Never in the history of the Dow Jones Industrial Average has the index risen more than 500 points in a single session. After last week’s historic largest weekly percentage loss ever, today the greatest one-day rally in the history of Wall Street occurred, with the Dow Jones average rising almost 1000 points to close at about 9400, up 11%. One key question on everyone’s mind tonight is whether the rally will last or if is the last gasp of the bull market that disappeared last week. The other key question is whether McCain can use this rally to get past narrative of defeat that has smothered his campaign since the crisis began.
Most political observers agree that the race between Obama and McCain for the presidency turned from a near dead heat in mid-September into a substantial 7 point Obama lead today because of the crash of the U.S. and world financial markets. The freefall in McCain’s popularity has been greatly assisted during the economic crisis by McCain’s early mishandling of the crisis via his oft-repeated line that “the fundamentals of the economy are strong.” Many independent and centrist voters were turned off by McCain’s stubborn refusal to accept the depth of the problems in the economy and now lean towards Obama.
The final straw to put many swing voters onto Obama’s side was the quarter ending 401K reports which show striking declines in most Americans’ retirement accounts that came in the mail in the past week or so. Whether the nearly 1000 point rally can turn this trend around will be determined in the days to come.
The onus is clearly on McCain to perform in the upcoming debate and use the turning economic news to his advantage quickly and perhaps avoid the imminent landslide facing him today. Obama can also point to his steady leadership as pleasing to Wall Street and further highlight McCain’s erratic performance in the past month.
Over the past few days, the Association of Community Organizations for Reform Now, or ACORN, has come under scrutiny across in a dozen battleground states regarding their voter registration activities. The most high profile government move to date in this election against ACORN is the FBI’s raiding of Nevada’s ACORN office last week. Today, the scrutiny on ACORN’s voter registration methods continued with election board hearings in all-important Cuyhoga County, Ohio, which encompasses Cleveland.
Tomorrow, the next shoe will drop as a lawsuit in Ohio will initiate a wide-ranging RICO action against ACORN and its subsidiaries. RICO is the Racketeer Influenced and Corrupt Organizations Act and it provides for extended penalties for criminal acts performed as part of an ongoing criminal organization while also providing a civil cause of action for those injured by violations of the act. The “organization” is ACORN and its subsidiaries, and the criminal acts are the forgery of voter signatures as reported in various states nationwide.
The Obama campaign’s response to the GOP claims of ACORN ties has been uneven at best to date. First, via the “Fight the Smears” website, Obama claimed that he never trained any ACORN workers nor worked for or with ACORN at any time. Almost immediately, evidence of Obama’s representation of ACORN in a voter registration lawsuit in the mid-90’s and multiple published reports of Obama’s training of ACORN organizers surfaced, along with evidence of an $800,000.00 payment to an ACORN subsidary from the Obama campaign this summer. A video of Obama himself stating he’d worked side by side with ACORN for years and will do so indefinitely also reinforced his longstanding ties. Predictably, Obama’s website was then alterered to state that Obama was never a paid employee of ACORN, implicitly conceding the misrepresentations of the initial statement denying any Obama ties to ACORN.
With the new high profile RICO action coming tomorrow, “ACORNgate” could be the first major scandal of the general election. Before now, both Obama’s (Ayers, Wright, Rezko) and McCain’s (Keating) scandals have been rehashings from either the primaries or past campaigns. How the Obama campaign deals with the coming media firestorm tomorrow upon the filing of the action against ACORN could decide the election as ACORNgate may be the last, best chance for McCain to gain traction against Obama in the presidential race.
The effect on the presidential race is could be significant. Centrists and independent voters have little tolerance for explicit fraud by either side in electioneering. Obama is pulling away from McCain in the head-to-head national race presently, now standing at his highest lead of the campaign of about 7%. If McCain can effectively tie Obama to ACORN, those independents and centrists now leaning to Obama may take a second look at McCain and put the race back to a dead even contest going into the final few weeks of the campaign.
In a stunning move only attempted once in presidential election history, the Obama campaign today finalized a deal to purchase an entire half hour block of broadcasting time from a major network. CBS sold Obama a half hour of time on Wednesday, October 29th, starting at 8:00PM. It appears Obama will present his closing argument to the American people in this fashion as negotiations are also ongoing with NBC and Fox for a similar half hour block of evening broadcasting.
The news of Obama’s strong network buy comes at time when John McCain’s campaign stands at its nadir and possibly its last legs. Three of the four debates are over, and both instant polls and later larger surveys of each debate show the public siding with the Democratic ticket. More troubling for the McCain campaign is the strong voter move to Obama over the past few weeks as world’s stock markets have steadily sold off with no end in sight. Indeed, today’s selloff of the Dow Jones Industrial Average pushed below 9000, the first time the Dow Jones has seen such depths since August of 2003, to close at 8,579.19. Over 20% of of the Dow Jones has been lost in the past seven trading days, nearing the 22.6% selloff on Black Monday in 1987.
Obama’s purchase of blocks of primetime network time follows in the footsteps of Ross Perot in 1992, the only prior presidential candidate to buy such half hour blocks of network time. In 1992, Perot purchased blocks of time on NBC and even beat some of the other networks for ratings at the time. Considering Obama’s popularity, Obama’s primetime show will undoubtably beat Perot’s numbers and perhaps all other competing broadcasting.
The move into blocks of network time comes on the heels of Obama’s purchase of an entire satellite channel, Channel 73, on the Dish TV network last week. Channel 73 is looping an effective two minute Obama economy ad entitled Barack Obama’s Plan for America. The fundraising advantage of the Obama campaign enables such large and unprecedented media buys and sets up Obama for a strong closing message.
Against that backdrop, the McCain campaign continued with a focus on Obama’s relationship with ex-terrorist William Ayers and explaining McCain’s debate night proposal to buy up mortgages directly and renegotiate them downward with the homeowners. Neither initiative appears to have picked up steam, and the media narrative continues to be dominated by discussion of Obama’s surge in popularity since the economic crisis began.
Centrist, independent and moderate voters are moving strongly towards Obama, and McCain has yet to find the right message to stem that tide. Considering the shocked reaction of many Americans to the recent stock market collapse, and Obama’s skillful linkage of this crash to the GOP as the market’s “final verdict” on GOP’s economic policies, no message may fit the bill for McCain.
McCain now stands nearly 10 points behind in most national tracking polls, with the esteemed Gallup tracking poll showing Obama with a commanding, campaign-best 11 point lead, 52-41%. State polls are following suit, with McCain at his lowest support level of the campaign in battlegrounds such as Virginia, Indiana, North Carolina, Missouri, Ohio, Pennsylvania and Florida. With only one debate to go and less than four weeks until election day, the McCain campaign is teetering on the edge of a collapse in support which would result in a electoral landslide not seen since Reagan’s victory over Mondale in 1984.
Quick takeaway from the 2nd presidential debate – Obama claimed specifically that U.S. government invented the computer, and Obama was very wrong. The computer was developed over a long period of time, and by most historical accounts trace back to Europe with British and German inventors in the late 19th and early 20th century for the conceptual idea of a computer. For a functioning machine, most historical accounts point to a Iowa State University professor and his graduate student:
“I have always taken the position that there is enough credit for everyone in the invention and development of the electronic computer” – John Atanasoff to reporters.
Professor John Atanasoff and graduate student Clifford Berry built the world’s first electronic-digital computer at Iowa State University between 1939 and 1942. The Atanasoff-Berry Computer represented several innovations in computing, including a binary system of arithmetic, parallel processing, regenerative memory, and a separation of memory and computing functions.
Neither CNN, MSNBC nor Fox News have mentioned this so far. We’ll see if it develops in the days to come.
Both candidates excelled in a night of debate filled mainly with recited stump speeches that were largely unresponsive to moderator Gwen Ifill’s questioning without any major gaffes. The key question going into the debate was whether Sarah Palin could reestablish her credibility after a series of missteps in interviews. Palin clearly met that bar and avoided what could have been a support meltdown on the Republican side if she had tanked.
Biden was knowledgable and forceful in his policy discussions, especially in the foreign policy discussions. Thematically, Biden did his job by linking McCain to Bush and demonizing Bush in an effective manner. Palin survived on foreign policy issues and excelled on tax and energy issues. Thematically, Palin did her job and by reinforcing McCain’s image as a maverick and linking Obama to higher taxes, more government and a loss in Iraq. From an objective point of view, both candidates did what they set out to do and the debate was essentially a tie.
The initial pundit reaction was predictable: CNN and MSNBC called it for Obama, Fox News called it for Palin. However, even the CNN “analysts” agreed that Palin swept aside credibility questions with her performance and boosted GOP morale and any threat of Palin “dragging down” McCain was erased. Predictably again, the focus groups set up by CNN and Fox News split in their reaction. CNN/Opinion Rsearch’s instant poll shows a 51-39 Biden victory, with 84% believing Palin exceeded expectations and 64% believing Biden exceeded expectations. with 55% Fox’s text message poll went for Palin, 86-12.
As for undecided voters, CBS’s poll of undecided went to Biden, 46-24%, with 55% stating their view of Palin improved. Importantly, CBS’s poll 18% of the undecideds are now committed to Obama, while 10% of the undecideds are now committed to McCain. If this takeaway from the VP debate holds, with Obama gaining more than McCain from undecideds, the McCain campaign will continue to slide in the polls.
Regarding the impact on the presidential race, most soft McCain voters who were concerned about Palin’s recent interview performances were likely part of the 84% in CNN’s poll who believed Palin beat expectations. The question becomes how independents and conservative Democrats react to the debate over the next few days. These groups strongly dislike Bush and Palin did condemn the Bush Administration several times and talked about looking to the future instead of backward.
With the second Obama-McCain debate set for a week from now, McCain is likely to become much more aggressive attacking Obama should the House pass the bailout package passed by the Senate yesterday. McCain has a set of commercials relating to the GOP’s version of the cause of the economic crisis – failure to control Fannie Mae and Freddie Mac – set to be unleashed once the House acts.
The media often talks about the great Right Wing Attack Machine, and Hillary Clinton often warned that Obama would not be able to withstand a full-on assault. Expect the GOP and third party groups to unleash “Greek fire” on Obama on both the economic crisis and his character issues (Wright, Rezko, Ayers, Marshall, ACORN, etc.) as soon as the bailout passes. The only way that McCain can win this election at this point is to return the focus to a referendum on Obama’s fitness for office instead of the quality of the Bush years.
O’Reilly took a different tack and played a July 2008 clip, only a few days before the final collapse and government bailout of Fannie Mae/Freddie Mac, in which Frank stated that the “long term” prospects of Fannie Mae were “solid” and that they were “fundamentally sound”. Frank started off by stating that he couldn’t pass any legislation because the GOP was in charge, pointing to a 1994 attempt to regulate Fannie Mae and a 2007 bill he passed, while refusing to take any personal responsibility for the present economic collapse.
O’Reilly pounced, shouting “stop the crap” and demanding Frank admit he is at fault for the collapse of the giant government sponsored entities. Frank again tried to highlight his claimed attempts to regulate Fannie Mae, and O’Reilly attacked again, arguing that Fannie Mae fell 90% in value after August 2007 and Frank did not warn anyone.
Then O’Reilly called Frank a coward, taunting him with “come on you coward,” “say the truth,”
“your a coward.” Frank responded that “you start ranting, only way to respond is to look as boorish as you” and proceeded to say he “didnt tell anyone to buy stock” and again claimed he tried to get regulations adopted. O’Reilly responded: “any private concern, you’re out on your butt.” Frank swung back with “rant all you want arent going to shut me up,” claimed that the 1994 he referenced tried to stop subprime lending by Fannie Mae and then that “your stupidity gets in the way of rational discussion.”
O’Reilly retorted that “people lost millions” and reiterated his claim that the “folks” bought stock based on Frank’s appearance on CNBC in July 2008. Then there was a brief free for all with Frank attacking the format of the show, O’Reilly’s anger and claimed that O’Reilly is “too dumb to understand”. O’Reilly finished the night with a clearly planned line: that Frank presided over the “biggest financial crash in federal history”, and then cut Frank off.
All in all, very little substantive discussion of Frank’s longstanding defense against tighter regulations on Fannie Mae and Freddie Mac during the Bush Administration, but an entertaining prelude to tonight’s big Palin-Biden debate.
Alaska Governor Sarah Palin takes on Senator Joe Biden tonight in the one and only Vice Presidential Debate in this year’s presidential campaign. The GOP ticket has much more on the line tonight than the Democratic ticket as McCain-Palin has dived in the polls ever since the economic crisis took center stage about two weeks ago. The tail of the tape favors Biden, and the public expects Biden to win by a small margin.
Tonight’s debate will probably boast the largest national television audience for any night of the campaign so far, as the first Obama-McCain debate unperformed ratings wise last Friday night. Palin has a platform to talk “over the head” of the media directly to perhaps a majority of all likely November voters. 34% of likely voters report that tonight’s debate is “very important” to their vote, with another 38% percent claiming it is “somewhat important”.
A chance to turn the tide could not come at a better moment for McCain-Palin as the situation is dire, with the public favoring Obama’s handling of the bailout and a steady slide in both national and state polling. Indeed, in mid September McCain-Palin seized a tiny one or two point lead in the national polling average, and Obama-Biden has since surged to a six point lead, with only 6-7% undecided.
Making a comeback improbable is the historical trend of voters (less than 5%) changing their choice for president after the end of September. For instance, in 2000, the defectors from Bush and Gore after September canceled each other out. In 2004, Bush received a slight net gain from defectors, about 1% of the national vote as Bush lost 2.8% of his September voters and Gore lost 4.2% of his. Even if McCain-Palin can take a net 2% of the national vote from present Obama supporters, the GOP would have to take 75-80% of the undecided vote just to tie.
Against that backdrop, Palin steps into the spotlight again tonight. The McCain campaign is relying upon Palin for a third time to revive their campaign. First, McCain used suberfuge to pick her out of the blue as VP the night after Obama’s convention speech, limiting Obama’s momentum boost. Second, Palin delivered a solid convention speech in the face of mixed expectations, partially powering McCain’s move to a small lead in mid-September.
Now, the McCain campaign has come under severe criticism for its mishandling of Palin’s press availability and overall strategy. By keeping Palin away from press scrutiny, the strategy ensured that even small mistakes with the press would be magnified and the press would dig relentlessly into her background. The media narrative has caricatured Palin in negative terms in recent weeks, epitomized by the Saturday Night Live brainless bimbo version. While many of the media accounts of Palin dirt have been debunked, polling suggests that the negative press narrative is dragging down her favorability. The media is now discussing how Palin is a net drag on the ticket.
Many of the undecided voters are moderates and centrists with no strong party affiliation. Palin will likely try to play to these undecided, independent voters tonight with a focus on her reform record and blue collar roots. A major gaffe, or even a minor one, will feed into the present narrative.
Tonight is Palin’s chance to connect with the voters directly. Nothing less than a big win tonight for Palin both in the post-debate polling and the pundits (at least a majority) will reverse the strong momentum built up by Obama during the economic crisis. For only the second time in American history, tonight a woman will take part in a general election vice presidential debate and the stakes could not be higher.
As the clock winds down to tonight’s vote in the Senate on the latest incarnation of Treasury Secretary Henry Paulson’s request for authority to purchase up to $700,000,000,000.00 in “toxic” mortgage securities, a substantial shift has occurred in the language describing Paulson’s request. No longer do McCain, Obama, congressional leaders or President Bush refer to the “bailout”. Now, the legislation set for a vote tonight in the Senate is referred to by the aforementioned politicians and the media as a “rescue” instead.
The rhetorical shift comes at a critical time, about two days after Monday’s surprising bipartisan defeat of the bailout package in the House of Representatives. As the strong public outcry against and subsequent defeat of the unpopular “bailout” in the House demonstrates, the term bailout has negative connotations with the American public. This is especially so because the receipients of the $700 Billion will indisputably be mainly large financial institutions, in exchange for the “toxic’ mortgage securities and perhaps the loans themselves. Calls, emails and letters continue to come in from Americans strongly against passage at a clip of 10-1 against at least.
Both parties and presidential candidates appear to be wary of being strongly associated with a bailout, hence the shift in rhetoric. “Rescue” conjures up images of heros coming to the aid of a distressed victim. Both Obama and McCain exclusively used the rescue term today’s speeches, and neither directly attacked the other today. Perhaps the candidates have implicitly (or explicitly behind the scenes?) agreed to a brief truce in order to move the “rescue” through Congress this week. However, the basic thrust of the package remains the same: providing the Treasury Department authority to borrow up to 700 Billion Dollars to purchase “toxic” mortgages securities and perhaps the loans themselves.
One key issue which is presently unclear is whether Treasury will actually try to service the loans themselves in some respect. Obama’s comments, along with other congressional Democrats, appear to signal that if Obama wins the election, the federal government will buy up the loans themselves in part and push a strong loan modification program to reduce interest rates, payment amounts and perhaps the principal amount due. The government’s ownership of millions of mortgage loans will balloon the federal government’s bureaucracy exponentially, which is no guarantee of competent, let alone sound, management.
Another key issue is one of the additions to the Senate version – a provision to lift the cap on FDIC coverage from 100,000 to 250,000. As outlined here, Obama’s annoucement at 6AM Tuesday morning is the one specific policy proposal forwarded by Obama in the last few weeks on the economic crisis. Strangely, House Democrats, as guided by Obama, rejected the inclusion of the FDIC provision when House GOP negotiator Roy Blunt argued for its inclusion on Saturday night. Amazingly, as Jim Clyburn did yesterday, Obama surrogates continue to claim credit for the FDIC proposal today on the cable media, such as Democratic Wisconsin Senator Amy Klobuchar on CNN today. The Obama campaign’s attempt to use this arguable Obama flip flop on the FDIC provision as an example of Obama’s leadership could backfire in the days to come.
The political battle afterwards about the causes of the market crisis and who’s to blame will define the presidential campaign moving through the debate period, which ends when McCain and Obama lock up for a final battle on October 15 at Hofstra University. Obama will continue to blame the incompetence and culture of deregulation brought by eight years of the Bush Administration and excesses on Wall Street. McCain will continue to blame both greed on Wall Street and “evil” in Washington, namely the Fannie Mae/Freddie Mac role in creating the ponzi scheme previously known as mortgage securities.
Above all, if the bailout passes, whichever campaign controls the the media narrative about the passage of the “rescue” package will gain momentum. As McCain is struggling to keep within five points of Obama in most national polls, McCain needs to win the bailout battle to avoid a risk of seeing the race slip away to a double digit margin.