toward the wealthy, roll back a quarter-century of deregulation, extend health-care coverage to all Americans and reassess the U.S. government's pursuit of free-trade deals." Not to mention "creating jobs" and massive investments in public works.
Persons Most Oddly Out: Women. Once more, a talented woman gets to be...First Lady.
Most Curious Election-Day Market Moves: Gold up 5.5%, more than the 3.5% gain in S&P futures.
Worst media coverage: MSNBC, for over-the-top sentimentality about the Obama win. "If this doesn't move you, you can't be moved," said one commentator, to footage of an Obama rally.
Best moment in Obama's speech: Telling his daughters they'd "earned the puppy they'll be taking to the White House." Writing Rule No. 1: Always put the puppy first when you write a story (or a speech)!
Best overall coverage: The Daily Show's "Indecision 2008."
Coolest techie development: Huge touch screen TVs giving instant county-by-county results, current and for the last two elections.
Biggest tipoff that Obama would win: The terrible weariness on Peggy Noonan's face.
Most curious clothing: Michelle Obama's red-and-black dress, seemingly designed to draw attention to her belly.
Most hopeful sign: Democrats failing (as of midnight) to win the 60-seat "super-majority" in the Senate. Long live gridlock!
Biggest change a'coming: The U.S. economy. Obama, writes Bloomberg's Matthew Benjamin and Rich Miller, "intends to shift the tax burden back toward the wealthy, roll back a quarter-century of deregulation, extend health-care coverage to all Americans and reassess the U.S. government's pursuit of free-trade deals." Not to mention "creating jobs" and massive investments in public works.
Monday, November 3, 2008
The Art of Fighting Jihad
Geert Wilders, a Dutch parliamentarian, has produced a short film about the worldwide jihad. One of the most shocking images comes near the end: a newspaper proclaiming a death fatwa against the filmmaker.
http://video.google.com/videoplay?docid=3369102968312745410
http://video.google.com/videoplay?docid=3369102968312745410
Subscribe to:
Posts (Atom)