Tuesday, October 7, 2008
9:00 PM David Gregory on MSNBC is expecting McSame to attack, to bloody Obama's nose repeatedly.
9:02 PM Brokaw lays down the rules. 2 minute response, 1 minute followup.
9:03 PM McSame taking notes, Obama gets #1. "What's your bailout plan for Americans?" Obama: People are worried. Final verdict on Bush/McSame policies. Step 1, rescue package. attacking AIG junket. Step 2, tax cuts for middle class, infrastructure projects, health care. McSame: Americans are angry. My plan is energy independence. Tax cuts for everyone. Stop spending, $10 trillion debt. Home values in decline, addresses questioner by name.
Followup, who is your SecTreas? McSame..."Not you Tom". McSame mentions Warren Buffet, Meg Whitman. Obama: Yeah, Buffet...but somebody who helps middle class. More stump speech, wages flatlined. Says MCSame is RIGHT on housing prices.
McSame wins this one, actually.
9:11 PM Question #2 "What's in the bailout for US?" McSame: "rescue plan". I suspended my campaign to protect taxpayers. Blames Obama and his cronies for the crisis. Buy up bad loans again. Once again, McSame addresses Questioner. Obama: Lemme explain credit markets, credit lockups, layoffs, we had to take action. Lemme correct John there, deregulation was the problem. I said re-regulate, nothing happened. I never promoted Fannie Mae, not pointing fingers. (does it anyway).
Followup: Are you preparing us for pain? Obama: No, we need leadership. McSame: Depends. Stabilize housing market, mentions buy up bad loans for the third time in 15 minutes.
McSame wins this too.
9:18 PM Question #3 "How can we trust EITHER of you at this point on money?" Obama: You're right, YOU'VE been responsible. Washington hasn't. We had a surplus, now doubled the national debt. But Bush was leading this. We've got to make investments, I'm making a net spending cut. McSame: Washington is broken, I'm a reformer! I have a record. Obama's a LIBERAL! I FOUGHT SPENDING! I FOUGHT EARMARKS! NEW SPENDING! (which Obama just rebutted 2 minutes ago.)
Followup: What's your priority, health care, energy, entitlements? McSame: All three at once! But entitlement reform, I have a record of reform. Build a whole bunch of nuke plants. Health care, yeah, have to do all three. Obama: We've got to prioritize. Energy first. Mentions the price of gas in Nashville (nice!) 10 years, we're energy independent, just like Kennedy. #2, Health Care, #3 education?!? Look at our records. I want line item cuts on crap programs. McSame's corporate tax cuts will hurt.
Obama does win.
Question #4: Internet question. "What sacrifices will you ask Americans to make?" McSame: We will eliminate programs. We're starting with defense pork. Spending cuts, spending freeze for everything but Defense and veterans affairs. Goes back to last question. We'll work together.
Obama: Brings up 9/11?!?!, how Bush told you to shop? We need better leadership. Increased oil production, Carter's energy cuts. Ugh. Peace Corps? This is your sacrifice?
Followup: "How do you break our American spending habit?" Obama: Starts with Washington. We must share a burden. It's hard to ask poor people to cut spending when rich people are rich. I disagree on spending freeze, unfair burden. McSame: HE'LL RAISE TAXES LIKE HOOVER! HE'S HOOVER! HE'S HOOVER! JOB LOSS! NO TAX RAISING ON ANYONE! But I'll cut taxes for you. Tax credit on health care!
I'm sorry, if Obama pulls the 9/11 card, he loses no matter what McSame says.
Question #5: "Would you give Congress a 2 year date on SS/Medicare?" Obama: 4 years, not 2. But we need to have tax policies. Back to taxes. TAX CUT ON 95% OF AMERICANS. He's pulling a Gore here. McSame: "It's easy." We need more Reagan bipartisanship! Medicare, tougher...commission! Recommendations like base closing, make em vote. Back to record. HE'S GONNA INCREASE TAXES! I'M A REFORMER!
Obama barely, at least he answered the questions.
Question #6: "Can you make Congress move fast on environment and green jobs too?" McSame: I fought Bush on climate change. Nuclear power is clean! Green jobs! Obama: It's an opportunity, 5 million new jobs in green industries, we need an investment. I agree with McSame on energy, but he voted against green energy. We must use less oil, can't drill our way out. Innovation, cutting emissions.
Tom is getting pissy now.
Followup: Manhattan Project or SIlicon Start up on climate change? Eh, whatever. McSame: I FOUGHT PORK! I VOTE AGAINST PORK! WE MUST DRILL! MORE OIL IS CHEAP OIL! LOOK AT RECORD! And I stop.
Obama wins with good stuff.
Question #7 "Health care as commodity?" Obama: Premiums are killing you. It's a moral commitment. You can keep your plan, we'll lower your premiums. If you don't, you can buy health care, no prexisting denials. McSame's plan is giveth, taketh away, stops state regulation. I have the Chamber of Commerce vote. McSame: Let's do what Obama wants, only HE'LL IMPOSE MANDATES! HE'LL FINE YOU! TAX CREDIT! SHOP AROUND! You'll get more money! Choice not mandates!
Followup: "Health care as responsiblity, commodity, or right?" McSame: Responsibility. MANDATES! FINES! Obama: It's a right. Lemme explain my plan again, since McSame just lied about it. McSame voted against SCHIP. Government must crack down on insurance companies. Dleware and banking...bad bad move Barry. McSame : HE DIDN'T MENTION THE FINE!
Question #8: "How will America be a peacemaker?" McSame: We're the greatest force for good on the Earth. I know how to wield it to make a difference. Check my record, I voted for some pretty good wars. Obama is wrong about everything, he doesn't understand Obama: Yeah, I don't understand how MCSAME CAN HAVE SUCH BAD JUDGEMENT. Check our budget, already, $10 billion a month in Iraq. We need it here for JOBS. We gotta do it better. Gotta change foreign policy.
Followup: "What's the Obama Doctrine on humanitarian efforts?" Obama: It's a moral obligation. We can't be everywhere, we need allies. McSame: Obama doctrine sucks, timelines are suck. DEFEAT IN IRAQ! We must do whatever we can. I'm a cool hand at the tiller. (no, he's not, lose.)
Obama stomps him here.
Question #9: "Pakistan, do we go in or is it Cambodia all over again?" Obama: We screwed up in Iraq and it's the central force on terrorism. We must get out of Iraq to get into Afghanistan. We can't coddle a dictator. And yes, if Osama is there, we will do it. McSame: Teddy Roosevelt. We can't announce we're going in. We need the support of Pakistani people.
Tom loses it as Obama is pissed. Obama: Lemme clarify dammit. BOMB BOMB BOMB IRAN! McSame: I know how to get Obama, I'm not gonna tell you.
Followup: "How do you reorganize Afghanistan?" Obama: "We get out of Iraq to get into Afghanistan and we need help there." McSame: PETREAUS SURGE IN AFGHANISTAN! SURGE! SURGE! SURGE!
Question #10: "How do we contain Russia without another Cold War?" McSame: I warned you about Putin. We will put economic pressure and moral support pressure. Obama: I agree with McCain. We must support democracies with MONEY I JUST SAID WE COULDN'T AFFORD TO SPEND IN IRAQ. Reduce energy consumption.
Followup: Russia as evil empire, yes/no? Obama: Evil acts, not evil empire. McSame: Maybe hahahah no really can't answer yes no.
Question #11: "Will you defend Israel if Iran attacks or wait for UN?" McSame: "Hell no we won't wait, we'll mess them up HARDCORE." Obama wants to negotiate. I want to MESS THEM UP WITH...sanctions. We must stop a second holocaust! Obama: Pretty much same thing! No really, same damn thing! Lemme copy Bush's foreign policy on Iran only we talk to them first. Pretty much.
Question #12: "What don't you know, and how will you learn it?" Obama: "Ask my wife." No seriously, it's the challenges you don't forsee. Are we going to pass the dream on? We have to do different thing. McSame: "We all don't know what's going to happen." You're PRESIDENT, you'd better have an answer. I believe in America, country first!
Obama by a slice.
Final score: Obama 5, McSame 4, 3 ties. Not a good night for either one of them, but a tie goes to the status quo, which is Obama up. McSame did not get his gamebreaker. It's a wash at best.
As we saw yesterday, John McCain's latest gambit is to juice up his and Palin's crowds into calling Obama a "terrorist", hurling racial epithets at black reporters (presumably, there aren't many in attendance as supporters), or just random calls for murder. This morning there was more ...This despite Sarah and Todd Palin's own ties to the Alaska Independence Party.In the latest instance of inflammatory outbursts at McCain-Palin rallies, a crowd member screamed "treason!" during an event on Tuesday after Sarah Palin accused Barack Obama of criticizing U.S. troops.
"[Obama] said, too, that our troops in Afghanistan are 'air raiding villages and killing civilians,'" Palin said, mischaracterizing a 2007 remark by Obama. "I hope Americans know that is not what our brave men and women in uniform are doing in Afghanistan. The U.S. military is fighting terrorism and protecting us and protecting our freedom."
Shortly afterward, a male member of the crowd in Jacksonville, Florida, yelled "treason!" loudly enough to be picked up by television microphones.
"My government is my worst enemy. I'm going to fight them with any means at hand."And yet IOKIYAR. Meanwhile, Sarah Palin's main goal seems to be inciting people to take possibly take action against Barack Obama. Obama and Biden meanwhile...are leaving this alone.
This was former revolutionary terrorist Bill Ayers back in his old Weather Underground days, right? Imagine what Sarah Palin is going to do with this incendiary quote as she tears into Barack Obama this week.
Only one problem. The quote is from Joe Vogler, the raging anti-American who founded the Alaska Independence Party. Inconveniently for Palin, that's the very same secessionist party that her husband, Todd, belonged to for seven years and that she sent a shout-out to as Alaska governor earlier this year. ("Keep up the good work," Palin told AIP members. "And God bless you.")
AIP chairwoman Lynette Clark told me recently that Sarah Palin is her kind of gal. "She's Alaskan to the bone ... she sounds just like Joe Vogler."
McSame and Palin have nothing but hatred left. Nothing. Keep that in mind tonight.
Dick Morris, September 26, Newsmax:Honestly, can we throw the Village out now and get new, more intelligent pundits already? The Village is creating most of the stupid in this country, because they have the methods and means to inflict their idiocy upon millions.McCain's Brilliant Bailout Strategy
McCain has transformed a minority in both houses of Congress and a losing position in the polls into the key role in the bailout package, the main man around whom the final package will take shape. . . .
Then McCain comes out of the process as the hero who made it happen when the president couldn't and Obama wouldn't. He becomes the bailout expert. And, of course, the bailout will work. . . .This bold move by McCain is about to work. Big time.
Dick Morris, New York Post, today:The polls now all indicate an Obama win on Nov. 4; some even suggest a landslide. . . .Two weeks ago, Dick Morris was running around proclaiming McCain's decision to suspend his campaign and make the bailout happen as a "brilliant move" that would pay off "big time" for McCain because he would be viewed as the bailout's prime mover by a grateful public. A mere two weeks later, with McCain continuing to plummet in the polls, Morris today just blithely announces in his column that McCain's woes are due to his awful decision to suspend his campaign and involve himself in the unpopular bailout -- and never bothers to mention or even acknowledge that it was Morris himself who, at the time, was breathlessly hailing the move as "brilliant" strategic choice that would be the centerpiece to McCain's imminent victory.
Anger over the Wall Street mess has been pushing voters to Barack Obama in droves. And John McCain's effort to get involved in the solution only hurt him.
By suspending his campaign and heading to Washington, McCain made himself a central actor in the unpopular bailout, and thus a target of populist outrage. It also hurt his his effort to show how he far he is from President Bush -- there he was, shoulder to shoulder with Treasury Secretary Hank Paulson, Bush and Wall Street.
That Dick Morris is a buffoon is hardly news, but he was one of Bill Clinton's closest advisers and, for people who watch Fox News and read The New York Post, he's considered to be one of America's foremost political analysts. A potent reflection of our predominant political culture is the fact that people like Dick Morris can not only exist, but thrive within it (speaking of which, here's jubiliant Fox News genius Frank Luntz after the Biden-Palin debate: "Brit, this debate's gonna have significance; this debate is gonna stand out; watch the polling data over the next 48 hours, because you’re going to see a shift").
I only inflicy my idiocy on like 12 people. Max. Two of them are my parents. Internet: the great equalizer. And yet I'm confident I'm better at this than Dick Morris.
Silly K Drum. Actual citizens aren't allowed to address our leaders. You think we live in a democracy or something?
DEBATE FORMAT....Taegan Goddard summarizes the rules for tonight's "town hall" debate:
The questions will "be culled from a group of 100 to 150 uncommitted likely voters in the audience and another one-third to come via the Internet."...."An audience member will not be allowed to switch questions. Under the deal, the moderator may not ask followups or make comments. The person who asks the question will not be allowed a follow-up either, and his or her microphone will be turned off after the question is read. A camera shot will only be shown of the person asking — not reacting."....McCain and Obama are not supposed to ask each other direct questions.
This is ridiculous. Why bother with a human audience or moderator at all? You might as well just select the questions, project them on a screen via PowerPoint, and televise the results. Wire the candidates up to received increasingly intense electrical shocks if they exceed their time limits and you'd be all done. Anybody got a problem with that?
Still, some people are actually surprised that a rate cut is being floated.
Bernanke said the economy is poised for subdued growth during the remainder of this year and into next year. Financial turmoil is likely to extend the weak period and increase risks to growth, he said.C'mon folks, this is Helicopter Ben here. The only question in my mind is 50, 75, or 100 BP rate cut, cause I can guarantee you one's coming before Monday.
"Continued efforts to stabilize the financial markets are essential," he said. "The Federal Reserve will continue to use the tools at its disposal to improve market functioning and liquidity," he added.
The chairman's comments drew surprise from some quarters.
"Despite the huge new programs to provide liquidity to the markets, the Fed Chairman just gave the green light for a rate cut at the October meeting if not before," said Bank of Tokyo-Mitsubishi economist Chris Rupkey. "When the risks to the economic outlook increase, this is the sign that policymakers are preparing the markets for a rate cut and not a moment too soon."
[UPDATE] And the Dow dives across the finish line down 508. All the losses we avoided with yesterday's intra-day rally promptly caught up with us. Dow well under 9,500 at the close.
The Reasons To CutWhich is actually a pretty balanced argument. I'm going to say that right now there's way more deflationary pressure (housing depression) than inflationary pressure (energy/food/commodity prices are way down), but the argument that the Fed's rate cuts earlier this year did nothing is spot on.
The credit crunch has not only spread around the world it’s seeping into the real economy at a time when it is already weak.
“Cut rates," says Robert Brusca, chief economist at Fact & Opinion Economics. “Not for the financial sector but for the real economy.”
With commodities – especially oil prices – down sharply, so the argument goes, there’s little, if any, inflationary risk – as there was, say, in July.
If that’s the case, there’s also an argument that a rate cut certainly can’t hurt at this point, which may be why some believe the market is pricing in one.
So, if a rate cut is the right medicine, there’s also the question about whether it should be coordinated with other central banks, especially the European Central Bank, which has this far resisted.
Supporters say coordinated – if not entirely simultaneous – action – will have a more powerful impact on financial markets, underscoring the global nature of the problem as well as a unified commitment to battle it.
“I think you're going to see a significant global move," Pimco co-CEO Mohamed El-Erian told CBNC. "Whether it's coordinated or correlated doesn't really matter as long as it is simultaneous across many jurisdictions."
“It’s imperative for the ECB to cut,” says CNBC contributor Vince Farrell, a principal of Scotsman Capital. “It’s well-behind [the curve].”
Farrell is among those who don’t think the Fed will cut rates. Indeed, there’s also no shortage of reasons for the central bank to hold pat.
The Reasons Against a Rate Cut
For some time now, economists have argued that you can’t fight a liquidity problem with rate cuts, which may explain the Fed's previous moves have done little, if anything.
A recent study of major banking crises by two IMF economists concluded that monetary policy appeared to be neutral at best.
The Fed – and Treasury department — may have already come to that conclusion and have demonstrated extraordinary innovation and resourcefulness in using new and existing tools to attack the liquidity problem.
The Fed’s decision to create a special lending facility for the commercial paper market Tuesday is the latest move and quickly followed its decision to pay interest on bank reserves Monday.
Some say that’s as good—or better – than an interest rate cut.
“In a time of credit stress, the job of a central bank is to be a lender of last resort,” says Cato’s O’Driscoll, who says the Fed “has abandoned the federal funds market,” where the rate has been well below the central bank’s target level at various times in the financial crisis.
"Paying interest on reserves should help us better control the funds rate," Bernanke explained Tuesday, in referring to the move.
The final – and perhaps most irrefutable – argument against a rate cut is that they’re already very low at 2 percent and the Fed has very little ammunition left ... and it might need it later.
Rate cutting as crisis management got the Bank of Japan nowhere during its decade-long fight against the deflation of an asset bubble.
And the few Fed members who remain from the Alan Greenspan era are well aware that taking rates down to 1 percent at that time probably wasn’t a good idea, if only because it set a bottom.
The real problem is confidence. Banks have massive liquidity, they just aren't using it. They have to be made to want to use it. By what, I have no idea. Rate cut, paper buy up, who knows at this point.
You can bet the questions tonight are going to be about the economy as it's a town hall style debate. Real people asking real questions...questions that McSame isn't going to be able to answer, and if he goes into scorched earth attack mode or loses his temper on national TV, he's dead and gone.
Obama keeps it cool here and lays out his case, he can finish McSame tonight.
Dow's kinda lazing around the down 50 mark or so. A rather ho-hum reaction to the move if you ask me.
As speculated, the central bank said it was creating a special facility to help the $1.7 trillion commercial paper market. The Commercial Paper Funding Facility will buy unsecured and asset-backed commercial paper directly from eligible issuers.
"Terrific news," Gordon Charlop, of Rosenblatt Securities, said of the Fed announcement. " Frees up money markets. If you just look around at some of the valuations ... book value versus earnings, there seems like there's some opportunities here."
Some traders said there are signs that we may be nearing a bottom and that it’s a good time to start following Warren Buffett’s lead and dabbling in the market.“There are signs,” said Scott Redler, chief strategic officer at T3Live.com. “Investors should be putting money to work now month over month – not take your money out if you need it for the next five years,” Redler said.
Australia slashed its benchmark interest rate by the most since 1992 and central banks pumped more than $480 billion into money markets as policy makers tried to staunch the worsening financial crisis.The prospect of global rate cuts and that emergency G7 meeting on Friday has the markets in something of a holding pattern right now. On one hand, rate cuts are sexy short term. On the other hand, Australia's 100 bp cut did dick to the LIBOR, the overnight rocketed back up to 3.9325. The Euribor continues to rise. Nikkei and Hang Seng indexes are still quite wobbly, but Euro markets are posting modest gains this morning on hopes that a rate cut will bleed off the money market pressure.
Australia's central bank lowered its key rate by one percentage point to 6 percent, twice as much as economists forecast. The European Central Bank and its counterparts provided extra funds one day after the worldwide stock market slide wiped more than $2 trillion off investors' wealth.
The moves failed to stem strains in credit markets that have pushed Iceland's financial system close to collapse and sent European money-market rates to records today. With financial conditions deteriorating, central banks are coming under pressure to follow Australia and cut interest rates.
``There seems a growing chance of emergency ECB and Bank of England easing in the next few days,'' said Michael Saunders, chief western European economist at Citigroup Inc. ``To be sure, early easing, even 50 basis points or more, would not provide a full solution to the current economic and financial crisis.
ECB President Jean-Claude Trichet is scheduled to speak in Evian, France at 3:30 p.m. local time. Fed Chairman Ben S. Bernanke will discuss the economic outlook from 12:30 p.m. in Washington today. They will meet Group of Seven counterparts in the U.S. capital on Oct. 10.
It's clear investors are looking for concrete, global action now. The money markets are immobile. Iceland nearly went under...not the bank, the country. In response, they nationalized the country's second-largest bank and took a loan on crappy terms from Russia, which in international terms is like taking a payday loan from, well, the mob.
US futures are modestly higher. Global financial analysts are looking for a 50 bp cut from England and Europe and a full 100 bp cut from the Fed...anything less may cause another disastrous Monday. Only the promise of Friday's G7 meeting and the global action it prefaces allowed the Dow to rally and cut its losses in half yesterday. If that hadn't happened, the Dow would have surely tanked by 1,000 points or more. That's how close we came yesterday to a nearly 10% meltdown as the French proposal for the emergency meeting crossed the wires at about 3 PM New York time and the Dow staged a nearly 500 point rally in one hour.
And in all actuality, like venting a steam pipe, a lot of folks were actually looking for a meltdown day like that on the theory that it would have represented a concrete bottom to the market that would have led to a massive rally today. But, that rally came in the last 60 minutes of the trading day yesterday instead, so today looks like a flat day.
It might even be quiet on the markets for the next few days for once as the world awaits Friday's G7 meeting in Washington. European action could come as soon as Thursday, and that could mean a strong day both Thursday and Friday on the markets. The US markets coming out ahead this week is not out of the question at all.
And while the stock markets may pause for a bit, the real problem is that the credit markets are still locked up tight. Action may need to be taken before Friday.
The cost of borrowing in dollars overnight in London jumped as U.K. lenders held talks with the government on emergency funding and Iceland nationalized its second-biggest bank amid an unprecedented credit squeeze.Nothing the central banks have done so far has made even a dent in the credit markets. The prospect of a global rate cut hasn't budged it.
The London interbank offered rate, or Libor, that banks charge each other for such loans rose 157 basis points to 3.94 percent today, the British Bankers' Association said. The corresponding rate for euros climbed 22 basis points to 4.27 percent, the highest in four days. The Tokyo interbank rate stayed at the highest level this year and the Libor-OIS spread, a gauge of cash scarcity among banks, widened to a record.
``There's still a massive lack of confidence in this market and the more we talk about it, the more it becomes a self- fulfilling prophecy,'' said Jan Misch, a money-market trader in Stuttgart, Germany, at Landesbank Baden-Wuerttemberg. ``Sentiment hasn't improved much and rates remain at elevated levels.''
If whatever coordinated action decided upon by the G7 on Friday and put into place between now and Monday morning in Asia doesn't loosen up the credit markets, this whole stack will blow sky high next week.
We came damned close to Game Over yesterday. We may be in the same situation next Monday too.