The housing meltdown and subsequent credit crisis primer

Not completely accurate but close enough for someone to get a decent background

The Credit Crisis Of 2008a

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and this

Creditcrisis 30slides Final

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and our experts have lots to say even if it means contradicting their own statements... ah, the bliss of slective memory

Experts on the Credit Crisis

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So You Think You Can Dance?

Let's get serious here for a bit

A review of conservatism

David Brooks, in this article, explores a missed opportunity for McCain. He points out that McCain could have rejected Burkean conservatism (which in its modern incarnation posits the role of government is to promote individual liberty of the kind later espoused by Ayn Rand), and FDR styled liberalism (which posits that the role of government is to provide equal opportunity and equality), for the centrism of Hamilton and Lincoln (which posits that the role of government is to enable people to progress, by providing a helping hand). It's a fascinating exploration. He says, McCain essentially ceded the center to Obama.

The interesting nugget of news in the opinion piece is that Obama's economic team actually had a project called the Hamilton project to actually create a centrist economic plan.

The one shortcoming of Brooks' analysis is his complete avoidance of a discussion of social conservatism. Brooks' explanation seems to conflate the Burke and Goldwater conservatism with social conservatism, and view the more extreme positions of Sarah Palin as being the exception or the fringe, rather than the norm. This is a misrepresentation of history.

Social conservatives posit that government has a moral responsibility to use its power to protect their values. This is somewhat consistent with Burkean conservatism. However, modern social conservatism goes further. It is based on the belief that America is a Christian country whose values are evangelical Christian and ultimately draw from white traditions of America. They posit that the role of government is to protect those "American values". The unstated undercurrent of these assertions is that non-white non-Christians are less moral and less American.

Historically, due to Lincoln's role, the GOP was the party of liberty and the DNC attracted the social conservatives. After FDR, though, the central value of the DNC became equality. After the Brown v. the Board of Education decision in the mid 1950s, Eisenhower moved to impose Civil Rights, but hesitated. The mantle of Civil Rights was taken up by the Democrats, who saw this as an issue of equality that seemed a natural offshoot of FDRs philosophy. After initially moving slowly, after Kennedy's death, Lyndon Johnson was able to get the support needed to pass the Civil Rights Act and Voting Rights Act. With that decision, the DNC lost their hold on the social conservatives. Nixon moved in to capitalize, with his Southern Strategy.

It was not until Reagan though that this strategy was built into a significant movement. The Reagan team's brilliance was to conflate two extraordinarily different political philosophies (Burkean Conservatism and Social Conservatism) into one movement by using some touchstone issues that they agreed on: Roe v. Wade and taxes.

This brings us back to the current elections. The McCain camp seems to be talking about simple issues in fiscal conservative voice. However, people who understand the history, know what the actual statement underneath is for the Social Conservatives. Here are some examples:

• "Spreading the wealth around" in the social conservative code that government will take your money and give it to undeserving un-Americans (read African Americans, liberals, non-Christians, Hispanic, etc.)
  
• "American exceptionalism" asserts America is the greatest country in the world and the naysayers and those who criticize America are not patriotic. This, of course, is about saying to the Southerners that America does not have to apologize for slavery or segregation.
  
• "Real America" and "pro-American regions" is a direct reference to the social conservative belief in the evangelical Christian, White values of America.
  

A successful Obama in many ways would challenge the fundamental precepts of social conservatism. Obama, after all, is not white and is not of the evangelical Christian movement in the same way as say Sarah Palin. The social conservatives are reacting heatedly to the crumbling of their ideology.

There are three interesting aspects to ponder:

• David Brooks' discomfort with the social right is symptomatic of the fissure between the social and fiscal conservatives in the GOP that this campaign has exposed. The question for the Obama camp is: 'Can they bring these disenchanted conservatives into the DNC fold?'
• Secondly, the Hamilton-Lincoln progressive conservative center that was captured by Reagan, Clinton and Bush, seems to be veering to Obama. The question is: 'Can Obama consolidate the center for DNC?'
• Thirdly, we see in the social conservative reaction, the vituperative attacks that will plague an Obama administration. They will be waiting for a slip-up. The question is: 'How far will Social Conservatives go?'
  

Obama's win is definitely not in the bag. However, if he wins, he will have an opportunity to redefine the political map. We will need to wait and see whether, if he wins, he is able to grab the opportunity and achieve a new coalition.

Is Obama an American?

This is an old smear that is making the rounds again. It seems Philip J. Berg, Esquire, of Pennsylvania filed a lawsuit recently seeking a Declaratory Judgment and Injunction that Barack Obama does not meet the qualifications to become President of the United States. The fact is that Obama is an American citizen by virtue of his birth, as can be seen from his birth certificate reproduced here. What is interesting is that Mr. Berg goes on to claim that Obama "lied and cheated his way into a fraudulent candidacy and cheated legitimately eligible natural born citizens from competing in a fair process." Fascinating.

Pancham's astrological take on the elections

I am trying to predict this based on 3 factors:
- Overall strength of natal chart with some emphasis on planet positions related to winning in competitions/politics
- Current dasha and bhukti and their stranghts/weaknesses
- Transits (what are the planets doing on & around Nov 4)
Typically, the above framework shows good coverage as well as is MECE in nature.
We'll do a comparison of Obama vs. Mccain and also Palin vs. Biden for some of the above factors.
Also - a big assumption here is that the birth times and locations I get from the internet are accurate.
Overall strength:
McCain has a strong virgo ascendant and lord Mercury is placed on the ascendant making it a strong horoscope. Such strong Mercury should give sharp analytical/problem solving skills as well as articulation/language/sharp choice of words skills - have not seen him enough to comment on that. His 6th house (house of competitions) has Saturn well placed in his own sign Aquarius. That does make it strong however its motion is retrograde or backwards which reduces its power. It will give him patience in competition and long lasting fighting power against any kind of problem. One fairly significant weakness I see is Mars in his chart is debilitated (in weakest position) and its sitting in the 11th house of 'wish fulfillment' as the 3rd (house of efforts) lord indicating that he either loses interest in putting efforts or will put them in an undesired fashion. This will negate some of the fighting power of Saturn and perhaps he may go down fighting without his wish getting fulfilled. He has a well-placed Jupiter in the 3rd house which will help him as it aspects the weak Mars as well as protects the 'luck' of the 9th house. Overall definitely strong.
Obama's lagna is libra & its lord is also powerful, Venus is in the 9th house enhancing overall luck. His 6th lord Jupiter is retrograde & debilitated in capricorn however Saturn is in the same house (own sign) which makes this combination a very powerful 'vipreet rajyoga'. The combination aspects Sun in the 10th house (house of profession). Sun is very strong and in the 10th house is typically an indicator of a successful political career. Sun in the 10th house as the 11th lord (wish fulfillment) becomes digbala (extra strong) in that respect. 6th lord Jupiter (lord of competitions) aspects 9th lord Mercury (lord of luck) in effect making him lucky in competitions.
Current Dasha
McCain has Saturn Mahadasha and Jupiter Antardasha indicating end of Saturn Mahadasha. Generally at their end, Dasha's give poor results (recent e.g. Federer's sudden drop towards end of 2007 to end 2008.)
To me this factor by itself can signal a loss for McCain.
Obama has Jupiter/Sun (with Sun Bhukti having started in August 08)- it’s a strong strong phase for him indicating victory.

Transits
The transits are more or less equally strong with Obama's being a shade stronger as he has influence on Sun on lagna (another vipreet rajyoga), Jupiter in own 3rd house of efforts.
What also favors him here is that transits are very strong for Biden on Nov 4th (indicating prestigious job offer) compared to Palin. Palin has leo as the 12th house with saturn aspecting it and jupiter transiting natal ketu which makes it a weak transit and possibly 'deception' in some form. Otherwise though, her chart is that of a total warrior and a very strong one.
On all 3 dimensions, the astrological indications favor Obama. Lets see what happens.

Did attraction had anything to do with it?

This is a very interesting Op-Ed piece where Kathleen Parker speculates that McCain may have selected Palin because he was subliminally attracted to her. I wonder ...

What's up with the polling?

One of the interesting things about the election coverage are the polls. Like most people, I am intrigued by the daily movements, and love to speculate why the polls are moving. But, taking a step back and contemplating the polls a bit more rationally, you begin to realize that something is seriously wrong.

Most of these polls are supposed to have a +/- 3.5% accuracy. The 3.5% represents the 95% confidence interval. That means, that there is supposed to be only 5% chance that the actual result is outside the predicted range. Except that, when I look at the polls, the number of outliers are far more frequent, and the spread is far more than would be expected. So, it would appear that there is something seriously wrong.


I don't have a precise answer for why this is happening, I do have three potential hypothesis:

• The first is that the polls try to forecast "likely voters". A closer examination of the polls suggest that the polls that have Obama up by large margins tend to skew in favor of people who claim in the form that they intend to vote. In contrast, the polls which have Obama down in the dumps, appear to be overweighting prior election turnout ratios. Essentially, this suggests if the same people who voted lasted were to vote this time, this race would be a toss-up and Obama would probably have a high chance of losing. On the other hand, if all the voters who say they will vote turn out in large numbers, this could be an Obama landslide. They key uncertainty, therefore, is voter turnout, and the polls frankly are just getting at what will happen on this front.



• The second reason has to do with demographics. The historical polling data used a segmentation scheme that was appropriate for a white man running against a white man. Having an African American and a woman on the tickets has completely changed which demographics are relevant. For instance, do pollsters know which groups tend to be racist and which tend to be sexist? Pollsters have got better as they can extrapolate from state and local elections. However, it seems that different agencies are using different weights and samples of the various groups, thereby skewing the results differently.
  


• Finally, there is a systematic methodological error that may be hugely significant this time. Most polls are telephone polls, conducted over land lines. Unfortunately, land line use in the US has dropped dramatically in the last four years, particularly among young people. Pollsters were still confident in their results as they assumed that there were no statistically significant systematic differences between those with land lines and those without. That may not be true this time. If the people who use land lines behave differently from people who don't, then the polls could be wrong. Different pollsters have been oversampling different demographics to adjust for this, which may explain some of the variance.

Overall, all I can say is that currently the polls suggest that this race is anything from a toss up to an Obama landslide. It all depends on who votes. Beyond this, any inference from any poll, is pretty much meaningless.

One interesting side note is this article, which shows that the polls actually mirror Google Trends. Here is how McCain, Palin, Obama and Biden track on Google trends in October:

(Obama - Yellow, McCain - Blue, Palin - Red, Biden -Green)

India launches moon mission

India just launched Chandrayan 1, a two year unmanned moon mission. The orbiter carries two NASA equipment and is supposed to conduct scientific tests. Here is a more detailed story.

Did he say "Recession"? In 2006?

While many of us (incl. your's truly) lament "we did not see things turning sour - so bad, so fast; it is a real shame when we ignore the warnings and dismiss Peter Schiff as a doomsday prophet. In fact he was nicknamed "Dr. Doom".

Watch this.


As one of my friends who forwarded this said "I wonder where that moron who kept arguing (with Peter) is." Well, Arthur Laffer is a well regarded economist and known for "Laffer curve". Definitely read the two wiki articles. It will give a perspective of why Laffer was so convinced/unwilling to concede.

Picture referenced by Colin Powell

This
This is the photograph that Colin Powell referenced in his extraordinarily moving rebuke to the GOP for calling Obama a Muslim. This is the link to the whole photo history in the Newyorker.


Here is what he said:

"I'm also troubled by, not what Senator McCain says, but what members of the party say, and it is permitted to be said. Such things as 'Well you know that Mr. Obama is a Muslim.' Well the correct answer is 'He is not a Muslim, he's a Christian, he's always been a Christian.' But the really right answer is 'What if he is? Is there something wrong with being a Muslim in this country?' The answer is 'No. That's not America.' Is there something wrong with some 7-year old Muslim-American kid believing that he or she can be president? Yet I have heard senior members of my own party drop the suggestion he's a Muslim and he might be associated with terrorists. This is not the way we should be doing it in America.

"I feel strongly about this particular point because of a picture I saw in a magazine. It was a photo-essay about troops who were serving in Iraq and Afghanistan. And one picture at the tail end of this photo essay was of a mother in Arlington Cemetery and she had her head on the headstone of her son's grave. And as the picture focused in you can see the writing on the headstone. And it gave his awards, Purple Heart, Bronze Star, showed that he died in Iraq, gave his date of birth, date of death. He was 20 years old. And then at the very top of the headstone, it didn't have a Christian cross, it didn't have a Star of David. It had a crescent and a star of the Islamic faith. And his name was Karim Rashad Sultan Khan. And he was an American, he was born in New Jersey, he was 14 at the time of 9/11 and he waited until he can go serve his counrty and he gave his life."

Sarah Palin in advertising

This ad in a Manhatten shop window suggests that opinion on Palin has crystallized to a point where she is now iconic for inexperienced.

Could this crisis have been foreseen?

Many have commented that this economic crisis took the world by surprise and no one really understood the gravity. This link has a compilation of people who predicted part of all of what has unfolded in this economic crisis.

However, for me the more compelling one is The Economist. As readers of the magazine would be aware, that publication has been warning of this since 2007. Don't believe me, see the covers from 2007 below:






PS: Many of the prescient theorists who warned of impending crisis, such as Joseph Stiglitz and Warren Buffet, are Obama's advisers. Others like, Paul Krugman, have endorsed Obama and are on the advisory panels for key Democrats, such as Hillary, who would be involved in any final rescue effort.

Voter suppression

This is an extraordinary example of the type of voter suppression strategies being used by the Right. Put simply, millions of newly registered voters and volunteers for Obama have received letters that state that they could be sued or be subjected to intrusive investigation if they continue promoting their views.

I have to say, some of these GOP tactics seem nothing short of voter intimidation. Huh? This is the "freedom" that these "patriots" want to promote?

Is it racism?

There is probably widespread consensus that a white person who votes against his or her economic and other interests because of the color of Obama's skin, is a racist. The question is whether the overwhelming support that Obama receives from minorities can also be classified as racism.

It is clear that the very fact that someone uses race in the decision could be classified as racism. Having said that, what race represents to white people cannot really be compared to the experience of minorities. This is an extraordinarily thought provoking examination of what Obama's race means to minorities. It's a trifle long, so, while I strongly urge you to read the whole article, here are some quotes that'll give you flavor of the article:

In describing how the author, a Hispanic, felt about his drive to succeed, he says: "I needed to succeed because I was a minority -- which meant there was no failure like success, what with the doubt and resentment that shadow one's accomplishments. (Was it because of affirmative action?)"

...

"Anyone who has ever felt in his own body the hot shame that awareness of color brings could not escape the myriad emotions that emerged in the course of Obama's campaign. There was cynicism. I certainly believed the axiom that my generation -- and who knew how many generations more to come -- would not live to see a black man become president. (The realization that I'd abandoned all hope shames me to no end.)"

...

"Obama's victory in the Iowa caucuses brought an oh-so-cautious optimism, and resurrected the ghosts of the past in fears over his safety. Then came Wright, and Obama's "A More Perfect Union" speech in Philadelphia. My wife and I watched it live as we spoon-fed our twin baby daughters. Obama's attempt that morning to span the distance between his black pastor and his white grandmother -- to span the distance between all of us "others" in America -- brought tears to my eyes. (But I held them back.) It was a speech that addressed the confused kid who ran for student body president and the adult who'd endlessly wrestled with the contradiction of color."

...

"Much has been said about a "post-race" generation that Obama would seem to herald. But the very presence of the "r" word in the moniker tells us that there is more road left to travel. By insisting that we are past race, we betray how much it is still with us.

Which brings us to the intangibles of an Obama victory. What would it mean for the subject of race in America? Surely, some will see it as an opportunity to continue to open the kind of discursive space Obama himself did in Philadelphia. Others will no doubt declare the end of the story: If Obama can become president, then truly all barriers have fallen.

What difference will it make for my daughters to grow up pledging allegiance to a flag next to which hangs a portrait of Obama? Maybe, given the confluence of the economic crisis and this "historic election," America will finally be able to speak about race and social class at the same time.

In focusing on these things, perhaps I reveal myself as hopelessly trapped in the world of color I grew up in. Or maybe I'm pointing out the possibility that instead of "post-race" we are actually "pre-race" -- that is, on the verge of truly engaging the legacy of America's "original sin" and the way its reverberations affect us even today.

But right now, days before the election, I feel more than I think. I am my body, my color, with all the great weight of its shame, with all the anger about how I came to believe what others believed about me, and yes, the hope that survived my cynicism.

I am taut with tension -- as if I'm expecting a blow, as if I'm waiting for a storm to pass."

Voting deadline

The initial reading of the absentee ballot rules appears to suggest that you can submit absentee ballot applications well after the registration deadline. Which is true. Unfortunately, I looked at the absentee ballot form for Virginia and it seems that only voters who are already registered can apply. So, it seems if you haven't registered already, tough!

More racism in evidence

This video has been making the rounds. I have to say that the report doesn't focus as much on the fact that Obama supporters are also dressing up McCain in KKK robes to suggest he is racist. However, this is still disturbing:

Channeling Miss South Carolina

By popular demand, I am posting this video of Miss South Carolina trying valiantly to answer a question:



Compare this answer to the style of evasion employed by Sarah Palin in some of her interviews. For instance. consider these:

Sarah Palin on the Bush doctrine:




On Supreme Court decisions:




On foreign policy:



In some of these cases, she would have been forgiven for not knowing the answers. However, the way she tried to cover up was channeling Miss South Carolina, and to me, made it worse by making her seem inauthentic. In any event, she clearly uses a beauty pageant style for answering questions.

Powell endorses Obama

Powell Makes his endorsement official on Meet the Press. One of the more cogent arguments posited for Obama.


It was interesting to see him take on some of the senior Republicans who regularly drop hints that Obama is Muslim. Towards the end of the interview, worth a listen.

Undecided conundrum

Bertrard Russell said, "Fools are cocksure, the wise are split within themselves with doubt"

However, our friends at The Daily Show have a better take on the "still in doubt" electorate. Watch this episode - http://www.thedailyshow.com/full-episodes/index.jhtml?episodeId=188615

Extreme racists coming out of the closet

If anyone had any doubt what the whole "Who is Obama campaign" is about, here is a video that should dispel them.



I often wondered where the racists were. Well, now we know. By the way, this is the type of report the Arabs are seeing.

Cheney's Presidency

This is just the most unbelievable article about how Cheney actually kept control of the Bush administration. It seems that Cheney learned his style of management from: Yes Minister!

The sky is falling!

Volcker, the former Fed Chief says the US is in recession. Reactions to the recession forecasts have been strong. Gloom abounds. People are running around panicking like chickens. Conservatives are making gloomy predictions about how this will play out. In a recent article on the economy, David Brooks makes one such attempts at soothsaying. He predicts that Obama will ride this tide to a liberal overreach which will be followed by a conservative backlash. Very plausible.

Meanwhile, another interesting philosophical debate wages between liberals and conservatives, about whose view of the economy is right.

The liberals are crying vociferously that this means the end of free markets and the GOP approach to economics. They say it proves the GOP theories failed.

Meanwhile, the Libertarian fiscal conservatives are shouting that Bush is leading America to socialism, as illustrated this article on Ron Paul's economic adviser railing against Bush's socialism.

In a recent article on CNN, Jeffrey Miron, makes his case for free marketers, and waxes eloquently on why bankruptcy not bailout is the answer. Essentially, he points out that the bailout will reward the worst excesses and thereby facilitate the return of such excesses. By letting banks fail, you ensure that the system self corrects itself to a state where everyone is more prudent. You won't get good behavior, if you bail out the offenders every time they slip up. He also suggests that efforts to intervene will either distort the market or fail completely. On the whole, he advises doing nothing.

Others though are less sanguine. George Soros and others are pointing out that the free market system assumes that markets are self correcting. However, Soros suggests that the evidence is that markets are not. That to be self correcting they need regulations that ensure that the players play by the rules.

Others like Sloan point out that what is happening is just normal market correction and the cries of socialism or calls for re-examination of the whole structure of government are premature and unwarranted.

Meanwhile, Nassim Taleb is challenging one of the fundamental tenets of derivative pricing and thinks their Nobel prize should be revoked. Taleb's explanation is that the formula used by Merton, Black and Scholes was a widely known formula for Markov chains, and they merely applied it to economics. Further, he points out that the data shows that the Black Scholes approach is fundamentally wrong, as it assumes the distribution of rate changes is normally distributed, when in fact, the data shows that there is a significantly higher probability of extreme events than predicted by Black-Scholes.

So, which view is right? From a Scientific perspective, all the theories have merit. For instance, Supply-side and Keynesian economics both work. There is mountains of evidence that both do. There is mountains of evidence that blind adherence to one or the other doesn't. In the Asian crisis in the mid 1990s, Malaysia and Thailand went in opposite directions, and the results for their economies was much the same. So, net net, the economic theories seem a wash.

The reason of course has to do with the fact that these debates fail to realize two essential elements of economic theory. The first is that while economic theory can help frame up the debate about what could happen if you did A vs. B, it says nothing about which is better. What would happen is a scientific question and amenable to testing, whether it is good is a moral question and a choice.

For instance, raising taxes indefinitely would in fact reduce growth. However, not providing services like social security, defense, basic infrastructure, etc. for the economy, could be devastating for many people. So, taxes are necessary, too much is not. There is of course a trade-off. How much is good? The answer is how important is protecting people, providing healthcare etc. vs. making lots of money? By the way, it can be shown that at a certain point, the infrastructure will fail to the point that incremental tax breaks will no longer generate growth, but will retard growth.

The choice therefore is a moral one.

In a pure free market system, the length of the recession can be very long and the interim downward spiral would punish a lot of market participants. The people hardest hit would be those at the fringes, i.e. the poor and the middle class. If things were allowed to play out, ultimately it might correct, but not before wreaking devastation on huge numbers of people. The reason pure free market economics has never been applied in full is that whenever things get bad, the usually powerless populace reacts badly, voting out or throwing out the government and demanding change. The longer free market approaches are tried in bad times, the more political instability it creates.

Supply side economics works too. It enriches richer people first and prioritizing the plight of poor people lower. Ultimately everyone benefits. Given the incentive to rich, means that powerful market participants invest heavily, driving investment and growth. However, in general, while the benefits do trickle down, in most economies that have tried this, income disparities have grown, not shrunk. Ultimately, what that means is that poor people have substantially lower risk tolerance and richer people (i.e. people who drive the economy) have substantially higher. Ultimately, when the people in power can no longer empathise with people who are not, it can lead to very stupid risks - i.e. bubbles.\

Keynesian theories work too. The problem with them is that the allocation of money by the government is almost always a political decision and not an economic decision. Also, governments are notoriously bad at cutting back in good times. The effect of the two is that Keynesian intervention often creates huge market imbalances, lower productivity, higher structural unemployment (usually because giveaways reduce the incentive for people to go and find work), and significantly greater long term inflationary risk - because of government's inability to cut back. On the other hand Keynesian approach substantially reduces the impact on poor and middle class, and minimizes the risk for them.

Properly regulated and governed, in all three you can avoid the worst excesses.

These are no where near complete analysis. However, the larger point is that we need to choose what effect is desirable and choose the best tools to achieve it. No amount of examination of the tools can reveal the ideal goal.

This brings us to the second fallacy. As Soros points out, all human systems are flawed. And every decision has a measure of good and a measure of not so good. The good and the not so good can be concentrated on particular sections of the economy or spread around. Over time, the dogmatic continuation of any philosophy will create sufficient accretion of the not so good aspects where the good of that policy no longer offsets it. At that point, you need a different solution.

This brings me back to David Brooks' article. In the article, David Brooks describes the effect of an Obama government, and predicts that it will ultimately result in the revival of conservatism. It's not very clear whether he wants to pass judgment, but there is just a hint that conservatism in its purest form is the better philosophy. However, in describing the effect, Brooks has explained something else very eloquently - that governments in democracies are also market participants. The swing from liberalism to conservatism in a sense is the attempt by the market to find a balance between the evils of competing approaches. The longer we double down on one or the other philosophy, the more the imbalance it creates, and the more the need for a change in direction. So, what Brooks, describes a market place where the competing ideas seek balance and equilibrium. In this sense, democracy is enabling the free market to help drive the moral choices we make.

Sachin Breaks Lara's record

Sachin just broke Lara's record for the most runs in test cricket and became the first man to score more than 12000 test runs.

Why equity infusion is better than buying bad loans

I was recently in a conversation about whether buying defaulting debt and investing in equity had the same effect. The answer of course is no. Let me explain.

Let's say we have a hypothetical bank. The bank makes a bunch of loans whose value is $100. So, the assets of the bank are now $100. Meanwhile, the bank funds these assets with 90% debt and 10% equity. So, the bank has $90 in debt and $10 in equity.

Now, if say $20 in loans were bad. Then the bank can sell the $20 in loans at market value to the government under the original Paulson plan. What would happen, therefore, is that the bank would have an asset side of $100 and a liabilities and equity side of $100. Let's say the actual worth of the $20 in loans bought by the government is $10. The immediate cost to the government was $20, with $10 of that being recoverable in future. So, the government is set to make a net loss of $10. The balance sheet of the bank remains unaffected, except that $20 in bad loans got replaced with $20 in treasury bills. What this plan did, was to prevent the loss from affecting the equity of the company. It was a bailout - transferring the banks loss to taxpayers. The bank could sell the $20 in treasury bills and lend it out, creating $20 in additional liquidity.

In the equity infusion plan, the Government could give the bank $20 in equity. The company would need to write down its loan values by $10 (remember the $20 of bad loans are actually worth $10). So, what happens is that the company now lands up with $20 in equity ($10 of the original equity + $20 from the government - $10 loss recognized). Of course, banks tend to leverage up. So, if the bank continued to maintain the same debt to asset ratio of 90%, it would mean that the debt portion of the bank could now be $180. They only have $90 in debt at the moment, so the bank can now borrow and lend an additional $90. This would be in addition to the $10 that it received from the government net of losses. If interest rates go down, then it's possible that the loans would appreciate in value and the government could make back some if not all the losses. However, given the toxic nature of the loans, its unlikely that the government would turn much of a profit.

So, the ending balance sheet in the equity infusion approach is that $20 in equity, $180 in debt, and $200 in assets. The effect was: (a) that the company was forced to absorb its own losses, (b) there was huge capital infusion into the system ($100 in this example), and (c) the cost to the government was the same, but instead of a likely loss, the government now holds $20 in stock in the company which will probably make the government a tidy profit at the end of it.

Net-net, buying bad mortgages is not good for the tax payers and doesn't induce much liquidity. Putting the money in equity infuses significantly more liquidity while protecting shareholders.

Late bloomers

In this fascinating article, Malcolm Gladwel discusses how the common belief that geniues must be precocious and bloom young is actually not supported by facts. That, in fact, many geniuses bloom late in life after years of toil and hard work, and can only get there with the help, support and love of others. Very interesting and well written piece.

McCain Transition Chief had ties with Saddam

Hmmm ... this is interesting news, and could have consequences for McCain. It seems the Chief of his transition team lobbied to have sanctions lifted on Saddam - many years ago, but doesn't look good when you declare Saddam was the evil incarnate who needed to be overthrown in a pre-emptive attack.

Palin on troopergate etc.

Palin reacting to the Troopergate report. Rachel Maddows is a huge Obama supporter, but is also a very smart and witty reporter who does a news report that's more like a partican version of the Daily Show than news. So, I usually avoid posting her. However, this one was just too funny to miss.



Meanwhile, it seems that Palin's son-in-law to be, Levi, dropped out of High School to support his newly pregnant girlfriend, Bristol. Call me an elitist, but how does getting a teenager to drop out of school make you a good mother or have the right values?

Finally, here is John Cleese on Sarah Palin. I read similar exclamations of disbelief from blogs around the world.

The Bradley Effect

One of the issues that has become a subject of speculation is the Bradley Effect. Does this effect really exist? How does it affect the race?

First, what is the Bradley effect?

The effect is named after Tom Bradley's run for Governor of California in 1982. On October 7th, Tom Bradley, an African American, led his GOP opponent by more than 12 points and looked set to become the first African American governor. Even on election day, some exit polls had him ahead, and some news agencies called the race in his favor. Then the results came in and he lost. The popular explanation for the error was that people were not willing to tell pollster the truth about their voter preferences because of racism. If that explanation is correct, then polls not withstanding, Obama would need to lead by 6% or more in the polls to win the election.

So, is the Bradley effect impacting the polls in this race? Probably not. Why? Well, consider the following:

• It's not clear that the Bradley effect ever existed. It may have been a cop out by agencies that got things wrong. This post explains why.
  
• If there is a Bradley effect, it didn't show up in the primaries. Generally, except New Hampshire, the polls were spot on in the primaries. Even in New Hampshire, it was more some assumption errors than the Bradley effect that explains the discrepancy.
• Much has changed demographically in the US. African Americans and minorities now make up much more of the electorate. If we assume that there is a Bradley effect, there may in fact be a reverse Bradley effect where minority turnout and votes swing so dramatically that it completely offsets the effect.

... but, that should not make you more comfortable about the polls, because:

• Polling samples people's opinions and then projects it on the population using a segmentation based on historical data. This method works well as long as the dynamics of the campaign are similar to past elections. However, if there are changes in voter turnout or some key assumptions, e.g. like having a woman or an African American on the ticket, history is not a good guide for these assumptions, and the polls become uncertain guides. Case in point, the 1992 UK elections.
• A lot of the polls at the moment factor in the opinions of the under 30 age group, which overwhelmingly supports Obama. This age group is notorious for not turning out. Their low turnout cost Kerry and Howard Dean their elections. Their low turnout impacted Ron Paul, who didn't get close the the votes he was polling in the pre-election polls. Will they turn out for Obama in the general elections as they did in the primaries?
  

http://www.fivethirtyeight.com/ has some more interesting thoughts on this. Overall, what all this tells us is that while polls are interesting, their predictive value in this election is uncertain. They may well be spot on, but they may be wildly wrong.

Racism in the Presidential race

There are a number of articles and opinions flying around on how race plays into the race. A couple of the more interesting blogs that have been tracking this issue are these from the BBC that track Obama and McCain on the campaign trail. They are fascinating blogs, even if you are not interested in the race question.

Here are some interesting excerpts from the blog following Obama on the campaign trail:

So no-one on the road gets into the detail of McCain's or Obama's plans. What they do talk about are the "low blows" of the campaign.

In Pennsylvania at the weekend, I was at two events with Barack Obama. When he mentioned John McCain's name, the crowd booed. It was instant, immediate. It seemed to me the "boo" of a ball game, tinged with a little irony. I did not detect any hatred. Obama immediately told the crowd that he respected John McCain's service to his country but that he disagreed on the economy and on other issues. He added that we can disagree and still respect each other.

Last week at a Sarah Palin rally in Ohio, the feelings were different. Many of the people there detested Barack Obama. "Detest" is a strong word, but I felt their dislike of the Illinois senator was visceral. Nearly everyone I spoke to doubted his patriotism.

One conversation went like this: "Do you think Barack Obama is a patriotic American?" "No. No, nothing in his background indicates that." The man went on: "I think he's got too much Marxism and black power in his background."

The man, on camera, added a bit of analysis; he thought Obama was angry because he had some white blood in him.

Another woman told me: "I just believe he is not an American. I just think he's angry."

A younger woman had a poster with a picture of Adolf Hitler on it. Hitler's face had been replaced with that of Obama. We did not use this in our coverage because we did not think it was in any way typical of the Republican crowds.

Yet the people around her did not challenge her.

An older man was explicit in that he thought "race" was an issue. But what caught my attention was "patriotism".

In our conversations, many of which were on camera, I struggled to find someone who felt Barack Obama was "patriotic".

I tried to nail down what lay behind this. Many people were disturbed by Obama's associations with the radical William Ayers and with his former pastor, the Rev Jeremiah Wright.

Yet I felt the concerns ran deeper than that. It was the fears of "otherness". Many of those we spoke to just felt he was not like them, he did not share their values. They spoke about lapel badges, saluting the flag and, above all, about the military. For some, being patriotic was about supporting the military.

I asked a question as to whether it was "patriotic" to oppose the invasion of Iraq. Some agreed - reluctantly, I thought.

These may be superficial encounters but the "boos" in Pennsylvania seemed different to the comments in Ohio.

…

The other fear concerns race, that some working class Democrats won't vote for a black candidate. The issue is openly discussed and no-one knows what part it will play in the silence of the voting booth.

This afternoon we were in Scranton, where Bill and Hillary Clinton appeared with Joe Biden and his wife Jill. There are still people who voted for Hillary in the primaries but are resisting voting for Barack Obama. We met a biker called Joe who was precisely in that position. He said he'd supported Hillary but was worried about Obama's background. …

The signs are, however, that the economic crisis is driving doubters into the Obama camp. The pollsters are noting a sharp increase in support for Obama and most of that is due to a feeling "that the country is on the wrong track".

…

Asheville, North Carolina: The first deep shades of autumn have descended on North Carolina. The crowds at the local high school memorial stadium were still filing in when Barack Obama started speaking.

It looked impressive, but a young man said to me: "Go 10 miles up the road into the mountains and you'll hear a different story. "Race is still an issue here."

So, later, we drove up I-63 and the Leicester Highway and turned on to a road that ran through the hills.

We were looking for interviews when we saw a man working a plot in the late afternoon sun. He was in his 50s and wore dark overalls.

He drew out his words as he thought about the election.

"I'm a Southerner," he told me, putting tomatoes into a wicker basket. "My grandfather owned slaves, but I'm thinking of voting for a black man."

I looked at him. The comment seemed to surprise him even as he made it.

He thought about it for a while and added: "It was the Wall Street bail-out that has done it."

He was disgusted that the reckless bankers were being helped - he didn't agree with debt. He was sick of Washington and was prepared to give Mr Obama a chance.

"Something is wrong with America," he said.

I asked him to go on camera but he refused. "I see how TV chops you up," he said, without meaning offence.

But he confirmed that in these rural areas race is still an issue.

For men like himself, electing a black president is still a big step. The young man at the rally had been right.

But this brief meeting confirmed something else: that the economic turmoil is challenging old certainties and prejudices.

Maynard Keynes and economics revisited

John Maynard Keynes' economic theory fueled the approach to market management between the 1930's until the Reagan era. In this article, the author argues that Keynes would have a better understanding of what just happened in the US than most modern economists. It makes for interesting reading, even if you don't agree.

Since the 1980s, the vogue has been Reaganism, which is actually based on Milton Friedman's ideas of economics, and is often posited as a theory that contradicts Keynes. Of course, such claims of mutual incompatibility are usually proferred by those with political axes to grind. From a purely positive economic perspective their theories are largely compatible, with a few adjustments.

Fiscal and monetary policies are just different levers. They have differences, which make them more or less efficacious in different situations. Ignoring one in favor of the other, or just being profligate and irresponsible with either one could have disastrous consequences. In the current situation, the US was irresponsible on both.

Mudslinging through the ages

This is a fascinating article that recounts how the mudslinging so apparent in this time's election campaign is actually a time honored tradition in US Presidential elections. I particularly liked Lincoln's comebacks cited at the closing. Apparently, Lincoln had responded to assertions of "Judge Douglas" on several matters, allowing that he was certain Douglas wasn't intending to lie. He also, reportedly, compared Douglas to an "obstinate animal" and added, "I mean no disrespect."

Actually, mudslinging is not so much a US tradition but a general human failing. When you can't win an argument through the force of your logic, resort to undermining your opponents credibility and character. History is replete with examples of tactics that leverage smearing opponents in Britain and France, and in slightly different manifestations in monarchies around the world. And, its not been limited to politics alone. Consider for instance the attacks against Charles Darwin.

Of economics and related news

This is one of the better explanations of the credit crisis that I have read. It explains why the mark-to-market rules precipitated a major collapse. It explains why government guarantees of certain transactions is proving to be so effective in the UK. It also alludes to reasons why the latest Paulson plan, i.e. buying equity in the banks, may prove the best solution yet.

In other economic news, Paul Krugman just won the Nobel Prize for economics.

This is a very interesting perspective on the crisis from George Soros.

Racist, where art thou?

This is a clip from Countdown on MSNBC. If you had been wondering where all the racists had got to, wonder no more. They were all at the McCain-Palin rallies.



Palin has managed to draw all the racists and bigots to their fray.

Bouquets and Brickbats

The Maharaj is retiring from Test cricket. Perhaps he should have done it earlier. Or may be not if one considers the performance of his expected 'replacements'.

This article was splendid for the praise and equanimity it shows in balance. My favorite -
Ganguly could easily have been the greatest batsmen of our times had the likes of Sachin Tendulkar chosen another career.

I might argue about his talent (or sometimes, the lack thereof) but there is no questioning his committment, audacity, effort, daring and the "fire in the belly" that charged the new Indian team. Nuff said. Thanks Dada and wish you the best.

Of lies and politics

This is the latest from McCain. They clearly are stepping up the attacks. The problem is that almost none of it is true.



For instance, it is true that Obama served on the board of the Annenberg Challenge with Bill Ayers. It is also true that the Annenberg Challenge is an organization funded by GOP and former Nixon administration official, Walter Annenberg, and also has the GOP member Arnold Weber on its board. So, Obama gets smeared as a terrorist for working with a Republican funded organization.

It is also true that Democrats, including Bill Clinton, were also involved in pushing for more lax regulation. However, McCain now alleges that a law passed in 1985 requiring underwriting minorities is responsible, which seems bizarre to anyone except those who want this to some outsider or minority's fault.

They also put the blame for deregulation completely on the Democrats, which seems to conveniently forget that most of the legislations were passed by Republican Congresses to resounding cheers from the GOP. The "ownership society", i.e. housing for all, was in fact Bush's specific campaign promise which helped propel him to victory.

Finally, the NY Times reports that McCain's justification for linking Obama to the housing and financial crisis is a line from Obama's speech where he said, "Subprime lending started off as a good idea - helping Americans buy homes who couldn’t previously afford to." The problem is that this was the first line in a speech in which Obama explains the source of the mortgage problem and outlines a plan demanding more transparency and regulation. Most people who'll see the ad, of course, won't know all this. So, the ad will likely be effective.

Objectivity and politics ...

In Charles Krauthammer's recent piece he argues: "Obama is a man of first-class intellect and first-class temperament. But his character remains highly suspect. There is a difference between temperament and character. Equanimity is a virtue. Tolerance of the obscene is not."

Really? So, how does he justify Sarah Palin and John McCain smiling blithely and egging the crowd on as the crowd shouts, "Kill Him! He's a terrorist! Off with his head!" and various racial epithets? Well, he doesn't, of course. In fact, conservatives are apparently bewildered by the media criticism of Palin, and argue that both sides engage in this type of rhetoric. Really? No sign of such hate spewing from the other side, at least not as far as anyone covering the Obama campaign can tell.

However, while I jump to condemn him, might I also be permitted to recognize that Mr. Krauthammer is the victim of one or two common human failings (you can read Daniel Gilbert's book 'Stumbling on Happiness' for a a more humorous explanation of these).

The first fallacy is how we accept and reject information. Rationalists may believe that they are like Mr. Spock, absorbing information, evaluating it with an unprejudiced eye, and then reaching a conclusion. They may believe it, but they would be wrong.

Experiments suggest that human beings generally evaluate the worst characteristics when rejecting something, and the best when accepting. So, to Mr. Krauthammer, the relevant information about Obama is the worst things about Obama, i.e. every dubious association he has ever had, his lack of experience, etc. In contrast, the relevant information about Sarah Palin are the best things about her, i.e. her ability to connect with people, be positive, and be tough. Sarah Palin is experienced because she has "executive experience" a standard by which she has more experience than John McCain. Obama is not because he has only been a community organizer, college professor, state legislator and US Senator. The point is those who support Obama can't see what Mr. Krauthammer sees and vice versa, because they have already formed their judgments and are actually seeking only confirmatory evidence, and are dismissing the non confirmatory evidence. In some cases, in experiments, people with opinions are physically incapable of seeing the evidence that does not conform. Admit it, you have sometimes turned away from information because you didn't agree with it. We all have. That's why it is so hard to be objective.

The second fallacy has to do with how those preconceived notions and judgments are formed. There is no comprehensive theory that explains how that initial judgment is formed, but we do have a lot of concepts that explain some of it. I won't attempt to go through all of them, but let me touch on a couple.

We tend to believe things that are repeated often. It's the entire basis of advertising. Say something over and over again and after a while it feels true.

The other is that we make implicit associations that are based on unconscious frameworks. For instance, in test after test, people of all races have been found to unconsciously associate African American with criminal behavior. Even African Americans tend to exhibit this bias.

The fact that you have implicit assumptions or a biased framework does not in itself lead to overt racial bias. However, it makes you predisposed to believing adverse information. Couple that with frequent repetition of that information, and a complete lack of interactions where the counterpoint is effectively presented, and very soon you may actually exhibit overt racism. Now, if you actually worked with someone or frequently interacted with someone, over time, you'd come to realize that a lot of the opinions were wrong. However, it would not necessarily eliminate the framework nor replace the opinions of others. The unconscious view of the world is surprisingly resilient.

Mr. Krauthammer's inconsistency in evaluating Palin when she commits transgressions at least equal to Obama's, suggests that he is victim to one of the most common fallacies of human behavior - i.e. he is seeking confirmatory evidence. Was this driven by race? I don't know. Was this driven by the frequency with which conservatives sling mud against Obama? Again, I dont know. However, it would be surprising if Mr. Krauthammer's prejudice wasn't, at least in part, affected by race and his constant association with people who repeat his views.

However, turning from Mr. Krauthammer to the campaign strategies, it is clear that both campaigns are using these fallacies to their advantage, Obama has systematically rebranded McCain as a Bush clone, helped along in no small measure by McCain's erratic lurch to the right. Meanwhile, the latest vehement attacks by McCain and Palin against Obama linking Obama to Bill Ayers seem designed to exploit the implicit unconscious racial bias, which they hope to reinforce through repetition.

Here's the question - to what extent has Obama reinforced his image so that people will tune out McCain's allegations? To what extent is racial bias so deep seated that it could change people's opinions with just four weeks of mudslinging? To what extent can Obama blunt the attacks by tying McCain to the economic crisis and Bush? We will soon know the answers to some of these questions.

Microcredit

Some of you might be intimately aware of the concept. Even so, this PBS video might be a good refresher. Take some time off (57 min) and give it a listen. There are some interesting nuggets in there. For example, how this works when trickled through women versus men.

Errors and misdirection ...

No, this is not another post on Palin. Recently, Obama has released a few statements and ads that bear correcting.

In one recent radio ad, Obama alleges that McCain has consistently voted against Stem Cell research. This is misleading. Pre-2000, McCain was against stem cell research, and Palin has a position against it, but McCain has voted for stem cell research since 2000 according to NPR.

In the debates and ads, Obama's campaign also alleges that McCain's healthcare proposal would not help at all. If I remember correctly, it says, "One hand giveth, while the other hand taketh away." This is correct, but misleading inasmuch as the conclusion it draws is that McCain's proposal wouldn't help.

It is true that McCain has proposed to tax people's employer provided healthcare contributions. The average healthcare plan is probably around $12,000 on average. Which actually implies the effective tax on this is around $4,000. The tax rebate offered by McCain for families is $5,000. It's more complicated than I am making it, but this actually implies that it's possible that many if not most people with employwr provided healthcare may actually get a net tax rebate under the McCain scheme.

Obama, meanwhile, calls his plan universal healthcare. It's nothing of the kind. It does provide a government backed alternative healthcare package to anyone who wants it. He does also want to mandate that insurance companies cannot turn away people with pre-existing conditions. However, the savings for almost everyone else is largely supposed to come from computerization, data sharing, etc. most of which isn't going to be realized for years.

The problem with McCain's idea is not that it is not going to give a lot of people some rebate. The problem is that it makes no attempt to address the underlying issue. It doesn't, for instance, compel insurance companies to insure people with pre-existing conditions. So, there is no change there. It gives $2,500 in a tax rebate to individuals, when the average individual insurance plan costs more than $4,000, which will probably still leave a huge number of people uninsured. It does nothing to reduce the cost of healthcare. It does attempt deregulation to encourage more competition for health insurance, but lack of competition for health insurance has never really been the problem. So, his plan does reduce healthcare costs for a lot of people, but it does so by giving a $1.5 trillion handout (by some reports on NPR) without addressing the underlying issues.

Obama's plan also has a lot of flaws, but by creating a low cost government provided alternative, they can create a player that forces insurance companies to lower rates and keep rates low. It insures the uninsured. It does create some regulations that should ultimately lead to reduction in costs for all, and it addresses the issue of people with preexisting conditions.

So, all in all, McCain has a massive entitlement program that doesn't address the basic problems, but that does give more people cash back, Obama addresses the underlying issues better (albeit by using the government rather than markets), but gives less to those with insurance already.

This is not really explained by the Obama ads. McCain, I'm sure, will attempt to distort it the other way.

Hotelier Theory and Political Campaigns

Just saw McCain at some rally, ranting along the same lines that have become all too familiar - paint Obama as risky, unreliable, un-American. Problem is, all that resonates well with audiences that were not going to vote for Obama anyways. I'm not so sure that it's effective for people who are undecided.

Kerry and the Democrats, I thought, made a different but related mistake in 2004. They didn't have to paint themselves as the exact negative image of Bush. At the very least, try and avoid being perceived as such.

Reminds me of the Hotelier Theory. It's not a perfect fit for political campaigns, but has some bearing in terms of which constituency should you try to appeal to along a spectrum. Imagine a 10km long beach with just the one restaurant at the 4km mark. You are thinking about setting up your restaurant. You don't go set it up at the 9km mark. The better solution is closer to the 5km mark. You will get business from everybody on beach between the 5km and 10km mark. And you get to steal some of the other restaurant's business as well. Of course the next restaurateur does the same to you.

The reason the Hotelier theory can't be taken to an extreme in politics and other arenas is that you need some "distance" between you and your opponent and be seen as sufficiently different choices. The common mistake is to make a dash for the other end.

It's another matter, however, if the McCain camp is hoping rather, to simply gnaw away at some subconscious racism, essentially saying "if you think we're a tie, I'm the white guy. I'm the Vet and my middle name is Sidney not Hussein." Unfortunately, this isn't subtle enough to get straight to the subconscious, and while you might gain a few votes this way, you end up pissing off some as well. There's a bit of the "previous successful model" trap that I think his strategists have fallen into. Rove and his proteges were hired because, admit it, they pulled of a fantastic win in 2004. Let's see how it plays out in 2008.

Did you know?

A nice one - though riddled with some illogical conclusions. It makes one think and provides some real 'arbit gyan'


http://www.youtube.com/watch?v=ljbI-363A2Q

Can pastors endorse candidates?

Professor Stanley Fish provides some of the most well reasoned arguments on issues in the press. In this article, he discusses the issue of pastors exhorting their parishioners to vote for one or the other candidate, generally John McCain.

If you missed the issue, here's a brief summary. The current tax code currently disqualifies religious organizations from enjoying a tax exempt status if they "participate in or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office." Churches that endorse candidates risk losing their tax exempt status. Several pastors argue that this is a violation of the their First Amendment right to freedom of speech and religion. So, they have all given vituperative sermons in favor of one of the candidates, usually McCain, and challenged the IRS to take away their tax exempt status.

Prof. Fish argues very effectively that the underlying argument is actually a difference in world views that cannot be resolved through rational argument. You can read his article and see if you agree.

In my view he has overcomplicated it. Tax exempt status is essentially a way of the government giving a handout. It is unclear why religious organizations are exempt in the first place. But, given that they are, if religious organizations were now permitted to take political positions, wouldn't that in effect be a tax subsidy to one side of the political argument? While I am with the pastors that they should have the right to say what they like from the pulpit, I don't see anything in the constitution that tax payers to subsidize such speech. That's the real issue.

Obama retort

This is the 13 minute video released by the Obama campaign on McCain's ties with the Keating Five. It's very timely, as the Keating scandal was related to a market meltdown in the finance industry which bears some resemblance to what is happening now.

The speed with which the Obama camp released this suggests that the Obama camp expected an October surprise with Reverend Wright and Bill Ayers, or something like that, and had their own ace up their sleeves to counter McCain.

Hey There Delilah Remix

Okay, technicially it isn't a remix. But it's something to tickle your funny bone. Most of you will likely recognize the tune. It's a classic - "Hey There Delilah by the Plain White Ts." It's not an editorial so go easy on the kids. Loved the line about "seeing the moon."

Life stories ...

This is a very interesting version of McCain's life story. It may be a bit biased, but still makes very interesting reading. It suggests that McCain's erratic behavior far from being recent is actually a character trait that would have been self evident to anyone who cared to look, and dates back more than 30 years. And this article suggests that three crashes early in his career led Navy officials to question or fault his judgment, leading the LA Times to conclude he was cocky, occasionally cavalier and prone to testing limits.

More on McCain: in this post, McCain discusses his assessment of Osama Bin Laden as a threat in 1998. His assessment? Well, he didn't think much of Osama as a threat, unlike Clinton and Biden. Remember, he pooh poohed Obama's suggestion that the US should focus on Osama, Afghanistan and Pakistan.

Meanwhile, Sarah Palin continues to astonish. First, there is troopergate, which is still ongoing and a report is due in weeks. Then there is her astonishing suggestion in the VP debates that may be the role of the Vice President should be expanded. Then, she appeared to suggest that she sided with Cheney, that the VP was a member of the legislature and yet not, thereby suggesting wiggle room. This is an extraordinary expansion of the Vice President's powers. Now, in this article, it seems that Palin has been allegedly attempting to avoid the disclosure and transparency laws in Alaska by using her private email account for official business. If this sounds reminiscent, this was exactly how Cheney and Bush avoided indictment so far, by deleting all the emails and by using the GOP mailbox rather than the government mailbox for official business.

Touching story

This is an extremely touching story, sort of out of a women's magazine. Sounds too soppy to be true, but makes a wonderful anecdote if true. It basically talks about how Obama may have once saved a young girl at Miami airport.

Those children ...

This is every parent's nightmare ... Sarah Palin's children appear to have been trained in spunk.

What next?

Polls are indicating a massive surge for Obama redefining the electoral map. This is one surge that McCain doesn't support. So, what's he going to do? The answer the McCain camp seems to begracitating to is to "take off the gloves," i. e. get negative and start making wild accusations. So, expect a resurrection of Reverend Wright and William Ayers. In fact, as this article suggests, Sarah Palin has started it already, by personally giving credence to something like the Bill Ayers controversy (interesting for someone being investigated for significant transgressions in office). Will it work? As this insightful article by Nicholas Kristof suggests, this approach just might work, not because of overt racism, but because the biases against race are so ingrained that in ambiguity we tend to run the other way.

Meanwhile, this is an uncannily accurate summary of the strategies that the two VP candidates used at the VP debates.

Palin Parsed

Shockingly accurate flowchart to help you parse Palin's debate performance yesterday. This is from the Daily Kos site.

Click on the image to see it zoomed in.

Something to consider ...

This is an example of how Fox News spins things. Essentially, Bill O'Reilly on behalf of the GOP claims that because the Congress was controlled by the DNC for two years, the economic crisis is all the DNC's fault. Actually, Clinton perhaps had more to do with it than the current Congress. However, it raises an interesting point. If Obama wins, the GOP could paint the entire economic collapse on the "failed policies of the DNC". In fact, it may not be in the GOP's interest to win. If they did, they may actually have to clean up the mess, and they don't have any idea how to.

Is she qualified?

If you have not seen the Katie Couric interviews of Sarah Palin, then here they are. They speak for themselves.

Watch her extraordinary confidence and ease when she gets a question which she (or her handlers) anticipated and what happens whenever she's asked for a deeper explanations on unexpected subjects.

(In case you don't have the time here are some short summaries:

This is a quick (somewhat biased) summary of the highlights:




This is SNL's take some of her more interesting answers (there are more such versions on youtube):



)


Here are the longer clips.

These are clips on the economics:







In case you missed it, here's Cafferty on one of the more lucid bits. I mean talk about liberal bias:




Did you get all that? I mean, I studied this stuff for years and even I didn't follow what she said about why the $700 Billion is necessary! What an intellectual!


This is her on foreign policy:




Here, among other things, she tries to remember newspapers she reads. Remember she's a journalism major:




This is what she said on Supreme court cases:




Here's the transcript of what she said on her foreign policy credentials:

COURIC: You've cited Alaska's proximity to Russia as part of your foreign policy experience. What did you mean by that?


PALIN: That Alaska has a very narrow maritime border between a foreign country, Russia, and on our other side, the land-- boundary that we have with-- Canada. It-- it's funny that a comment like that was-- kind of made to-- cari-- I don't know, you know? Reporters--

COURIC: Mock?

PALIN: Yeah, mocked, I guess that's the word, yeah.

COURIC: Explain to me why that enhances your foreign policy credentials.

PALIN: Well, it certainly does because our-- our next door neighbors are foreign countries. They're in the state that I am the executive of. And there in Russia--

COURIC: Have you ever been involved with any negotiations, for example, with the Russians?

PALIN: We have trade missions back and forth. We-- we do-- it's very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where-- where do they go? It's Alaska. It's just right over the border. It is-- from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to-- to our state.


Here is CNN's attempt to verify whether she can see Russia from Alaska: