Note to Blago

Resign, dude.

Your cover's blown.

Deal with it.

Caroline Kennedy to seek HRC's NY-SEN seat

NYT (link):

Ms. Kennedy will ask that Gov. David A. Paterson consider her for the appointment. The governor was traveling to Utica today could not immediately be reached for comment.

If appointed, Ms. Kennedy would fill the seat once held by her uncle, the late Robert F. Kennedy.

Ms. Kennedy has been making calls this morning to alert political figures to her interest.

Ms. Kennedy’s decision is likely to have a major impact on the governor’s considerations as he mulls who should succeed Mrs. Clinton. Already, some other Democrats have pointedly questioned her credentials for the job. Rep. Gary Ackerman, a Queens Democrat, said last week that he didn’t know what Ms. Kennedy’s qualifications were, “except that she has name recognition — but so does J. Lo.”

But others, including Mayor Michael R. Bloomberg have praised her abilities.

Thanks to RealClearPolitics for their great map tool.

EXPECTED OUTCOME: Obama wins with 353 electoral votes to McCain's 185.

A McCain victory is unlikely, but not impossible. Barring some unexpected dynamic that shifts results nationwide, it looks highly likely that Obama will have at least 305 and as many as 364 electoral votes.






















THE BASELINE SITUATION: Obama safely has 224 electoral votes. McCain has 110. That leaves 204 up for grabs, of which McCain must win 160. That's a very tall order.

45 electoral votes are leaning Obama, bringing his safe+lean total to 269 -- one elector away from the presidency. 32 electoral votes are leaning McCain, bringing his safe+lean total to 142, 128 away from the presidency. That leaves only 127 toss-up electors, meaning McCain must bring at least one leaning Obama state into his column to win. The most likely candidates are NV, PA, NM, and MN. Obama could be in trouble if he cannot hold at least two of those states and McCain wins Ohio.

HOW MCCAIN COULD WIN: I have mapped out five potential winning scenarios for McCain (you can see them at the bottom of the attached spreadsheet). Most require McCain to:

• hold every state where he has a marginal advantage
• win Ohio and New Mexico
  
• and win at least one state that is leaning fairly convincingly in Obama's direction.

While it is technically possible for McCain to win without Ohio, it would require him to win FL, VA, NV, PA, and NM.


Obama supporters should check their confidence if 10PM arrives and the following conditions are met: McCain has held all of the territory where he was ahead in the polls (esp. Missouri), Ohio is up for grabs, and at least two of the following four states -- Pennsylvania, Florida, Virginia, New Mexico -- are still up for grabs.





















THE BOTTOM LINE: It will be very hard for McCain to pull this off. First, the "Bradley effect" would have to be strongly in play, whereby white voters tell pollsters they will vote for a black candidate but then chicken out in the booth. That could move Missouri, Virginia, and Ohio into McCain's column. Second, hard-core GOP voter suppression tactics would have to effectively depress the vote in urban areas, especially Cleveland, the east coast of Florida, Indiana, and latino communities in Nevada, New Mexico, and Arizona.

I think it is highly likely that Obama will win with between 305 and 364 electoral votes. Colorado, Virginia, Ohio, Florida, North Carolina, North Dakota, Missouri, Indiana, Montana, and Georgia are toss-ups. As I said, my prediction: Obama wins with 353 electoral votes to McCain's 185.

Knock on wood.

Mistaking correlation for causality

Times: Teens who watch Sex in the City more likely to get pregnant

Roundup on markets, economy

Bonddad:

...take a look at the above chart from the standpoint of stabilization. I've drawn two lines that I'm thinking will provide the general borders of the market's action for the next bit of time. This assumes nothing crazier happens in the interim. My thought is we'll see a standard consolidation -- be it a trading range or some type of triangle formation.

Hussman:

Investors will berate themselves for the panic they are now exhibiting. This, from an advisor that has adamantly argued for over a decade (with the exception of 2002-2003) that the stock market was strenuously overpriced and likely to deliver disappointing long-term returns. My impression is that investors who abandon properly diversified and carefully planned investments here, with the stock market already down by nearly half, will regret it as the emotionally panicked decision that wrecked their retirement prospects.

Warren Buffett recently repeated some useful advice – “good investors are fearful when everyone else is greedy, and greedy when everyone else is fearful.” Though we continue to have put option coverage below nearly 90% of our stockholdings, we have covered our short call options, and have moved our put strikes lower. At present, those options provide significant (but not complete) defense against continued market losses without exerting a major drag on positive returns that appear increasingly likely. (With reference to the strategy articulated in the Prospectus, we are now in the yellow “Moderate” condition - favorable valuations but still unfavorable market action – where we gradually establish moderate exposure to market fluctuations on price weakness).

Roubini:

Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to ``sputter.''

``There are significant downside risks still to the market and the economy,'' Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. ``We're going to be surprised by the severity of the recession and the severity of the financial losses.''

The economist said the recession will last 18 to 24 months, driving unemployment to 9 percent, and already depressed home prices will fall another 15 percent. The U.S. government will need to double its purchase of bank stakes and force lenders to eliminate dividends to save them from bankruptcy, Roubini added. Treasury Secretary Henry Paulson said today he plans to use $250 billion of taxpayer funds to purchase equity in thousands of financial firms to halt a credit freeze that threatened to drive companies into bankruptcy and eliminate jobs.

Wallerstein:

The depression has started. Journalists are still coyly enquiring of economists whether or not we may be entering a mere recession. Don't believe it for a minute. We are already at the beginning of a full-blown worldwide depression with extensive unemployment almost everywhere. It may take the form of a classic nominal deflation, with all its negative consequences for ordinary people. Or it might take the form, a bit less likely, of a runaway inflation, which is simply another way in which values deflate, and which is even worse for ordinary people.

Of course everyone is asking what has triggered this depression. Is it the derivatives, which Warren Buffett called "financial weapons of mass destruction"? Or is it the subprime mortgages? Or is it oil speculators? This is a blame game, and of no real importance. This is to concentrate on the dust, as Fernand Braudel called it, of short-term events. If we want to understand what is going on, we need to look at two other temporalities, which are far more revealing. One is that of medium-term cyclical swings. And one is that of the long-term structural trends.

The capitalist world-economy has had, for several hundred years at least, two major forms of cyclical swings. One is the so-called Kondratieff cycles that historically were 50-60 years in length. And the other is the hegemonic cycles which are much longer.

Pre-emptive strike

Politico (LINK):

Branding his opponent as “erratic in a crisis,” Sen. Barack Obama (D-Ill.) is preempting plans by Sen. John McCain (R-Ariz.) to portray him as having sinister connections to controversial Chicagoans. Obama officials call it political jujitsu – turning the attacks back on the attacker.

McCain officials had said early in the weekend that they plan to begin advertising after Tuesday’s debate that will tie Obama to convicted money launderer Tony Rezko and former Weathermen radical William Ayers.

But Obama isn’t waiting to respond. His campaign is going up Monday on national cable stations with a scathing ad saying: “Three quarters of a million jobs lost this year. Our financial system in turmoil. And John McCain? Erratic in a crisis. Out of touch on the economy. No wonder his campaign wants to change the subject.

8%

8% unemployment by end of 2009: doom-and-gloom, or hopelessly optimistic? What say ye?

MarketWatch (LINK):

The U.S. recession will be "significantly deeper" than they previously thought, Goldman Sachs economists predicted Friday in a research note.

The economy will probably show no growth at all between the middle of 2008 and the middle of 2009, with gross domestic product falling 2% this quarter and 1% next, they said. Two other quarters will show 0% GDP growth. The unemployment rate will likely rise to 8% by the end of next year from 6.1% currently.

"We now also see at least another 100 basis points of monetary easing from the Federal Reserve, aggressive measures to stabilize the money markets, and a possible further easing of fiscal policy under a new administration," wrote Jan Hatzius and his team of economists.

Via Calculated Risk