Nouriel Roubini's Global EconoMonitor

Barack Obama, the 44th President of the United States

The 2008 U.S. Presidential election was historic itself owing to the candidates’ profiles.  But the timing of the election, as the U.S. and the global economy are in the midst of the worst financial crisis and recession in decades, reminds us of the Great Depression era and the 1980s recession, when incoming Presidents Roosevelt and Reagan faced immense challenges to cure the economic woes.

By the time Obama takes his oath in January 2009, he will face an economy which is still in a middle of a severe and prolonged recession where households will continue to face unaffordable mortgages and other debts, declining values of homes (that financed their consumption all these years), risks of debt default or foreclosure, tight access to credit with stringent borrowing conditions, erosion of their retirement savings amid the bearish stock market, over a million lay-offs taking the unemployment rate to 7-8% and critical foreign policy challenges.

Therefore, immediate challenges for Obama will include cushioning the consumers (who account for over two thirds of GDP) from the economic slowdown by means of a large fiscal stimulus package and acting on a government guaranteed mortgage modification program. In fact, he has already called for a fiscal stimulus in the form of grants for state and local governments, infrastructure spending to create jobs, scrapping the tax on unemployment insurance, tax cuts for lower income-groups and small businesses, tax credits for firms that create jobs and government aid for the ailing auto industry. Some of the tax cuts would be financed by taxing the windfall profits of oil companies. Part of his program would allow households to draw up to $10,000 from retirement funds during 2008-09 without any tax penalty. Obama has also called for a ninety-day moratorium on foreclosures, modification of bankruptcy laws, a $10 bn foreclosure-prevention fund and a 10% mortgage tax credit for the middle-class. But more importantly he has emphasized preventing taxpayer funded bailouts of banks and giving golden parachutes to CEOs of failing institutions. He has also strongly endorsed greater financial sector oversight, control and reporting with the creation of a financial market oversight commission to oversee liquidity, capital and disclosure requirements and plans for streamlining regulatory agencies to prevent overlap and assign a greater role to the Securities and Exchange Commission (SEC) to prevent market manipulation and to the Federal Reserve to carry out regulation.

The Democratic Congress will also have an influence on the asset markets, business sentiment and financial sector regulation, as well as on the country’s energy policy and the oil sector, health insurance and pharma sectors, tax incidence on high income-groups and the corporate sector, pre-conditions under trade talks and the role of labor unions.

Tax Policy and Fiscal Deficit

Obama will face a swelling fiscal deficit which might be pushed over $1trillion in the next few years. Mounting fiscal costs of the housing and financial sector bailouts and fiscal stimulus measures to sustain aggregate demand will impact the budget, while the downturn puts a dent in tax revenues. Ballooning Medicare and Social Security bills will only add to his challenges.

A redistribution-oriented tax policy which gives larger tax cuts to a greater number of low and middle-income groups, while raising taxes on the high-income group is at the center of Obama’s proposals. When Bush’s tax cuts expire in 2011, Obama plans to raise the federal individual income tax rate from the current 33% and 35% to 36% and 39.6% for the over $200,000 and $250,000 income-groups respectively. Tax cuts would be kept at the current rate for the rest of the income groups. However, the total tax incidence might be higher when combined with the State and other taxes. The new administration also plans to remove various exemptions and deductions for the high-income groups while extending several tax breaks and credits for the low and middle-income groups, retirees, homeowners, and students.

For the corporate sector, the plan is to cut the tax rate to below 35% and act stringently to broaden the corporate tax base and reduce loopholes, crack down on international tax havens and tax distortions and have a shareholder vote on CEO pay. The plan also includes tax breaks for firms that keep their headquarters in the U.S. Capital gains and dividend tax rates are expected to go up to 20% for the above $250,000 income group. Moreover, carried interest of private equity and hedge-funds will be taxed as ordinary income (at a higher rate) rather than as capital gains.

In order to finance the Social Security shortfall from the oncoming fiscal burden of baby boomers, the new president plans to raise the earnings cap on payroll taxes from the current $102,000 income cap to the over-$250,000 income-group. The Social Security plan will also include a job-portable and tax-deferred Retirement Fund.

While Obama has pledged to follow the pay-as-you-go rule to contain the fiscal deficit, his proposals to increase spending on lower and middle income groups, infrastructure, research and technology would nevertheless raise the national debt with a possible impact on Treasury yields and sources of debt financing.

A Democratic Congress might strengthen the stance to raise taxes especially amid criticism that recent tax cuts dented the fiscal deficit, created investment distortions, and raised income and wealth inequality. But the economic slowdown might limit or delay the administration’s ability to raise taxes. Moreover, there have been concerns about a possible impact of these policies on U.S. competitiveness, investment, and small businesses.

Health Care Reform

In a country with around 47 million uninsured and the middle-class battling with rising health insurance premiums and job-immobile coverage, Obama will face an immense challenge to undertake the impending health care reform and ensure quality health care – that presently fails to match with other developed countries. The President has endorsed a universal health insurance coverage which will have mandates only for children. The plan includes the creation of a regulated National Health Insurance Exchange where individual insurance can be purchased. Low and middle-income households will benefit from subsidized premiums. Firms that do not offer insurance to their employees will face a tax penalty. The improvement in the insurance coverage, in the next few years, might come with a high price tag. 

Trade Policy

Regarding trade, Obama has pressed on labor and environmental standards in trade agreements. He has also proposed to raise duties on Chinese imports to offset the undervalued Yuan and the dumping of goods as well as take measures against China’s violation of intellectual property rights. Part of the plan also includes greater scrutiny of investments by Sovereign Wealth Funds.

Even as the global recession is increasing the risk of a slowdown in global trade and a possible rise in protectionism, this might be exacerbated by a Democratic Congress that favors conditional trade agreements. The current financial crisis and the rising significance of Sovereign Wealth Funds might also increase Congress’ aversion to financial globalization and inward foreign investment. But aversion to trade might be overrated as Congress realizes the risk of unilaterally withdrawing from global trade.

While fair trade might be the way for survival ahead, U.S. insistence on non-tariff barriers to protect some sectors and jobs from import competition might isolate it from trade deals and possible gains from multilateral trade talks.

Labor and Middle-Class 

However, the most important and significant challenge that Obama will face is alleviating the American middle-class woes due to the recession but also due to the impact of globalization on workers’, in recent years. While the lower and middle-income groups have benefited from trade via cheaper imports, the net benefits from globalization are still being heavily debated. In the most recent years, real wages have remained stagnant for the middle-class in spite of a rising cost of living.

In this respect, Obama has offered to raise the minimum wage adjusted for inflation and introduce laws to make organizing unions easier. He has proposed to reform the Trade Adjustment Assistance, wage insurance and worker retraining programs.

Foreign Policy

While economic policy issues may take the fore and constrain foreign policy, many global leaders will be watching the new foreign policy team for clues of the new administration’s priorities. No shortage of challenges await – a resurgent Russia resenting NATO’s involvement in its near abroad, an Iran that remains dedicated to nuclear proliferation despite sanctions etc. Obama’s foreign policy vision has centered around multilateralism and revived diplomacy – something for which European allies have been longing – to further US interests at a time when the U.S. military is engaged in two wars. Iraq and Afghanistan will likely consume much of the administration’s focus – Obama has pledged to withdraw troops from Iraq within 16 months of taking office and counter resurgent Al Qaeda and Taliban forces in Afghanistan. Meanwhile, economic and not political ties may continue to define the U.S. relationship with key Asian economies, including China, its largest creditor.

But finding common ground with China, the second largest consumer and importer of oil, may be required to meet energy policy and anti-climate change goals. Obama has stressed conservation and use of alternative fuels to meet America’s energy needs in order to reduce US oil imports and its trade deficit. However, the lower price of oil and worsening economic outlook expenditures may reduce some of the political will around cap and trade policies as well as reducing pressure to begin offshore drilling.

154 Responses to “Barack Obama, the 44th President of the United States”

hmdashNovember 5th, 2008 at 10:49 pm

Dear Sir,The astounding victory of Mr.Obama in the US presidential election is a providential decree. The world populace is fed up with violence, economic meltdown and devastating miseries in major parts of the globe. Mr. Obama’s emergence as the leader of the USA will not only bring succour to the American people but to the world at large. Apart from economic recession the terrorism in many parts of the world is a major concern. It is eagerly hoped that Mr. Obama displays enough of courage to address these issues in the shortest possible time.Yesterday, from one of the farthest corners of India I was watching the post-win address of Mr. Obama . It was pregnant with ideas and hopes for the mankind.Let the President bring total transformation in the world economy and polity like an Angel and spread the message of peace and brotherhood.I from India on behalf of myself and on behalf of 1.1 billion population salute you and pray GOD to bestow you with all the divine qualities to deliver for the cause of world peace and prosperity.CONGRATULATIONS the PRESIDENT.Long Live the President.SincerelyHMDASHMUMBAIINDIA

GuestNovember 5th, 2008 at 11:11 pm

wow, give me some of that kool aid and a pair of mess.iah glasses cause I’m not seeing the same thing as you.

GuestNovember 5th, 2008 at 11:35 pm

Mr. HMDASH, did you or the other 1.1 billion not notice Mr. Obama not always vote spreading message of peace and brotherhood?be careful pregnant with ideas,obama allows to end birth violent unnature.

GuestNovember 6th, 2008 at 8:22 am

“”The astounding victory of Mr.Obama in the US presidential election is a providential decree.”” there may be more truth to that statement than hmdash realizes.

Satyam’s Raju Sees Obama Having Open Mind on Outsourcing November 6 (Bloomberg) — Ramalinga Raju, chairman of Satyam Computer Services Ltd., talks with Bloomberg’s Nina de Roy in London about the outlook for revenue, acquisitions and the potential impact of U.S. President-elect Barack Obama’s policies on outsourcing. Satyam is India’s fourth-largest computer services provider and earns more than 60 percent of its revenue in the U.S. (Source: Bloomberg)Play * Watch

AnonymousNovember 6th, 2008 at 11:27 am

@hmdash -I agree. thank you for posting not be discouraged by cynicism of comments. you are right in your hopes.

guestNovember 5th, 2008 at 2:14 pm

Sounds like small business owners will be better off closing shop and use there entrepreneurial wisdom to ride the social programs into the easy chair. If we were in a boom cycle you may have some possibility of compliance from small business owners, however most small business owners are hanging on by sheer will adding another brick to each pocket will send many into the unemployment line along with their employees. Work hard take risk and coming soon you will be legally held at gun point and robbed by the government in more ways than you can imagine. No this will not work for small business they will not work twelve hour days, take all the risk just to be robbed of any profits earned. I don’t think they will go for it.

GuestNovember 5th, 2008 at 2:29 pm

Most small businesses clear less than $250,000 per year. How is this a brick in each pocket? As I see it, this is a tax cut for most small businesses.

Miss ItalyNovember 5th, 2008 at 2:38 pm

Don’t worry. If things are a little like in Italy, most businesses will find the way to report less than the 250k that will allow a tax break. The notion that businesses report anything close to the real income and so are subject to the nominal tax bracket is just a joke. What are those loopholes for then?

GuestNovember 5th, 2008 at 5:34 pm

I have a small business. I am in the category of which you speak. After I pay my mortgage payment of $3100 monthly on my median-priced 1200 square foot house, my $10,000 plus property taxes, my FDIC of $15,500, my self-supported 401(k), my business fees, my health and dental insurance and deductibles, my accountant and insurance fees, my federal and state income taxes of 45%, my car payment and gasoline for metropolitan commutes and my lunches, I can assure you I have very little left at the end of the day. And I am very frugal and work up to 12 and even 14 hours many days.If you don’t think that out-of- ballpark union wages and higher taxes and more regulations are bricks in my pocket, then think again. And, if you profess to know of tax loop holes and tax breaks that would be of advantage to me, list them pronto. For how, I ask, does a small business cheat when it’s dealing with reported sales receipts and proof of expenses—even to the mileage on its car use? You need to list the ways: I am monetarily interested. I paid $3000 to have my taxes prepared for 2007 and my accountant found no opportunities to cut. So fess up.You want to know one reason GM went bankrupt? It was paying a total compensation package of $73 dollar an hour for existing skilled workers in 2007: its 2007 workforce was earning $78.21 in wages and benefits. That, Miss Italy, is $162,676.80 a year–each.

Miss ItalyNovember 5th, 2008 at 7:50 pm

Thank you for bringing your testimony. I cannot speak from personal experience, but from that of a friend of mine who approached some tax expert. If he had made enough (400k or similar) he would have worked on his case, cutting taxes considerably, but he was below that threshold, so we don’t know how it would have worked. So, sorry, no hints. Just anectodical evidence that loopholes do exist. Probably your business didn’t have strong enough lobbies? Don’ want to irritate anybody, just trying to make sense of what I see around.

Miss ItalyNovember 5th, 2008 at 8:10 pm

Another point I would like to make about the poor conditions of the automakers. How much of their expenses go to health care? How much of your expenses are for the medical insurance? How much is the overhead for the private insurance business in the USA? How much is it for Medicare? How much is it for the Canadian health system?From the top of my head, I should check with my girlfriend who got these numbers recently, but they are around: private medical insurance, overhead around 40%, Medicare around 6%, Canadian public health system around 3%. Let me double check the exact numbers, but, see, this is probably the real brick in the pocket. Let’s face these numbers, then we talk why an industry is bankrupt!

MarkNovember 5th, 2008 at 10:34 pm

Again, fundamentals! Even if automobiles were half their present costs people cannot get loans to purchase them, because, people are massively in debt. Oh, and autos will be a thing of the past in the not-too-distant-future; this, I’d argue is the REAL reason. What we have occurring is a paradigm shift imposed by resource shortages.

AnonymousNovember 6th, 2008 at 6:50 pm

seems like a very high mortgage payment for such a small house – $3,100. What is your interest rate?

GuestNovember 6th, 2008 at 10:37 am

You are totally spot on. And furthermore, when the supposed middle class wants to move up in income, they will have a VERY difficult time crossing the $250,000 threshold. That is what all these lower income people don’t realize. Their ability to move up will become more impossible.

crgordonNovember 5th, 2008 at 3:01 pm

I read and reread the post and see nothing about an Obama proposal about more bricks in small business owners’ pockets. Your refrain does sound familiar though – perhaps Rupert’s Faux News Network misinformation propaganda? The real news is that a majority of Americans rejected that garbage. You can stay wedded to the past or join the future. Sour grapes does not a great wine make.

GuestNovember 6th, 2008 at 11:34 am

The bricks would be a metaphor; this I would guess includes the known and unknown increase in small business cost. I would list bricks as but not limited to the Bush tax cuts being allowed to expire, Raising minimum wage, increase in taxes, and health care solutions for those who do not currently have or desire to pay for insurance or those who cannot afford it due to the mismanagement of their own finances or not properly prioritizing their personal finances. This will be engineered by the government and it will be (a brick) or cost to small business. Small business hiring minimum wage employees would look at a minimum wage increase as an engineered increase (or brick) by government to the bottom line of business. The small business owner works very hard for his $250.000.00 annual salary and contributes greatly to his community and in most cases pays the employees way more than minimum wage, The owner of any business is always aware of the fact that his business could be wiped out by many different scenarios. Unless you own a small business and see firsthand all the unexpected cost that crop up on a regular basis from State, County and Local governments to have the federal government step in and say for all your hard work you will be paying out more of your hard earned salary. Then you will not be able to understand the concept of Bricks.

GuestNovember 5th, 2008 at 6:56 pm

i hope for transparency and enlightened accounting…the new accounting method which truly revealed just how badly the company’s core Australian childcare centres were really performing…It triggered a series of profit downgrades and revelations of other third-party payments which appeared to have artificially inflated ABC’s earnings…At its peak, ABC was the largest publicly listed child-care operator in the world and a sharemarket darling, with a market capitalisation of $4.1 billion.

PeteCANovember 5th, 2008 at 1:29 pm

I am encouraged by Mr Obama’s success – but I’m already a little woried by some of the choices that are being rumored for the new administration. How does the possible selection of Tim Geithner (Fed NY) possibly move us to a new economic team and a better acceptance of free-market principles? Mr Obama needs to pause and think … we need fresh ideas at this point. The new President could easily squander the surge of idealism if he makes the wrong choices.PeteCA

Kent S.November 5th, 2008 at 1:41 pm

Thank you for your continuing guidance. RGE is a lighthouse in our stormy voyage! I work for a public transit agency, and I am disturbed by today’s NY Times article regarding AIG and public transit agencies “paying about $4 billion in early-termination fees to A.I.G.” I would dearly like to hear your analysis and comments on the topic.

Tom INovember 5th, 2008 at 1:44 pm

Congratulations to Mr Obama. Your challenges are very daunting indeed.Perhaps Prof Roubini is prepared to serve in the Obama administration??

GuestNovember 5th, 2008 at 2:41 pm

This is a truly empty slogan. If the Republicans really cared about the country, why did they rack up a trillion dollar deficit by cutting taxes for the wealthy and boosting spending? If they cared about the country, why did they go into a politically motivated war in Iraq, after Colin Powell, just a few months before had said Saddam Hussein was “contained” and of no threat to anyone? Why have they been dismantling our pollution controls and consumer protections? Why have they been stripping our citizens of the right to sue in a court of law? Why did they politicise the department of Justice? Why have they been so divisive to the rest of the world and our own citizens? Why did they drag the name of the USA through the filthiest of mud by torturing people in our name? Why did they leave big businesses, whose only responsibility is to make as much money as possible, without any regulation whatsoever, resulting in the Enron scandal and the destruction of our economy.yeah, but “Go USA!”

GuestNovember 5th, 2008 at 5:53 pm

If you really cared about history, you might look into it. Even a quick look at Wikipedia might clear a few cobwebs from your vision:The Enron scandal was a financial scandal involving Enron Corporation Former (NYSE ticker symbol: ENE) and its accounting firm Arthur Andersen, that was revealed in late 2001. After a series of revelations involving irregular accounting procedures conducted throughout the 1990s, Enron was on the verge of bankruptcy by November of 2001. A white knight rescue attempt by a similar, smaller energy company, Dynegy, was not viable. Enron filed for bankruptcy on December 2, 2001.In the early 1990s the Congress of the United States of America passed legislation deregulating the sale of electricity. It had done the same for natural gas some years earlier. The resulting energy markets made it possible for companies like Enron to thrive… Strong lobbying on the part of Enron and others kept the system in place…The United States Presidency of Bill Clinton, also known as the Clinton Administration, was the executive branch of the federal government of the United States from 1993 to 2001.Additionally, every single solitary penny spent on Iraq or for salaries for torturers or for every federal expense is approved by the United States House of Representatives, called to order and brought to a vote by…the Democrat Party. Every expenditure.

AnonymousNovember 5th, 2008 at 7:06 pm

The Dems have only been in control of the House for less than 2 years. When they tried to limit spending on the military and War efforts, they were accused of “abandoning” our troops – talk about pulling at the heart strings. The truth is that the BUSH administration went into a war of choice, which they sold hard, and accused people who asked questions of not being patriotic.BTW – it is well documented that Phil Graham was responsible for the death of the banking regulations via an amendment in the passage of an unrelated bill. Oh and his wife is a lobbyist who just happened to work for the same goal. You know, I’m not a rocket scientist, but that is a bit of a coincidence.Now, if you wish to spew your revisionist history here – be warned, the rest of us pay attention and have had enough. Bush will not be treated kindly by history and he will go down as the WORST president in the history of the US. He is a monumental piece of shit.

GuestNovember 5th, 2008 at 7:55 pm

The point is, even before the Democrats had control of the Congress they voted for the war. Ask Diane Feinstein, ask the leaders of the Congress, ask John Kerry et al. Of course you’re right about Phil Gramm, and he operated under the administration of and approval of Bill Clinton. Spew that!And speaking of the activity of spouses, who was the Democrat flag bearer, a wife of a former president and signatory to the War in Iraq, who would rather be president than a statesman? Spew that!By the way, I despise the Republicans and their performance during this past administration, and I despise the Democrats who went along with them every step of the way and I think it is not useful at this point in our history (unrevised) for partisans to pretend history is something it ain’t.

GuestNovember 5th, 2008 at 7:34 pm

“Additionally, every single solitary penny spent on Iraq or for salaries for torturers or for every federal expense is approved by the United States House of Representatives, called to order and brought to a vote by…the Democrat Party.”So that’s your argument? ‘You could have stopped us, but you didn’t, so it’s your fault’?

GuestNovember 5th, 2008 at 8:08 pm

Pelosi sets the calendar as to what the House is going to vote on. The Democrats are the enablers of the war.Dennis Kucinich has been driving himself crazy trying to bring up a bill of impeachment of Bush and Cheney and the Democrats won’t bring it to the floor. Why? It would embarrass them! that they’ve got 4200 young men killed and a 100,000 wounded and 100,000 Iraqis killed in Iraq. That’s embarrassing…to have to vote against it.And speaking of torn strings of the heart and embarrassments that the Democrats would have to suffer by stopping the war, the one celebrated Democrat who was opposed to the war seems to have done okay with the American people.

bcdogsNovember 5th, 2008 at 7:34 pm

You are not correct. The Enron scandal came about because California deregulated, it was a state issue not a Federal issue as you suggest. It was the California legislature in the 1990s not Bill Clinton and the Federal government that led to the crisis. you are surely aware that GWB began his term on 01/20/2001 and this tidbit also from wiki:”Vice President Dick Cheney was appointed in January, 2001 to head the National Energy Development Task Force. In the Spring of that year, officials of the Los Angeles Department of Water and Power met with the Task Force, asking for price controls to protect consumers. The Task Force refused, and insisted that deregulation must remain in place.” will not judge the presidency and VP of the 43d kindly if looked at truthfully.[edit]

GuestNovember 5th, 2008 at 8:45 pm

Your argument fails to present the full picture.“For years, the Enron Corporation used its political muscle to build the markets in which it thrived, pushing relentlessly on Capitol Hill* and in bureaucratic backwaters to deregulate the nation’s natural gas and electricity businesses.”Its achievement, as one Enron executive said today, in creating a “regulatory black hole” fit nicely with what he called the company’s “core management philosophy, which was to be the first mover into a market and to make money in the initial chaos and lack of transparency.”– Jeff Gerth and Richard A. Oppel Jr. “Regulators struggle with a marketplace created by Enron.”, The New York Times, Nov 10, 2001″At the beginning of 2001, the Enron Corporation, the world’s dominant energy trader, appeared unstoppable. The company’s decade-long effort to persuade lawmakers to deregulate electricity markets had succeeded from California to New York. Its ties to the Bush administration (which took office in late January 2001)** assured that its views would be heard in Washington. Its sales, profits and stock were soaring.” -A. Berenson and R. A. Oppel Jr.The New York Times, Oct 28, 2001.*Under the Clinton administration.**Enron filed for bankruptcy on December 2, 2001 and the scandal broke. Apparently its short “ties” to the Bush administration – all 9 months – were to little avail.'s become clear to anyone interested, with eyes to see, that the two parties have an incredible record of re-election of incumbents who work hand-in-glove with the 1000s of lobbyists on the Hill to thwart the will of their contituents. For all practical purposes, they have melded into a single political entity. Those who would pick one or the other of these two wings of the same political struture as evil and the other as above scrutiny, contribute nothing useful, IMO. It is partisanship that leads to ignorance, deceptiveness, folly and failure.

The RussianNovember 5th, 2008 at 3:21 pm

Good luck Barack Obama, also with the search for the new team:You must call Nouriel Roubini, now, and form a group of people around him, like Robert Oppenheimer at Los Alamos, and let them be your main advisory team. There are many able Americans who are not too far inside the asses of Lower Manhattan. Talk to Peter Schiff, to Paul Kasriel, to Marc Faber, George Soros, Bill Fleckenstein and Meredith Whitney. Give Doug Noland and Bill Bonner a call. Sit down with Ron Paul…

MANovember 5th, 2008 at 3:25 pm

@ ORRe: “I changed my mind. Stayed with the 15% equity exposure. People seem to be very upbeat about the election and Paulson’s latest idea for a short squeeze. IMHO, Goldilocks are back for a while. By octavio Richetta on 2008-11-04 14:54:32″It’s just my opinion but… I think the “Bank of Paulson” is there to buy the dips. That’s the control side now. (at least until it becomes predictable or they are the only buyer with cash) Hope that exposure didn’t burn.As I advised yesterday… I moved back to “safe”.Miss America

CaponeNovember 5th, 2008 at 4:17 pm

MA, i rightfully deferred to your call yesterday. Well done! Thanks for the levels – i think they’ll stick through year end and then we’ll see. I am so disappointed I missed the rally for my sister’s 401K, BUT truly better to be safe than sorry with those funds in this casino. I did not even scale in at 8,000. Scale in and scale out right? Then you don’t have to be perfect. Honestly, when you announced the 100% move at once that was the part that made me nervous! Of course, you were right as usual so did not matter…I would still like to gloat for a moment on my technical sell post yesterday as well from the desk of an amateur chart junkee… initial bounce high 9,750 (9,800) resistance consistent with 87 and 29, overhead trend 9,750, VIX “random” 10 year support of 45ish… Wow!Attempting to buy oil dips and sell equity rallies. I wish they made a patience and discipline pill…

MANovember 6th, 2008 at 9:19 am

Capone, I love the charts too. A while back, you timely pointed to the 87 chart and as a chart junkie I gave a second look. Take a look at the 4 month chart leading up to 87. Now take a look at the 2.25year chart of where we are right now.Now stretch that 4 month (87) chart to equal the current 2 and a quarter year chart. It’s EERILY SIMILAR!!!Take printouts and hold them up to the light! The past 2 years look like a slow motion version of 87!OK, onto something else… Why are you such a VIX guy? (I am not for or against)If you have a minute, can I ask you to do me a favor? Can you make a “sales pitch” on why I should follow it more closely then I do? Then, can you also make a “devil’s advocate” pitch on why its useless? I’d like to hear your versions. (if you have the time…)Thanks, Miss America

Octavio RichettaNovember 5th, 2008 at 7:48 pm

Better late than never. I pulled the trigger today; liquidating 50% yesterday would have been better but I have no crystal balls. I am now out of equities; the “short” venture INTO RISK cost me 0.8% on total return YTD. I am not following the news closely but it looks like the Cisco news may make for a bad day tomorrow as well.

GuestNovember 6th, 2008 at 8:32 am

You had to see it coming! Did the same, liquidated everything I had. I am not a part of this roulette anymore. Let the poker players be there, my money is too invaluable for me to loose. If I had a lot to spare, I might have joined the game. But not now. I am done with equities!

Octavio RichettaNovember 6th, 2008 at 10:08 am

T hings are worse than anyone can imagine. Old f*rt WB is dead wrong. I had to listen to a cardiologist and plastic surgeon friend (shame on me) to get my feet on the ground again. The next thing I may have to liquidate is my premature 7% commodities long position. Cutting your losses soon is another one of my painful learnings.

GuestNovember 5th, 2008 at 3:48 pm

I would be very proud to be American today (looking forward).Sorry, off topic:Still waiting for my greencard, I am trying for years now. Is there no other way besides the lottery? The Old Glory flag is impatiently waiting for fresh air and sunshine in CA, IL or NYC. Ready for any job in finance, economics. Fluent in several languages from Old and New Europe.Any advice would be appreciated, no joke.Now is the time…

kilgoresNovember 5th, 2008 at 6:27 pm

The following general information is not to be construed as legal advice. You should seek the assistance of a qualified immigration attorney regarding your particular situation.The U.S. immigration system works much as any other system in the West. There are basically three ways to become admitted as a permanent resident (green card holder), which is a necessary step to becoming a naturalized citizen. The foreign policy of the United States dictates one means: political asylum. That’s pretty hard to do these days. You have to establish a well-founded fear of persecution in your home country, but while you may be legitimately afraid, the U.S. often won’t necessarily recognize your fear unless it is interested in making some sort of political statement to your home country. For example, asylum is granted as a matter of course to any Cuban national who managed to get to U.S. soil by any means. If you’re a Haitian and get to the beach in Florida, though, you’re likely to get sent back home.A second means derives from the public policy of promoting family unity. If you enter into a bona fide marriage to an American or are engaged to be married to one, that’s one way. If you have a parent or a child or a brother or sister here, they can petition for you, but sometimes there are very long waiting lists. The longest lists have traditionally been for the Phillipines, China, and India. There are quotas for each country, so it’s easier if you’re from Reykjavik, for example, than if you are from New Delhi.The third basic way to come to the U.S. permanently is by creating jobs for Americans through investment here, or bringing some special skill in short supply. For instance, registered nurses are in great demand here, so if you are an R.N. or the equivalent, you may be able to get a green card on that basis. These days, unless you have a Nobel Prize or something along those lines, your background in economics and finance may not meet the “short supply” criterion. I appreciate your language skills, too, though as General Vernon Walters (who spoke 7 languages) once quipped, “That will get you a good job as a concierge in a hotel in Paris.”All this can be pretty complicated, so your best bet is to speak with a qualified immigration lawyer, preferably a member of the American Immigration Lawyers Association who has been practicing law for several years. Hope this helps.SWK

GuestNovember 6th, 2008 at 1:33 am

Thank you very much for your advice!I will see what I can do and contact an immigration lawyer. Asylum will become difficult in my case I am afraid, officially I live in a so-called “controlled democracy” until now. But I am quite sure that I will make it somehow, and I am already looking forward to posting on this site from a US IP address! Thx again.

Michael KhorNovember 6th, 2008 at 10:38 am

Marriage to an American is the fastest approach. On the other hand, a common method of immigrating to the US is through education and subsequently apply to work here and get your employer to sponsor you for a green card. There are people who have successfully get green cards by working in a restaurant as special skill category.

GuestNovember 5th, 2008 at 4:52 pm

“Part of his program would allow households to draw up to $10,000 from retirement funds during 2008-09 without any tax penalty.”2008?!? How is the mess.iah going to pull that one off?

bcdogsNovember 5th, 2008 at 7:41 pm

I was thinking that wall street wouldn’t particularly like that proposal. Wouldn’t a proposal like that have a somewhat destabilizing effect on the stock market?Aren’t people who are not doing well with their 401K anyhow right now, more likely to take the 10,000 out. Would that be offset by the purchase of consumer goods (assuming they buy with the money) or paying down debts? Who can predict?

Wild BillNovember 5th, 2008 at 5:20 pm

I’m going to wait a while before I declare Obama is our new messiah. I hate to beat a dead horse but I’m still bridling over the bailout.

GuestNovember 5th, 2008 at 6:23 pm

U.S. Luxury Retailers Face Grimmest Holiday Season (Update2)Nov. 5 (Bloomberg) — Luxury retailers may suffer the industry’s biggest reversal of fortune during the holidays as the global financial crisis dents the wealth of the richest Americans.Sales at Saks Inc., Nordstrom Inc. and Neiman Marcus Group Inc. stores open at least a year may decline as much as 3 percent in November and December after advancing 5.2 percent a year earlier, according to the International Council of Shopping Centers trade group.The 8.2 percentage point swing may be the biggest of the seven retail segments that the New York-based ICSC tracks. The drop in demand may signal that America’s wealthiest consumers are retrenching more than the rest of the country, avoiding luxury purchases while the U.S. loses more jobs and home foreclosures rise…Tomorrow Seattle-based Nordstrom will probably report a 13 percent October sales decline, and Saks’s drop may be 12 percent, according to the average estimates of analysts surveyed by Retail Metrics LLC. Dallas-based Neiman’s sales will retreat 14 percent, said Carla Casella, an analyst at JPMorgan Chase & Co…Among the sectors, discounters may see the biggest improvement this holiday season, more than doubling their gain in sales at stores open at least a year to 2.5 percent from 1.1 percent a year earlier, the group estimated.Taken together, comparable-store sales for all the 36 chains the ICSC tracks may have their worst performance since 2002.

John RyskampNovember 5th, 2008 at 7:01 pm

HA HA! HOW ILL-INFORMED THIS ALL IS!!!Therefore, immediate challenges for Obama will include cushioning the consumers (who account for over two thirds of GDP) from the economic slowdown by means of a large fiscal stimulus package and acting on a government guaranteed mortgage modification program.WHAT IS MEANT BY ‘CUSHIONING.’ DON’T YOU LOVE THESE RIDICULOUS ELITES WHO WAVE THESE WANDS. STOP WAVING WANDS. DO INDIVIDUALS HAVE THE INDIVIDUALLY ENFORCEABLE RIGHT TO MAINTENANCE OR NOT? WAKE UP. THINK. CHECK WITH A LAWYER. YOU SOUND LIKE YOU BELONG TO THE DALEY CHICAGO MACHINE.In fact, he has already called for a fiscal stimulus in the form of grants for state and local governments, infrastructure spending to create jobs, scrapping the tax on unemployment insurance, tax cuts for lower income-groups and small businesses, tax credits for firms that create jobs and government aid for the ailing auto industry.MORE BRIDGES TO NOWHERE. WHAT ‘INFRASTRUCTURE?’ WHAT ‘JOBS?’ IDIOTS. ELITIST TRASH. YOU SOUND LIKE YOU WERE BORN UNDER A BRIDGE.Some of the tax cuts would be financed by taxing the windfall profits of oil companies. Part of his program would allow households to draw up to $10,000 from retirement funds during 2008-09 without any tax penalty.YOU MEAN THE SAME RETIREMENT FUNDS WHICH HAVE LOST SO MUCH VALUE DUE TO WAND-WAVING ELITE POLICE STATE MONKEYS SUCH AS YOURSELVES. FUHRER WE THANK YOU!Obama has also called for a ninety-day moratorium on foreclosures, modification of bankruptcy laws, a $10 bn foreclosure-prevention fund and a 10% mortgage tax credit for the middle-class.DOES THE PERSON IN POSSESSION OF THE HOUSING HAVE ANY RIGHT TO ENFORCE ANY OF THIS? WHAT ABOUT RENTERS? AGAIN, TALK TO A LAWYER BEFORE MOUTHING THESE HAPPYHAPPY POLICE STATE PLATITUDES. TALK ABOUT RIGHTS, NOT ABOUT BANANA REPUBLIC-STYLE LARGESSE. WHAT A PACK OF DOGS YOU ARE!But more importantly he has emphasized preventing taxpayer funded bailouts of banks and giving golden parachutes to CEOs of failing institutions.WAIT A MINUTE! YOUR GURU JUST SIGNED OFF ON 3 TRILLION DOLLARS OF SUCH BAILOUTS. THERE WILL BE 10 TRILLION MORE.He has also strongly endorsed greater financial sector oversight, control and reporting with the creation of a financial market oversight commission to oversee liquidity, capital and disclosure requirements and plans for streamlining regulatory agencies to prevent overlap and assign a greater role to the Securities and Exchange Commission (SEC) to prevent market manipulation and to the Federal Reserve to carry out regulation.WOW, IS THIS BLATHER. REALLY? IS THAT WHY OBAMA TAKES HIS MARCHING ORDERS FROM A COMBINATION OF GOLDMAN SACHS AND TONY REZKO? HOW IGNORANT ARE YOU?The Democratic CongressREAD, ORGANIZED CRIMEwill also have an influence on the asset markets, business sentiment and financial sector regulation, as well as on the country’s energy policy and the oil sector, health insurance and pharma sectors, tax incidence on high income-groups and the corporate sector, pre-conditions under trade talks and the role of labor unions.OH BLAH BLAH BLAH. WHAT A BUNCH OF POLICE STATE MALARKEY.Tax Policy and Fiscal DeficitObama will face a swelling fiscal deficit which might be pushed over $1trillion in the next few years. Mounting fiscal costs of the housing and financial sector bailouts and fiscal stimulus measures to sustain aggregate demand will impact the budget, while the downturn puts a dent in tax revenues.TRY RECOGNIZING INCREASED INDIVIDUALLY ENFORCEABLE RIGHTS. TALK ABOUT THAT BEFORE YOU TALK ABOUT DEFICITS.Ballooning Medicare and Social Security bills will only add to his challenges.THEY WOULDN’T BE CHALLENGES IF YOU ENFORCED THE MEDICAL CARE RIGHT OF THE NEW BILL OF RIGHTS. JUST READ MY BOOK, THE EMINENT DOMAIN REVOLT. AGAIN, CONSULT A LAWYER. YOU ARE IGNORANT, IGNORANT, IGNORANT AS A GAGGLE OF GEESE.A redistribution-oriented tax policy which gives larger tax cuts to a greater number of low and middle-income groups, while raising taxes on the high-income group is at the center of Obama’s proposals.NO IT ISN’T. BY THE WAY, TO WHAT LEVEL THESE CUTS. TO THE LEVEL OF MAINTENANCE? WHAT IN FACT IS THAT? TRY UNDERSTANDING THE FACTS YOU ARE BANDYING ABOUT.When Bush’s tax cuts expire in 2011, Obama plans to raise the federal individual income tax rate from the current 33% and 35% to 36% and 39.6% for the over $200,000 and $250,000 income-groups respectively. Tax cuts would be kept at the current rate for the rest of the income groups. However, the total tax incidence might be higher when combined with the State and other taxes. The new administration also plans to remove various exemptions and deductions for the high-income groups while extending several tax breaks and credits for the low and middle-income groups, retirees, homeowners, and students.ALL WITHOUT ANY REFERENCE AT ALL TO RIGHTS. AND SO ON, WITH RESPECT TO ALL THE REST OF YOUR ILL-INFORMED DRIVEL….

Jason BNovember 5th, 2008 at 7:15 pm

I love you Ryskamp, you crazy crackhead. Man are you a nutjob.How about the right to mental healthcare? Exercise that right, would ya?

bcdogsNovember 5th, 2008 at 7:47 pm

Wish he wouldn’t caps lock so much. I look at a screen all day, it’s tough on old folks eyes…I guess he is indicating he is angry…What are some of your proposals John? I don’t want to buy the book, I’m trying to 12-Step my way out of my weakness for purchasing book addiction…I have to buy a new Balducci…

MedicNovember 5th, 2008 at 7:14 pm

“AND SO ON, WITH RESPECT TO ALL THE REST OF YOUR ILL-INFORMED DRIVEL….”Hello Pot? It’s the kettle……You know John, if we displease you so much and make you this angry, perhaps you should just…..Oh I don’t know…..Leave!

GuestNovember 6th, 2008 at 8:29 am

Just google John Ryskamp and you’ll find that he has been banned from several blogs. There is no where for him to go…

GuestNovember 6th, 2008 at 9:27 am

I wonder sometimes if John is Roubini’s alter ego? You know his contrarian personality that brings balance as in ying and yang?

GSMNovember 5th, 2008 at 7:16 pm

A “fleece the rich” policy by Obama would be financial suicide.The fact is that the rich are now the only ones who have money. If they become even more threatened than they are now with both houses and the Executive in Dem hands, watch them bail on the US and it’s economy.Capital flight should be the last thing Obama’s Administration needs.No, cool heads MUST prevail at this juncture. Obama and his zealous followers need to think and act very carefully prior to tinkering ( as they must!) with taxes, trade and domestic entitlements of all sorts. This is NOT time for radical surgery, there are no easy answers or solutions. Sound bite fixes will not only fail, they will shatter any budding confidence arising from Obama’s historic victory. There is no single magic bullet for the US financial debacle.Recovery from this will likely take a decade and 2 terms during which well laid and executed plans must unfold, simply to ensure even a reasonably stable financial future for the US.Success, true success will be arduous and grim. All quick fixes and hip answers to this crisis must be viewed with extreme caution, if not scorn.

JohnRyskampNovember 5th, 2008 at 7:38 pm


bcdogsNovember 5th, 2008 at 7:49 pm

Caps lock is not your friend…I couldn’t agree with you more about the 17.9 naonsecond honeymoon, though I doubt that it will last that long…

kilgoresNovember 5th, 2008 at 8:03 pm

Baloney. The argument that the marginal tax rate can’t be increased for the wealthy is made whether the economy is doing well or doing poorly, and the justification invariably references the supposed “financial suicide” that would ensue.As I noted in a previous thread, in 1929 and in the early 1930s, there was — as now — tremendous disparity in the distribution of wealth in this country. Something like 70 percent of stock dividends went to only one percent of all Americans, the top marginal tax rate for individual income taxes was around 24 percent, and the highest estate tax rate was about 20 percent. The corporate income tax rate in 1929 was less than 14 percent. More than 20 percent of the entire wealth of the United States was owned and controlled by the elite 0.1 percent of the population.By around 1946 or 1947, all that had changed. Why? During its first term, the Roosevelt administration increased the highest marginal tax rate on individual income from the 24% it had been to 63 percent, and during its second term, that rate rose by another 16 percent to 79 percent. These measures did NOT, incidentally, cause the Great Depression (which was already underway), exacerbate it, or prolong it.By the mid 1950s, the top marginal income tax rate for individuals was 91 percent, topping out at about 95 percent when Kennedy took office (at which time it began to go down). The top estate tax rate rose from its 1929 level of 20 percent to 77 percent. Similarly, the corporate income tax rate had increased to more than 45 percent by 1955.As a result of this tax-based redistribution, by the mid-1950s — in the span of about 25 to 40 years following the Crash and the onset of the Great Depression — that elite 0.1 percent only controlled about 10 percent of the nation’s wealth, or about half of what it had controlled before. The net effect of all this was to reduce the concentration of economic and political power in the hands of a few, and vest in more citizens the opportunity to share a greater portion of the economic and political pie. While the pre-tax incomes of the elite upper 0.1 of the population had declined to around 60 percent of what it had been in 1929, real median family income doubled, allowing the standard of living for the average American to rise. For the first time, many citizens were able to enjoy their own indoor plumbing, to own an automobile, and to have a telephone in their own homes. The economic pie grew for everyone despite hiking the marginal tax rates for the wealthy in a graduated, progressive tax structure.What we’ve seen over the last 30 or 35 years has been a gradual dismantling of this tax policy as income taxes and estate taxes have been cut, more so on the upper end of the income scale than the lower end, shifting the burden of taxation to the lower and middle classes. That’s why the real median income has been dropping overall during the past three decades, and may well be a reason why we have witnessed growing corruption in the halls of our federal and state governments.We’ve been fleecing the middle class for the last 30 years, redistributing money up the food chain to a wealthy few through these misguided regressive tax “reforms” that have left us with a massive public debt and the greatest disparity in income in this country since 1929. Fleece the rich? It’s about time the rich paid their fair share of taxes, and I speak as someone who may well pay higher taxes if Mr. Obama’s plan goes through. We need to get back to progressive tax policies in this country or risk creating a permanent underclass in which a majority of Americans will find themselves with little or no stake in the economic and political future of America.SWK

GSMNovember 5th, 2008 at 9:49 pm

SWK,It may be the right thing to do. But is that the right thing to do NOW? I think not. Re-engineering the US society can wait for now. The most important challenge for Obama’s early Adminisistration will be to halt the serious decline in the US’s finances and economy without causing a currency/bond crisis. To achieve that some very difficult choices will need to be made.

kilgoresNovember 6th, 2008 at 6:22 am

I’m not proposing that we double or triple the highest marginal tax rate all at once. It should be introduced incrementally, but it must happen. One thing it may do is help buttress demand for tax-exempt municipal bonds that local governments will need desperately to continue to fund new infrastructure in their communities.SWK

London BankerNovember 6th, 2008 at 4:47 am

@ KilgoresI agree that the middle class has beens ripped off to enable the excess enrichment of the top 1 percent. I agree that would not have happened with reasonably progressive taxation policies. That said, this is not 1932 (and don’t forget the attempted coup against Roosevelt by the fascist corporate and Wall Street elites of the day who admired Hitler and financed the Third Reich).Obama has fewer means of discouraging or preventing capital flight than Roosevelt had. He cannot control international travel and asset movements. Obama will find it harder to seize gold and make gold ownership illegal. Obama will be unable to prevent a flight from the dollar. Obama doesn’t have the luxury of an oil and trade and capital account surplus, as Roosevelt had.I agree that wealth needs to be redistributed to get the economy growing again, but that has to be done through higher wages and lower taxes on working Americans (and Brits), rather than rapidly taxing the mobile wealth already in the hands of the elites. That is why inflation is the chosen policy by the Fed and Treasury (and Bank of England), even though deflation is a more likely outcome. Inflation would preserve more the fortunes of the elites and also gradually enable redistribution through higher wages (reversing the policies of the last 30 years) if wages grew at above inflation rates.I don’t think they will pull it off. Their “controls” as described by Rich/MA have allowed control demolition so far, but with enough shocks to indicate that the “controls” also fail because not all elements of this unstable system are predictable. But they have limited options, so have to keep trying.

kilgoresNovember 6th, 2008 at 6:37 am

As always, LB, I appreciate your insight. Please see my comment in response to the post by GSM immediately preceding yours, noting that I am not advocating any sudden substantial hike in marginal tax rates for the wealthiest Americans.I realize the current conditions differ significantly from those present in 1932. I also appreciate the problem of controlling capital flight, but I’m not yet convinced there is no way to address this shy of freezing the highest marginal tax rates at their current levels.SWK

MarkNovember 6th, 2008 at 12:21 pm

While I’m purely an “equality” person, I still am failing to see how any redistribution is going to get us around the fact that growth is going to (probably already has) stall and reverse. My question remains: how can we have indefinite economic growth in a world that’s bounded by finite resources?The argument by the rich elite has always been that they know best on how to invest resources. One could argue that museums and other such cultural investments are more meaningful than plasma TVs. NOTE: I see museums as primarily tributes to the rich; and perhaps plasma TVs as tributes to the poor(er)?If we’re not all working together on sustainability then all we’re doing is re-arranging the deck chairs on the Titanic.

Lord SidcupNovember 6th, 2008 at 1:41 am

Strawman arguments from GSMWhy don’t you discuss reality instead? Obamas real actions / stated intentions?”A “fleece the rich” policy by Obama… ” ==> what are your sources for this? specifics of it?”Obama and his zealous followers…” ==> those people sure sound crazy.”No, cool heads MUST prevail at this juncture”==> who is arguing for rash, reckless action?

GSMNovember 6th, 2008 at 5:44 am

As usual, Sidcup (oops, Lord) argueing semantics. If you don’t for a minute believe that the Obama Administrations will not actively attempt to fleece the “rich”, that his followers are zealous, that dramatic action on taxes and wealth re-distribution are NOT being actively discussed (if not planned), then your naivety really is more chronic than I thought.

Lord SidcupNovember 6th, 2008 at 6:01 am

Please provide evidence that the “Obama Administrations will . . . actively attempt to fleece the “rich”,That’s all.

JohnRyskampNovember 5th, 2008 at 7:35 pm

As I said earlier, we are now well into the currency race to the bottom. Money can be made here, but you must have a VERY SEASONED currency trader. This arena involves governments leaping out of the shadows, acting on their own inside information. Reporting these plays is where, I think, Marx had the most fun in his reporting.Nov. 6 (Bloomberg) — The euro fell for a second day against the dollar on speculation the European Central Bank will follow an expected interest-rate cut today with further reductions to revive the region’s shrinking economy.The 15-nation currency also declined against the yen as economists forecast the ECB will lower its main refinancing rate by a half-percentage point to 3.25 percent, after a similar- sized reduction less than a month ago. Britain’s pound also weakened on speculation the Bank of England will bring down borrowing costs when it meets today.“You can’t buy the euro,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The ECB may cut rates well into next year, and that will cause the currency to fall.”The euro declined 0.6 percent to $1.2877 at 10:10 a.m. in Tokyo, after falling 0.2 percent yesterday. It bought 126.29 yen from 126.89 yen. The dollar traded at 98.13 yen from 97.94. The pound fell 0.5 percent to $1.5827.The ECB will announce its decision at 1:45 p.m. in Frankfurt today and the bank’s president, Jean-Claude Trichet, will hold a press conference 45 minutes later. The ECB reduced the target to 3.75 percent from 4.25 percent on Oct. 8, joining the Fed, the Bank of England, the Bank of Canada and the Swiss National Bank in coordinated reductions.“The market will view the action as a step to restore confidence and to mitigate the economic fallout from the crisis,” said Todd Elmer, currency strategist at Citigroup Global Markets in New York.U.S. EconomyThe dollar was little changed against the yen after companies in the U.S. cut an estimated 157,000 jobs in October, the most in almost six years, a private report based on payroll data showed. The drop was larger than forecast and followed a revised 26,000 decrease in September that was bigger than previously estimated, ADP Employer Services said.Total U.S. payrolls fell by 200,000 last month, and the unemployment rate rose to a five-year high of 6.3 percent, according to the median forecast of economists surveyed by Bloomberg News. The Labor Department’s report is due tomorrow.President-elect Barack Obama has advocated a second fiscal stimulus package to help boost the economy. About three weeks ago, as financial markets reeled and the crises deepened, Obama increased the proposed cost of his “middle-class rescue plan” to $175 billion from $115 billion.`Very Bleak’U.S. stocks dropped yesterday on concern the world’s largest economy will worsen even as Obama moves to stimulate growth. The Standard & Poor’s 500 Index slumped 5.3 percent yesterday, the most following a presidential election, after data showed U.S. services industries contracted by the most on record in October.“Everything is very, very bleak,” said Firas Askari, head currency trader at BMO Nesbitt Burns in Toronto. “It’s hard for me to be a lover of the U.S. dollar. You’re putting your grandkids into hock.”The pound declined for a second day against the dollar and yen as traders bet that U.K. policy makers will lower their benchmark interest rate by 75 basis points to 3.75 percent, according to a Credit Suisse Group AG index of probability based on overnight indexed swap rates. Fifteen of 60 economists in a Bloomberg survey say the Bank of England will reduce rates by that amount or more, with the rest predicting a half-point cut.Japan’s currency strengthened to 66.34 against the Australian dollar from 66.73 and to 9.9670 per South African rand from 10.0239 on speculation the drop in stocks will discourage carry trades, in which investors get funds in a country with low borrowing costs and buy assets where returns are higher. Japan’s 0.3 percent target lending rate compares with 5.25 percent in Australia and 12 percent in South Africa.`Repatriation Flows’The yen dropped against the dollar and the euro on Nov. 4 as U.S. stocks rallied the most on a presidential Election Day since the New York Stock Exchange first opened for trading on a voting day in 1984.Any yen weakness “is likely to prove both limited and short-lived as the onset of potentially the worst global recession since the early 1980s continues to drive further dollar- and yen-supportive repatriation flows,” Lee Hardman, a currency strategist in London at Bank of Tokyo-Mitsubishi Ltd., wrote in a client note.

GuestNovember 5th, 2008 at 8:18 pm

one more challenge:GM’s `Time Is Very Short’ for U.S. Aid, Altman Says (Update3)

Nov. 5 (Bloomberg) — General Motors Corp., hammered by the worst auto market in 25 years, needs U.S. aid because “time is very short” to stop its collapse, says Roger Altman, the former Treasury official advising GM in merger talks with Chrysler LLC.With the government offering a $700 billion rescue for banks, it should have enough to assist GM, Chrysler and Ford Motor Co., Altman, 62, said in an interview. Altman, now chief executive officer of Evercore Partners…

Full Bloomberg ArticleI have observed a massive PR campaign in recent days attempting to instill fear in the public and the decision makers (sound familiar), of the consequences of a failure of GM. e.g. a million jobs lostThe chairman of Cerberus, the ibank that owns the equally troubled Chrysler, which is party to the proposed GM deal, is none other than former Treasury Secretary John Snow.It will be interesting to see how the Bush/Barack/Pelosi dynamic handles this.

GuestNovember 6th, 2008 at 8:14 am

Mr. Buffet is not a politico. He needs to stay behind a desk in Omaha. In all probability his wrong guesses and silly assertions will lead to the moniker “BB” or Buffoon Buffet.

KJ FoehrNovember 5th, 2008 at 9:15 pm

If you had any doubt about the kind of change President Obama intends:Obama May Not Wait for Inauguration to Put His Stamp on EconomyBy Matthew Benjamin and Rich Miller(excerpt)Nov. 5 (Bloomberg) — Barack Obama will transform a U.S. economy reeling from the worst financial crisis since the Great Depression — and he may not wait until Inauguration Day to get started.He’ll get his chance when Congress returns in less than two weeks for a lame-duck session with plans to pass another economic stimulus bill. Such a package would only be a down payment on Obama’s economic recovery program if the Republican incumbent, George W. Bush, supports it. The rest will come when Obama, 47, is in the White House.The Democratic president-elect has much more on his agenda, amounting to what may be the broadest overhaul of the U.S. economy since Franklin D. Roosevelt’s New Deal. Beyond job creation and big investments in public works, Obama intends to shift the tax burden back toward the wealthy, roll back a quarter-century of deregulation, extend health-care coverage to all Americans and reassess the U.S. government’s pursuit of free- trade deals.“The changes will be far greater than many expect,” said Andrew Laperriere, managing director at International Strategy & Investment Group, a money management and research firm in Washington. “From taxes to energy to health care, it’s a pretty sweeping agenda.”… ‘em and weep plutocrats and Reagan revolutionaries.

GuestNovember 5th, 2008 at 9:59 pm

He’s also suppose to improve sunsets by 30%, reduce or completely eliminate the smell of wetdogs by 2016 and make beans less gassy.We will see…

GSMNovember 5th, 2008 at 10:09 pm

Oh , if it were all so easy.KJF, the Govt coffers are EMPTY. There is nothing left to loot.From where will come all the money needed for added healthcare, education,big public works etc. Answer= MORE DEBT.Obama is promising tax CUTS for the majority of Americans.Even more income lost?The rich will pay? Some will, sure. But looting the rich will ensure they deploy their formidable wealth protection mechanisms depriving the state of its grab at thier treasure.That door will squeeze shut pretty soon I’m sure.The US must take a CHAINSAW to it’s spending and start SAVING. Stop living light years beyond it’s means,funding a gargantuan military, bailing out Walls St shysters. Build up it’s coffers again. Make stuff to sell again.To not do so runs the risk of a devastating currency collapse and bond market meltdown. Delivering a decade or more of impoverishment to it’s people. In short , the US needs live within it’s means absent more debt.

KJ FoehrNovember 5th, 2008 at 11:07 pm

When Reagan ran up huge deficits, defense contractors made billions, but at least we out spent the Russians and won the Cold War.When W did it oil companies made billions, and many more CEOs and Wall Street pigmen made obscene salaries while the rest of our money went to OPEC and China. The OPEC oil got burned, pumping more carbon through our tailpipes, and all the junk we bought from China is already in or soon will be on its way to the landfill.And then in the end the whole house of cards collapses, and who suffers the most? The CEOs? The pigmen? Hardly. It’s the American people who were sold down the river by the free-marketeers and the Republican enablers.That is madness! There has got to be a better way!Instead of privatizing the gains and socializing the losses, it’s time for fairness; it’s time to socialize everything.

AfANovember 5th, 2008 at 11:14 pm

KJ, this is time for the proverbial “set back and watch”. Let the dust settle and the hype cool down, things will become clearer aftermath.Change is nice but not necessarily good.Anyway, if you still want to believe, and to set you in the mood, this is time to listen to 2pac: Changes.

Lord SidcupNovember 6th, 2008 at 1:30 am

The headline says what Obama “may” do. The word “may” is repeated in the first line.On these very shaky foundations (conjecture) the argument advances.based on this you write “If you had any doubt about the kind of change President Obama intends:”Very weak logic mr kj foehr.

painterNovember 6th, 2008 at 4:24 am

The rich have made their money on the backs of hard working people. It is time they return some of it . let them keep 20%. The rich have the money and can make the rest of us scream that the world will end if we tax them any more. Overthrow the bastards and put them in jail

kilgoresNovember 6th, 2008 at 6:44 am

Well, threatening to take away their passports and throw them in jail if they send too much money overseas could be one way of discouraging capital flight! ;-)SWK

kilgoresNovember 6th, 2008 at 11:08 am

You flatter yourself to think you know me, Guest. You don’t know me, but you obviously despise what you assume that I believe.Sorry, I’m not sure I’d go as far as to outlaw transfers of capital from the U.S. to places abroad, unless those transfers constituted tax evasion. Then the perpetrators damn well should be thrown in prison because they’re cheating the rest of us who obey the law and pay the taxes we owe, and they’re leaching off the benefits the government provides them. If you want to establish a tax-free Libertarian enclave, Antartica might be a good bet. Penguins never try to redistribute income through taxation.Incidentally, for purposes of personal and corporate income tax, the U.S. imposes taxes on income regardless of source. If you are an American citizen or an American corporation, you are subject to U.S. income tax even if you make your money outside the U.S. Most other countries tax only income that arises within their borders, which accounts for a good bit of tax avoidance, if not evasion, in those countries. Capital can go wherever it wants to go, but if you get caught not accurately and completely reporting your extraterritorial income to Uncle Sam, be prepared to enjoy the benefits of room and board at Club Fed, courtesy of the law-abiding citizens of this country who pay their taxes without whining.SWK

GuestNovember 5th, 2008 at 9:46 pm

if this color can change the usa, howcome there is no member of G7/8 is from Africa?Lovely Amercia you always has a dream…

Little SaverNovember 6th, 2008 at 1:46 am

As if the only interesting thing on Obama is his color.Some deliberately choose selective filters on reality in order to maintain their selfish views.Nice try, but little chance to succeed with shortsightedness on this blog. Would be interesting to see your identity, so that we know who’s the shortsighted one.

kilgoresNovember 6th, 2008 at 6:46 am

Because the criteria for membership in the G8 is not about the color of the skin of the inhabitants of the member countries, but about the level of economic development they have achieved.SWK

Luke LeaNovember 5th, 2008 at 9:49 pm

If we are going to tax the rich it has to be done with a graduated consumption tax, with savings tax exempt. Otherwise you destroy the incentives of entrepreneurs and businessmen to become rich, which is part of what drives the economy. See the U.S.A. Tax of Nunn and Domenici, and the writings of Irving Fisher.

GuestNovember 5th, 2008 at 10:04 pm

We don’t need entrepreneurs, just create a volunteer Entrepreneurial Corps who will do it all for a $500 tax credit.

kilgoresNovember 6th, 2008 at 6:55 am

In concept, a graduated consumption tax would help avoid the regressive nature of a flat tax. What would be the mechanism, though, for determining how much someone is consuming? Presumably, you’re taxed at the point of sale. How does a merchant determine what tax rate applies for any given purchase? In other words, how does the merchant know how much the buyer has consumed for that year so that the appropriate rate of taxation can be applied?Pardon me if I seem a it thick here, but I just don’t get it.SWK

GuestNovember 6th, 2008 at 9:34 am

Just tax EVERYONE at the HIGHEST rate, thenwhen they file their taxes they have to prove that they should get a refund.Let the government take it all first and you have to go to them to prove it should be returned to you. Guilty until proven Innocent,like what the guberment does now, I’m sure they would like it that way.

GuestNovember 6th, 2008 at 11:26 am

Better yet, let’s have the government give us an allowance. Send all the money in, put it in one big basket, and have the politicians, i.e. Pelosi and Frank, decide who gets it. It sure would ease my ambitions. As Alfred E. Neuman might have said, “What, Me work?”

GuestNovember 6th, 2008 at 11:58 am

imbed infrared tags under the skin…and since the last eight years created a bubble in global paranoia mutual funds perhaps the techies can create a trust spray to reverse all the brain damage to restore confidence.

GuestNovember 5th, 2008 at 10:44 pm

“What Happened in 1980?(…besides a lot of real wealth starting to change hands.)” by Wilton D. Alston|November 5, 2008 Excerpt”Deficits and a mounting debt, therefore, are a growing and intolerable burden on the society and economy, both because they raise the tax burden and increasingly drain resources from the productive to the parasitic, counterproductive, “public” sector. Moreover, whenever deficits are financed by expanding bank credit – in other words, by creating new money – matters become still worse, since credit inflation creates permanent and rising price inflation as well as waves of boom-bust ‘business cycles.’”~ Murray N. Rothbard “Repudiating the National Debt”Up until about 1980, the growth in real wages across economic classes seemed relatively uniform, that is, enjoyed by everyone. Thereafter, one can see that the growth in wages is skewed toward the upper income levels. In my view, this skewing exemplifies the transfer of wealth driven by inflation (and increased national debt) and to whom that money flows. That transfer continues today. My suspicion: The State, via the Federal Reserve, is the facilitator of that transfer… It strikes me as curiously ironic that the Monetary Control Act, which gave the Fed much broader powers, including the power to “monetize” sub-prime mortgages, was passed in 1980. Again, while I am certainly no economist and therefore cannot draw a firm conclusion, my suspicions are strong.Either way the result is rather obvious. That result is the widening gap between the proverbial ends of the income spectrum that seemed to accelerate beginning around 1980. According to a well-researched and fascinating presentation on the economy by Chris Martenson, entitled, “The Crash Course,” the Greek philosopher Plutarch stated, “An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” That this imbalance seems to be ever widening in the current U.S. society should be, in my view, cause for concern, no matter the amount of debt. This is not because it is inherently bad for some to be more proficient at making money than others. Differences in performance are both normal and expected. However, when the State facilitates that difference well, “Houston, we have a problem!”…Make no mistake; the production of fiat money by a central banking scheme drives much of this widening gap between the ends of the socio-economic food chain. Libertarian philosopher and Austrian economist Roderick Long explains:“When the central bank creates money, the new money doesn’t propagate throughout the economy instantaneously; some sectors get the new money first, while they’re still facing the old, lower prices, while other sectors get the new money last, after they’ve already begun facing the higher prices. The result of such “Cantillon effects” is not only a systematic redistribution of wealth from those less to those more favoured by the banking-government complex, but an artificial stimulation of certain sectors of the economy, making them look more inherently profitable than they are and so directing economically unjustified levels of investment toward them…”There was a time when I would have said this gravy train of “free” money for whomever or whatever boondoggle would continue for as long as the coercive state draws breath, but even the State can’t change the laws of math.Those laws indicate that the debt load of the U.S. has each of us headed for a bumpy – possibly very bumpy – ride, of which this most-recent $700B scam was just the iceberg’s tip. Buckle up. (And gentlemen, wear a cup.)

GuestNovember 6th, 2008 at 7:02 am

Interesting. We were told c. 1980 that money would “trickle down” to lower levels, but obviously that didn’t happen.

GuestNovember 5th, 2008 at 10:51 pm

Deja vu or change?Obama Names Podesta, Jarrett to Head Transition Team (Update1)Nov. 5 (Bloomberg) — President-elect Barack Obama named a group of loyalists and former aides to President Bill Clinton to lead his transition team in building the new administration that will take power when he is inaugurated.The work will be overseen by John Podesta, Clinton’s one- time chief of staff, Obama confidante Valerie Jarrett, chief executive officer of Chicago real estate developer Habitat Co., and Pete Rouse, Obama’s Senate chief of staff.An advisory board that will help with transition planning includes former Clinton administration officials Carol Browner, William Daley and Federico Pena, as well as Arizona Governor Janet Napolitano, an early supporter.Stephanie Cutter, who was communications director for Massachusetts Senator John Kerry during his 2004 presidential campaign, was named chief spokeswoman. Dan Pfeiffer will be communications director after serving in the same role during the campaign…

GuestNovember 5th, 2008 at 11:06 pm

“The World Tires of Dollar Hegemony” By Paul Craig RobertsWhat explains the paradox of the dollar’s sharp rise in value against other currencies (except the Japanese yen) despite disproportionate US exposure to the worst financial crisis since the Great Depression? The answer does not lie in improved fundamentals for the US economy or better prospects for the dollar to retain its reserve currency role.The rise in the dollar’s exchange value is due to two factors.One factor is the traditional flight to the reserve currency that results from panic. People are simply doing what they have always done. Pam Martens predicted correctly that panic demand for US Treasury bills would boost the US dollar.The other factor is the unwinding of the carry trade. The carry trade originated in extremely low Japanese interest rates. Investors and speculators borrowed Japanese yen at an interest rate of one-half of one percent, converted the yen to other currencies, and purchased debt instruments from other countries that pay much higher interest rates. In effect, they were getting practically free funds from Japan to lend to others paying higher interest.The financial crisis has reversed this process. The toxic American derivatives were marketed worldwide by Wall Street. They have endangered the balance sheets and solvency of financial institutions throughout the world, including national governments, such as Iceland and Hungary. Banks and governments that invested in the troubled American financial instruments found their own debt instruments in jeopardy.Those who used yen loans to purchase, for example, debt instruments from European banks or Icelandic bonds, faced potentially catastrophic losses. Investors and speculators sold their higher-yielding financial instruments in a scramble for dollars and yen in order to pay off their Japanese loans. This drove up the values of the yen and the US dollar, the reserve currency that can be used to repay debts, and drove down the values of other currencies.The dollar’s rise is temporary, and its prospects are bleak. The US trade deficit will lessen due to less consumer spending during recession, but it will remain the largest in the world and one that the US cannot close by exporting more. The way the US trade deficit is financed is by foreigners acquiring more dollar assets, with which their portfolios are already heavily weighted.The US government’s budget deficit is large and growing, adding hundreds of billions of dollars more to an already large national debt. As investors flee equities into US government bills, the market for US Treasuries will temporarily depend less on foreign governments. Nevertheless, the burden on foreigners and on world savings of having to finance American consumption, the US government’s wars and military budget, and the US financial bailout is increasingly resented.This resentment, combined with the harm done to America’s reputation by the financial crisis, has led to numerous calls for a new financial order in which the US plays a substantially lesser role. “Overcoming the financial crisis” are code words for the rest of the world’s intent to overthrow US financial hegemony.Brazil, Russia, India and China have formed a new group (BRIC) to coordinate their interests at the November financial summit in Washington, D.C.On October 28, RIA Novosti reported that Russian prime minister Vladimir Putin suggested to China that the two countries use their own currencies in their bilateral trade, thus avoiding the use of the dollar. China’s prime Minister Wen Jiabao replied that strengthening bilateral relations is strategic.Europe has also served notice that it intends to exert a new leadership role. Four members of the Group of Seven industrial nations, France, Britain, Germany and Italy, used the financial crisis to call for sweeping reforms of the world financial system. Jose Manual Barroso, president of the European Commission, said that a new world financial system is possible only “if Europe has a leadership role.”Russian president Dmitry Medvedev said that the “economic egoism” of America’s “unipolar vision of the world” is a “dead-end policy.”China’s massive foreign exchange reserves and its strong position in manufacturing have given China the leadership role in Asia. The deputy prime minister of Thailand recently designated the Chinese yuan as “the rightful and anointed convertible currency of the world.”Normally, the Chinese are very circumspect in what they say, but on October 24 Reuters reported that the People’s Daily, the official government newspaper, in a front-page commentary accused the US of plundering “global wealth by exploiting the dollar’s dominance.” To correct this unacceptable situation, the commentary called for Asian and European countries to “banish the US dollar from their direct trade relations, relying only on their own currencies.” And this step, said the commentary, is merely a starting step in overthrowing dollar dominance.The Chinese are expressing other thoughts that would get the attention of a less deluded and arrogant American government. Zhou Jiangong, editor of the online publication,, recently asked: “Why should China help the US to issue debt without end in the belief that the national credit of the US can expand without limit?”Zhou Jiangong’s solution to American excesses is for China to take over Wall Street.China has the money to do it, and the prudent Chinese would do a better job than the crowd of thieves who have destroyed America’s financial reputation while exploiting the world in pursuit of multi- million dollar bonuses.

MarkNovember 6th, 2008 at 12:15 am

I don’t think that they could out f8ckup Wall Street as well as US leaders have been able to. They’re not as seasoned…But all things end eventually. It’s the twilight of the US empire. We all had “fun” while it lasted, but now is the time to realize that it’s now all history.

GuestNovember 6th, 2008 at 9:40 am

Those chinese on the top will be willing to muck it for much less than multi million dollar bonuses and with a huge downside to boot (getting axed for real). They have already proven it.

Detlef GuertlerNovember 6th, 2008 at 2:46 am

If everything changes with Obama, obviously this blog will change as well.As you all might have seen (if not, go to top of the page), this post was not written by the professor, but by four RGE analysts. I don`t believe the reason was that NR was just too busy – he`s always too busy to post, and still he posts. I`d guess the reason is a conflict of interest: either NR was offered a job in the Obama administration, or he expects such an offer, or he hopes to get one; in any case it would be better for him not to write about the coming tasks for Obama.If NR gets such a job, conflict of interest will be a big problem for RGE: How can you analyze unbiased any economical problem in the world, if your boss/founder runs/tries to run the US economy? And it will be a problem for this blog: Can it go on, if the professor becomes a politician? And if he stops posting at that time: Can this blog go on without NRs posts? And how?Maybe it`s a bit early to think about that now. But if we just go on as if nothing would change, and then it changes, it will be too late to think about it.

Berlin taxi driverNovember 6th, 2008 at 3:11 am

I think it would be great for the US and a priviledge for this blog if NR became successor of GS-Paulson. It will probabely not take long before Obama decides on a new Treasury. I heard NR on BBC this morning and had to think of London Banker and his great posts. So in any case there would be LB, MA and others to continue posting, hopefully.Interesting times!

Lord SidcupNovember 6th, 2008 at 3:40 am

Yes.I found it strange a few weeks when the word ‘depression’ was largely dropped from NR’s vocabulary.If he’s working with the US gov I cant see how his independence as commentator can be maintained, though he could of course be an excellent strategist etc.Dr. Doom would have some cheerleading duties if employed by the government.Maybe MA, London Banker, peteCA et al will have to take over?

London BankerNovember 6th, 2008 at 5:05 am

It is an honour to be on your blogroll wish list, but let’s not make any assumptions about Professor Roubini’s options or intentions. I’m sure that the blog would be kept going in some form.If not, I created early this year at a time when there was apprehension that access to this blog would be limited by the subscription policies. Citori posts over there now, I’m pleased to say.The wonderful thing about the web is its expression of collective adaptive behaviour. We determine our collective interest in maintaining the ties and exchanges that have evolved here. We adapt to the changing constraints on access. We persist because we value what we gain from the exercise.

GuestNovember 6th, 2008 at 9:47 am

Guerler, your worried about a blog?Don’t worry, his political machine expressively prohibits office appointments based on meritinstead of political reward.

GuestNovember 6th, 2008 at 6:20 am

“Nov. 6 (Bloomberg) — The Bank of England unexpectedly slashed the benchmark interest rate by 1.5 percentage points as policy makers tried to contain the damage caused by a recession.”What a slash.

GSMNovember 6th, 2008 at 7:09 am

@LB,This 150bp cut by BoE smacks of panic IMHO.Considering the latest round of cuts by the Fed,RBA and now BoE, it seems that something rather big and nasty (again) is out there headed this way.Your take?

London BankerNovember 6th, 2008 at 7:20 am

The panic is at HM Treasury where I imagine they twisted Monetary Policy Committee arms with vigour. Brits vote their house prices – and these fell by over 16 percent last month. Labour is looking at losing power for another decade or two if the credit crunch continues to decimate house prices.Europe and Swiss cut by 50bps each.The Bank of England may have hoped to slow the crisis by slamming on the brakes, but I fear the brake cable is cut. The banks here in UK did not pass on the previous cut to borrowers or reduce the rates they offered to depositors. It is unlikely they will implement today’s cut either.

P1AQL.November 6th, 2008 at 7:46 am

You gotta loose the noose after self inflicted dogmatic asphyxiation.Print First Ask Questions Later aka P1AQL.

GuestNovember 6th, 2008 at 7:48 am

Fed hires Bear Sterns executive … really”The hiring of Michael Alix, who headed Bear Stearns’ risk management for two years, was met with some skepticism.”You’re kidding me,” said Dean Baker, economic policy expert at the Center for Economic Policy and Research in Washington. “You would think (his record) would be a big strike against him,” Baker said.”

GuestNovember 6th, 2008 at 8:28 am

From – October unemployment report is due for release tomorrow morning (November 7th). Consensus expectations are running at roughly a 200,000 payroll loss and a 0.2% increase in the unemployment rate to 6.3%.

GuestNovember 6th, 2008 at 9:42 am

For the middle-of-the-roaders and progressives who voted for Obama, things are looking really bad. Bair is deadly, part of the Barney Frank/ Wall Street ilk. Regarding Rahm Emanuel, this from post above:”Obama has offered the position of chief of staff to Rahm Emaneul. A corporate lobbyist and also the son of a former zionist terrorist! A member of AIPAC, a known corporate and zionist lobby. The owner of time warner cable (and CNN), meanwhile, is also the part of that organization. No wonder he had so much favorable coverage on the CNN!” 2008-11-06 07:42:27“Frank Says FDIC’s Bair Should Have Role as Obama Builds Team”Nov. 6 (Bloomberg) — House Financial Services Committee Chairman Barney Frank said Federal Deposit Insurance Corp. Chairman Sheila Bair should play a prominent role in Barack Obama’s administration as the president-elect starts assembling his team.“I think very highly of her,” Frank, a Massachusetts Democrat, said yesterday in a telephone interview from New York. “I think she should play a role.”Frank has advocated giving Bair, a Republican, greater responsibility in managing the government’s response to the mortgage and foreclosure crisis.Meanwhile, it’s probable that former Clinton administration official and U.S. Representative Rahm Emanuel will be Obama’s White House chief of staff, though Emanuel has told friends he is reluctant to leave the House, where he is the No. 4 ranking Democrat. The Illinois lawmaker has said it would be difficult to turn Obama down.The day after Obama, an Illinois senator, won the presidential election over Republican John McCain, Obama, 47, met for six hours in Chicago with his top advisers and named a group of loyalists and former Clinton administration officials to guide the transfer of power that will occur upon his Jan. 20 inauguration.Treasury PostThe two leading contenders for Treasury secretary continue to be Lawrence Summers, who held the post in Clinton’s Cabinet, and Timothy Geithner, president of the New York Federal Reserve bank.Former Senate Democratic leader Tom Daschle and Kansas Governor Kathleen Sebelius are possible contenders for secretary of Health and Human Services, according to people in contact with the president-elect’s health-care advisers.This from “Obama picks pro-Israel hardliner for top post “Ali Abunimah, “The Electronic Intifada,” 5 November 2008Emanuel is Obama’s first high-level appointment and it’s one likely to disappointment those who hoped the president-elect would break with the George W. Bush Administration’s pro-Israel policies. White House Chief of Staff is often considered the most powerful office in the executive branch, next to the president. Obama has offered Emanuel the position according to Democratic party sources cited by media including Reuters and The New York Times. While Emanuel is expected to accept the post, that had not been confirmed by Wednesday evening the day after the election.Rahm Emanuel was born in Chicago, Illinois in 1959, the son of Benjamin Emanuel, a pediatrician who helped smuggle weapons to the Irgun, the Zionist militia of former Israeli prime minister Menachem Begin, in the 1940s. The Irgun carried out numerous terrorist attacks on Palestinian civilians including the bombing of Jerusalem’s King David Hotel in 1946.Emanuel continued his father’s tradition of active support for Israel; during the 1991 Gulf War he volunteered to help maintain Israeli army vehicles near the Lebanon border when southern Lebanon was still occupied by Israeli forces…One of the most influential politicians and fundraisers in his party, Emanuel accompanied Obama to a meeting of AIPAC’s executive board just after the Illinois senator had addressed the pro-Israel lobby’s conference last June.In Congress, Emanuel has been a consistent and vocal pro-Israel hardliner, sometimes more so than President Bush. In June 2003, for example, he signed a letter criticizing Bush for being insufficiently supportive of Israel. “We were deeply dismayed to hear your criticism of Israel for fighting acts of terror,” Emanuel, along with 33 other Democrats wrote to Bush. The letter said that Israel’s policy of assassinating Palestinian political leaders “was clearly justified as an application of Israel’s right to self-defense” (“Pelosi supports Israel’s attacks on Hamas group,” San Francisco Chronicle, 14 June 2003).In July 2006, Emanuel was one of several members who called for the cancellation of a speech to Congress by visiting Iraqi prime minister Nouri al-Maliki because al-Maliki had criticized Israel’s bombing of Lebanon. Emanuel called the Lebanese and Palestinian governments “totalitarian entities with militias and terrorists acting as democracies” in a 19 July 2006 speech supporting a House resolution backing Israel’s bombing of both countries that caused thousands of civilian victims.Emanuel has sometimes posed as a defender of Palestinian lives, though never from the constant Israeli violence that is responsible for the vast majority of deaths and injuries. On 14 June 2007 he wrote to US Secretary of State Condoleezza Rice “on behalf of students in the Gaza Strip whose future is threatened by the ongoing fighting there” which he blamed on “the violence and militancy of their elders.” In fact, the fighting between members of Hamas and Fatah, which claimed dozens of lives, was the result of a failed scheme by US-backed militias to violently overthrow the elected Hamas-led national unity government. Emanuel’s letter urged Rice “to work with allies in the region, such as Egypt and Jordan, to either find a secure location in Gaza for these students, or to transport them to a neighboring country where they can study and take their exams in peace.” Palestinians often view such proposals as a pretext to permanently “transfer” them from their country, as many Israeli leaders have threatened. Emanuel has never said anything in support of millions of Palestinian children whose education has been disrupted by Israeli occupation, closures and blockades.Emanuel has also used his position to explicitly push Israel’s interests in normalizing relations with Arab states and isolating Hamas. In 2006 he initiated a letter to President Bush opposing United Arab Emirates (UAE)-based Dubai Ports World’s attempt to buy the management business of six US seaports. The letter, signed by dozens of other lawmakers, stated that “The UAE has pledged to provide financial support to the Hamas-led government of the Palestinian Authority and openly participates in the Arab League boycott against Israel.” It argued that allowing the deal to go through “not only could place the safety and security of US ports at risk, but enhance the ability of the UAE to bolster the Hamas regime and its efforts to promote terrorism and violence against Israel” (“Dems Tie Israel, Ports,” Forward, 10 March 2006).Ira Forman, executive director of the National Jewish Democratic Council, told Fox News that picking Emanuel is “just another indication that despite the attempts to imply that Obama would somehow appoint the wrong person or listen to the wrong people when it comes to the US-Israel relationship … that was never true.”Over the course of the campaign, Obama publicly distanced himself from friends and advisers suspected or accused of having “pro-Palestinian” sympathies. There are no early indications of a more balanced course.

AnonymousNovember 6th, 2008 at 9:55 am

So – no change then, eh? I guess the change we need didn’t apply to Israel or economic policies.

GuestNovember 6th, 2008 at 10:48 am

The post at 2008-11-06 07:42:27 regarding a Republican Democrat two-party party and from which this quote was taken has been removed. (?)

GuestNovember 6th, 2008 at 10:51 am

Additional Wall Street info on Emanuel:Used to work as: An investment banker for three years after leaving the White House and before being elected to the House. He banked $16 million while handling mergers and acquisitions with an emphasis on utilities…Carries as baggage: Emanuel’s stint in high finance and his experience in the banking world opens him to some criticism of being too allied with Wall Street, not the image Democrats want to cultivate these days. Critics have asserted he was only able to succeed in the banking world because of his political connections. Since he is part of the Daley circle, Emanuel’s appointment as chief of staff could also create the appearance of a White House that is too Chicago heavy…Is otherwise known for: Training as a ballet dancer. And his brother, Ari Emanuel, a Hollywood agent, is the model for the abrasive agent Ari Gold in the HBO series “Entourage.”Biography includes: Born Nov. 29, 1959, in Chicago … liberal arts degree from Sarah Lawrence College, masters from Northwestern … served briefly as a civilian volunteer on an Israeli military base during the Persian Gulf war of 1991.From the International Herald Tribune, the global edition of the New York Times

GuestNovember 6th, 2008 at 10:57 am

The author here suggests that this can turn into a greater depression: on great depression: note a lot of similarities here).Does anyone think it is possible this could become as bad.Especially since Roubini gives a strong argument for deflation, but he stops there (what happens after deflation?)something like the great depression?

GuestNovember 6th, 2008 at 11:10 am

The KEY to restoring confidence and prosperity to America’s economic system is that point at which the politicians now will draw the line between “rich” and “middle class.”In former Democrat Party administrations, “middle class” has been used as a synonym for non-taxpayers. If “rich” is going to be defined as anyone who is able to bank disposable income and if “middle class” is anyone who does not have disposable income, then the incentive to work for one’s improved situation in this economy is absolutely destroyed.So the old political axiom of “soak the rich” might actually mean, “soak the taxpayers.”If so, the economy is on a long, long, long trip…DOWN.

kilgoresNovember 6th, 2008 at 11:24 am

That is nonsense. The world isn’t black and white, and an increase in marginal tax rates on the highest income earners in this country doesn’t mean they’ll stop working for lack of incentive.A lot of Americans are motivated to work, not just to amass as great a personal fortune as possible, but in order to make a positive difference in the world and to help other people, not just themselves. If higher taxes mean some people won’t work as hard, then whatever they were working at before — such as most of the investment banking community that leached off the rest of us creating complex instruments that added little or no value for investors but made the folks in the industry wealthy — will not be missed. Give me a hard-working but struggling elementary school teacher over a wealthy professional basketball player any day.SWK

BetterBelieveItNovember 6th, 2008 at 12:02 pm

Republicans/Democrats Were Co-Sponsors Of This Economic CrisisBlame The Subprime Meltdown On TheRepeal Of Glass-SteagallThe ConsumeristApril 17, 2008A lot of blame has sloshed around for the sub-prime meltdown, from greedy borrowers to greedy mortgage brokers to Alan Greenspan, but if you want the real culprit, it was the repeal of the Glass-Stegall Act. On November 12, 1999, the champagne must have been shooting from the walls at Citigroup, which had worked behind the scenes for over 30 years to get the act overturned. After recovering from their hangover, they and their banking buddies went on a sub-prime lending orgy. But what was Glass-Steagall and how did it use to protect us?Glass-Steagall was passed under the Roosevelt administration in 1933 in direct response to the Wall Street shenanigans that ushered in the Great Depression where banks shoved their own depositors into buying the stocks the banks were dealing. The basic idea was to keep banks from speculating with the savings that American citizens were entrusting within their vaults.Now, on the one side they could sell mortgages to homeowners, and then invent fancy investment structures which they sold on Wall Street. Because they were “covered” on both ends, banks felt free to sell increasingly dicey mortgages, just so long as another sucker was picking up the garbage. This sucker was picking it up because he had a plan to repackage it and sell it to another sucker, and so on. Eventually we end up with no-doc stated income interest-only option-ARM no money down mortgages being repackaged as “sound investments” being sold as “stable assets” for city pension plans to park their money in. (See “Subprime Meltdown As Told By Stick Figures”).We can only imagine the level of machination exerted over those 30 years, but we do know this. Robert Rubin was Secretary of Treasury, which had oversight over Glass-Steagall regulation. Days before he resigned, Glass-Steagall was repealed. Just over a year later, he became chairman of the Citi executive committee, with an annual compensation of $40 million, a position he still holds, despite Citigroup’s $24 billion in subprime-related losses.Read the entire article at: …———————————Repeal of the ActThe bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA) in 1999. The final bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. This veto proof legislation, the Gramm-Leach-Bliley Act, was signed into law by President Bill Clinton on November 12, 1999.The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s.The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the “finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors . They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics…” These industries succeeded in their two decades long effort to repeal the act.——————————————————Here's how the Senators voted on the final bill that President Clinton signed into law.U.S. Senate Roll Call Votes 106th Congress – 1st Sessionas compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the SenateVote SummaryQuestion: On the Conference Report (S.900 Conference Report )Vote Number: 354 Vote Date: November 4, 1999, 03:30 PMRequired For Majority: 1/2 Vote Result: Conference Report Agreed toMeasure Number: S. 900Measure Title: An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers, and for other purposes.Vote Counts: YEAs 90NAYs 8Present 1Not Voting 1Grouped By Vote PositionYEAs —90Abraham (R-MI)Akaka (D-HI)Allard (R-CO)Ashcroft (R-MO)Baucus (D-MT)Bayh (D-IN)Bennett (R-UT)Biden (D-DE)Bingaman (D-NM)Bond (R-MO)Breaux (D-LA)Brownback (R-KS)Bunning (R-KY)Burns (R-MT)Byrd (D-WV)Campbell (R-CO)Chafee, L. (R-RI)Cleland (D-GA)Cochran (R-MS)Collins (R-ME)Conrad (D-ND)Coverdell (R-GA)Craig (R-ID)Crapo (R-ID)Daschle (D-SD)DeWine (R-OH)Dodd (D-CT)Domenici (R-NM)Durbin (D-IL)Edwards (D-NC)Enzi (R-WY)Feinstein (D-CA)Frist (R-TN)Gorton (R-WA)Graham (D-FL)Gramm (R-TX)Grams (R-MN)Grassley (R-IA)Gregg (R-NH)Hagel (R-NE)Hatch (R-UT)Helms (R-NC)Hollings (D-SC)Hutchinson (R-AR)Hutchison (R-TX)Inhofe (R-OK)Inouye (D-HI)Jeffords (R-VT)Johnson (D-SD)Kennedy (D-MA)Kerrey (D-NE)Kerry (D-MA)Kohl (D-WI)Kyl (R-AZ)Landrieu (D-LA)Lautenberg (D-NJ)Leahy (D-VT)Levin (D-MI)Lieberman (D-CT)Lincoln (D-AR)Lott (R-MS)Lugar (R-IN)Mack (R-FL)McConnell (R-KY)Moynihan (D-NY)Murkowski (R-AK)Murray (D-WA)Nickles (R-OK)Reed (D-RI)Reid (D-NV)Robb (D-VA)Roberts (R-KS)Rockefeller (D-WV)Roth (R-DE)Santorum (R-PA)Sarbanes (D-MD)Schumer (D-NY)Sessions (R-AL)Smith (R-NH)Smith (R-OR)Snowe (R-ME)Specter (R-PA)Stevens (R-AK)Thomas (R-WY)Thompson (R-TN)Thurmond (R-SC)Torricelli (D-NJ)Voinovich (R-OH)Warner (R-VA)Wyden (D-OR)NAYs —8Boxer (D-CA)Bryan (D-NV)Dorgan (D-ND)Feingold (D-WI)Harkin (D-IA)Mikulski (D-MD)Shelby (R-AL)Wellstone (D-MN)Present – 1Fitzgerald (R-IL)Not Voting – 1McCain (R-AZ)…Only 8 Senators voted against this bill, 7 Democrats and 1 Republican. And Senator John McCain didn’t bother to vote at all!!!————————————-Statements in support of the bill that repealed the Glass-Steagall ActFOR IMMEDIATE RELEASE: CONTACT: CHRISTI HARLANFriday, November 12, 1999 202-224-0894GRAMM’S STATEMENT AT SIGNING CEREMONYFOR GRAMM-LEACH-BLILEY ACTSen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following statement today in a ceremony at the Eisenhower Executive Office Building, where President Clinton signed the Gramm-Leach-Bliley Act into law:”The world changes, and Congress and the laws have to change with it.”Abraham Lincoln used to like to use the analogy that old and outmoded laws need to be changed because it made about as much sense to continue to impose them on people as it did to ask a man to wear the same clothes he did when he was a child.”In the 1930s, at the trough of the Depression, when Glass-Steagall became law, it was believed that government was the answer. It was believed that stability and growth came from government overriding the functioning of free markets.”We are here today to repeal Glass-Steagall because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom.”I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality.”-30-THE WHITE HOUSEOffice of the Press SecretaryFor Immediate Release November 12, 1999REMARKS BY THE PRESIDENTAT FINANCIAL MODERNIZATION BILL SIGNINGPresidential Hall1:37 P.M. ESTTHE PRESIDENT: Thank you and good afternoon. I thank you all for coming to the formal ratification of a truly historic event — Senator Gramm and Senator Sarbanes have actually agreed on an important issue. (Laughter.) Stay right there, John. (Laughter.) I asked Phil on the way out how bad it’s going to hurt him in Texas to be walking out the door with me. (Laughter.) We decided it was all right today.Like all those before me, I want to express my gratitude to those principally responsible for the success of this legislation. I thank Secretary Summers and the entire team at Treasury, but especially Under Secretary Gensler, for their work, and Assistant Secretary Linda Robertson. I thank you, Chairman Greenspan, for your constant advocacy of the modernization of our financial system. I thank you, Chairman Levitt, for your continuing concern for investor protections. And I thank the other regulators who are here.I thank Senator Gramm and Senator Sarbanes, Chairman Leach and Congressman LaFalce, and all the members of Congress who are here. Senator Dodd told me the Sisyphus story, too, over and over again, but I’ve rolled so many rocks up so many hills, I had a hard time fully appreciating the significance of it. (Laughter.)I do want to thank all the members here and all those who aren’t here. And I’d like to thank two New Yorkers who aren’t here who have been mentioned — former Secretary of the Treasury Bob Rubin, who worked very hard on this; and former Chairman, Senator Al D’Amato, who talked to me about this often. So this is a day we can celebrate as an American day.To try to give some meaning to the comments that the previous speakers have made about how we’re making a fundamental and historic change in the way we operate our financial institutions, I think it might be worth pointing out that this morning we got some new evidence on the role of new technologies in our economy, which showed that over the past four years, productivity has increased by a truly remarkable 2.6 percent — that’s about twice the rate of productivity growth the United States experienced in the 1970s and the 1980s. In the last quarter alone, productivity grew at 4.2 percent.This is not just some aloof statistic that matters only to the Federal Reserve, the Treasury, and Wall Street economists. It is the key to rising paychecks and greater security and opportunity for ordinary Americans. And the combination of rising productivity, more open borders and trade, working to keep down inflation, the dramatic reduction of the deficit and the accumulation of the surplus, and the continued commitment to the investment in the American people, research and development, and new productivity-inducing technologies has given us the most sustained real wage growth in more than two decades, with the lowest inflation in more than three decades.I can tell you that back in December of 1992, when we were sitting around the table at the Governor’s Mansion, trying to decide what had to be in this economic program, the economists that I had there, who are normally thought to be — you know, you say, well, they’re Democrats, they’ll be more optimistic — none of them believed that we could grow the economy for this long with an unemployment rate this low and an inflation rate this low. And it’s a real tribute to the American people.So what you see here, I think, is the most important recent example of our efforts here in Washington to maximize the possibilities of the new information age global economy, while preserving our responsibilities to protect ordinary citizens and to build one nation here. And there will always be competing interests. You heard Senator Gramm characterize this bill as a victory for freedom and free markets. And Congressman LaFalce characterized this bill as a victory for consumer protection. And both of them are right. And I have always believed that one required the other.It is true that the Glass-Steagall law is no longer appropriate to the economy in which we lived. It worked pretty well for the industrial economy, which was highly organized, much more centralized and much more nationalized than the one in which we operate today. But the world is very different.Now we have to figure out, well, what are still the individual and family and business equities that are still involved that need some protections. And the long, and often tortured story of this law can be seen as a very stunning specific example of the general challenge that will face lawmakers of both parties, that will face liberals and conservatives, that will face all Americans as we try to make sure that the 21st century economy really works for our country and works for the people who live in it.So I think you should all be exceedingly proud of yourselves, including being proud of your differences and how you tried to reconcile them. Over the past seven years, we’ve tried to modernize the economy; and today what we’re doing is modernizing the financial services industry, tearing down these antiquated walls and granting banks significant new authority.This will, first of all, save consumers billions of dollars a year through enhanced competition. It will also protect the rights of consumers. It will guarantee that our financial system will continue to meet the needs of underserved communities — something that the Vice President and I tried to do through the empowerment zones, the enterprise communities, the community development financial institutions, but something which has been largely done through the private sector and honoring the Community Reinvestment Act.The legislation I signed today establishes the principles that as we expand the powers of banks, we will expand the reach of that act. In order to take advantage of the new opportunities created by the law, we must first show a satisfactory record of meeting the needs of all the communities the financial institution serves.I want to thank Senator Sarbanes and Congressman LaFalce for their leadership on the CRA issue. I want to applaud literally hundreds of dedicated community groups all around our country that work so hard to make sure the CRA brings more hope and capital to hard-pressed areas.The bill I signed today also does, as Congressman Leach says, take significant steps to protect the privacy of our financial transactions. It will give consumers, for the very first time, the right to know if their financial institution intends to share their financial data, and the right to stop private information from being shared with outside institutions.Like the new medical privacy protections I announced two weeks ago, these financial privacy protections have teeth. We granted regulators full enforcement authority and created new penalties to punish abusive practices. But as others have said here, I do not believe that the privacy protections go far enough. I am pleased the act actually instructs the Treasury to study privacy practices in the financial services industry, and to recommend further legislative steps. Today, I’m directing the National Economic Council to work with Treasury and OMB to complete that study and give us a legislative proposal which the Congress can consider next year.Without restraining the economic potential of new business arrangements, I want to make sure every family has meaningful choices about how their personal information will be shared within corporate conglomerates. We can’t allow new opportunities to erode old and fundamental rights.Despite this concern, I want to say again, this legislation is truly historic. And it indicates what can happen when Republicans and Democrats work together in a spirit of genuine cooperation — when we understand we may not be able to agree on everything, but we can reconcile our differences once we know what the larger issue is — how to maximize the opportunities of the American people in a global information age, and still preserve our sense of community and protection for individual rights.In that same spirit, I hope we will soon complete work on the budget. I hope we will complete work on the Work Incentives Improvement Act, to allow disabled people to go to work — and I know Senator Gramm has been working with Senator Roth and Senator Jeffords and Senator Moynihan and Senator Kennedy on that.There are a lot of things we can do once we recognize we’re dealing with a big issue over which we ought to have some disagreements, but where we can come together in constructive and honorable compromise to keep pushing our country into the possibilities of the future.This is a very good day for the United States. Again, I thank all of you for making sure that we have done right by the American people and that we have increased the chances of making the next century an American century. I hope we can continue to focus on the economy and the big questions we will have to deal with revolving around that. I hope we will continue to pay down our debt. I still believe in a global economy. We will maximize the opportunities created by this law if the government is reducing its debt and its claim on available capital. So I hope very much that that will be part of our strategy in the future.But today we prove that we could deal with the large issue facing our country and every other advanced economy in the world. If we keep dealing with it in other contexts, the future of our children will be very bright, indeed.Thank you very much. I’d like to ask all the members of Congress to come up here while we sign the bill. Thank you. (Applause.)

MarkNovember 6th, 2008 at 12:30 pm

For those wishing to keep score, you’ll find that once again Feingold was on the right side. Recall that he was the ONLY US Senator to vote against the USA (UN)PATRIOT Act!

GuestNovember 6th, 2008 at 12:18 pm

The Dow reflects a bigger and longer– albeit more sustained– build-up before this crash than the great depression. The second thing that it also reflects is that the index rebooted and fell back, and again–suggesting drag on the economy (the misery piled up thru longer periods). Compare that to the one in 70s and 80s, and what makes them different from the depression one is, that there is a steep decline but then the bulls come and index jumps back again. In a sense perhaps the worse happened and recovery followed.The current economic climate seems more of a drag which will culminate thru 3,4 years. The policies have been similar to the depression era. Goverment intervention in the sense that they supported ailing bussiness only to find them that they would fail in the future–hence creating a “drag”.Similarly, these sub-prime mortgages, the collapse of the asset bubble, and deleveraging can create a drag. If the goverment adjusts the rates for homeowners who are in foreclosures, then 6 months, 1 year down the line it might be found that these people still can’t pay their mortgages (rather than housing finding a bottom by falling another 10, 15 percent fast, it might gradually build up). Similarly, weak banks and auto-companies, firms at large, have the full support of the goverment– another indication of a drag (that weak firms aren’t being allowed to fail, or at least significantly cut costs, deleverage, and come back to levels of growth which are sustainable). The asset bubble in the links– read three posts above (the ratio to the price of the gold)– would not bottom either with this intervention. Another sign that it will be a drag. Of course this is not conclusive enough to say that this will be, but the similarities are there. Especially considering the fact that with the deravatives market, the system is vulnerable like never before.

GuestNovember 6th, 2008 at 12:31 pm

Might be interesting to note that a newly wed couple I know just bought a house in foreclosure in the $200,000 to $260,000 range with 3% down at 6.5%, and with no savings. One is a newly-employed school teacher just graduated. I am surprised banks are still lending with only 3% down after what the taxpayers have had to go through.

JimmyTheBankerNovember 6th, 2008 at 1:00 pm

We are testing the huge breakout from 2 weeks ago. IF the market can’t hold here, it will be a fugly close! Big buyer in the market as I type…

GuestNovember 6th, 2008 at 6:47 pm

Can the site admins please purge these first, second, etc. type comments from the ADD afflicted idiots. Thank you.

CHRIS DAVISNovember 10th, 2008 at 1:15 am

JIMMY II:o No military experience(just like LBJ, Bush & Clinton)o Never drafted, packaged & promoted ANY piece of significant legislationo No foreign policy experience: will be, like Jimmy, mincemeat for Russkies, Chinese,Iranians, Palestinians, North Koreans & everybody elseo Not good on his feet the moment the teleprompter’s taken away: recent comments on GM’s plight sounded like reply unprepared bright twelve-year-old winging it in classo His bio skips over time at Columbia — what was he doing there? While media deliber-ately soft-pedaled multiple nationalities issue. Barry Soetro? or is it Barak HusseinObama? Or,……..o Media fawning will abruptly end, when same clowns who ducked and covered, bobbed and weaved for Clinton are embarassed by The One(it won’t take long)o No knowledge of finance or fiscal policy: solution to all fiscal issues is, as McCain inappropriately pointed out, tired old redistribution schemes. Problem: USfederal liabilities have already doubled under Bush administration to $67tn. Nothingleft to redistribute…….o All other OECD countries with single-payer, national health plans ration proceduresfor the elderly. This is the Dems’ and Obama’s big lie: no need to institute rationingfor the AARP, whose members don’t give a rat’s ass about “the children”(barf), whilewe add another 47m to the rolls — what a crock!!!o Appointees have no class: former ballet dancer chief of staff from Sarah Lawrencewho uses the “f” word as puntuation and gives everyone around him the finger. Oooh,I’m scared, and I’m sure KGB is, too……….in addition to which we now get asecond look at a bunch of Clinton retreads, ex-Vince Fostero Just dumb enough to lump much needed mortgage subsidy/guarantee bill in mass oftotally unneeded liberal redistribution fantasy legislation. Instead of Carville’sbond market, this time signal will come from Mr. Stock Market. One word: DOWN.o Like many others before him: very little exposure to the — do we dare use the term whose concept can’t be mentioned — the private sector!!!!o Some other appointments have leaked out, whose names I will release to you Roubineesfirst: Secretary of State: Sean Penn; White House Press Secretary: Graydon Carter(onlyif he gets a haircut);Secretary of Defense: George Soros(only if HE gets a haircut)