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Posts Tagged ‘selloff’

Obama Buys Up Primetime on Networks as McCain Reaches Nadir of Campaign

Thursday, October 9th, 2008

Obama in Catbirds Seat

Obama in Catbird's Seat

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.

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Bailout Deal Reached – Taxpayer Protections, Insurance Provision Added, ACORN Pork Removed

Sunday, September 28th, 2008

Verbal Deal Reached on Bailout

Verbal Deal Reached on Bailout

After midnight on Capitol Hill negotiators emerged to announce that a verbal bailout deal had been reached between Congressional Democrats and House GOP negotiator and whip Roy Blunt. Since the meeting at the White House on Thursday night, representatives of the House GOP and congressional Democrats have been locked in negotiations to create a bailout package that both parties could support.

John McCain returned to his Arlington, VA campaign headquarters after about a twelve hour stay in Mississippi to debate Barack Obama on Friday night. By suspending his campaign and returning to DC on Thursday, McCain provided the House GOP an opening to curb some of the more undesirable aspects of the bailout package negotiated between Treasury Secretary Paulson and congressional Democrats. Blunt laid out the most pressing objections on Saturday afternoon, and it appears the Democrats have caved on several of the demands.

Most importantly, Democratic giveaways to leftist public interest groups, such as ACORN and La Raza, were removed from the bill. The Dodd-Paulson bill, which was heralded as a completed bipartisan deal on Thursday afternoon (notwithstanding the lack of House GOP approval), contained a provision which provided for 20% of any profits realized on the sale of any asset purchased via the bailout to be funneled to the Housing Trust Fund and the Capital Magnet Fund. These two Funds would then hand out grants to service organizations, such as ACORN Housing, an offshoot of ACORN. Amazingly, the provision did not require an overall profit on the 700 Billion dollar investment – just profit on any individual transaction.

Instead of funnelling such potential profits to service organizations, the deal reached tonight will dedicate any and all profits directly to deficit reduction – a priority applauded by moderate and centrist Americans. Another provision inserted by Democrats which favored unionization was also watered down. Further, another provision to ensure that the federal government receives a piece of the selling banks, in the form of a stock warrant, is part of the new deal.

The other major change brought by the House GOP was the insertion of a program that would encourage banks to hold onto their mortgage backed securities by providing federal default insurance for a fee. It is hoped that this insurance provision will reduce the dollar amount of taxpayer funded loans that are required to purchase assets.

Certain bipartisan alternations to the original Paulson proposal were included in tonight’s deal as well, such as limits on executive compensation and significant oversight over the Treasury Department. The entity to be created as now envisioned by the bailout bill in some respects is similar to the Mortgage and Financial Institutions (MFI) Trust proposed by McCain about 10 days ago. Democrats were mainly responsible for the inclusion of increased assistance to defaulting homeowners, which a major change to bankruptcy law to allow reduction of mortgage balances in bankruptcy did not make the final package.

Of course, the heart of the bailout deal remains the authorization of borrowing by the Treasury Department to purchase “toxic” mortgage backed securities. The deal tonight allows for $350 Billion in authority immediately, with the potential for 350 Billion more unless a joint resolution of Congress is signed by the President disallowing the additional funding. It is hoped that the bailout package will calm markets, starting with Asia’s opening on Sunday night, and free up some liquidity in the U.S. Economy to allow normal business operations to continue.

With the bailout package now in its final form and all sides in agreement that something must be passed in the next few days to avoid a market selloff, the focus now turns to how McCain and Obama will present their position and responsibility for the package. Both candidates are well aware of the deep unpopularity of the bailout bill, with the public opposing the bailout 50%-24%.

Politically, the effect of the bailout deal is up in the air. John McCain will certainly attempt to claim credit for the improved bailout package that resulted from the inclusion of the House GOP in the negotiations. It remains to be seen whether McCain will assert that Congress followed suggestion of the MFI Trust in part with the new package. Obama will probably continue to assert that McCain’s presence was only counterproductive. After the Sunday talk shows and many surrogate appearances tomorrow, a picture of the political battleground on the bailout package should become clear.

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