What will it take to beat Obama now?
October 11th, 2008-
Which events could turn the tide this late in the game?
On Thursday night, I recorded another 10-minute slot for ‘Inside City Hall’ on NY1 (the Time Warner Cable news channel for New York). To the astonishment of the host, Dominic Carter, I mentioned an InTrade market that assesses the likelihood of an Israeli or US attack on Iran. Though I don’t play this market myself (I actually find it in rather poor taste), I suggested that such a significant event might be what it would take to push the economic crisis off the front pages, and make military and foreign affairs the centre-point of the final few weeks of campaigning. Such an occurrance would, I suggested, play into the hands of John McCain.
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The more I have dwelt on this issue, the more convinced I am that it will take a significant event for the Republican candidate to overcome such a substantial Obama lead. Indeed, only yesterday Politico.com carried a story which cited a Democratic pollster and strategist as saying that only a terrorist attack could revive McCain’s chances.
Whilst this is a little crass, there is some truth in the underlying claim. John McCain needs a significant ‘event’ to regain the momentum and the front pages of the papers. Beyond a terrorist attack, or an attack on Iran’s nuclear facilities, I cannot imagine that anything other than a major personal scandal could bring this election back to level-pegging in the betting markets. Maybe PB.com’s punters are more imaginative than I am, but there seem to me to be very few scenarios that plausibly suggest that John McCain could win this Presidential election.
To compound his worries, the Troopergate report was published yesterday - it found indications of abuse of power, but no illegal activity. Also, Harry Brighouse at Crooked Timber is running with rumours along a theme that has been oft-mentioned on PB.com - that the RNC might give up on McCain (given his polling defecit) and focus instead on trying to save some of its Congressmen and US Senators from the Democratic tide.
Unless there is a major gaffe by Obama-Biden, possibly during the final Presidential Debate, there seems little that will stop the Democratic Party contender, once priced at 50/1, from becoming the next President of the United States.
Any suggestions?
Morus
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Maybe if Brown came out and declared for Obama, on historic form it would be the kiss of death and hand a landslide win to McCain?!
1st? I think the US would probably still vote for Obama if an attack on Iran started. I can’t see a ground war, it would only be a few bombs. A terror attack in the US might be different, but if Obama said the right things that might not even do it.America won’t be rushed into a war, or two, after the next attack (God forbid there should be one).
1 - Didn’t Brown already do that?
Reposted from the end of last thread (with thanks for the opportunity to correct the atrocious spelling)
176
Morus, much as I normally agree with a lot of what you write, I find it impossible to understand why you would feel reassured by the presence of the man who was one of the prime causal factors in getting the UK into this mess in the first place.
It was Brown’s mismanagement of both the economic golden egg he was given in 1997 and also of the regulatory framework that he dismantled and then rebuilt in a completely Heath Robinson fashion which has caused this creisis to be so severe in Britain. Add to that the fact that his first response has been to lash out at others including friendly countries in a vain attempt to deflect attention away from himself and I am afraid you have someone in charge who is the very last person I would ever want to see anywhere near the decision making process.
He and his Treasury team remind me of nothing so much as Mickey, Goofy and Donald trying to clean the clock.
by Richard Tyndall October 11th, 2008 at 12:59 pm
Bush states no nation will benefit by acting at the expense of another in this crisis - a swipe at the Iceland position?
Criticism of the G7’s lack of an actual plan is growing.
‘We will do whatever is necessary’ has not worked and will not work - the words are now a proven busted flush.
The economic crisis probably has a side benefit in making opening another front unaffordable and Bush’s weakness makes an Iran attack unlikely.
As it comes down to the wire the election will I think turn increasingly on character - Obama’s weaknesses in reaching out to redneck/blue collar voters due to his perceived distance and inability to connect, McCain’s ability to extract John McCain, the straight talker, from the wreckage of his campaign. The GOP will be hurt badly because of Bush, Iraq and his administrations failure economically but a Presidential election is more about the man than the party. McCain’s only hope is to present himself as a leader in a crisis, but Palin and the campaign errors don’t present that image today.
The possible game changer is less likely an externality like Iran but a different McCain in the final debate. A few tears almost did it for Hilary….
It will take a monumental event to stop the Obama bandwagon now - even a military strike on Iran or a major terrorist incident would be unlikely to see a sudden surge for McCain. The latest news on Sarah Palin is also disastrous for McCain - the odds on her surviving until election day must be dropping dramatically, and the allegations from the McCain camp that it was ‘Obama supporters’ holds no water given that it was a Republican state senate in Alaska. I would not be surprised if she’s gone by the end of the weekend, indeed odds on her replacement would be interesting, Rudy Gulliani??. The vetting of Sarah Palin seems to have been very shoddy given what has emerged about her subsequently – clearly it was a sop to the nutty right.
No matter what the RNC do now it’s unlikely to stop Republican congressmen being swept out on the Democratic tide - indeed the latest polls show Georgia senate race to be deadlocked, a race that only a few weeks ago was rated as ‘Safe Republican’ just a few weeks.
This election could end up being a landslide for Obama, on a scale not seen for the Democrats since 1964, and above any of the Clinton victories given the latest polls. When the tide seems to be running in your favour, there is little, or anything to stop it and this could very well turn into a Democrat rout.
Obama is gonna win. Even an attack on Iran wouldn’t stop his momentum: and besides, the last thing the world economy needs now is another hideous war in the Middle East, with crude going up to $300 a barrel - so the Americans would surely prevent the Israelis from doing anything, even if it might benefit the Republicans.
On the wider note of the presidency and American power, as I may have mentioned, I’ve been watching all seven series of the West Wing (which I’ve never seen before) over recent weeks. It’s a cracking show, even if it is dismally and tediously liberal and PC in places.
However what it most exudes now is an air of nostalgia: for that brief period 1985-2008 when America was The Hyperpower, the undisputed leader and policeman of the world. In the West Wing, when Jed Bartlett goes into the Situation Room, you sense he really can do anything, anywhere, anytime - that he watches over the globe, that he can sort any problem.
That feeling has gone now, you can just sense it. In just a few weeks. I don’t think America will ever look as uniquely puissant ever again. When Obama goes into the Situation Room, he’ll be thinking about China, and the EU, and his reliance on oil, and the fragile US economy. He won’t be master of the world. No US president will ever wield that undisputed power now.
It’s an extraordinary evolution. And that’s just one ramification of the Krunch. There are many more.
5 When the G7 said they would “use all available tools”, I thought they were referring to those in the group photo:
http://news.bbc.co.uk/1/hi/world/americas/7664790.stm
7 Sean - the West Wing was extremely well written, and very enjoyable, but suffered from the fatal flaw of being set in a parallel universe where 9-11 had never happened, nor the Afghan or Iraq wars. Never referring to the biggest political event of our age ensured it was going to to suffer from terminal nostalgia - for an age gone by, when airplanes landed at airports and Saddam was a rum cove in a far-off land - and America was a fine upstanding world citizen (-ish).
http://politicalbetting.com/index.php/archives/2005/05/26/could-this-man-be-the-next-president-of-the-united-states/
The first comment on this thread still makes me laugh
I went out for a drink last night - when I left the Dow was -500 and seemed to be struggling to break away from the 8000 marker - OK, it recovered somewhat ffrom there but whilst I was out I had a Jeff Wayne moment from WOTW - all these people having a drink, eating their supper, doing all the things that we do day in day out - and I thought ‘could it really come crashing down’ - what if the letters of credit dry up, what if the slide cannot be stopped, what if the fabric of captialism fails?
It felt as ‘real’ as the fear of nuclear armageddon did in the early 80s - as relevant and as present.
I am sure we’ll all be ok and somehow things will get on to an even footing, but it will be a rocky ride getting there and looking around the pub last night I picked up on snippets of economic conversations but more to the point noticed in my own group’s inevitable disucssions that thoughtful draw on the pint after some catastrophic prediciton… ‘we’re lauging about it but you know, I am sh!tting a brick here’ - I wonder how long before or if we’re not silently pondering but openly panicking.
I forgot to mention on the other thread about our experiences when we went to Wayzata in MN - my partner and I went out for pancakes - and we wore our Obama buttons as usual - there were a group of four people behind us - and one of the women had a loud mouth and when seeing his button - started talking in a loud voice about how crap the Obama policies - were - no problem - but then she started denigrating Obama in racist terms - we asked the manager to move us and my partner called her an asshole.
At our new table she followed us and asked why he had called her an asshole - he was silent - but I told her we did not tolerate racist views we don’t care what politics she had but racism overstepped the line - she looked at my partner and called him un-American.
This is what McCain and Palin are spewing - and this must be going through the country which is so scary.
http://www.iftheworldcouldvote.com/
Cast your vote on the US election and see how people around the world would vote.
NOTE: Its an Icelandic site, so you might want to get your vote in quickly while its still there!
6. Indeed, the economic crisis means that an Iran attack is unlikely - The US. has also removed the N.Koreans according to breaking Sky News:
http://news.sky.com/skynews/
190. Floater
Let met set out the facts. Lehman had assets of $639 billion and liabilities of $617 billion.
The liabilities are as follows:
Bonds $155 billion
Other debts (including accounts payable) $463 billion (includes all bank debts and owed to internal creditors etc)
Assets are
Cash $314 billion
Receivables $42 billion
Fixed assets (buildings etc) $4.3 billion
Non-current assets $279 billion. (mortgage debt, derivatives, etc)
So one would have hoped that the bond holders would come out OK. That was the view immediately post-bankruptcy. Now we open the can and find that the bondholders are expecting to be paid 9 cents on the Dollar. So for that chunk of liabilities, $140 billion worth of losses. So assuming that the numbers are right and that bonds are the least senior of all debtors, Lehman lost at least $140 billion. In reality we dont know how much of the rest of the debt is going to be paid.
The CDS magnify the effect. So according to the news feeds, there was a nominal $400 billion worth of protection sold. So in total anyone who sold protection on Lehman’s debt now must pay $360 billion to those who bought protection. Now to some extent, this will be hedged - people will have shorted the debt or the equity or both (and made a handsome profit). Some people who lost money because of the failure will be made whole. So the net effect is not a wholesale loss for the sellers of protection. But, the amounts involved are huge. No one is quite certain where the debt losses end up.
The big questions are “how large are the total Lehman losses” and “why were they so large”? Assuming that the loss will be just $140 billion - one assumes it comes from the non-current assets portion. That means that the portfolio of assets was more than 50% bad. Or is it off-balance sheet problems, or bad hedging post failure, or was it always this bad? Then think “what about the assets of other banks”. Lehman was dodgy, but was it truly exceptional? Compare the loss of $140 billion to the US$ 700 billion TARP package and it doesnt seem so big. Also the loss is nearly 10% of the IMF’s US$1.5 trillion estimate for the US bad debt losses. One requires more information to make a solid analysis, but I am more nervous, these are very big numbers.
10 cerrig. One or two other notable PB faces a la oeufs there too !!
A Bin Laden capture maybe more likely than we think!
Why? I was going to comment on this yesterday but got distracted! That is Pakistan are on the verge of an Icelandic situation - Bankruptcy. There situation in Pakistan is a balance of payments problem. The US & Nato Allies could stipulate that a bailout was linked to the capture killing of Bin Laden: That would be a boost to the GOP candiadate would it not? He also mentioned it in a recent debate.
My view is that an Obama presidency would now be the best thing, a period of stability is required.
4 - It’s a fair point, Richard. I posted an answer at 210 on the last thread - let me know your thoughts.
I have to run out for a little while - see you all later on. Mike will be covering this evening’s polls, if any materialise.
15. I voted Obama!
13 McCain should run for President of Macedonia! (getting over 90% of the 360 votes cast there)
Or Burkino Faso (100%!!!! Admittedly, reduced in impact because only two voted there - probably US Embassy staff?!?)
22 Sorry, should refer to 15 not 13.
If Obama were still the “risky celebrity” candidate, an outside event may change the race dramatically. Ultimately, I do think that Americans trust McCain more on foreign policy and national security, but the gap is not as pronounced as it used to be. So even in the case of a major event in that area, I’m not sure the current lead would be erased. Obama has very successfully moved from a theme based on lofty optimism to one based on steady leadership and common sense. In fact he may find just the right words in case of a terrorist attack.
So what would it take? First of all, I think it requires McCain to steady his campaign, stop the bleeding. There are multiple indicators the campaign is collapsing (GOP losing message discipline, local crowds turning vicious, down-ticket Republicans seeking distance, RCP considering cutting off funds). A campaign in dissolution cannot win, no matter the circumstances. I do think McCain has a chance to stop this. That would be step one.
Step two would be a convincing McCain performance at the next debate. He has to pass the economy threshold. Outline a surprisingly decent recovery plan, tell people where he will get the money from, apologize to Obama for the crowds, look presidential. He has to overcome the emerging “erratic and angry” image of the past weeks. The debate is his last chance to do that. I don’t think it’s very likely he can, but it’s not impossible.
Step three. a major event. This would have to be a terrorist attack most effectively an Al Qaida attack on American soil, or a war against Iraq. McCain would have to show calm but determined leadership (i.e. just showing he’s “tougher” would not work) and Obama would have to react too late, too soft, and/or too intellectually. The probability of the event happening in the first place, McCain not being a hot head and Obama appearing out of touch is extremely low in my opinion.
The problem really is that McCain would probably need each of the steps and in that order. If his campaign collapses, the debate will not help him and there will be nothing left to react. If he doesn’t already project a better image before an event, that event alone will probably not suffice.
Realistically, I don’t see McCain winning this. In fact the GOP seems well on the way to collapse before the actual election and that means a landslide is becoming increasingly likely.
19 - You make the assumption that Bin Laden is still alive. It is very likely that he was killed in the attacks on the Tora Bora cave complex.
12 It’s a classic, isn’t it, Cerrig?!!
It’s not for nothing that our man is known as ‘Rogerdamus’, PB’s most celebrated Antitipster.
You have to say he bears the teasing with very good humour though.
Looks like McCain should retire to Skopje, seems like he’s popular there. Lucky him, it’s my favourite city in the world
15 A self-slecting poll sample, but it does demonstrate that Obama has a 90%+ vote right across Europe, and would take office with a huge fund of goodwill from this side of the pond.
Also worth noting that 20% of Iranians would vote for John “bomb bomb bomb Iran” McCain!!!
With the markets as twitchy as they are, it’s hard to imagine a serious foreign policy crisis - an attack on Iran or major terrorist incident - not also triggering a massive economic crisis. The economic crisis would likely have far more effect on most Americans than the foreign policy crisis.
Meaning that if Obama is overwhelmingly more trusted on the economy, he still wins.
The sort of thing that could help McCain is something with no serious economic or foreign policy implications, but lots of political implications - like Osama bin Laden appearing to endorse Obama. You could see that closing the gap to the point where a good few days of media at the right time and McCain-friendly assumptions about turnout could be enough to give him a win.
More likely, although Obama’s team appears to be very competent and you wouldn’t normally expect him to make a serious gaffe, the media is going to need something to talk about for the next few weeks. Will McCain’s campaign unraveling be entertaining enough? If not, somebody will dig up some bad news for Obama. Again, probably not decisive, but given the right media coverage at the right time and favourable turnout assumptions, McCain might somehow be able to pull it off.
All looking very unlikely, though.
I’ve just had a bath, where I always like to think apocalyptic thoughts, and I’ve come up with a few more ramifications of the Kredit Krunch.
1. (as menshed before) Scottish independence is a dead duck. You don’t divorce your richer spouse in the middle of a deep recession. That means any chance of a Yes vote is gone for ten years. And the oil will be very depleted by the time the world restabilises. It’s over, Alex.
2. We may see revolution in Iran. Think about it. This is an unstable country with an unpopular regime. Oil is now collapsing in value - if it continues to fall then Iran may go bankrupt - leading to civil strife. Ditto Syria?
3. For the same reason Russia - losing money - might become more stridently aggressive. An attempt to annexe parts of Ukraine? What else could they do? Scary.
4. The eurozone could break up. If one member looks like defaulting - Italy, Greece,Belgium - are the Germans really gonna bail them out with their own billions? Can’t see it.
5. However, for that reason we may see a sudden move by core eurozone members towards true Federalisation. The elites in France and Beneluxs etc already want it, this might be their chance. What would Britain do in that situation?
6. We could see the first far right government in a western democracy in sixty years. Austria, Denmark, Belgium - who knows. They can’t keep killing all the charismatic far right leaders. Eventually one will win.
7. Tom Knox could sell millions of copies of the Genesis Secret as punters worldwide turn to violent escapist literature.
So it’s not all bad.
17. Those numbers seem extraordinary.
I remember seeing somewhere not long ago that only about 1% of UK mortgages are in arrears. In the US there has been talk in some areas of about 10% in arrears.
How do the above numbers tie in with 50% of Lehman’s non-current assets being bad?
Don’t forget, there is already a lot of voting going on whilst Obama has double-digit leads. Any “game-changer”* event would have to flip McCain over to be doing even better than Obama is doing now to overcome these cast votes. A 14% McCain lead, anybody? Nah, me neither….
* I know, it’s a sh1te term. Sorry.
What will it take to beat Obama?
A surprise Bin Laden video (as in 2004) would not be enough, so it could involve Bin Laden but be something much worse for America, in order to scare them into voting Republican.
I’ve more or less given up on trying to find any remaining value in the individual US State elections, but I am still keeping a watching brief on the total number of States the Democrats and Republicans look likely to win.
What do the score cards of the experts, Jack W, PtP and Mr Partridge currently show please?
Frankly I want Obama to win as I think he will be a good and maybe even a great president and in mercenary terms whilst not a 50:1 merchant I am on at 12:1 - a better investment than the stock exchange. Thus I expect and hope that nothing emrges to stop him
Re Iran etc, I always find it most worrying that very few, if any, USA politicians understand the nuances of international relations or have experience of dealing with the widely different cultures that one meets around the world. Also few have another language and not many have studied the history of the nations. Thus whilst they may sit on foreign relations committees, they lack the practical experience that is so necessary to defuse a difficult situation and still let both sides believe that they have come out as winners. In fact many USA politicians react as they are still winning the war on the western frontier and still mentally walk around as if they are carrying a pair of six-guns at the hip.
On the trade topic, whilst there is a danger that international trade will freeze due to lack of liquidity and trust, much of the world’s trade does not use letters of credit. For trade with a developing country where purchaser does not have the finance to put up a LC, trade us still done using a combination of insurance and merchant bank facilities. This could freeze first and would need the World Bank to guarantee funds to free the log jam.
13 I go from worried about My family’s future to hope that Britain might break away from the yoke of EU integration and will create a better form of less corrupt capitalism that doesn’t deify the fabulously wealthy but really works for the majority through regulation looked at from a consumer rather than a business perspective. As well as putting power at a more local level.
I also hope that in this coming recession businesses will look to cut non staffing costs first, so perhaps innovative solutions like homeworking will allow businesses to cut rental, heating, security and other costs before the wage bill is considered. I admit a lot is wishful thinking but if you can’t look beyond the possible financial armageddon then you won’t handle it well if it comes.
31. The proportion of sub-prime borrowers in arrears (by 30 days) was 21.7% in Q1 2008. But these numbers tell us little about the nature of the expected Lehman losses (note that the 9% payment on Lehman bonds is what people were willing to pay for the bond and is thus a best estimate of the extent of the losses, many assets will need to be sold over time). I’d guess that sub-prime is going to see massive defaults and losses of over 50% - but not all of Lehman’s assets are in this category, so I am at a loss to explain the expected scale of the losses.
Can McCain make anything of the economy?
Obama is making the running here but some of his material is open to the same attack Labour make on Cameron and Osborne: where is the plan? Obama is stronger on blaming McCain for the crisis than on actually solving it.
Republicans on the other hand seem to be spending most of their time trying to blame Bill Clinton for encouraging mortgages for poorer people. Doubly stupid because Bill isn’t running and in any case the narrative has long since moved on from the subprime crisis.
GOP strategists need to come up with a simple plan that will reassure ordinary Americans they will be protected. Because McCain has a certain amount of baggage here, Palin should launch it.
184.”Our host`s obvious dislike, combined with vitrolic hatred of the man,by many tories on here, which I percieve most decent people think starts to go beyond the pale at times.”
Its a very wide and mixed coalition of people who are not impressed with Gordon Brown, including many within the Labour party. No one would disagree that the three biggest Scottish figures in the Labour party who rose to prominence under Tony Blair were Brown, Reid and Cook. And yet Brown had already fallen out with the other two during his time in Scottish politics…
Maybe some on here need to get things into perspective and remember that other Prime Ministers before Brown got hard time in the press and from supporters of other parties. Being able to handle criticism and deal with a sometimes hostile reception was something that Mrs Thatcher had to be able to cope with almost from day one of her leadership. And she had a mobile rent a mob following her around most of her premiership.
Maybe its been too long, and some Labour supporters and members of the PLP have forgotten the dark days of the last Labour government and the Winter of discontent? I think that was part of the problem for Labour and its backbenchers this week, but for the Conservatives the memories of being in government in tough economic times are that much fresher, and Roger and others should stop bleating and think back to political capital that New Labour gained from the anger directed at the Conservatives back in 1997.
I also think that it is unrealistic to think that the country will rally around Brown and hail him as a war time hero figure as full implications of the present recession start to bite. And those who think he is getting a rough ride now on PB.com or else where in the media or blogsphere better start understanding this, when the economic pain really starts hitting ordinary voters they will turn their anger on the people in charge.
New Labour were able to control the media narrative and agenda when things were going well in the first heady years after that 97′ GE victory, but I doubt that even Mandelson and Campbell, now back in the fold can recapture that skill in the present economic crisis.
The situation is too volatile and its changing all the time.
34 PfP. ARSE (BUTT) currently projects Obama 28/22.
37. My company does have many its staff working from their home office as they are nearer their clients, but we still need a small head office where the international business is controlled, acts as a communication centre, and is a focal point for clients as well as performing the legal functions of a company.
41 Many thanks Jack.
Sean, have you finished all 7 series now?
McCain now 5.4 on betfair.
I still wouldn’t put stolen monopoly money on him at that price.
42 I appreciate it sometimes won’t be possible, for example anyone who physically has to look after customers is unlikely to be able to do it from home(apart from some oldest profession type home workers, but I won’t go there), but for example the government could set an example and vast swathes of the civil service could probably remotely work using relatively cheap PCs and internet connections. Meanwhile the government could seel off the expensive buildings and pay off some debt.
34 PfP
If you look at the Intrade projection, 22 States are colored red. Missouri is likely to go blue, so call it 21. There’s no value in the 21-25 option so what’s the chances of another State going blue to take you down to 16-20?
W.Virginia and Georgia are your best bets - both possible rather than likely. So maybe there is some value is the 16-20. Beware though. If we get into true landslide territory, Texas,Montana, N Dakota and Mississippi could fall in a heap and suddenly you are danger of dropping down to the level below, the under 16 category, so you’d need to cover that possibility.
Not sure what the next State to go would be though?
Alaska anybody?
17
Thanks. Great post.
My view is that - with undeclared loans offshore - Cayman Islands etc - and basically ENRON style concealment rife …(when you have bonus pools of £5 billion a year, why spoil the party?) all US banks have potential losses 3 to 5 times the declared likely outcomes.
My personal view of the G7 statement is horror: Nothing has been agreed apart from bullsh1t and nothing concrete is going to be done. On that basis - as stockmarkets in Europe and US are at KEY support levels - we may very well see a temporary lull (1-2 days max?) and then an even bigger panic.
The G7 statements remind me of Congress and the US bailout: it takes a week and another set of huge falls to bring reality home.
If I am correct we will see the 2003 lows being tested this coming week..and that will prove a temporary bottom (Dow 7250, FTSE 3250) - giving time for another G7 emergency meeting next weekend lasting for 4-5 days until they actually agree to DO something instead of speaking platitudes.
31
B&B have approx 2.5% mortgages in arrears. That’s their own loans. The loans they purchased are running apprx. double that.
I have no doubt these figures will worsen but falling food and enrgy costs will provide some relief to household budgets next year.
Unless something sensible is done we will have a depression: or a very bad recession -4% GDP growth.
US new car sales are down 20% year on year. Credit agencies are starting to withdraw credit to finance new car stocks in dealers. If that continues, expect 40% year on year declines in new car sales.
And ditto all other consumer spending: gradually getting worse.
As usual the IMF and other economic forecasters are about 6 months behind the curve. The IMF is seeking hundreds of billions for emergency aid. It will be needed in my view.
I’m sorry to be so gloomy. But where is the New Deal or its equivalent. We need ACTION now before the world financial system lies down and turns its feet up in the air and expires.. slowly.
47 Thanks PtP, your figures are pretty much the same as Jack W’s then.
Having checked Betfair’s odds, I can’t see any value on either side of the equation and the only way this is likely to change would be if we get into real landslide territory, ie 35:15 split, beyond which the odds are currently in the 20s.
12. If by any remarkable chance John McCain still does manage to win - doesn’t look likely but no election is over until the votes are counted - Roger is going to have a good laugh at all the people who mocked him for that post.
49 Isn’t DC counted as a separate State, PfP? That would make it 51.
“1. (as menshed before) Scottish independence is a dead duck. You don’t divorce your richer spouse in the middle of a deep recession. That means any chance of a Yes vote is gone for ten years. And the oil will be very depleted by the time the world restabilises. It’s over, Alex.”
Don’t be too quick to write the epitaph for nationalism. Building nationalism on oily foundations was always folly. It was proposing that Scotland becomes Heather Mills McCartneyland and run out of the marriage because of the sniff of a windfall. The nationalism of Alex Salmond may indeed fail because it is a greed based nationalism. But there is a solid base for a less greed motivated form of nationalism to carry the independence cause. If Salmond can sow the seeds of detachment, then oil becomes irrelevant.
51 PtP. No. DC is the federal capitol not a state.
51 Oops. Betfair Rules state DC not counted. 50 is correct.
Sorry.
53, does DC have senators and congressmen?
My current prediction is 28/23, it could be as low as 24/27 or as high as 30/21. Absolute bottom falling out of campaign time and a perfect storm would only ever take it to about 36/15.
56 - For states take one of the first figure (DC will always be democrat).
Latest Rasmussen tracker :
McCain 45% .. Obama 52%
Note - Yesterday M-45/O-50
http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/daily_presidential_tracking_poll
So, a Republican state legislature’s appointed bipartisan commitee of Inquiry has found that Sarah Palin is a bully who breaks laws to achieve her own ends. Are we surprised? Does a duck quack?
To which the McCain campaign spokesman Meg Stapleton answered that the “Legislative Council seriously overreached, making a tortured argument to find fault without basis in law or fact”
Not at all like the tortured arguments put forward by book-banner Palin that Dinasaurs walked the earth with men. Oh no!
47 Alaska anybody?
Arkansas first….
56 It’s the ‘about’ that’s the problem, UKPaul. In a real meltdown situation, States like Arkansas, Kentucky and Alaske could nobble your bet.
Tricky.
53 MD. DC has a non voting delegate in the HoR and no senators. It has 3 EV’s in the electoral college.
20
Hi Morus,
A number of other contributors to the previous thread have already answered some of your points pretty effectively but just to summarise why I am so critical and why I have absolutely no faith in Brown.
It is not true that he was generally regarded as a good chancellor and that the only people criticising him were Tories. From the very start of his “reign” at the Treasury there were plenty of eminently qualified people pointing out that what he was doing was creating a short to medium term bubble which would at some point have to burst.
Even he tacitly had to admit he had inherited a very good economic situation when he continued to claim that he was responsible for the longest period of continuous economic growth for 200 years (a dubious use of statistics actually) when over a third of that growth period had been under the last government!
His decision to decimate the pensions provision in Britain - turning it from one of the best in the world into a virtual basket case - was catastrophic and laid the ground work for the housing bubble by convincing people that a private, company or state pension was not going to be enough to support them in old age and the only real answer was property.
His decision to split the regulatory authorities into three distinct, mutually exclusive and isolated organisations has been shown by plenty of commentators - such as in the excellent Channel 4 Documentary back in February - to have been a major factor in allowing the city institutions the run of the system with little or no effective oversight - a direct cause of the current crisis.
He compounded this by then signing up to the Basle 2 agreement which effectively drives any company into bankruptcy as soon as they accrue a relatively small number of bad debts. The result is that those companies that do declare the bad debts are almost committing financial suicide so instead they try and hide the debt which most of the time works but which means that when we do get a large scale crisis like this they find themselves over exposed.
He has driven the consumer and housing bubble to extraordinary heights as a means of maintaining unrealistic growth fed by credit since this was the only way he could find to get even close to balancing the books. At the same time he has racked up simply astronomical off the book liabilities through the PFI system and has continually changed the accounting rules to try and make sure the country appears to be solvent when in fact it is far further into debt than he has admitted.
He then has the audacity to attack the banks and financial institutions for doing exactly the same thing.
There have been plenty of non-political commentators making these exact observations for years now. He has been warned about both the overall direction of the economy, about the unsustainable levels of debt, about the reduced and fragmented regulation and about the specifics - see today’s revelations about Lord Oakshott and Michael Fallon MP warning about problems with Iceland back in July.
Whilst it is true that there are problems world wide, we are terribly placed to deal with them directly as a result of Brown’s incompetence and political manipulation of the whole financial system in order to maintain his myth of no more boom and bust. Whatever he does now we are going to be paying for this for decades to come.
62, cheers:)
53 Is it fair to say the Obama camp have written off West Virginia as McCain has Michigan and probably aren’t too bothered now.
New SUSA poll for Alabama :
McCain 62% .. Obama 35%
http://www.surveyusa.com/client/PollReport.aspx?g=b2db5e34-9654-4a51-a3ea-02cbea1a304f
65 Punter. WV is way down Obama’s target list …. a bit like Labour and Enfield Southgate in 97 !!
BTW …. Palin is undertaking a bus tour of WV on Sunday and McCain in back in Iowa !!
67. oh you can’t be serious, why is mccain in iowa again ?!
61 - This is my list
DC excluded
1 Hawaii
2 Vermont
3 Maryland
4 Illinois
5 Rhode Island
6 Massachusetts
7 Delaware
8 New York
9 Connecticut
10 California
11 New Jersey
12 Maine
13 Oregon
14 Washington
15 Iowa
16 Michigan
17 Wisconsin
18 New Mexico
19 Pennsylvania
20 Minnesota
21 New Hampshire
22 Virginia
23 Nevada - Current Obama low point
24 Florida
25 Colorado
26 Ohio
27 North Carolina - Current position
28 Missouri
29 West Virginia - Current Obama high point
30 Indiana
31 Georgia
32 Montana
33 North Dakota
34 Arkansas
35 Mississippi - Potential Obama landslide
36 Arizona
37 South Carolina
38 Alaska
39 Louisiana
40 Texas
41 Kansas
42 South Dakota
43 Kentucky
44 Tennessee
45 Nebraska
46 Wyoming
47 Idaho
48 Utah
49 Alabama
50 Oklahoma
65 fivethirtyeight.com has W Virginia shaded white - evenly balanced. Pollster.com also has it as a toss-up. Electoral vote.com has it in the “weak Dem” column - firmer than Florida, Ohio, Nevada or Colorado! So no - it is very much in play.
in fairness, obama is spending all day in pennsylvania…
70. only thing you have to be careful of with west virginia is that only one poll has shown obama ahead there, and that was a suspicous looking one from ARG.
Why is Washington DC not a state? (I know I could just look on Wiki but I trust PB as the ultimate source of historical knowledge
)
52
What d’ya reckon Salmond, as First Minister, buys the BOS from H, to enable a fractured LloydsTSB takeover to complete, with the political cover of a national indignance to the sad demise of its erstwhile National Bank. A pro-EU christiansocialdemocrat small state administration, how could the EU let it fail?
Also, Iain Dale survived a near-miss last night, the like of which might have done for another prominent euro-baiting Teutophile.
65 - The point about West Virginia is that it isn’t needed, if the Democrats take West Virginia then they have already won. Better to focus on places which are potential tipping points.
71 Dan. Obama has four big rallies in the state today. Difficult to pull out at short notice. Also IIRC a big fundraiser too.
“If by any remarkable chance John McCain still does manage to win [...] Roger is going to have a good laugh at all the people who mocked him for that post.”
Now I’m even gladder I donated $100 to Obama!
An Obama victory is the last thing Brown wants, you know.
My current different scenarios translated to EVs by the way is -
Current Obama low point - 282 EV
Current Obama position - 353 EV
Current Obama high point - 369 EV
Potential Obama landslide - 413 EV
A big spread and it all revolves around a relatively small percentage of votes.
73 - To show that the seat of federal government is independent of any one state.
76 And it also blunts Palin’s presence in the state. Less risk of it coming back as a nasty surprise…
It will be interesting to see if Palin has toned down her rhetoric any.
75 Quite. That’s the down side of the EV system, which otherwise seems a very good one. You wonder why anybody bthers outside the swing States.
Thanks for that piece of work. We can all quibble with the order, but it’s very helpful to have a list like that.
63 I think that much of that is fair, and I think that much of the gloss has worn off Brown’s record as Chancellor, with the public at large. But I think he can recover *some* standing if he handles the financial crisis effectively. Not enough to win, but enough to mitigate defeat. Also, it’s ended the plotting against him, as even his fiercest internal critics realise it would be grossly irresponsible to bring down a Prime Minister at this point.
82, I think he can mitigate the effects of the financial crisis, but the coming recession may be a different matter. People want change and Brown isn’t charismatic or intelligent enough to persuade them otherwise.
Sky have Palin on now - she has about the most irritating voice on the planet - not just going up at the end of sentences but actually squealing. Ugh.
Obama all the way, Tories for Barack!!
New Research 2000/Times-Union poll for Florida :
McCain 44% .. Obama 49%
http://www.jacksonville.com/tu-online/stories/101008/met_342306549.shtml
Is there any betting on senate races because there are some interesting ones out there? Georgia looks as though it could possibly flip Democrat, the latest poll has the candidates level. Smith (R) is still fighting hard against Merkley (D) in Oregon and that could go down to the wire. Franken (D) looks to have been helped by the Independent in Minnesota and it is going his way and I still think there could still be a surprise in the Mississippi special election with Musgrave (D) improving his polling position rapidly.
What a nice day it is today - McPalin is tanking, the financial markets are closed, the sun is shining and for the first time this year I have beaten my wife at tennis!
77. Are you an American citizen BannedHorse?
84. ah so abortion is the “anything apart from the economy” topic of the day
86. I think Obama turnout operations and unaccounted for minority voting for could make places like Georgia and Mississippi more likely to flip than Minnesota or Oregon. Right now I really think we have about a 45% chance of getting 60 seats.
89. When in doubt, go for the culture war. It’s the GOP’s favourite strategy - and year-by-year it’s losing its effect. Culture wars only work when you have the majority on your side.
88 — no, I just gave my NYC friend a hundred-dollar bill and he did it on my behalf while I was visiting him. Would that count as an illegal donation?
87. Goupillon. When did you start beating your wife?
(If I was an American citizen I’d hardly be so worked up about Labour’s ID card scheme, would I?)
92. Yes. You have just single-handedly gifted the election to the Republicans…
89 - As William F Buckley’s son, Christopher, Kathleen Parker’s fellow writer for the National Review said, about the reaction to an article she wrote that was less than fulsome in its Palin praise.
“she has to date received 12,000 (quite literally) foam-at-the-mouth hate-emails. One correspondent, if that’s quite the right word, suggested that Kathleen’s mother should have aborted her and tossed the fetus into a Dumpster. ”
http://www.thedailybeast.com/blogs-and-stories/2008-10-10/the-conservative-case-for-obama
Sometimes there are no words…
95 Perhaps it will be declared void now this is publicly known, Mark.
92. Yes.
If I choose to give my liberal American friend $100 out of the goodness of my heart and he chooses to donate it to Obama, there’s not a lot I can do about that, is there..?
96.
“Kathleen’s mother should have aborted her and tossed the fetus into a Dumpster. ””
Interesting position from rampant anti-abortionists. They obviously have secret ‘get-out’ claws?
96 - Mild stuff. Guido’s correspondents are the real thing.
48. “B&B have approx 2.5% mortgages in arrears. That’s their own loans. The loans they purchased are running approx. double that.”
This is what I don’t understand. B&B have approx 2.5% mortgages in arrears and they were the 2nd weakest bank (after Northern Rock). Even if every one of these mortgages went completely bad (with nil recovery) and every bank had 2.5% bad debts then that is still a position that every (or almost every) bank could survive.
I recall HBOS had £450bn of assets and £430bn of liabilities so 2.5% bad debts = £11bn which would just reduce overall net assets from £20bn to £9bn.
Obviously a massive hit but still survivable. So what is going on?
100, your accidental spelling of ‘clause’ as ‘claws’ brings to mind another paradox — why does the fundie Right reject biological Darwinism but embrace socioeconomic Darwinism?
99 “If I choose to give my liberal American friend $100 out of the goodness of my heart and he chooses to donate it to Obama, there’s not a lot I can do about that, is there..? ;-)”
You are not a tax accountant by any chance are you, Horse?
101 I remember the Editor of the Independent’s Letters Page saying that on the basis of the letters he received, which were not printed, Hitler would have had no difficulty recruiting a British SS, if this country had been occupied in WWII.
Real Clear Politics currently has the ECV count as being:
Democrats………..277
Republican……….158
Toss-up………….103
That looks like an enormous lead for Obama, but in several of the States showing him ahead, his lead is very modest and there are still almost 4 weeks to go.
Ken at 17. - there is a bit of a mystery here about the scale of Lehman’s losses, though I think the expectation was always that around US$100bn would be lost. More than likely both the level three assets and some off-balance sheet stuff are involved.
One thing this does point to though, is that the popular notion that illiquid assets have been wildly oversold and are being held at artificially low prices is not very convincing. Which in turn points to the need for massive capital injections on top of the illiquid asset purchases in the Paulson Plan. And soon!
96.”Sometimes there are no words…”
Agreed.
102.MikeL, but weren’t B&B big players in the buy to let market?
106 Pollster.com has the following ECV breakdown:
Democrats………320 (203 strong, 117 leaning)
Republican……158 (140 strong, 18 leaning)
Toss-up…………60
http://www.pollster.com/polls/us/08-us-pres-ge-mvo.php
Afternoon all. Just been watching the dreadful Palin woman on SKY News. Very grown up speech- not! Obama is a child murderer because he believes women should have the right to an abortion. That was the theme of the diatribe coming outof her mouth this afternoon. She was talking as though Obama was standing there in the abortion clinic spearing any foetus born alive. This woman is just evil. I seriously worry that some fruitbat GOP supporter listening to her tries to take a pot shot at Obama with a gun.
102 Most lenders have well below 2.5% mortgage arrears.
69 - The Senate races in GA and KY (The Republican leader McConnell is defending here and Democrats want revenge for the Daschle defeat) have tightened noticeably since the economic crisis. Maybe this is having more of an effect in the South than elsewhere? Would be interesting to see some new MS polls to check the effect there.
On Mississippi I would have it higher on the list, possibly after Georgia. Rasmussen had a poll 2 weeks ago which showed McCain up 52-44. However the crosstabs showed McCain winning white voters 83 - 17 (assuming undecideds split in proportion to decideds) and Obama winning Black voters 98 - 2. In 2004 Bush won 85% of white voters, so Obama is holding his own here. In 2004 Black voters made up 34% of voters. If that is replicated this year McCain wins 55 - 45. About 37% of the population is Black, if turnout matches this McCain wins 52.5 - 47.5. If Black turnout exceeds this and hits 40% McCain wins 50.1 - 49.9 i.e. a tie.
If Republicans are demoralized and turn-out is down this could be a surprise Obama win. Another wildcard - the Black population may be even higher with many evacuees from New Orleans now in MS.
The only thing that will stop Obama winning is the doubts that many Americans have about him coming forth as a major deciding factor.
So far they havent because there are other issues, mainly the economy that matter much much more and 8 years of George Bush in what has basically become a discredited presidency. You only have to look at the term elections last year. The GOP are in the dog house. The troubles in the markets and the real economy have really shunted Obama clear. The morbid fascination wth Palin has I believe been largely irrelevant in the big scheme of things. Its the economy stupid, and 8 years of GWB. Its thats simple.
Ironically, its the view of some Democrat types that McCain who is the future of the GOP, at least in terms of his broad position. Despite the propaganda spouted by some, McCain is basically a centerist Conservative in American eyes (those eyes being the only ones that matter, ours do not).
114, Whether the GOP understand that is another story and McCain’s likely defeat used by factions to pull the party further right.
111 Eastercross,I really hope not, but as you say there is always a possiblity of a fruitbat racist attempting such a thing.
Was`nt there someone arrested before the convention, but the Police said they were not serious.
114/115 I wouldn’t disagree with a word of that.
102 Problem wasn’t just bad debt but profit margins and roll-over/replacement of wholesale loans. Complex but basically B&B, NR and others borrowed short term lower interest capital and lent out at higher rates of interest. Business model worked when they high credit ratings and the market was awash with cash to be borrowed. When credit tightened and risk rose on their income they were increasingly faced with higher risk markups on borrowings, which they had to take to replace loans due for payment, but fixed competitive rates meant they were looking at liabilities quickly exceeding assets.
The US housing bubble burst earlier but lenders were using it as a model for how the UK might develop - figures I saw this week were that nearly 1 in 6 US homeowners had negative equity in terms of value of their homes against mortgage borrowings and it was nearly one in three for those who had bought in last few years.
114 At least the Bush family brought morals to the whitehouse after the Clinton years, well anyways thats what they said in 2000, and is their claim !
114 - Obama has been helped here by the debates. Not because he ‘won’ them but because he reassured people that he had what it took to be President. That has brought over undecided who were concerned about him personally (this is similar to Reagan in 1980).
As Freidrich indicates this insulates him to a degree if a national security issue arises. IMHO the only chance McCain has is a terrorist attack on domestic soil that completely changes the debate. A bin Laden video or an attack on Iran would not do it. They are too distant and the election would still be about the economy. Plus an attack on Iran would highlight the disaster that Iraq has been, turning off Americans sick of foreign wars.
The only other chance McCain has is to come up with a credible economic plan and hammer away at it for the next month. It must have differences with Bush policies and make the election about the future (who can restore American greatness) rather than the past. This seems though a very long-shot.
For the first time it seems an Obama landslide, a 10-point victory, is eminently possible. In a worst case scenario for the GOP the Democrats could end up with 62/3 Senate seats and a 100 seat majority in the House.
118 My impression (I could be wrong) is that most UK mortgage lenders have been more conservative than their American counterparts.
what do people think of this, Obama to be arrested? http://hillbuzz.wordpress.com/2008/10/10/urgent-big-story-about-to-break-we-are-one-step-closer-to-rezko-giving-obama-up-to-federal-prosecutors/
http://www.diageohotlinepoll.com/
Diego/Hotline tracking poll:
Obama 50 (+2) McCain 40 (-1)
Obama is now on the verge of 50% in the RCP tracker.
121 - I thought one of the major problems was that it is easier for US mortgage holders to default. They can just “hand in the keys”.
In the UK there is more incentive to keep the mortgage going, because if the house isn’t sufficient to cover the debt the bank can come after your other assets.
112 Answer into ether - different conditions in US market (fixed rates through term, loan against property not person). Concern is when commercial market crashes?
Negative Equity is not necessarily a problem in itself - its effect is as much psychological as real in the short term. There is a potential problem with rolling over mortgages if the borrower gets nervous, but in practice if the debt can be serviced then it is in the mortgage givers interest to keep the deal going.
#121 With their lending but not necessarily their leverage?
Thanks to Ken and madasafish for your responses.
Mind you, I’m begining to wish I hadn’t asked the question……
The problem in the US was that people were given mortgages that they would have no hope of servicing in even the slightest downturn - it was the people being lent to, not the value of the assets themselves that was the problem (other than that they determined the size of the mortgage).
The problem in the UK is that people were lent amounts that were almost the total value of their house (or greater). When the market began to crash “mark to market” meant that the value of the lenders creditors had to be downgraded. In the UK the immediate problem isn’t that people can’t pay (default rates remain very low). It’s the values that have to be reported on the balance sheet.
124 I think it varies State by State.
In this country, I think that relatively few people are actually aware that a lender can pursue them for any shortfall, for up to 12 years after the lender’s taken possession.
127 This crisis has actually brought home to me just how risky banking/mortgage lending is. Even the most conservative building societies are basically borrowing short, from depositors, to lend long. Depositors can get their money back either instantly, or by giving relatively short notice.
126 agreed - problem is that when a recession strikes and owners are forced to sell. Govt, I believe, recently changed policy so mortgages up to £x are paid after 3 months employment, so reducing risk of forced sales for a large proportion (can’t remember x). Alternative is for state to take over mortgage and buy equity in property with repayment on sale or over time when owner can pay. Problem there is that government borrowing is already heading way too high.
102. Let’s take B&B.
In the first half of 2008, they had arrears in excess of 3 months in
2.29% of their mortgage book (FY2007 1.48%)
1.78% in their organic book (FY2007 1.2%)
5.11% in their acquired book (FY2007 3.04%)
The acquired book is roughly a quarter of the total book.
Credit impairment for 1H 2008 (fraud, provisions for future losses)
£75 million (1H 2007 £5.3 mn) total impairment was £101 mn at 1H 2008
Loan to value for BTL is 69% and avg loan value £122,000
Overall market (all CML)
BTL arrears 1.1%
Normal mortgages arrears 1.33%
B&B’s balance sheet at the end of 2007 was as follows:
Liabilities
£24 billion in customer deposits
£22 billion in debt securities
Shareholders equity of £1.2 billion
Assets
£51 billion (of which loans £40 billion)
Shareholders equity after the rights issue took their capital to £1.5 billion.
This means that to get to a zero capital position, the loan book needed to fall by 3.75% - note that is outright losses. So we are talking about arrears of perhaps three times that 11%? Of course B&B still had a structured finance portfolio of £747 mn. A one-third fall in this would have taken a sixth of the shareholders equity.
The failure of B&B might seem harsh. But with every bank watching the possibility of outright failure and exposure to weak banks like hawks, any sign of weakness is bad. No doubt B&B were cast out from the interbank markets. Also their prominent and early posiion probably meant their lending had already shortened dramatically. Their large fraud provision in the first half probably did them no favours as liars loans are particularly unpopular (although this was only £18 mn of the credit provisioning). So though they claimed a LTV ratio of 69%, I suspect that people worried it was worse. The clear deterioration in both their organic and acquired books in the first half also spooked the market.
Remember one can go bust because of liquidity (no one will lent to you) as opposed to going bust because no one will lend to you because you are insolvent (assets worth less than liabilities).
116. History has shown that black political leaders are far more likely to be assassinated by another black person.
130. Sean - that’s essentially what banks do all the time, i.e. taking in short-term funds and lending them out at longer maturities. Banking is a confidence-driven business, as we are now remembering…
131 - Of course normally in a recession you would hope that the effect would be mitigated by lower interest rates making mortgages less of a burden.
Yes, I should have added - the problem for NR, HBOS, A&L, B&B was
1) Too much dependence on interbank
2) Business models (target markets) that were unattractive (too much too late for NR, BTL for B&B) that made them vulnerable when the capital markets went into meltdown.
133. And it’s often forgotten - maybe because of the conspiracy theories - that JFK was killed by a communist sympathiser who had lived in Moscow and may have been/wanted to be a s