More motgage trouble

In this article, the author discusses the Alt-A mortgage resets, which are expected to peak in 2009-2010. Essentially the author argues another risk uptick is in the offing which will throw a bunch of currently healthy people in a mess, particularly in a worsening economy. Not sure how credible the data is.

If this is true, can this averted? Well, maybe. One difference between the Alt-A resets and the subprime mortgage resets is the ability of the borrowers to refinance. If the US government is able to get Fannie Mae and Freddie Mac to lower refinance rates and create sufficient liquidity, some of the impact of the reset may be offset. If, if, if ...

Ironical kill by great white

Will ironies never cease. First, the famous environmentalist and naturalist Steve 'crocodile hunter' Irvin was killed by a ray in 2006. Now Brian Guest, a naturalist who campaigned to rescue Great White sharks, was eaten by one while swimming only meters away from his son off the coast of Australia. The article gives a gruesome account of his death.

He reportedly wrote on the Western Angler website forum in 2004: "I have always had an understanding with my wife that if a shark or ocean accident caused my death then so be it, at least it was doing what I wanted. Every surfer, fisherman and diver has far more chance of being killed by bees, drunk drivers, teenage car thieves and lightning. Every death is a tragedy – regardless of the cause – but we have no greater claim to use of this earth than any of the other creatures [we] share it with."

It doesn't seem as if the Great Whites discern between their friends and enemies in picking their meals.

Fear of cliffs

If you expected an article about the white cliffs of Dover, you will be sorely disappointed. I am referring here to cliff events in the context of the economy.

In recent days there have been frantic efforts by many in the government egged on by many reputed economists including advocates of free markets to intervene in the market and prop up failing institutions. They have intervened, but seemingly to little effect. What's going on? Why is there such a panic?

Underlying the theory of free markets is an assumption that free markets, even when not perfectly efficient, are mean reverting. This is why advocates of non-intervention speak of "market correction". The idea is that while there can be a distortion in value for a time, ultimately everything will automatically revert to a true value. Of course, this view assumes the existence of such am invariant 'true value'.

There is, however, a more interesting set of theories that have been evolving that postulate that natural systems, including financial markets are chaotic. This means, that while they may occasionally appear to be mean reverting, there is no reason that they should revert to a mean. Instead, even small changes can have extremely magnified effects resulting in a different level in the long run. In such systems, small changes can have huge, often catastrophic effects. Examples of such chaotic changes are literally the straw that breaks the camel's back or the butterfly effect. In this view, there are times when a financial system like the economy can stand at a brink, where on one side, it seems unwell but curable, and on the other it faces complete ruin.

Let me illustrate with an example.

In the early part of this decade, as Enron devolved into a financial debacle, disclosures made to ratings agencies put the ratings agencies in a quandary. On the one hand, if they continued to maintain the same credit rating, then it was possible that in the interim time the company could find a way to pull itself out of the mess. On the other hand, if they reduced the rating, then it would automatically trigger a series of obligations that would hinder Enron's ability to borrow. The resulting mess would lead to further downgrades, and so on, quickly reducing Enron to junk bond status.

This was an example of a credit cliff. It's a situation where a small change in the conditions, i.e. Enron's credit rating, could push it over a cliff.

Two things to note.

• Firstly, the cliff was characterized by the value was driven belief that was ultimately self referential - i.e. it had value because people believed it had value. It was solvent as long as people believed that it was and would continue to be solvent.

• Secondly, the fiction was ultimately unsustainable.

How does this relate to the US economy? Well, you see, all those panicking economists are actually worried that the US economy is at such a cliff. The value of US companies, US markets, US debt and ultimately the US economy is ultimately dependent entirely on everyone's belief in the US economy and its ability to survive this crisis.

The problem is that the US economy as a whole is over-leveraged and over valued. The US need a HUGE amount of money to dig itself out. The only way for the US to get that money is that everyone continues to believe in the US.

With huge foreign holdings of US debt and US investments, if people suddenly started to doubt the US and started to disinvest, then the US economy could, in theory, collapse. The problem is that unlike the mean reverting view, in this view, the new equilibrium would leave the faith in the US economy so damaged that it would permanently destroy the US economy's value, and the US would never completely recover.

The Fed's experiment with Lehman caused a crash that has everyone spooked. They won't try it again. No other large US brand name can be allowed to fail. What the US government, Fed and all those illustrious economists are hoping is that if they can just hold on long enough, things will get better. They are banking on the assumption that it's in no one's interest to let the US fail. The alternative is a complete collapse of the US economy.

Are we really at such a cliff? Who knows? But you don't really want to find out by stepping off the ledge, do you?

However, note that all these interventions maintain a fiction. They keep you on the right side of the ledge. They don;t get you further away from the ledge. In fact, in some ways, they lift you up a bit, making the fall, if it comes, all the worse. So long as there is no catastrophic collapse of the economy, you could say these measures are working. But you are still at the edge.

To fix things, we still need to fix the underlying problem - asset price inflation. There are only two solutions. Either let the asset prices deflate. Or, let them stagnate until the value increases to the price. Neither is attractive. Both take time, maybe years. And, remember the second lesson from Enron is that ultimately the fiction can only maintained for so long. Let's hope the creditors of the US economy are more patient.

On the bailouts ...

Dhakks and I were having a discussion recently on the bailouts, and I was almost inspired to write a lengthy piece explaining my views. But then I came across this Calvin and Hobbes strip that does it so much better. Enjoy! (click on the strip to expand)

Should India receive a Dinosaur Tax?

I've often heard the idea toyed around that the world should perhaps pay Brazil an oxygen tax. No, the UN isn't seriously contemplating that.

But now, methinks, the world owes India a Dinosaur Tax. There's new evidence that suggests lava flows, and related sulfur emissions, in India led to the decline of dinosaurs.
It's a nascent investigation but you can read more about it here.

Fun stuff

With the economy tanking, consumer prices falling by the largest amount in 50 years, the Fed cutting rates to unheard of levels (apparently unaware of the complete failure of supply side economics over the last year), and Madoff adding to gloom and doom, I thought something more entertaining may be in order.

Dick Cavett recently got an earful for his amusing piece, "The Wild Wordsmith of Wasilla" where he explores gems such as: "My concern has been the atrocities there in Darfur and the relevance to me with that issue as we spoke about Africa and some of the countries there that were kind of the people succumbing to the dictators and the corruption of some collapsed governments on the continent, the relevance was Alaska’s investment in Darfur with some of our permanent fund dollars." It's stuff you can't make up.

His latest piece on Gov. Blagojevich is equally amusing, as he ponders, "The question overhanging this sordid mess, you might agree, is, “How did such a specimen ever get elected?”

It’s as if a soldier, tested for his fitness as potential combat leader, passed his physical despite scurvy, pyorrhea, Jake leg, leprosy, the quinsy, contagious influenza and at least two trick knees."

It's just what I was wondering.

And, if you missed it, President Bush provided his contribution with the famous shoe ducking incident, which just about summarises his presidency.

The $50BN fraud

This is the latest scandal to hit Wall Street. The facts are simple. Bernard Madoff, a hedge fund manager, has for years apparently run one of the biggest scams on wall street. He essentially took money from new investors and paid off older investors with it. The entire house of cards has collapsed with the fall in the world markets. The aggregate losses to investors, which includes some big names across the world, is estimated to be $50BN. He has been arrested, and is out on bail.

The puzzling part is that for years, investors, bankers, lawyers, IRS agents and auditors all scrutinized his books and concluded he was completely above board. The fact that this could continue for years (some estimate 10+ years) without alerting any regulators has investors shaken. The BBC is reporting that this has shaken foreign investors' confidence in the US regulatory system to an extent that could potentially have serious consequences for the US.

By the way, this is a classic Ponzi scheme. A Ponzi scheme is one where you delude people into thinking you are making them money by paying them off with money from incoming investors. You can keep this going so long as everyone trusts you.

The term "Ponzi scheme" refers to Charles Ponzi. Charles Ponzi was by no means the first to conceive of this. However, he did do it more extravagantly than most. In 1920, he was involved in a scheme to make money off arbitrage on postage stamps that promised to "double your money in 90 days". He realized soon enough though that he didn't actually need to buy the postage stamps and exchange them as he promised. He could do it on his books and everyone would go along with him. So, he kept paying off people with the money he collected from incoming investors. Ultimately, his scheme collapsed leading to his ruin, arrest and jail. He died in poverty in Brazil. Before he died, he is reputed to have told a reporter, "Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over."

India placed second at Miss World 2008

Ksenia Sukhinova has won Miss World 2008, while Parvathy Omanakuttan from India has come in second and Gabrielle Walcott from Trinidad & Tobago has come third.

Lessons from Japan

In 1990, Japan suffered a massive financial crisis. Their banks had been involved in profligate lending, resulting in a housing boom. Then after an all time high on December 29, the Nikkei crashed. Housing prices began to slide and Japanese banks were left holding billions in non performing assets. This caused a banking collapse that spread into a recession.

The Japanese response to the crisis was, at first denial, and then a reluctance to intervene. However, Japan also tried all the measures the US is contemplating, lowering interest rates, fiscal stimulus, tax cuts, etc. The result:

The chart above shows the result. The Nikkei 225 index has never again reached anywhere close to its peak in December 1989.

In this article, the authors argue that the real culprit was not the actions taken by the Japanese government, but the relative inaction, the changes were slow, and there was reluctance to make large enough bets (i.e. relatively tight fiscal policies) that have caused the subsequent gloom. This view is echoed by the consensus opinion of economists as illustrated here. And, in this article, the current actions taken by the US government are compared to actions by the Swedish government (only much more accelerated), and the Swedes did get their act together.

Having said all this though, the lesson that Japan holds for us is that while there are a plethora of opinions on what the right thing to do is, if mismanaged we could see a very long and hard route to recovery.

Economic collapse?

This article in the Atlantic suggests that the Obama team is worried about the real possibility of double digit unemployment and the potential collapse of large but unstable foreign economies (Pakistan?). Doesn't sound good. Hopefully, they'll think of a solution.

Corruption in the windy city

Blagojevich, the Illinois Governor, has been caught attempting to make money by selling such mundane things as the Obama's Senate seat to the highest bidder. The press has led the charge as judge, jury and executioner, with good reason, given the extraordinary tapes of phone conversations. In one of these conversations he brazenly declares, "[the Senate seat] is a (expletive) valuable thing, you just don't give it away for nothing." Ah, Lincoln would be proud.

The expletive laced conversations was enacted on the Rachel Maddow Show to the amusement of viewers:



This is a very interesting piece that outlines Obama's many associations with the said Governor. As the article points out, it would be hard for a politician from the state legislature in Illinois not to have had many an association with the murkier side. Obama is no exception having had extensive dealings with both Blagojevich and Rezko, and he certainly has friends in high and corrupt places. In a state where three of its last eight Governors spent time in prison (Blagojevich would make the fourth), it would have been nigh impossible for a rising star like Obama to have avoided them. As Blagojevich's highly expletive laced opinion of Obama in this piece illustrates, Obama was not playing ball on Blagojevich's demands for money for favors. But, while Obama's reputation may remain unscathed in the eyes of his many supporters, the GOP, conservatives and Fox News have already gleefully declared him guilty by suspicion. Read the conservative bloggers and you'd think Obama committed the crime himself. In fact, the irony of it may be that Obama himself may have expedited Blagojevich's downfall by championing a revised ethics bill, which forced Blagojevich to attempt to speed up his takings before the bill took effect. Also, while Rahm Emmanuel's aides deny it, the chatter on the blogosphere is that he or someone on Obama's staff may have tipped of the Feds.

Apart from the obviously criminal behavior, Blagojevich's seems to have been astonishingly stupid in not following his own admonishments of caution (there are extensive pieces where he advises the parties on the phone with him to always assume someone is listening). As with so many other corrupt politicians before him, lulled by previous successes, he seems to have indulged in increasingly risky behavior, a.k.a. Elliot Spitzer in many ways.

Still, in some ways, as a rick38 on this blog points out, the press seems to forget that people are innocent until proven guilty. As rick38 says, "Much talk is made about Blagojevich “scheming” to sell a senate seat, but scheming alone isn’t enough to convict anyone. He has to be caught trying to make a deal before they can even think of indicting him. But since he was exposed before he had a chance to carry out his scheme, his plans have become thwarted, and he may now get off scot free.

If they (Fitzgerald and the Tribune) had held off until Blagojevich had shaken hands with someone, they would have had enough to force him to resign, allowing the Lieutenant Governor to step in and select a successor to Obama in accordance with the Illinois Constitution. They would also be able to pursue the case to its completion and get more goods on more people inevitably involved. ..."

Having not seen the evidence in the case, I can't say how prescient Rick38 is.

Palinisms

I recently came across a quote from Sarah Palin where she strings together seemingly sagacious phrases and multi syllabic words to produce sentences that defy explanation. I began to ponder whether, with Bush about to fade away, Palinisms are going to be the new Bushisms. I started trawling the net for a list of fun examples and it seems I wasn't the first to think of this idea. Here is a list of some famous Palinisms. A review of this attempt to diagrammatically represent her sentences reveals why I believe Palinism is to Bushism like Ulysses is to a Western flick. Enjoy :)

Zardari a peacnik?

In this article by Asif Ali Zardari, President of Pakistan, he makes some interesting assertions. First, he basically declares the terrorists enemies of Pakistan as well as India. Second he makes overtures to India. Thirdly, he draws parallels with his own loss and those of India's. Finally, he acknowledges the presence of terrorists in Pakistan and acknowledges that this is a vestige of the cold war.


Benazir Bhutto's commitment to democracy was questionable. Her commitment to peace with India was even more questionable. Benazir Bhutto often came across as having a deep seated resentment for India.


Having said that, Mr. Zardari's comments do resonate. Benazir's death was as much an offshoot of the terrorists in Pakistan as the attacks on India. They have arrested the Lshkar-e-Taiba members, Let's see how this plays out.

PS: Pakistan has reportedly refused to extradite the terrorists to India. While Indians may be shocked, few countries agree to extradite people, notwithstanding treaties. The UK, for instance, is notorious for dargging its feet on extraditions despite extradition treaties. For instance, the UK is on record as saying no extraditions to the US for death penalty cases (i.e. terrorists included).

Sincerest form of flattery?

Bangladesh has nearly completed a life sized replica of the Taj Mahal, complete with marble, diamonds, and garden. Here is the article. I wonder whether this will have any impact on the Indian tourism industry over time.

The difficulties of dealing with gunmen

There are two major outstanding questions on the Mumbai terrorist - how did this happen, and what can be done to prevent it?

One of the baffling pieces questions about the Mumbai terror attacks is how just 10 people could have inflicted so much damage for over 60 hours across 10 locations. Some have been tempted to accuse the Indian troops of incompetence.

There are a lot of people alleging a cover-up. In this article, Sandhya Jain points out that a number of the facts make it seem unlikely that 10 people could have committed these attacks. How, she argues could two people hold the commandos at bay for 60+ hours while torturing and killing victims. One view is that there were mercenaries involved who were actually killed by the terrorists. Another is that there were more terrorists involved who have made a getaway, and it is being suppressed.

It's very hard to know the facts. However, in defense of those who allege only 10 people were involved, here are some things to ponder.

The first thing to remember is that gunmen intent on killing people can be surprisingly effective at causing carnage. For instance, the April 2007 Virginia Tech massacre resulted in the deaths of 32 people and injuries to scores more with just one gun man. The average per terrorist in the Mumbai attacks was ~18. The Columbine High School Massacre killed 12 people, and the shooting was continuing well after the SWAT teams arrived. It was probably the incompetence of the shooters at Columbine that kept the number of deaths so low.

The gunmen in such attacks have a huge tactical advantage. Whereas the gunmen are intent on killing people indiscriminately, security forces must only kill the gunmen and must avoid injuring all the other innocent bystanders. To make things more difficult, it's often not possible for security forces to tell who are the gunmen and who are innocent bystanders, so they need to move with extreme caution verifying identities of people before acting. There are no such constraints on the gunmen.

Also, it's hard to reason or deal with gunmen on a suicide mission. Most procedures for hostage situations tend to assume that the gunman doesn't want to die or is mentally disturbed. Terrorists are on suicide missions but are otherwise surprisingly rational, which causes many standard hostage procedures to fail completely. It is why Israel has been unable to stop Palestinian terrorists completely.

Some have wondered about the length of time it took to deal with the situation. In the beltway sniper case in 2002, the snipers were able to continue terrorising the I-95 corridor in Virginia and Maryland for three weeks, largely by moving around. The same, to an extent is true of the killers in India. They weren't stationary. In a building with hundreds of rooms, tens of floors and hundreds of innocent people, the police and army had no idea how many people they were dealing with and where they were, which made this very tough. Also, in many cases they just moved from one location to another, e.g. from the railway station to Nariman House, which meant that the responders were always one step behind. The terrain inside the building made it more like guerrilla warfare, which tends to even the odds for the underdog.

The gunmen were extremely well trained, by some reports they were trained by special forces. They carried sophisticated weapons - automatic assault rifles, grenades and two way communication devices, etc. They rigged bodies and the locations with booby traps, making negotiating the passages more difficult for the Indian commandos. They also took hostages and used them as shields.

This is a great article that describes the attacks in detail.

Even if we accept the official version of the story, there is no denying that India was woefully unprepared and the response was so poor that the death toll and injuries were much worse than they need have been:

• Lack of preparedness: The police in Mumbai were neither equipped nor trained to deal with situations like this. There was no SWAT team in Mumbai (a city of 19 million people). They had to fly in the commandos from New Delhi (where they protect politicians) so that the commandos only arrived 10 hours after the terror began. Contrast that with Virginia Tech and Columbine, where SWAT teams arrived within a couple of hours of the attack beginning, despite these not even being major metro areas.
• Lack of equipment: At the scene, the police didn't have proper bullet proof vests, few had two way radios. Even the commandos lacked night vision goggles and thermal sensors, so they were unable to see in the darkness. In fact, most of the police lacked even basic weapons or weapons training. Many have pointed out that the shooters didn't have all that sophisticated weapons. True, if you compare them to US SWAT teams. Not true if you compare them with Indian police.
• Poor training: Some of the procedures used by commandos: rappelling from a helicopter onto the roof, slowly descending down the narrow corridors, shooting blindly with the gun held over their heads suggested that the commandos weren't adequately trained, were too slow and tentative and weren't willing to take a hit. Contrast the speed of the action with what happens with the FBI or Israelis and you'll see what I mean.
• No clear demarcation of responsibility or procedures for response: India received several warnings about such an attack, the last as late as November 18, several days before the attacks. Yet, India could do nothing as intelligence filtered through the systems slowly, at each stage being met with skepticism and confusion. It's not clear that the right people were ever informed. The various agencies that were informed had no action plan of how to respond or how to coordinate. This is similar to what happened in the US after 9/11 which led to the creation of the color coded threat level system in the US.
• Ineffective communications systems: There were massive communications problems as there is no common intelligence sharing or communications system shared by all agencies. Not all the egncies involved had the same types of devices, there was no shared lines, and there were no communication and information sharing procedure. This is similar to what happened in Hurricane Katrina in the US. So, fire brigades, police, commandos, etc. couldn't convey information from one to the other quickly enough.
• Hotels with inadequate security: In most Western hotels, there would have been closed circuit televisions, sophisticated security systems, automatic doors that could be used to cordon off sections in the hotels. It seems that the Taj and Oberoi lacked even basic security systems, making intelligence about the terrorists' movements within hard to come by.
• Lack of tactical information about terrain: The commandos didn't have maps of the buildings they were entering, whereas systems in the US and elsewhere would have given SWAT teams exact maps and visual representations of all the buildings. So, the Indian commandos had to literally feel their way through unknown darkened corridors.
• No effective administrative command and control: There was an amazing breakdown in the command and control structure at all levels of the civilian administration. The Chief Minister and Governor can call martial law. They didn't do that in India, which meant huge crowds were able to gather metres away from the impacted buildings giving commandos little room to maneuver. It wasn't exactly clear who was in-charge and who needs to make what calls. There was no decision making structure and no clear lines of authority and authorities jockeyed for position and power.

I am sure that a thorough investigation will reveal a lot more weaknesses. All in all, it was very pathetic. If this were to happen again, even with advance warning, it isn't clear that India could prevent it or reduce the damage.

On the prevention front, the focus of the recriminations in India has been the ineptitude of the politicians. Unfortunately it requires a whole lot more, including a complete overhaul of the counter-insurgency systems in India. As the list above suggests, there are obvious areas of focus that stem from easily identifiable symptoms, e.g. fix security preparedness, equipment, administrative systems and procedures and intelligence gathering and response.

On the larger strategic front, though, the fixes are a lot less less clear.

The traditional view peddled by Pakistan is that Kashmir is the underlying cause of the hatred against India. However, there is a growing view as discussed in this article by Patrick French, that the type of hatred that fuels these attacks is the cause in itself and not a symptom. That the use of Kashmir and other examples of Indian transgressions are merely excuses, which, even if fixed, wouldn't root out people like these terrorists. Mr. Hafiz Saeed, head of Laskar-e-Taiba, reportedly said in 2000, “There can’t be any peace while India remains intact. Cut them, cut them — cut them so much that they kneel before you and ask for mercy.” However, he and his ilk have gone further, clubbing Israel, America and India in the same breath and avowing to establish a caliphate in Central Asia and murder those who insult the Prophet. The good news is that Indian Muslims are outraged by the terrorists. This same article talks about how Muslims were killed by the terrorists and Mumbai's Muslim council's refusal to allow the dead terrorists to buried at their cemeteries.

Fareed Zakaria argues very convincingly in this insightful piece that the solution to this problem is really to get Pakistan to start policing and rooting out the safe havens for these people within its border. To make matters more interesting, the terrorists attacks against Israelis, British and Americans has put Pakistan on the back foot in terms of their ability to continue to give aid and comfort to terrorists. Pakistan's civilian leadership seems to have got this memo from the US too, and they have made an arrest already - funny how quickly they can move when they want to. What remains to be seen is whether the Pakistani government is going to keep up the pressure or whether their resolve will wane after this token gesture.

As Richard Clarke illustrates in his article about the next steps that US and Al-Qaeda could take, the problem is that the task ahead for the terrorists is substantially easier than the one for US, and by extension India and Pakistan.

Obama's birth certificate

This article and the comments below it discuss Obama's citizenship. It is extraordinary the lengths to which some of these people are willing to go to in justifying their argument that Obama is not a natural US citizen.

The Supreme Court is considering a case on this. However, a quick clarifications. Contrary to the assertions of the bloggers and the commenters, Obama's birth certificate is not the issue in the case before the Supreme Court. The facts of Obama's birth have already been settled. He was born in Hawaii. Here's politifact.org's comment on the subject.

The case the Supreme Court is considering alleges that because Obama's father was a Kenyan and Kenya was still at the time a British colony, that the laws at the time would have made him a dual citizen of both the US and UK/Kenya and therefore he is not a natural born American citizen. If the Supreme Court decides that this view is correct, children of immigrants (even if only one parent is an immigrant) would be ineligible to be the US President. It seems unlikely though that the Supreme Court would decide to overturn the election.

UPDATE: The Supreme Court has thrown out the case. One appeal is still pending - the case filed by Berg alleging Obama wasn't born in Hawaii. The Federal court in Philadelphia had earlier rules that Berg had no locus standii to challenge Obama's citizenship. It's more than likely that Berg will lose the appeal.

Higgs Boson - addressing Dhakks

Dhakks asks in an earlier post whether the Large Hadron Collider is worth the billions that are being spent on it. My answer, quite simply, is yes. In fact, my only regret is that the US abandoned the even bigger Superconducting Super Collider in 1993. They should probably build it now, or an even bigger one.

I have two reasons. The first is my bias towards supporting scientific research - knowledge for knowledge's sake.

There are a number of problems with Science as we know it today. Most of the world lives comfortably unaware of the extent of ignorance and incongruity that the Human race is condemned to. If you'd like an entertaining version of our lack of knowledge, I would recommend "A Brief History of Nearly Everything."

A quick summary is as follows. We don't really understand where life came from or indeed what life is. We have discovered, just of late, that most of known biology is but a small fraction of life on Earth, most of the rest we don't know and don't understand. In Physics, the two great theories relativity (the theory of really big things) and quantum mechanics (the theory of really small things don't agree at the crucial point where they meet, and if we look into space and try to explain everything we see with existing theories, then the only explanation is that 96% of the Universe is made of stuff we don't know anything about. This is only the stuff which we know that we don't know. Who knows how much we don't know we don't know.

The experiments on Large Hadron Collider will, among other things, test the current standard model of the quantum physics, look for the Higgs boson, and start looking at whether String Theory is really valid. All this for a cost less than the amount the US spends on potato chips in a year.

These are just the experiments currently scheduled. Over time, it could yield surprising results that enable us to explore the reaches of what we don't know.

Does this knowledge have any practical value? Not immediately. However, those theorists working on quantum theory in the early 20th century could never have imagined the types of technologies their theories made possible. So, the results it generates could be the foundation of science and technology in the future. It all depends on what we learn, and we won't know that until we try.

However, there is a second more practical reason for building it.

The LHC is undoubtedly going to be the best particle accelerator in the world for many years to come. This means that the over 40 years of dominance that the US has had in the world of particle physics may end, as the best and the brightest from around the world will congregate to Europe and not the US for particle physics. That could, very soon, have noticeable economic consequences for both the US and Europe, and may be well worth the $2+BN that Europe has shelled out.

The centrist puzzle

Throughout the election season, the GOP peddled the view that Obama was a closet radical leftist. McCain and Co. went so far as to describe him as Socialist. Even the 'punditocracy' pointed to the "data" - his votes in the legislature and Senate that supposedly proved that he had no record of being centrist. Now, as Michael Gerson's article shows, they are all scratching their heads in wonder as his picks for various cabinet posts prove to be centrist. The left is infuriated. The right is pleasantly surprised and horrified.

Of course, all these reactions are a repudiation not of Obama's record, but the media story surrounding his record. Those who were crying "Socialist" and "Radical" were relying not on facts, but on opinions based on a selective sampling of facts. For instance, Obama's voting record can only be described as leftist if you believe that all tenets of the Democratic party platform are by definition leftist. Those who had bothered to examine his statements, his record and his opinions (which have been surprisingly consistent over the last 15 years or so), would have realized that he was a centrist all the time, and that votes to the contrary were usually tactical voting or political maneuvering. The gasps of astonishment just show the extent to which the media is willing to delude itself and buy the memes they peddle.

Why no outrage?

A very good article by Thomas Friedman who points out that there has been little outrage in Pakistan to the attacks in Mumbai, in complete contrast to, say the outrage and riots in Pakistan over the Danish cartoons about the Prophet Mohammed which resulted in the deaths of several people.

Recession began in 2007

Finally, economists are coming around to saying what most consumers have known for ages, that the recession began in late 2007. Here is the latest report that asserts this. It also says that if anything, the recession seems to be gathering pace, not slowing down.

Uncomfortable facts

In this article, Asra Nomani criticizes the conditions of Muslims in India and points out that this is a disaster waiting to happen. While it may be tempting to dismiss criticism of the Indian government policy towards Muslims as being ill conceived and insensitive, coming as it does just after a horrific terrorist attack, the data on this is pretty damning. Over the last twenty years (i.e. roughly since the mid-1980s), Muslims have fallen behind even the scheduled castes and tribes in terms of socio-economic progress. This report as part of the Sachhar Committee report shows some of this data. At minimum, this shows that while India is progressing, for one reason or the other, Muslims in India are being left behind. For the Muslim community to fall off so dramatically, there really has to be widespread disengagement. This is particularly evidenced by the fact that unlike Dalits and other minorities, and despite being the largest minority in India, there is no effective political advocacy on behalf of Muslims in the political process. This is not to validate the demands of Muslims, but more to highlight the lack of effective democratic outlet for Muslims.

This is a great article by Fareed Zarkaria where he, among other things, points out that these issues need to be resolved not just by India but by the whole region, as the problems bleed from one country to another.

One of the readers comments in the Fareed Zarkaria article alleges that the Indian Army and R&AW routinely engineer these incidents within India and then blame Pakistan. Searches for reports on the Sabarmati Express, Godhra incident, Malegaon blasts, etc. reveals a pot pourri of allegations of this kind emanating from news organizations from Pakistan and India. As with all news, people selectively remember the reports that supports their view of the world.

The underlying problem for people like the commenter though is that there is no credible trustworthy impartial arbiter of truth in the sub-continent. Even in horrific cases such as the Godhra incident, there are contrary opinions issued by different commissions. These commissions are often designed to make political hay out of lamentable situations, and as a result, people are left with doubts. Even to this day the facts in most of these cases are unclear.

Adding to confusion are the often wild and baseless accusations and claims made by the Indian media and politicians, which never get rescinded and are then absorbed into the ongoing memes in the Indian consciousness. How many terrorists were there in the latest attacks? How did they get there? Where are they from? All sorts of facts and speculation have been bandied about.

Some of these are harmless. But often, these factoids, despite being blatently false, feed and justify the views of extremists.

Mumbai attacks

Initial reports suggested that the attacks were planned in Pakistan about six months ago. MSNBC reported that there were 40 terrorists including 29 Pakistan and 11 Bangladeshis. There are reports that some of the terrorists had British IDs.

Now, Indian authorities claim that there were just 10, 2 at each location and four at the Taj. Nine have been killed, and one is in custody. It's not clear whether they still believe the people who came by boat were joined by others who were already at the locations. The confusing thing is that the current math would mean only four locations, so unless the terrorists were finishing at one location and going to the next, there would seem to be more locations than there are terrorist pairs.

This and this are some extremely startling audio of a terrorist speaking with Indian media. He is ranting.

A few observations. I don't know whether we should take him seriously, but he seems not to have any idea who his colleagues are, which implies that this was masterminded by someone who must have worked out the logistics, so we have got the minions, not the mastermind. Most of the planning, the Indian media claim, was done in Pakistan, so no hope of the masterminds being brought to justice without Pakistani cooperation.

This terrorist has an interesting view of history, inaccurate and selective, one where history is replete with examples of a concerted effort to suppress and oppress innocent Muslims.

He asserts that they came to be martyrs, to die lion's deaths and to kill as many people as they can. The only time the terrorist, who calls himself Imran, hesitates is when the news reporter asks whether he considered that many of the people they may be killing may be Muslim, but he recovers by asking (I am paraphrasing here) do the authorities that persecute people think about that question?

He seems to suffer from persecution complexes - that Muslims are under siege the world over. Interesting, he didn't notice the ex-Muslim President of India.

Frankly, he sounds crazy.

LHC ... worth it?

In an effort to wake some sleeping bloggers ... let me pose a question.

Yesterday I happened upon a clip of a town-hall style meeting that was apparently held near where the CERN facility (the mega-blaster, earth-consuming blackhole-creating gizmo) just recently came up. The clip was from the year before construction began, to give local residents a voice. This lady stood up and asked why they were spending 100s of millions of dollars to find out whether the Higgs boson exists? Also, what's the value of answering (or starting to answer) the Higgs boson question now vs. in 20 or 50 years?

What's a good answer to that?

Btw - The Large Hadron Collider (LHC) project has direct costs of ~£2.6B; that's just the cost of the collider and detectors. Not including the costs of operating it, labor, etc.

Thoughts?

Wall Street, Mukasey, etc.

This is a fascinating article by Michael Lewis where he boldly predicts that the era defined by Investment Banks on Wall Street is over. He uses the story of Meredith Whitney and Steve Eisman to craft his tale. It's a fun read.

In other news, Attorney General Michael Mukasey literally collapsed in the midst of his speech.



If this is familiar, you may be thinking of Alben Barkley.

Alben Barkley was Vice President under Truman. A famously humble man he would refer to himself as the Veep. After Truman refused to run a third time, he returned to the US Senate and sat on the back benches. In his last speech in 1956, he famously declared: "I'm glad to sit on the back row, for I would rather be a servant in the House of the Lord than to sit in the seats of the mighty." before dropping dead. You can hear the dramatic event in this NPR piece.

Dow over time

The chart below shows the Dow Jones Industrial Average since the 1920s.


There are a few fascinating things to note about this chart.

1. Despite comparisons to the great depression, the fall in stock prices is not at all comparable to what happened in the 20s. In fact, they fell so much that it took more than 20 years for the index recovered to the point it had been at in the late 1920s.
2. Secondly, notice how stock prices essentially stabilized in the mid 1960s and then did not start rising again till the mid 1980s - i.e. a nearly 20 year hiatus from real growth. This is why "liberals" are so despised in the US and "conservatives" are so loved. It was only in the Reagan era that this trend changed.
3. Finally, despite claims to the contrary, the DJIA has essentially flat-lined since the late 1990s, with only sporadic bursts of life. Again, the last time this happened it took 20 years to fix. We've had just eight. Will Obama be able to change course?

Both the mid-1960s flat-lining and the mid-2000 flat-lining coincide with periods of war in the US. In the mid-1970s, as the war ended, the US faced a massive oil shock. We just experienced the start of one this time (it's not over folks - when the deflationary trend ends, oil prices will rebound to $150+ unless the promised green revolution delivers in short order). To make matters worse, just as in the mid-1960s and 1970s, the world could be facing a global food crisis as the economy rebounds, which could lead to severe inflation at the other end, especially coupled with the massive deficit that the US government will undoubtedly accumulate.

The Day the Earth Stood Still

Keanu Reaves is remaking one of the all time classics of the Sci Fi genre, The Day the Earth Stood Still. The early rumors of the script is that the story, while updated, is still largely similar to the original 1951 version. The original movie is very dated and looks a little silly now to anyone who is not a a Sci Fi buff. Also, you would be forgiven for seeing suspicious similarities between the original story and the story of Christ - it is rumored to be intentional.

"The Day the Earth Stood Still" is based on the premise that an alien being called Gort, enforces peace and harmony and decimates populations that don't live in harmony. Klaatu, an alien, arrives on Earth to warn us of impending disaster if we don't mend our ways. One of the sub-texts of the film is that humans can be made to unite through an external threat from an alien specie. It is a theme that was echoed by President Reagan, who was reportedly inspired enough by the film to tell the UN "I occasionally think how quickly our differences worldwide would vanish if we were facing an alien threat from outside this world."

I bring this up because early next year will see the release of another movie called "Watchmen" based on a comic book series by Alan Moore from the mid 1980s. The comic book, Watchmen, explores whether the conclusion that Reagan reached are likely to be true and reaches very interesting conclusions. It has rather a surprise ending, so I won't spoil it for those who don't already know it by discussing it here, but it is significantly darker.

It is fascinating that in 2008-09, Hollywood has chosen to make/remake two of the most profound and seminal Sci-Fi stories about attempts to end war - both with very different conclusions. It will be interesting to see whether the directors can find any lessons from the intervening years that add to the richness of their moral message, and whether Hollywood can resist the temptation of turning them into the same banal stuff they usually dish out.

Bill Ayers speaking out

This is an interview with Bill Ayers. It is fascinating to hear him essentially echo the same position that Obama expressed in the debates. It is also interesting just how much he is grilled on this.

Humorous take on the crisis

Deep Fried Secrets of the Credit Crunch

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The Credit Crisis according to ...

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Foreign hackers attacked Obama and McCain

Here's a fascinating report from Newsweek on espionage against the candidates:

"The computer systems of both the Obama and McCain campaigns were victims of a sophisticated cyberattack by an unknown "foreign entity," prompting a federal investigation, NEWSWEEK reports today.

At the Obama headquarters in midsummer, technology experts detected what they initially thought was a computer virus—a case of "phishing," a form of hacking often employed to steal passwords or credit-card numbers. But by the next day, both the FBI and the Secret Service came to the campaign with an ominous warning: "You have a problem way bigger than what you understand," an agent told Obama's team. "You have been compromised, and a serious amount of files have been loaded off your system." The following day, Obama campaign chief David Plouffe heard from White House chief of staff Josh Bolten, to the same effect: "You have a real problem ... and you have to deal with it." The Feds told Obama's aides in late August that the McCain campaign's computer system had been similarly compromised. A top McCain official confirmed to NEWSWEEK that the campaign's computer system had been hacked and that the FBI had become involved.

Officials at the FBI and the White House told the Obama campaign that they believed a foreign entity or organization sought to gather information on the evolution of both camps' policy positions—information that might be useful in negotiations with a future administration. The Feds assured the Obama team that it had not been hacked by its political opponents. (Obama technical experts later speculated that the hackers were Russian or Chinese.) A security firm retained by the Obama campaign took steps to secure its computer system and end the intrusion. White House and FBI officials had no comment earlier this week."

Sarah Palin related gossip

OK. It seems Palin was worse than we imagined. It now seems Sarah Palin was more clueless than we imagined. It's being reported that:

• She didn't know that Africa was a continent. She thought it was a single country.
  
• She thought South Africa was just the southern part of the country of Africa.
• She didn't know the countries in NAFTA.
  
• She didn't know the countries in North America.
• She didn't know what "American exceptionalism" meant.
  

Here is Fox News report on her.



Here's the reporton O'Reilly factor. See how the Fox News Chief Political Correspondent Carl Cameron tears her apart while O'Reilly tries to defend her.

This and this are some excerpts from gossip reported by Newsweek (the article portrays McCain in much better light than Palin, citing cases where McCain actually vetoed negative ads). I have reproduced some of the stories on Palin below (verbatim):

• At the GOP convention in St. Paul, Palin was completely unfazed by the boys' club fraternity she had just joined. One night, Steve Schmidt and Mark Salter went to her hotel room to brief her. After a minute, Palin sailed into the room wearing nothing but a towel, with another on her wet hair. She told them to chat with her laconic husband, Todd. "I'll be just a minute," she said.

• McCain himself rarely spoke to Palin during the campaign and aides kept him in the dark about the details of her spending on clothes because they were sure he would be offended. Palin asked to speak along with McCain at his Arizona concession speech but campaign strategist Steve Schmidt vetoed the request.

• Palin launched her attack on Obama's association with William Ayers, the former Weather Underground bomber, before the campaign had finalized a plan to raise the issue. McCain's advisers were working on a strategy that they hoped to unveil the following week, but McCain had not signed off on it, and top adviser Mark Salter was resisting.

• NEWSWEEK has also learned that Palin's shopping spree at high-end department stores was more extensive than previously reported. While publicly supporting Palin, McCain's top advisers privately fumed at what they regarded as her outrageous profligacy. One senior aide said that Nicolle Wallace had told Palin to buy three suits for the convention and hire a stylist. But instead, the vice presidential nominee began buying for herself and her family--clothes and accessories from top stores such as Saks Fifth Avenue and Neiman Marcus. According to two knowledgeable sources, a vast majority of the clothes were bought by a wealthy donor, who was shocked when he got the bill. Palin also used low-level staffers to buy some of the clothes on their credit cards. The McCain campaign found out last week when the aides sought reimbursement. One aide estimated that she spent "tens of thousands" more than the reported $150,000, and that $20,000 to $40,000 went to buy clothes for her husband. Some articles of clothing have apparently been lost. An angry aide characterized the shopping spree as "Wasilla hillbillies looting Neiman Marcus from coast to coast," and said the truth will eventually come out when the Republican Party audits its books.

Meanwhile, Fox reports that Palin apparently refused preparation help for her interview with Katie Couric and then blamed her staff, specifically Nicole Wallace, when the interview was rightly panned as a disaster. After the Couric interview, Palin turned nasty with her staff and began to accuse them of mishandling her.

They also report that Palin would view press clippings of herself in the morning and throw "tantrums" over the negative coverage. There were times when she would be so nasty and angry that her staff was reduced to tears.

The many statistics of the election

Everyone is pointing out that obvious, that the 2008 Presidential election resulted in the first African American President. What is less well known is that this represented a number of other interesting milestones:

• Barack Obama is actually the first colored person to become the head of state of any majority white Western nation. That is extraordinary when you consider that the US was among the last major white nations to abolish slavery and the last nation, bar South Africa, to abolish segregation. It's the first time that the US is ahead of the curve.


• Actually, most whites should be happy too. Before Barack Obama, all Presidents of the US were from just three racial groups: Irish, Anglo-Saxon (England, Wales) or Germanic (Germany, Austria, Switzerland). No one from any other white background has ever won the Presidency before, which includes all Southern Europeans, Eastern Europeans and Scandinavians. Of course, no other minority race has won either, although some of the prior US Presidents were rumored to have colored antecedants.


• This is only the second time in US history that a non protestant has won on the ticket - Biden is Catholic. The previous one was Kennedy.


• Barack Obama received more votes than any President in US history.


• This is only the third time since FDR that a Democrat has won the majority of the popular vote (Obama received more than 52% of the vote at last count). The only other presidents to have done so were Carter and Johnson. Kennedy, Truman and Clinton never managed the feat.


• A corollary is that the percentage of votes that Obama received was also the highest percentage of votes cast for any Democrat since FDR, save Lyndon Johnson.


• Obama's number of electoral votes, 340+ is actually the historical norm. The only presidents since FDR who failed to receive 300+ votes were Carter and George W. Bush - both with disastrous regimes. The others who were borderline were Truman, Kennedy and Nixon in his first term.


• Missouri appears to be going for McCain. If it does, its only the second time in history that Missouri didn't vote for the President.


• Obama won at least two states: Virginia and Indiana, that have not been carried by a Democrat since LBJ.


• The total spending on the campaign by all parties and their supporters was a staggering $5.3 BN, 27% higher than the 2004 campaign and the most ever spent in the history of Presidential campaigns. To put it in perspective though, it totals less than what US citizens spend on potato chips every year.


• Obama was the first Presidential candidate to refuse public financing since the laws were revised in the mid seventies.


• Obama spent more than $650 MM on his campaign, more than any other Presidential candidate in history. He also set the fundraising record for a single month, with $150 MM in September.


• Obama's campaign was only the second time in history that the Internet had been used so widely as a fundraising tool for a Presidential candidate (the first being Howard Dean), and the first time it was used as the primary fundraising tool by a major party candidate.


• Obama's campaign has reportedly received donations from over 3.2 MM people, the most small donors for a political campaign ever.

That was some campaign ...

A few useful links here for your perusal

I thought the CNN exit polls were quite interesting - they gathered info on everything from race, gender, religion, income, party affiliations, past electoral experience, etc.

If you didn't already check out the interactive results on nytimes summarizing this election and past ones (back to 1992), take a peek. The bubble view is interesting - gives you a sense for where the weights are. Also moving the timeline slider gives you a sense for how things changed with each successive election.

Also today, nytimes posted a very useful map of electoral shifts between 2004 and 2008. For example, Obama won Indiana thanks to inroads made with the White population.

Redskin's and Elections

Since 1936, if the Redskins win at home on the weekend before Election Day (or the next closest pre-election home game), the incumbant party wins the presidential election.

It has worked for the last 17 times. From last night whopping of the skins, it looks like a 15 point win for obama.

The election's hidden impact

In this article, a white banker writes about his experience canvassing for Obama. It's fascinating because it shows the type of change in perspective that Obama is bringing about. While we do not know who will win yet, we do know that like Sidney Poitier in 'Guess Who's Coming to Dinner', Obama has forced Americans of all hues, backgrounds and colors to confront their values and in doing so has changed the face of this country. Should he prove to be as competent a president and he has been a candidate, the US and the world will be a different place indeed.

The impact of this, at least for the GOP, could be very disturbing. In this article, Paul Krugman suggests that the GOP may, in reaction, lurch further right and become the party of racists and bigots. I was in conversation with a person who works for the office of one of the GOP Congressmen, and from what he said, such fears are shared by many in the GOP too. If Obama manages to wrest the taxation ploy away from the GOP by making offering tax cuts for the middle-class and tax hikes for the rich, it's entirely possible that the party will become the party of the Sarah Palin right, rather than the party of the fiscal conservatives and libertarians.

Not everyone agrees. In this article, Peter Beinert suggests that Sarah Palin represents the end of an era, as demographic changes and real economic woes have made these social issues seem trivial. Not sure I agree.

Of course, even otherwise, it would have been premature for fiscal conservatives to despair. Obama's Achilles heel are the members of his own party, who have mastered the art of discord. It's entirely possible that egged on by an increasingly powerful DNC Congress, he will overreach on spending in a way that puts fiscal issues squarely back in the center.

Should Obama defy his party's predilections and not go down in flames by being fiscally irresponsible, then the extraordinary power of having so much support in Congress could doom him to becoming a victim of his own success. For instance, Obama should have the votes to successfully address healthcare, taxation, college education, immigration and environment in his first term, if he so chooses. If he does, then what issues will be left for the DNC to rally their populace around in four years?

One quick postscript for those who start worrying about the prospects of an Obama presidency. In this article, Malcolm Gladwell discusses how being an outsider has proved to be so useful for so many in business. In fact, in most countries, outsiders often have disproportionate economic impact. If you follow Gladwell's reasoning, it could be an added advantage that could enable Obama to be more effective than many of his predecessors.

Sarah Palin gets pranked

I can't believe that Sarah Palin fell for this:



For those who didn't get the jokes, here are some of them:

1. The French saying that 'Sarkozy' cites about hunting translated to: 'Maybe we can kill some baby seals, too'

2. The name of the song that 'Sarkozy' says Carla Bruni composed for Sarah Palin translates to: 'Lipstick on a Pig'

3. Here's the exchange between 'Sarkozy' and Palin on the Prime Minister of Canada:

Sarkozy: Some people said in the last days and I thought that was mean that you weren't experienced enough in foreign relations and you know that's completely false. That's the thing that I said to my great friend, the prime minister of Canada Stef Carse.

Palin: Well, he's doing fine, too, and yeah, when you come into a position underestimated it gives you an opportunity to prove the pundits and the critics wrong. You work that much harder.

Palin pretends to know the Canadian Prime Minister. The problem is that the Canadian Prime Minister's name is Stephen Harper.

4. Here's the exchange between 'Sarkozy' and Palin on the Prime Minister of Quebec

Sarkozy: I was wondering because you are so next to him, one of my good friends, the prime minister of Quebec, Mr. Richard Z. Sirois, have you met him recently? Did he come to one of your rallies?

Palin: I haven't seen him at one of the rallies but it's been great working with the Canadian officials. I know as governor we have a great co-operative effort there as we work on all of our resource-development projects. You know, I look forward to working with you and getting to meet you personally and your beautiful wife. Oh my goodness, you've added a lot of energy to your country with that beautiful family of yours.

The problem: Quebec is not a country its a province of Canada. It doesn't have a Prime Minister. It does have a chief minister whose name in French translates roughly to first premier. His name is not Mr. Richard Z. Sirois but Jean Charest. Again, note, Palin claims to know him.

5. At one stage 'Sarkozy' says: 'Yes, you know we have a lot in common also, because except from my house I can see Belgium. That's kind of less interesting than you.' The problem is that to the best of my knowledge Sarkozy does not have a house on the Belgian border.

6. Finally, if you pay close attention to the very soft background conversation at the very end, Palin seems to say to her administrative assistant that its a prank call from France. She doesn't seem to know that Montreal is in Canada.

I realize that most of us would be hard pressed to know all these. However, Palin is the Governor of a state that neighbors Canada and Palin is supposed to have dealt with officials from Canada, so her lack of knowledge of the Canadian Prime Minister is galling.

Guess who's coming to dinner

This is a great analysis comparing the historic 1960s movie with the Obama run for the Presidency. Very good article.

How liberal is Obama?

At its heart, Conservative philosophy is about the belief that sudden drastic change to remake the world is doomed to failure; that it is better to seek the middle ground and move incrementally. So, conservatism opposes military adventurism and generally opposes drastic changes to the status quo. A reading of Obama's books suggests that while liberal on issues, he is temperamentally conservative.

However, conservative-liberal debate has been skewed by some touchstone issues. On these issues, Obama is considered to have one of the most liberal voting records in the Senate. The problem, this sort of scoring system is completely meaningless as it just adds up votes and uses arbitrary allocation of weights. To illustrate one of its shortcomings, if there were 19 votes on the same issue on which a candidate votes the 'liberal' way and one on another issue in which the candidate votes 'conservative', according to this scale person would have voted for the liberal view 95% of the time.

A better way would be to look at their actual positions. OK, so where does Obama stand on the issues?

Abortion: On abortion, the view expressed in many news organizations is that Barack Obama is an extreme liberal as he opposes a ban on late term abortion. This is actually inaccurate. He explains this in his book.

The perception about his liberal record stems from his record in the Illinois senate, where the GOP has tried for years to write laws on late term abortion in ways that weaken the hold of Roe v. Wade. The most consistent strategy by the GOP is to define the foetus as a person and include an exception for women's life, but not women's health. This latter definition means that doctors cannot operate on the mother in ways that could result in abortion in situations where, for instance, there is a breach in the womb that permanently prevents the women from having further children, or somehow damages internal organs in a way that would be debilitating but not life threatening.

The GOP strategy is that if the law pushes the issue enough, it will inevitably be challenged, giving the Supreme Court to reopen the issue for a constitutional challenge that could be a way to overturn Roe v. Wade.

Here is what Obama says on the issue:

'On an issue like partial birth abortion, I strongly believe that the state can properly restrict late-term abortions. I have said so repeatedly. All I've said is we should have a provision to protect the health of the mother, and many of the bills that came before me didn't have that.

Part of the reason they didn't have it was purposeful, because those who are opposed to abortion have a moral calling to try to oppose what they think is immoral. Oftentimes what they were trying to do was to polarize the debate and make it more difficult for people, so that they could try to bring an end to abortions overall.'

This is not the pro-choice position, but it isn't the highly liberal pro-life at all cost position either. What is more, he actually has a very interesting take on where life begins.

'Q: Do you personally believe that life begins at conception?

A: This is something that I have not come to a firm resolution on. I think it's very hard to know what that means, when life begins. Is it when a cell separates? Is it when the soul stirs? So I don't presume to know the answer to that question. What I know is that there is something extraordinarily powerful about potential life and that that has a moral weight to it that we take into consideration when we're having these debates.'

The social conservative movement and the extreme liberals suggest that this is a cut and dry issue. Interestingly, a conservative position would be that it is not. That the issue is so complex that only a slow deliberate incremental change would work. That was the basis of the conservative opposition to Roe v. Wade, as it cut short the debate.

Women's rights: The liberal view is "equal rights". This translates into equal pay for equal work and and equal opportunities in all walks of life. On this, Obama is firmly for equality. You can read his views here.

Gay marriage: On this, Barack Obama believes in: (a) no discrimination based on sexual orientation, (b) a repeal of "don't ask. don't tell" as he suggests that the policy as it currently stands makes sexual orientation a criteria for selection, which is discrimination, and (c) he opposes gay marriage, but supports civil unions. He does support the rights of states to define marriage any way they want, i.e. he opposes a Federal marriage amendment.

Healthcare: Barack Obama's healthcare plan is actually eerily similar to the one that a bi-partisan effort had produced in Congress in the early 1990s, the one that Hillary shot down. Hillary's plan mandated universal healthcare, Barack Obama's plan doesn't. It just provides a government subsidized option. The subsidy is to be provided by a market maker like Fannie Mae, except for health insurance. While Fannie Mae has come in for heavy criticism, its actually been hugely more effective in enabling home ownership than the government housing schemes in Europe.

The GOP has argued that Obama is more liberal because he apparently supports applying the antitrust laws to insurance companies. Currently, insurance companies are allowed to collude, unlike participants in virtually every industry in the US.

Environment: On this, the biggest criticism of Obama has been his historical opposition to further drilling in the US. He has backtracked on that position in the heat of the election, but essentially, Obama's belief is that more investment in oil exploration is a distraction from finding alternatives.

Economy: On the economy, Obama is supposed to be a tax and spend liberal who redistributes wealth. Here's what he actually said to Joe the non-plumber:

I do believe that for folks like me who’ve worked hard but frankly also been lucky, I don’t mind paying just a little bit more than the waitress who I just met over there. . . . She can barely make the rent. . . . And I think that when you spread the wealth around, it’s good for everybody.

Worried that this is socialism? Well, here's what Adam Smith had to say about it in his seminal work, "The Wealth of Nations":

The necessaries of life occasion the great expense of the poor. . . . The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. . . . It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

Moreover, the progressive income tax in the US was actually the brainchild of Teddy Roosevelt, who was no liberal.

Underlying Obama's refrain though, is the word "lucky". As George Packer explains:

Obama’s view is not that people deserve everything they have and taxation amounts to confiscation of what’s theirs. That’s been conservative dogma for decades, with a powerful hold over many Americans. But this year it’s grown considerably weaker. Obama allows (as did Joe the Plumber, at least in this moment of their conversation) a role for chance, the blind vagaries of the global market, and the sheer unfairness of human fate. It’s an important insight into Obama’s political economy and moral philosophy.

Just in case you feel this is socialism, Obama cites Warren Buffet in his book, 'Audacity of Hope' as having said of his fellow billionaires:

They have this idea that it’s “their money” and they deserve to keep every penny of it. What they don’t factor in is all the public investment that lets us live the way we do. Take me as an example. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless. I can’t run very fast. I’m not particularly strong. I’d probably end up as some wild animal’s dinner. But I was lucky enough to be born into a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the financial system to let me do what I love doing—and make a lot of money doing it. The least I can do is help pay for all that.

Judge for yourself how reasonable his positions are.

The most consistent trend in Obama's personal record is that while he leans liberal, he tends to look for middle ground and compromise. The good news for conservatives and the bad news for liberals is that he is likely to prove significantly more conservative and less liberal than his opponents are portraying. It is the liberals who will be disappointed.

Making and remaking of McCain and more

This is a fascinating article on John McCain's campaign. It provides perspective as to why John McCain lurched from issue to issue. It seems, his campaign manager missed one of the most important lessons of Bush/Rove strategy - message consistency, a lesson that Obama took to heart. Also, the selection of Palin was even more shockingly unresearched than I had first imagined. Here is the most telling exchange as recounted in the article:

The following night, after McCain’s speech brought the convention to a close, one of the campaign’s senior advisers stayed up late at the Hilton bar savoring the triumphant narrative arc. I asked him a rather basic question: “Leaving aside her actual experience, do you know how informed Governor Palin is about the issues of the day?”

The senior adviser thought for a moment. Then he looked up from his beer. “No,” he said quietly. “I don’t know.”

This is a fascinating perspective on Barack Obama from David Duke, former Louisiana state lawmaker, grand wizard of the Knights of the Ku Klux Klan and onetime presidential aspirant. I probably need to make several corrections to David Duke's assertions. Suffice to say facts and statistics were bandied about by David Duke in ways that were often entirely incorrect.

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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