Thursday, March 27, 2008

James Carville Is A Man of His Word

James Carville was one of the architects of Bill Clinton's successful 1992 Presidential campaign. He has been to Clinton what Karl Rove has been to George W. Bush (or for you TV fans, what Josh was to President Bartlett). He is a tough, smart, straight talking, hard charging, politico partisan. Carville continues to be a loyal Clintonista.

When Bill Richardson endorsed Barack Obama last week, James Carville called him a Judas, noting that is was just about the same time of year when Judas accepted 30 pieces of silver to betray Jesus (Bill Richardson served in the Clinton Administration as U.N. Ambassador and Secretary of Energy). Conservative commentators condemned the comments as mean-spirited.

Appearing on the Sunday talk show circuit Carville was asked about his comments and the subsequent uproar. Mr. Carville said that his comments were correctly quoted, taken in context, and had the desired meaning! He added that he thought the seasonal metaphor was quite apt.

I don't agree with James Carville's politics, but it sure is refreshing for a politico to say what he means and stand by it. No mealy mouth explanation about how that wasn't what he meant, or that he was taken out of context. None of Bill Clinton's innuendo and double-speak denials. None of Barack Obama's sitting in a pew for 20 years but never hearing Reverend Wright spew hate speech. James Carville spoke his mind and stood up for it. Good for him. I respect that.

For the record, I think very positively of Bill Richardson. He is a pro-growth Democrat who has a good record as governor of New Mexico. On a pure policy and resume basis he was the democratic presidential candidate that was the best qualified to be a good President.

Here Is A Headline You Never Want to See

"Gate Orders Inventory of U.S. Nukes"

I guess we want to make sure that we didn't misplace any of them. I will look forward to the answer.

http://news.yahoo.com/s/ap/20080327/ap_on_go_ca_st_pe/missile_mistake_12

And to Think I Saw It On Mulberry Street

Recidivism is a word most often reserved for criminals or sexual predators. But there is such a disturbing pattern of repeated and outlandish embellishment by Democratic leaders that the word comes to mind. Al Gore just cannot help himself, at various times claiming to have invented the Internet and that the male protagonist in "Love Story" was based on him. Of course, the wildly exaggerated and spurious claims throughout "An Inconvenient Truth" have been well documented so there is no need to repeat them here.

How about John Kerry, and his Winter Soldier testimony before Congress on the atrocities committed by our troops in Vietnam? These claims have been systematically shown to be fabrications. In fact, many if not most of the Winter Soldiers stories were made up by people that did not even serve in Vietnam, or served in different roles with different ranks in different places than they claimed. How about John Kerry insisting that he was in a firefight with the Viet Cong in Cambodia on Christmas eve? His commanding officer and most of the men he served with called him a liar, a charge which he has never successfully refuted.

Bill Clinton has a long and distinguished record of lying about his endless affairs, including the most famous, Ms. Lewinsky (an interesting side note: Hillary's just released White House schedule shows that she was at the White House when the most infamous of the Lewinsky liaisons occurred).

Now comes Hillary. Her repeated account of landing in Bosnia under sniper fire has been unceremoniously debunked since CBS released video footage of the event. Hillary's claim to have been instrumental in the Irish peace process has been similarly assailed.

What is interesting in all of these examples is that when challenged with evidence to the contrary, they continue to insist that the stories are true. Hillary doggedly repeated the Bosnian tale, with Hillary more Rambo-like with each telling. This was even after numerous people, including travel companion comedian Sinbad, said it did not happen the way Hillary described. Only after video came out with Hillary participating in a large, and peaceful, ceremony on the tarmac being presented flowers by an 8 year old Bosnian girl did she and her campaign reluctantly admit to "misspeaking".

In this day and age of 24/7 news coverage and cameras on every cell phone it amazes me that these politicians think they can get away with these preposterous stories. I reminds me a lot of teens that beat up some other kid, post the video on the Internet, and subsequently get arrested. Hillary, and Al, and John Kerry and Bill Clinton are all intelligent people, but they continue to commit these gaffs. There must be another explanation - they just can't help themselves. Even when they get caught, they do it again and again - recidivism.

Perhaps I am having a conservative blind spot, but I am having a hard time coming up with parallels in the GOP. I can't think of Ronald Reagan embellishing his accomplishments. John McCain has a long and distinguished career as a U.S. Senator, and is the anti-John Kerry when it comes to Vietnam service. George W. Bush may have gotten special favors to serve in the National Guard, but he didn't lie about it (sorry Dan Rather).

George H. W. Bush was a true WWII hero, surviving 58 combat missions as a Navy pilot and winning the Distinguished Service Cross. He was shot down over the Pacific and was rescued by a submarine. Before becoming President, "Bush 41" served in the U.S. House of Representatives, was Liaison to China, Ambassador to the U.N., and Director of the CIA. None of these GOP leaders had to embellish their experiences. They were genuine leaders and heroes.

If anyone can help me out with some examples please post a reply. Of course all politicians need to be viewed with skepticism. It is a profession that seems to appeal to liars and cheats. In the meantime, the Democrat's outlandish claims of achievement seem an awfully lot like the Dr. Seuss tale, "And to Think I Saw It On Mulberry Street". It makes you wonder if anything else they say is true?

Sunday, March 23, 2008

The Democrat's Gordian Knot

The Democratic Party has a well earned reputation for making it as hard as possible on themselves to win the White House. Think Dukakis in the tank, Walter Mondale or Eugene McCarthy in any situation, Edmund Muskie breaking down in tears. Bill Clinton is the only politically talented Democrat to run for the White House since LBJ. And of course, Mr. Clinton has his own peccadilloes.

This year may be the hardest yet. First Howard Dean imposes the primary death penalty on Michigan and Florida for moving their primary dates up against the wishes of the Democratic National Committee (DNC). Hillary campaigned in those states anyway but Barack Obama did not. The Obama campaign has now outmanuveured Clinton to thwart any do-overs in Michigan and Florida. Senator Obama believes he can win the nomination without those two states, with the help of the superdelegates. A do-over in these states would probably only have helped Clinton.

Now it gets interesting. The first task at the national convention in Denver will be for the Credentials Committee to decide what delegates will be seated. There are 186 committee members. 25 are named by Howard Dean and he has done so. The Credentials Committee will have to wrestle with whether to seat the Michigan and Florida delegates. The 186 could effectively decide the nomination. They can override Chairman Dean and seat the delegates from the banned states, or they can work out some other solution.

Much has already been said about the superdelegates. They are free to vote for whomever they want. The bottom line is that the nomination is going to be negotiated, or brokered, which will lead to bitterness on the losing side. Polls are showing that one in five Democrats may bolt to McCain if their Democratic choice does not prevail at the convention.

If it does come down to the superdelgates Hillary may be in even more trouble than she is in now. Mareen Doud in today's New York Times writes that, "If Jimmy Carter, Al Gore and Nancy Pelosi are the dealmakers, it won’t take Hercule Poirot to figure out who had knives out for Hillary in this “Murder on the Orient Express.”

None of these superdelegates are fans of the Clintons and their bare knuckles, entitlement style. In fact, it seems clear that Clinton fatigue has finally set in on the Democratic Party. Even once loyal Clintonista, Bill Richardson, jumped on the Obama bandwagon, and was promptly and savagely trashed by the Clinton campaign (I'm pretty sure calling out someone as a "Judas" is ill-mannered, especially at Easter).

As the Democrats attempt to unravel the Gordian Knot, it seems likely that Barack Obama will be the nominee. I don't think Obama can win against McCain in the general election. He lacks experience. Reverend Wright will weigh like a millstone around neck. He has been beaten by Hillary Clinton in the large, critically important states like Ohio and Texas. Senator Clinton is going to win huge in Pennsylvania. If you can't win Ohio you can't win the White House.

It is easy for me to envision an exhausted and embittered Hillary Clinton at a concession news conference channeling 1960 Richard Nixon, "You won't have Hillary Clinton to kick around any more!" Good riddance.

What I Learned in the Market Collapse

The rapid market downturn over the last 5 months, and especially the stunning January collapse, has been the most difficult investing environments I've ever seen. Even the tech meltdown in 2000 and 2001 was much slower moving, offering greater room to maneuver on the way down. Traders for whom I have great respect, such as Dennis Gartman of the "Gartman Letter", with 25 years of trading experience, have stated that they have never seen anything like the continuing difficulty and violence of this market. Like most, I took it in the throat.

Here are a few of the lessons I intend to remember "next time":
  1. It is always better to be out of the market and wish you were in, than to be in the market and wish you were out.
  2. It is OK to just sell everything so you can sleep at night and live to trade another day when the market finds a stable bottom.
  3. A violently volatile bear market means that you have to dramatically "shorten your swing". There is actually great opportunity to make some money by buying extreme weakness and selling the sharp bear market rallies. But to do so you have to be very nimble, taking quick gains and being more willing than not to leave some potential profits on the table.
  4. Hedges matter. As I finally got me head around the type of market we were really in I switched to a trading profile that was much more hedged, limiting my upside but also significantly protecting my downside. For example, I set up many of my long positions, especially the higher beta positions, as vertical call spreads (buy a call at one strike price and sell a call at a higher strike price with the same expiration date). This allows me to capture the upside to a certain strike price while greatly reducing the cost of the long side of the spread. When the market makes violent moves up or down I can take off one side of the spread and capture those profits and then reestablish the spread when the stock moves back the other way.
  5. When great profits have been made in the market, always take some off the table and put it away somewhere safe.
  6. It is important to always have some money on the side to take advantage of stocks that are unfairly punished. Too many people are too fully invested too much of the time.
  7. Professional traders and investors understand that in a difficult tape it is more important to limit the downside risk than it is to maximize upside gains. Personally, this is an area of discipline where I will do better going forward.
  8. You have to find a way to "stay in the game". Otherwise, when the rebounds occur, you don't benefit from the ride up. You end up selling low and then buying back in high.

Secretary of State Pelosi?

Nancy Pelosi is confused. She is the Speaker of the House but time and time again she feels compelled to insert herself into foreign policy at the most inopportune times. A while back she traveled to Syria, meeting with the head of state of a known terrorist state, allowing terrorists to cross their border into Iraq to fuel the insurgency, over the strong objections of the administration.

Now she is in India visiting the Dalai Lama in exile and inserting herself into a very delicate situation involving Chinese politics. Her bungling exacerbates the United States' ability to deal effectively with the China/Tibet conflict because Ms. Pelosi is a well know China basher. Already she has drawn strong negative comment from the Chinese government.

The Constitution grants the executive branch the primary responsibility to conduct foreign policy. In the case of treaties with other sovereign states, the President negotiates the treaties and the Senate votes to ratify the treaties. No role there for the House of Representatives.
I suppose everyone needs a hobby, but Nancy's dabbling is made all the more unfortunate by the fact that she has accomplished so little as Speaker of the House. Of course it is not the worst thing in the world for Congress not to do much. But Nancy and her chamber of horrors have been unable to perform even the most rudimentary duties. For example, Congress must finalize the budget and send it to the President within a particular timeframe. This is one of Congress' most fundamental responsibilities. Congress did not do so. Maybe Nancy should spend less time in a dalliance with the Dalai and focus on doing the people's work within the framework of the Constitution. Nobody likes a constitutional interloper.

Friday, March 21, 2008

Charles Krauthammer's Insightful Take On Obama's Speech

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/20/AR2008032003017.html

These People Want to Run the Country?

The Democratic Party wants to run the country but they can't even run their own party.

What could have possessed Howard Dean to invoke the primary "death penalty" on Michigan and Florida, denying these states to seat delegates at the convention? At first Howard Dean insisted that if a new primary was run in Florida that the State of Florida should pay for it. But the government correctly rebuked Mr. Dean telling him that is was not the taxpayers of Florida that should pay to correct a mess of the Democratic Party's making!

After considering a mail-in ballot paid for by private Democratic donations it now seems clear that there will be no do over in Florida. The deadline also just passed for the Michigan legislature to authorize a re-do of the Democratic primary, so Michigan is "out" too. Now Democratic donors from those states are demanding that Howard Dean and the Democratic National Committee (DNC) return donations made by them. No representation, no money.

Hillary Clinton is insisting that the delegates from these two states be seated at the convention. This is perfectly logical to Senator Clinton as she was the only candidate who campaigned in these states and was the only candidate on the ballot in one. Barack Obama does not quite see the logic. It may actually happen that two of the most important states in the general election, particularly Florida with its large number of electoral votes, will be disenfranchised by the Democratic Party.

All of this is setting up for the most entertaining (if you're a Republican) national convention since the 1968 Democratic debacle in Chicago. It seems likely that neither Obama or Clinton will have enough primary delegates to win the nomination outright, which brings us to the delicious topic of Superdelegates.

There has been much angst of late regarding the role of the Superdelegates. Many on the left have stated that it would be a travesty for one candidate to win the most primary delegates but have the Superdelegates award the nomination to the other candidate. But, in fact, this is exactly what the Superdelegates are meant to do.

The Superdelegates were put in place after the 1968 convention where Eugene McCarthy, who had no chance of winning the general election, was nominated as the Democratic presidential candidate. The Superdelegates were put in place soon after to protect the party from itself. Who are the Superdelegates? They are largely party apparatchiks. That's right - the nomination will be decided by what in an earlier age was called the "smoke filled back room".

As Hillary Clinton infamously said during her crusade to nationalize health care - and I'm paraphrasing, "some things are too important for the people to decide for themselves." This is the rallying cry of liberalism. That a paternalistic government will control and decide everything. Or in the case of the Democratic National Convention, the paternalistic party will decide what is best for their voters.

Now comes a report that the hosting committee in Denver has not been able to raise enough money for the convention. The internecine war within the party has caused the party to take its eye off the ball of the importance of staging a great convention.

This party wants to run the country? Really?

David Mamet's Epiphany

A poignant essay by one of our greatest playwrights who transformed his belief system from "brain dead liberal" to conservative.

http://www.villagevoice.com/news/0811,374064,374064,1.html/full

Laura Bush for President! Barney for Vice President!

Long delayed by the Clintons, the first tranche of records documenting Hillary Clinton's activities during her husband's presidency were finally just released. 11,000 pages documenting Mrs. Clinton's schedules are now finally available for review, 8 years after Bill Clinton left office. Do these schedules support Hillary's claim that her eight years as first lady give her the experience to be President and Commander in Chief? The short answer is an emphatic no.

During Bill Clinton's presidency Hillary played the traditional ceremonial role of a first lady. It turns out that she was not answering the phone at 3:00 AM or presiding over the Situation Room. Her main policy effort during the administration was to lead the effort to nationalize health care, which was rejected by the American people, and bungled by Mrs. Clinton. If Mrs. Clinton has the experience to be President then so does Laura Bush. Perhaps Barney,the Bush's dog, and an almost 8 year resident of the White House, is qualified to be Vice President!

On the question of experience, Hillary has been in the Senate for part of one term. Barack Obama served for a short time in the Illinois state legislature before now serving a short time as a U.S. Senator. In neither venue have his legislative efforts been noteworthy.

Contrast these two to John McCain. Senator McCain has many years of service in the U.S. Senate where he has earned the respect of both sides of the aisle. He has a legislative record that can be reviewed. He is perhaps the foremost authority in Congress on our U.S. military. He is a war hero. His reputation for integrity is impeccable. He has not one earmark to his name.

Hillary Clinton running on experience may win the Democratic nomination but it will lose the general election for her against McCain. Barack Obama running as the candidate of unity and change has been damaged by a 2 decade association with a hateful demagogue. As the media continues to finally delve into Senator Obama all they will find is an impressive individual who on policy matters is just an uninteresting boilerplate liberal. Barack Obama may one day be President, but not this time.

John McCain is the only centrist, and experienced, candidate that can unify and lead our country.

Thursday, March 20, 2008

The Black Liberation Theology of Obama's Church

Reverend Wright, in the "talking points" page of his church's web site, describes "systematized black liberation theology." Reverend Wright credits James Cone of New York's Union Theological Seminary with having undertaken this systematization. Here is Mr. Cone's description of black liberation theology:

Black theology refuses to accept a God who is not identified totally with the goals of the black community. If God is not for us and against white people, then he is a murderer, and we had better kill him. The task of black theology is to kill Gods who do not belong to the black community. . . . Black theology will accept only the love of God which participates in the destruction of the white enemy. What we need is the divine love as expressed in Black Power, which is the power of black people to destroy their oppressors here and now by any means at their disposal. Unless God is participating in this holy activity, we must reject his love.

This is the church at which Barack Obama congregated for 20 years. An odd belief system for Mr. "Audacity of Hope".

Obama's Big Speech - the Aftermath

Today Senator Obama went on a Philadelphia radio station to explain that Grandma is “not a racist” after he threw her under the bus in yesterday's speech. Then he said she is just a “typical white person”. Now I do not believe in any way that Senator Obama meant anything by that. But there is such a double standard when it comes to even the most unintentioned racial comments. Barack Obama actually had the audacity to equate Geraldine Ferraro's comments that some will vote for Senator Obama because he is black with the venemous hate spewing forth from Reverend Wright.

What if John McCain said something about a “typical black person”? He would be called out as racially insensitive by the Jackson/Sharpton/Wright wing of the black community. Trent Lott was pressured into giving up his post of Senate majority leader because he made a joke about Strom Thurmond that was ill considered and branded racist by some. Obama called for Senator Lott's resignation for being so insensitive. By the way, Obama also called for Don Imus to be fired for his regrettable comment.

It seems clear that Obama joined this church for political reasons to boost his credentials in the black community. It helped him get elected to the Illinois legislature, where my research shows that his primary accomplishment was voting “present” 130 times. If Obama really is the candidate that wants to transcend race then he should have objected many years ago not just to the hate speech, but to the indoctrination of the congregation with offensive falsehoods like the government killing the black population with HIV.

Listening to Reverend Wright sounds a lot like the radical Islamic mosques and television programs that "train" children from the earliest age that the United States is the "great Satan" and that the Jewish people are sub-human animals.

I think the speech yesterday helped calm his supporters. But it did not help with people on the fence. For the working blue collar class voters with whom Hillary has already done well, the Reverend Wright debacle will seal this segment for the Clintons in the remaining primaries. She is going to win huge in Pennsylvania.

The fact that Obama only sought to disavow and spin Reverend Wright and black liberation theology after getting "caught" makes him just another hypocritical politician who says what he needs to when he needs to win. He is certainly smart enough to have known better. Barack Obama was editor of the law review while at Harvard Law School.

What are the choices then for loyal Democrats? Barack Obama, who proclaimed to be the candidate of change who transcended race? Barack Obama who claimed to be the candidate that would lead not just the red states or the blue states but the United States? Instead he simply looks like a typical politician with unoriginal leftist policies that pander to big labor and the other special interests to which the Democratic Party is their patron. Plus, he has he has been unable to win the "big" states that are mandatory to winning a general election.

The other choice is Hillary Clinton. Do Democrats really want to have another round with the Clintons? The Clintons thrive on drama, careening from one self-induced crisis to another. Plus, her just released schedule while in the White House shows that she played the typical ceremonial role of a first lady. She is no more experienced to be President than Laura Bush - and Obama is even less experienced than that!

A while back I had pretty much given up hope of the GOP retaining the White House. But I am more optimistic than I have been in a long time. Hillary, Obama or McCain? I think a lot of voters in a general election will think McCain is a pretty good choice. He certainly is the only candidate of unblemished integrity.

Wednesday, March 19, 2008

The Clintons Take a Page Out of the Nixon Playbook

All disingenuous protests to the contrary, the Clinton's have taken every chance to label Barack Obama as the "black candidate". They don't care if they alienate the black community during the Democratic primary because they believe that if they win the nomination, they will still receive the black vote in the general elections.

Bill Clinton shamelessly tried to whip up a white voter backlash by drawing parallels between Barack Obama and Jesse Jackson in South Carolina. This week, in his best Nixonian style, Bill Clinton strongly stated that he did not make an issue of Senator Obama's black heritage during the South Carolina primary. This is exactly the same as Richard Nixon in 1960 when he emphatically stated that he would not make an issue on John F. Kennedy's Catholic religion. Of course by making that statement he was making sure that Kennedy wore the Catholic label.

Does anyone really think that Geraldine Ferraro's statement that Obama is only where he is because he is black was not orchestrated by the Clinton campaign? Ms. Ferraro is too savvy and experienced a political operative to do this by accident. She took one for the team, while allowing the Clintons plausible deniability.

Monday, March 17, 2008

Senator Obama's Big Speech

Barack Obama is making a major speech tomorrow to address religion and his long association with Reverend Wright. Polls show that only 8% of Americans are not turned off by Reverend Wright’s statements. Senator Obama has lost 5 percentage points in popularity in 3 days. Perhaps the clearest indication that this is a problem for Obama – the Clinton’s haven’t touched it with a ten foot pole. They are waiting to see how much damage there is and if they even need to do anything.

There are two issues for the Senator. First, the issue is one of judgment. He says that he has the judgment to be President, to be Commander in Chief. But he maintained a close association with a radical America hater for 20 years. Either he did not think it was a big deal or he really bought into the hate and the culture of victimization of the black community. His wife’s comment about never being proud of her country hints at the latter. Second, his response to the controversy has not been candid. His statements that he did not know about any of this is disingenuous to say the least.

There is absolutely no way Obama did not know about his pastor’s views and actions (such as traveling with Farrakhan to visit Gaddafi in Libya). Now he says that he does not agree with his pastor but only after the Reverend’s views came to light in the media. This is combined with the revelation from Obama the other day that campaign contributions raised by Rezko were actually almost double what he had previously admitted to, and his relationship to Rezko was much deeper that previously admitted to. Again an issue of candor.

It is interesting that the only time I’ve seen Obama look uncomfortable in a debate is when he was asked if he would disavow the endorsement of Louis Farrakhan. Obama hemmed and hawed and looked very reluctant to take a position. I think this issue surfacing has caused a lot of people to realize that we don’t really know very much about Barack Obama. His legislative record in the senate is scant. His speeches on the campaign trail lack specifics.

Mainstream media coverage has been predictable. On Friday, the day after the sermons aired on Fox News, neither NBC or CBS covered the story. ABC had 20 seconds. The New York Times had a well written, and I think fair article, but it was buried. In contrast, the NYT’s led with a major front page story on McCain’s association with a lobbyist. Although the story was light on facts and heavy on innuendo, the point of the story was one of association and judgment. Isn’t this controversy involving Senator Obama one of association and judgment?

This is awkward for the Democratic Party because many in the left wing of the party largely share the anti-American views – that America is the source and cause of all that is bad and evil in the world. Democrats like Senator Durbin who last year compared the United States to Stalin’s USSR, Pol Pot’s Cambodia, and Hitler’s Germany.

Observing the dialoge on Reverend Wright, racism and oppression of the black community seem to be defining themes in some parts of black culture. How else can you explain that some blacks, including Reverend Wright, believe that the U.S. government invented the HIV virus to infect and kill people of color? How else can you explain that some believe that the U.S. government imports drugs, sells them to blacks to “hook them” and then have a reason to put them in prison? How else can you equate the U.S. bombing of Hiroshima and Nagasaki to 9/11? These bombings ended a war against a Japanese people that were fanatically prepared to die rather than surrender? It saved by most estimates several hundred thousand American lives in a war that was launched by the Japanese with a sneak attack on Pearl Harbor.

I don’t believe that Barack Obama believes the statements made by Reverend Wright, although it seems Michelle Obama does to some extent. But that does not excuse the Senator in terms of judgment and association. In his speech tomorrow I think Barack Obama would be well served to do a full mea culpa. He needs to say that he was aware of Reverend Wright’s beliefs and statements and that he should have rejected them a long time ago. If he continues to parse this so finely (he very carefully said that he was not in the pew when the statements on the tapes were made, not that he was unaware of the statements or beliefs) he risks looking just like another smarmy politician trying to spin a damaging issue.

We don’t really know Obama. Unfortunately we know the Clinton’s only too well. We know that they are pathological in their pursuit of power and will say or do just about anything to achieve their goal. But is the same true for Obama, but with a more polished and erudite style?