Quote of the Week
Looks like I picked the wrong week to quit amphetamines.
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Looks like I picked the wrong week to quit amphetamines.
I saw this video over at Hot Air, and while Ed Morrissey's point, that laying all the blame on Democrats is a bit misleading, the most important aspect of the video is the philosophies that brought us to this crisis are alive any well with Obama. Oh and he was also a major beneficiary of these programs.
On September 19, 2008, the SEC banned short sales in almost 800 financial stocks. The list is growing daily and is now pushing one thousand names.
For those of you unfamiliar, shorting a stock is when an investor sells a stock that they do not own with the intention of buying it in the future at a lower price. The basics of this strategy is you are expecting the price of the stock to go down, therefore selling it now at a higher price allows you to keep the difference when you buy it at the lower price. That is your profit. However, if the stock rises, a purchase at a higher price will leave you on the hook for the loss.
You also have to borrow the stock before selling it. Since someone on the other end of your transaction is buying, you need to have stock to deliver to them. Shorted stock with no borrow is called naked shorting.
A free market demands the ability to make money on both sides. So when the government banned shorting of particular stocks I was concerned that maybe it was an overreaction. I mean what's next, replacing all sell pads with buy pads?
But maybe it wasn't an overreaction. Maybe something else is going on behind the scenes we don't know about yet. Over the last few weeks, I've heard the term Economic Terrorism used with more frequency, specifically in relation to what eventually came to a head early afternoon Thursday, September 18. Then today I read this:
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Over the weekend, I discovered there might have been more to that decision than initially met the eye. There was chatter on the beltway that we may have been the victim of economic terrorism, a coordinated short raid that originated in London and Dubai. While the legitimacy of that remains to be seen, my source is well respected. Further, as the goals of terrorism are economic destruction and social upheaval, it makes intuitive sense. The stock market is the world's largest thermometer and breaking the capital market construct-as some would say they did last week-would effectively achieve both goals. |
Is it possible that terrorist could take advantage of our weakness? Systematically shorting financial stocks with intentions of creating panic, adding energy to a down market, and making money of their own. Possible.
Everyone remembers the stories of massive shorting of airline stocks prior to 9/11. The stories became popular enough to become a major plot element in the most recent Bond movie, Casino Royale.
The 9/11 commission has since concluded pre-9/11 trading activity to be a matter of coincidence, and if you read Alexander Rose's NRO piece from 2004, you can see that a broader market picture revealed a trend that made shorting airline stocks, among other securities, a sound strategy at the time.
I suppose I am guilty of looking for the outside villain, sinister forces planning our demise. It is much easier than blaming ourselves, but I'm not blaming our financial mess on terrorists, just considering that they're always looking to take advantage of our weaknesses and profit from our loss. It is win-win for them; we suffer and they make money. I'm curious to find out what more comes of his story.
I know I've been MIA for a while, but it took me weekend of solitude to recover from the mayhem that was the stock market last week. In the short 12 years I've been in this business I've never seen anything like what happened Wednesday through Friday.
When you're in the middle of the fray, it's sometimes hard to see the magnitude of the battle. I haven't had a chance to think about the ramification of the bail out. However, I am aware of the blame game that's in full effect. So while popular belief will blame Bush for all our woes take this into account from an article today by Kevin Hassett of Bloomberg.
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The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.'' What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets. Different World If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed. But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter. That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.'' Mounds of Materials Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing. But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years. Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000. Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix. There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear. Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess. |
I struggle to find the words that express how I feel about September 11. In many ways I think I subconsciously reject finding those words, because they may just bring back the pain that I've long struggled to cope with.
This quote though, reminds me of how I felt watching the horrors of the day.
We stand, as it were, on the shore, and see multitudes of our fellow beings struggling in the water, stretching forth their arms, sinking, drowning, and we are powerless to assist them. -Felix Adler
Some sights from downtown and the Battery Park Memorial on the 7th anniversary of 9/11.
Here is a short clip of people signing the Memorial Steel Beams.
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On the eve of the seventh anniversary of the 9/11 attacks, New Yorkers are being invited to sign steel beams that will be used in the construction of a memorial and museum. Just blocks from Ground Zero, on the edge of Battery Park, so-called "notes of hope" will be offered on cold, hard steel. Those who witnessed the tragic attack almost feel a sense of obligation to take part in the signing. |
A pitfall of having your success built solely on a cult of personality is how quickly things can go south when that personality starts to sour. As quickly as the bandwagon fills, the fair-weather fans can leave it twice as fast. Oh, and they’ll leave that bandwagon looking like a frat house basement.
From the Hot Air headlines: Wisconsin McCain crowd turns on the media
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On the first leg of the "McCain Street USA" tour -- which will take the Republican presidential nominee and his running mate, Alaska Gov. Sarah Palin, to small towns across the heartland -- the 30 or so reporters and crew were walking back to their buses to join the McCain motorcade when hundreds of townspeople started yelling. "Stop lying! You are all liars! Tell the truth!" one woman yelled from the front of the pack. The crowd was not menacing or threatening, but was clearly angry. "You're telling lies! Stop the lies!" one man yelled. Asked why the crowd was so angry, Linda J. Green of Mequon, Wisc., said: "I'm thinking the press is very biased." |
Amazing phenomenon.
When you continue to belittle us, treat us like idiots, pretend we don't matter, look down on us for our beliefs and then sit in your studio or behind your computer and have the audacity to pretend you're fair; watch out for the backlash
I hope this becomes a major component top the campaign and as noted above "not menacing or threatening", just peaceful demonstrations.
Chicago is lost. A quagmire. We had better pull our people out now.
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An estimated 123 people were shot and killed over the summer. That's nearly double the number of soldiers killed in Iraq over the same time period. In May, cbs2chicago.com began tracking city shootings and posting them on Google maps. Information compiled from our reporters, wire service reports and the Chicago Police Major Incidents log indicated that 123 people were shot and killed throughout the city between the start of Memorial Day weekend on May 26, and the end of Labor Day on Sept. 1. According to the Defense Department, 65 soldiers were killed in combat in Iraq. About the same number were killed in Afghanistan over that same period. In the same time period, an estimated 245 people were shot and wounded in the city. |
We're relocating Chicago residents to Iraq.
Over the weekend I was listening to some talk radio in the car; since that's the only place I listen to the radio anymore. -- Really, does anyone listen to the radio at home anymore? - And a caller, who was a McCain supporter, was trying to make the point to the host, that even if you don't agree with Barak Obama, you have to give him credit for being able to inspire so many people. The caller's primary evidence was the roughly 80,000 in attendance for his DNC acceptance speech.
I thought about this for a few minutes and wondered if the same credit should be given to musicians for being able to inspire so many people to go to concerts? The polls show a tight race between him and McCain, in the face of all this inspiration, it makes me think all these people are just inspired to be seen and the place to be seen.
When your speech rolls out the red carpet, when celebrities know their presence will be noted, when an average Joe can say they attended the same speech as their beloved stars; you wonder if it's the speaker they're really there for. Or perhaps it's just to say, "I was there".
In a culture where wearing a rubber bracelet to advertise your benevolence is praised, the lack of cameras in the voting booth may prevent many "just to say I was there" voters from turning out. It's fun to go to rallies and concerts with your friends, but how about that Tuesday after work when you have to schlep to the local high school… you can always say you voted on Wednesday.