Tuesday, September 30, 2008

I Can Do That

Just to lighten it up a bit:


Sometimes the Opinion page in the WSJ leaves me speechless. This is one such article.

Inflation is a tax. Deficits are a tax. Public debt is a tax. There is no free ride.


Save, save, save!. I'm going through every single expense to figure out what can be cut.

FDIC insured and Treasuries for all non-tax deductible short to medium term investments is where I am headed.

NH and VA

New Hampshire and Virginia have become battleground states? Talk about a demographic change. (Click on each state for details)

Monday, September 29, 2008

Now What?

This is insane.

Maybe I won't be reading those 110 pages tonight.

Full Text

All 110 pages of it. I'm going to read it when I have time tonight. I read the summary on the plane this morning and while I'm still pissed that we are funding this with debt, this is probably as good a deal as the taxpayer is going to get. Let's hope it actually works.

Nouriel Roubini, who I just found out is the economist that Glenn Beck uses (props to Glenn Beck for tracking him down at NYU), is beyond pessimistic. And that scares the hell out of me. The man is brilliant and has been predicting this exact situation for a couple of years. They don't call him Dr. Doom for nothing.

Does anyone else find it a little odd that our entire economy is wrapped around credit? I understand why it works, but maybe we need to rethink the credit paradigm.

I'll comment more tomorrow after I read the details.


That's the percentage of the electorate that the debate was targeting, meaning voters that were using the debate to help them decide who to vote for.

Stratfor's Part 4 of its foreign policy debate series.

As I stated previously, I didn't see a clear tactical winner. From what I'm reading in punditland (both sides), it seems that there is a perception that Obama won strategically because he appeared presidential, thus alleviating any concerns of any fence sitters.

Saturday, September 27, 2008

Not Quite Inspiring

But at least it wasn't concrete. 9 mile run this morning, with only about 1/2 mile of it being on concrete. I found my canal bank! My favorite parts were the amazing sunrise as the sun comes over the Superstition Mountains, the roadrunner that ran across my path, and the two floppy eared hound dogs that were sharing the yard with about five broken down vehicles baying at me. Not a bad way to start the weekend.

Friday, September 26, 2008

Debate Notes

My comments in bold:

McCain's opening statement was a little weird. "We Republicans" – out of control spending and corruption (uh, you're a Republican John)

McCain – Obama wants to increase spending by $300B (nice jab)

Obama – focus spending on health care and education – spend money wisely – help middle class instead of the rich

McCain – 11% business tax in Ireland vs 35% tax in U.S. means we need to cut taxes on businesses (great point until Obama follows up)

McCain – raise taxes slows down business

Obama – tax loopholes for businesses mean that businesses have lowest tax rates in the world (and a left hook)

Obama – have to have energy independence (10 years), environment, health care (didn't like that he didn't answer the question about what he would give up)

McCain – cut spending, eliminate ethanol subsidies, do away with cost plus contracts in the military (direct answer to the question)

McCain – saved taxpayer $6.6B (Boeing and DOD)

McCain – spending freeze except for Defense, veterans, entitlements (that's what I'm talking about)

Obama – hatchet instead of a scalpel(nice one)

McCain – nuclear power (700,000 new jobs)(double whammy - energy independence and jobs)

Obama – have to trust the values of the candidate (amen and he's shown better overall judgment)

McCain – doesn’t want to hand health care over to the federal government (talking point)

McCain - $800B in new spending via Obama (whoa nelly!)

Obama – McCain agreed with Bush 90% of the time, presided over deficits and increase in spending – (keeps slamming this home)

Obama – against Iraq from the beginning, spent $1T, lost 4000 troops, Al Qaeda is resurgent in Afghanistan, spending $10B a month, when Iraq has $79B surplus, borrowing money for basic functions

McCain – Obama said surge wouldn’t work, but Obama recently said that surge worked (it sucks when you're wrong)

Obama – better judgment based upon 2003, McCain pretends war started in 2007 (one of the top three lines of the night)

McCain – Obama doesn’t understand difference between tactic and a strategy (that's gotta hurt)

Obama – better judgment. McCain took eye off the ball and said we could muddle through Afghanistan (another top three line of the night)

McCain - Obama's initial reaction to the Georgia/Russia crisis showed inexperience (major foreign policy point in McCain's favor. why won't McCain look Obama in the eye?)

After that, it started to get slow and less interesting. McCain's focus on pork was nice until you realize that pork is only $18B out of a $3T plus budget. Peanuts in the grand scheme of things.

McCain's reference to Obama's naivety and his experience was his driving theme. Obama's was his judgment. McCain was better than expected on the economy, until Obama started hammering him on tax cuts for the rich.

McCain had the tactical advantage on foreign affairs with his knowledge of everything foreign and hammered him on the "no preconditions" before talks with axis of evil heads of state, but Obama's better judgment on Iraq in 2003 and Afghanistan (the muddle comment was brilliant) makes it about even for me.

Both had good poise. I liked the format. Obama took the initiative by talking to McCain first. McCain's creepy smile and using his nickname to refer to himself was a little odd. He obviously despises Obama.

Both appeared presidential and no major gaffes. Maybe next time.

Economists' Voice

Some questions for Paulson and Bernanke.

A better way?


Some history and a minimalist approach.

And an interesting podcast with Arnold Kling("Bailouts and Uncertainty").

"The day after the bail-out passes, the market is going to grind to a halt."

Thursday, September 25, 2008

Deficits and Debt

You've seen me rail against debt lately. The problem is that during prosperous times (the last 6 or 7 years), the government has been running massive deficits (spending more than it takes in). This is due to three major items: the Bush tax cuts (yea!), the enlargement of Medicare(BOO!), and Iraq (DOUBLE BOO!). Where did the money come from then? We borrowed it from China (and other countries) by issuing debt (i.e., Treasuries). A lot of it. Almost $5 trillion, effectively doubling the debt and increasing the debt as a % of GDP (domestic productivity) from just below 60% to almost 70%.

Now deficits are not always bad. In bad times, deficit spending can help jump start the economy (see The New Deal) by injecting cash into the economy. However, we were deficit spending in good times. Unprecedented deficit spending.

Which leads us to today. We can't deficit spend our way out of this mess without long term negative ramifications to the dollar, inflation, and GDP. Pardon my French, but it's truly f*&$ed up. We're already in a serious hole and now we're going to dig it deeper.

Our options will be to raise taxes to pay for the debt (which will slow down growth) or just throw caution to the wind and let the dogs of hyperinflation loose (just print more money) in order to make the debt cheaper to pay off (which completely screws us over - just think Zimbabwe today or Germany in the 20s).

I honestly have no idea how we are going to get out of this mess. We need to see massive GDP growth (highly unlikely anytime soon) or cut both discretionary (things like defense and farm aid) and non-discretionary spending (things like Social Security and Medicare) off at the knees (a sure political loser).

Here's hoping for people much higher than my pay grade to solve this. Now I need a drink.

Here IT Is

The Mother of All Bail-outs.

Where are the details?

Equity sharing: How much? What type?

Profits to pay back the debt: How much? By when?

The debt sickens me. Unless the government is going to increase my income to pay for the inflation tax that it is about to laid at my feet via the printing press and more debt, this should not pass (I'm picturing myself as Gandalf shouting at the Balrog in Moria). We're heading for Zimbabwe territory.

I'm calling and emailing all of my elected representatives again.

The Bail-Out

What if one of the presidential candidates votes against the bail-out? Another game changer.


Interesting little post on Volokh regarding the amount of distribution discretion (i.e., equity warrants, executive compensation, and help for homeowners) Dodd's and Paulson's plans have.

Part 3 - McCain

McCain's foreign policy stance via Stratfor.

The history lessons that this series is providing are exceptional. Rather than just looking at stated positions from each candidate, Friedman is looking at each party's foreign policy traditions and what that potentially means for each candidate.

Wednesday, September 24, 2008

Friday Debate

Some of you might not like the direction I'm headed, but Senator McCain's political stunt in refusing to debate Senator Obama Friday evening is an utter joke. Now IS exactly the time for a debate. Let us see the choices before us. Let us understand what they are thinking in the heat of the moment without their scripted and vetted talking points.

As if the past two weeks haven't provided enough evidence of McCain's lack of knowledge of economics and finance, this cancellation for the benefit of the country trumps his populism/socialism/or whatever flavor of the dayism that he keeps coming up with. I predict that this little gimmick will help speed up the erosion of his support. Although with more than a month to go, who knows what else could happen. Afghanistan could erupt or we could invade Iran.

At the end of the day, we're all going to need to have a gut check when we go to the voting booth. That gut check for me will be all about judgement and pragmatism in moments of both peace and crisis. It's becoming clear to me who that person is.

Bailout Necessary?

Some think not. The summary on RGE here.

Other alternatives via the Washington Post.

The trillion dollar question is, what happens without a bailout? Will credit markets really completely fail? Will all of the institutions that are currently holding these securities go the way of Lehman? How many bankruptcies is too many?

Ok, that was more than one. Shoot me.

Getting It Right?

From the WSJ Opinion page.

This is an interesting idea. Use the bail-out to buy homes, and in some cases neighborhoods, and demolish them. Get rid of the toxic supply. NIMBY of course.

I'm still wondering why I haven't seen many people talking or pressing on the issue of how we are funding this bail-out (increasing the public debt by ~10%).


I have always been a political junkie. Few things get my mind and heart racing more than politics. It's fun, entertaining, and helps prevent brain atrophy. Most of the time, aside from my favorite P&E (Politics and Economics) links over to the left, I keep these topics off my blog. I do this for several reasons:

1. There is already a glut of high quality content out there.
2. I hate parroting back simply what I've read or heard.
3. I usually have nothing original to say regarding the topic (see #2).
4. My audience of two just isn't into politics the same way that I am and I'd hate to drive my readership away (i.e., it would be a bad marketing decision).
5. Running in Arizona just isn't as inspiring as running in NorCal or Westchester or even NYC.

However, as you have seen, I've recently begun changing my self-imposed policy. My ardor for politics has not changed, but the events that are taking place right now are too important for me not to express what I'm thinking and feeling (yes, I do feel).

I will continue to sporadically post about my running adventures, as they happen and as they inspire me, but for the immediate future, expect to see more links to political and economic articles that contain topics and opinions that I believe are important. I know that many of you ignore these topics, but (and here is where the editorialist in me escapes), you do so at your own peril. The events and decisions that we as friends, family, communities, and as a nation are faced with today will affect your day to day lives for a generation. It is that important.

Part 2 - Obama

Stratfor's Part 2 of 4: Obama's Foreign Policy Stance.

Tuesday, September 23, 2008

Beyond Outrage

The size of this potential bail-out (all funded by debt - that means we'll (and I'm including your children in that we) be paying for it for the next 50 years through our taxes) is making me physically ill.

Privatized profit and socialized losses are what we are looking at. And that is clearly unacceptable. The only way to do this is to swap this terrible debt (at prices well below book value) for majority equity stakes (i.e., control).

Write your Representatives and your Senators and voice your opinion.

An Open Letter to Secretary Paulson.


"A virtuous leader is one who is clever, cunning, decisive, ruthless and, above all, effective." - Machiavelli

In preparation for the debates beginning this Friday: Part 1 of 4 presented by Stratfor, a top (in my opinion, the top) independent foreign policy think tank.

This is a non-partisan series. The editors of Stratfor have staffers who ardently support each candidate and who are standing by "...to crush" any perceived unfairness toward either candidate. Great reading.

Monday, September 22, 2008

The Socialist Bailout

Led by our favorite Republican.

My favorite line is from Gary Hart:

"I know why you are conservatives -- you favor private enterprise for the poor and socialism for the rich."

Summary of a Crisis

Very good read on the current financial mess. Yes, it's on Kos, but it's the best I've read so far.

And another on the potential cost of doing nothing.

Sunday, September 21, 2008

For The Record

I get really angry when I run here in Arizona. Concrete drives me batty.

Friday, September 19, 2008


Please let this scenario happen. According to the Poll of Polls, I can see it.

Only look at the toss-up states.

For Obama:

For McCain:

Although with the economy on the forefront of everyones' minds (with the Republicans having been at the helm) and with the majority of Americans scared to death of a potential President Palin, this is probably unlikely (meaning Obama probably wins OH, IN, and/or VA).

Go Chaos!

Wednesday, September 10, 2008

In Keeping With The Season

Very interesting reading (open the PDF) that only looks at the tax side of the equation (nothing about spending, which is rarely cut anyway - cue the great sucking sound).

Tax Policy Center estimates of each candidates' tax plans.

For general tax/spending projections:

Congressional Budget Office

And just for giggles, one of my favorite Flash creations ever:

Death and Taxes

And for a state by state electoral map look (forget national polling, it is irrelevant):


Tuesday, September 02, 2008

In Honor of Marvin

Liz recently posted about moving mountains. The genesis of this post was our watching Sicko. We both enjoy Michael Moore and even though we(i.e., I) don't always agree with his politics, he sure does know how to make an entertaining movie. My favorite part of Sicko was when he wrote a check to cover one of his critic's wife's medical bills. Like I said, if nothing else (and I do think there is something else), Moore is an entertainer. One of my favorite moments is his Charleton Heston (may he rest in peace) ambush in Bowling for Columbine. It's not often that a movie makes me squirm.

But I digress. Moving Mountains. The day after we watched Sicko, we were driving (we always seem to be driving in Az.) and Liz was doing her communication thing, which I stand in awe of, and I couldn't find anything to say (which wasn't that surprising). We talked about our passions and using those to build the foundation of some tool that we would then use to build a better world.

Liz's task is easy (to me). She has so many passions and more importantly talent that she just needs to pick and do. Me, that's a different story.

My passions (in no particular order and excluding family):

- Running
- Politics
- Um
- I swear I have another one
- Still thinking

It's interesting. People have commented to myself and Liz that I am difficult to decipher because I don't say much and that I must be thinking about really heady stuff. Well, let me clear that up. Here's a sample of my brain activity when I'm not speaking.


It's that exciting.

So here I am, approaching the peak of my intellectual powers, with two passions and without an extraordinary amount of talent in either one (this is NOT a not so silent plea for affirmation), and I have nothing interesting to use them on. Even worse might be the realization that my powers are unfortunately, not super. All I've ever wanted to do was to turn into a pterodactyl (why did the girl always get to turn into cool creatures and the boy was always stuck being a pail of water?)

In other news, twice this past week on separate flights, I thought for an instant that I was going to die. Flying does not freak me out. I've logged too many miles. However, there are occasions when something happens that hasn't happened the other 80 times I've flown this year and death does cross the mind. The weird part is what I thought about in those two instances.

"Well, this will be interesting. Or not" I probably would have been bored two minutes after dying anyway.