Thursday, October 23, 2008

Zandar Is Wise, Grasshopper

Me, two days ago:
I got a fiver says somebody on the GOP (not a blogger or El Rushbo, but an actual state/national GOP party official or McSame campaign official) denounces Obama's trip to Hawaii as:

  1. a campaign stunt to elicit sympathy,
  2. something that proves just how out of touch Obama is for being able to fly to Hawaii at a moment's notice,
  3. proof that Obama is using all that "suspect campaign money illegally for personal reasons",
  4. some combination of the above.
Just sayin.
McCain douchebag Brad Blakeman, today:

Do not doubt the Zandar, people.

Do You See What I'm Up Against?

And every now and then I find folks that make me look perfectly sane here on the internets. Bonus snippet:
I suspect that the media-manipulated polls could lead to violence if Obama is not elected, including injuries to innocent citizens, rioters, and law enforcement officials.

The Next Stage Of The Meltdown

It's looking to be a race to see which one collapses first: Emerging markets in countries like Russia, Hungary, South Korea, Brazil and Mexico...
Developing nations' borrowing costs neared a six-year high after Standard & Poor's threatened to cut Russia's debt ratings as the global credit crisis deepened.

The extra yield investors demand to own emerging-market government bonds instead of U.S. Treasuries surged 39 basis points to 8.41 percentage points, the biggest since November 2002, according to JPMorgan Chase & Co.'s EMBI+ index. The annual cost to protect Russia's bonds from default soared as S&P lowered Russia's ratings outlook to negative on concern the cost of the government's bank rescue will climb.

Russia has committed as much as 15 percent of its gross domestic product to propping up banks, including a $50 billion credit line to development bank Vnesheconombank. Russia's international reserves, the world's third largest, declined by $14.9 billion last week after the central bank sold currency to support the ruble as investors pulled money out of the country.

``There is now no safe haven globally other than a deeply indebted U.S. government,'' said Jim Reid, head of fundamental credit strategy at Deutsche Bank AG in London. ``The events of the last few days are categorical evidence of the globalization of the credit crunch and its subsequent problems.''

Ex-Soviet republic Belarus added to requests from Iceland, Pakistan, Hungary and Ukraine for at least $20 billion of emergency loans from the International Monetary Fund as the financial crisis leaves nations unable to repay their debt. Belarus has requested ``no less than'' $2 billion and may also seek funds from central banks and commercial banks in other countries, said central bank spokesman Anatoly Drozdov.

Argentine Nationalization

In Argentina, lawmakers are battling to block President Cristina Fernandez de Kirchner from using $29 billion in nationalized pension fund assets to repay debt as the government struggles to avert its second default this decade. Fernandez announced plans to take over private pension funds on Oct. 21, sparking a rout in the country's financial markets. Argentina last seized retirement savings in 2001, before it reneged on $95 billion of debt and triggered a global selloff.

The yield on Argentina's 8.28 percent dollar bonds due in 2033 jumped 4.11 percentage points, to 33.44 percent at 11:44 a.m. in New York, according to JPMorgan. The bond's price fell 3.5 cents on the dollar to 20 cents, leaving it down almost 17 cents this week.

``It's becoming a mess in emerging markets,'' said New York University professor Nouriel Roubini. ``There are about a dozen emerging markets that are now in severe financial trouble.''

...or if the next disasterous collapse will be hundreds of hedge funds.
Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

``We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, told a conference of hedge-fund managers in London today. ``There will be massive dumping of assets'' and ``hundreds of hedge funds are going to go bust,'' he said.

Group of Seven policy makers have stopped short of market suspensions to stem the crisis after the U.S. pledged on Oct. 14 to invest about $125 billion in nine banks and the Federal Reserve led a global coordinated move to cut interest rates on Oct. 8. Emmanuel Roman, co-chief executive officer at GLG Partners Inc., said today that as many as 30 percent of hedge funds will close.

``Systemic risk has become bigger and bigger,'' Roubini said at the Hedge 2008 conference. ``We're seeing the beginning of a run on a big chunk of the hedge funds,'' and ``don't be surprised if policy makers need to close down markets for a week or two in coming days,'' he said.

Both are poised to go. We're nowhere near out of the worst of the financial crisis yet. It's just beginning. If emerging markets collapse into mini-depressions, or the mighty hedge funds fold by the dozen, the pain we're seeing right now in the markets will be a fevered dream of peace compared to the chaos that will ensue.

And honestly, the question is when, and how badly, will both of these global linchpins disintegrate?

People think we're through the worst and that we've avoided a depression or even a bad recession for the most part, people are looking forward to the next "bear market rally". You're smarter then that, I'm hope...the worst is still to come.

It's No Longer The Credit Crunch...Or Is It?

LIBOR numbers this morning were decidedly mixed for once. The overnight rate and TED spread went up slightly while 1-month and 3-month rates registered tiny declines (1.62 BPs and 0.63 BPs) this morning. Given recent declines of 20+ BP, and the fact the LIBOR numbers are still well above bank rates, it means banks may be holding on to their cash again.

Then again, things like Wachovia's nearly $24 billion quarterly loss tends to scare the crap out of banks. Meanwhile, weekly jobless numbers are out this morning and they are bad. It looks like another dismal day on the markets.
Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 478,000 in the week ended Oct 18 from a revised 463,000 the prior week, the Labor Department said.

Analysts polled by Reuters had forecast 470,000 new claims versus a previously reported count of 461,000 the week before.

The Labor Department said that the effects of Hurricane Ike in Texas added roughly 12,000 claims to the total.

"Job losses are clearly getting worse, we think this month we'll see more than 200,000 jobs lost," Nigel Gault, chief U.S. Economist at Global Insight, told Reuters.

That would bring total job loss number this year to close to a million in 10 months, a pretty staggering number considering in the first 9 months there were 750,000 jobs lost or so. 200k in one month is bad...because there's still two months to go this year. Holiday hiring may help reduce these job loss numbers for November and December, but with nearly everybody cutting back on seasonal hiring this year, by the time January hits, things are going to be downright disastrous. Still, over a million jobs lost in one year will be downright mild compared to 2009's totals. You can count on that.

First Rule Of Advanced Hole Management when finding self in hole, STOP DIGGING.

Today's contestant? Michele Bachmann, the lovely GOP Congresswoman who suggested the media should do a major expose' on Congress to see if it's anti-American or not. Not only did this prompt Democrats to give about a million dollars since just last Friday to her challenger, Elwyn Tinklenberg, the DNC is in fact matching that million, and now polls show a seat the Dems can now take on November 4.
There weren't enough chairs for the volunteers crammed inside the four-room campaign office Wednesday morning. Every time aides hit "refresh" on their computers, hundreds more online donations appeared. Downstairs, the postal carrier spent 10 minutes trying to cram a two-foot stack of envelopes stuffed with checks into the mail slot.

"It's been raining money," said Beth DeZiel, 39, the campaign's dazed deputy finance director. "There's so much, we can barely keep up. It's unbelievable."

But this unsolicited good fortune -- $1.3 million since Friday -- isn't based on anything the Democratic former mayor and grandfather of seven did. It's all because of something his rival, Minnesota Rep. Michele Bachmann, said.

On Friday afternoon, Bachmann appeared on MSNBC's "Hardball with Chris Matthews" and made what has been dubbed the million-dollar mistake: Bachmann, 52, alleged that presidential candidate Barack Obama may hold "anti-American" views, and proposed a media investigation into "the views of the people in Congress [to] find out: Are they pro-America or anti-America?"

While Sen. Obama's presidential bid has transformed the way campaigns use the Internet to reach volunteers and donors, the technology has also become a way for the public to instantly react -- even to races in which they can't vote.

Those quick reactions, often in the form of donations, can influence the outcome of a campaign, said Julie Barko Germany, director of the Institute for Politics, Democracy & the Internet at George Washington University's Graduate School of Political Management.

Barko German said "the Internet can be an amplifier," enabling viewers to react instantly to something that incites strong support or fury.

"It's an excellent fundraising tool," she added, citing research indicating that "when you show someone a video online, they donate 10% more."
So at this point, you'd think the Hole Management 101 lessons would kick in: you'd expect a candidate in this situation to own up, apologize, and move past the comments that made a decently easy race into a neck-and-neck one.

But you don't know Shelly Bachmann real well, do ya?
Rep. Michele Bachmann (R-MN) has dug in further on her position that Barack Obama is against America. Bachmann appeared today on the Hugh Hewitt radio show, and had this to say: "And so, he [Chris Matthews] was using the word "Anti-American" and I told Chris, what I question are Barack Obama's views. Because Barack Obama's views are against America." And here's what she said on the Mike Gallagher show: "What are Barack Obama's policies? Are they for America, or will they be against traditional American ideals and values?"
The GOP has decided to cut its losses now and leave Shelly's pedicured foot deep in her own throat, and has now cut off her party ad budget.
A Republican source has confirmed to Election Central that the NRCC is indeed pulling all its advertising for Rep. Michele Bachmann (R-MN), whose antics since her McCarthyist rant on Hardball have quickly put this once-safe incumbent in serious danger. Several hundred-thousand dollars worth of TV time had previously been reserved on Bachmann's behalf, but now it has all been cancelled, as Huffington Post first reported.

Bear in mind that Bachmann was heavily favored to win re-election before this whole mess happened, but since then her Democratic opponent has received $1.3 million in online donations and another $1 million in commitments from the DCCC. The national party is now directing its attention to other races.

Bachmann could still potentially win, as this district voted 57%-42% for George W. Bush in 2004. But she's now on her own. It's a rare thing for a national party to totally cut off an incumbent, so this should give you an idea of just how unpopular Bachmann is among Washington Republicans right now.

To cut an incumbent off at the knees like that whose seat is now in trouble just two weeks before an election is absoultely unheard of. When your local Congressional Representative becomes a national punch-line, and that person shows zero political skill in damage control, that person will be jettisoned by the Powers That Be.

The GOP doesn't want to help her at all now. They are abandoning her seat to the Dems just two weeks before the election. Given all the losses the GOP will suffer congressionally this year, she just added one more, and the GOP has no desire to even give a damn. That's amazing, especially given the day before she went on Hardball, polls showed she had only a 4-5 point lead in a district where the third party candidate was getting 6-8% and there were still 15% undecideds.

But that was last week. I'm betting those undecideds are a lot less undecided right now.

See ya, Shelly!


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