McCain Campaign is the Little Dutch Boy

As some of you may know, there is a Presidential election campaign going on.   We're upset at how little information there is out there for voters to weed through, in particular the lack of poll numbers and stories about polls.  So here's our effort to fill that gap at this late stage of the season.   This information is unique, in the sense that it is probably only one of 10,000 places where you can find it.

This analysis assumes that poll averages are not altogether misleading.  It assumes that a state with a 10-point spread with five days to go and where neither candidate is spending a lot of time, money or love is probably not going to go the opposite direction on November 4.

Starting with these assumptions, Senator Obama is leading 238-123 in the race to 270.

This is what Senator McCain has to do to win.  He has to do ALL of these.

1.  Hold onto three states (South Dakota, Mississippi and his home state of Arizona) where he still leads but is slipping.  Arizona in particular is very telling.

2.  Hold onto four states (Indiana, Georgia, North Dakota and Montana) where he leads by less than 3 points.  Again, the movement in Obama's direction in GA and MT in the last couple of weeks has been noteworthy.

3.  Win three important states (Florida, Missouri, North Carolina) where Obama leads by less than 3 points.  These are true toss-up states, according to the polls.  McCain needs all of them to break his way.

4.  Win Ohio.  This was supposed to be a tough go for Obama.   In spite of Joe the Wanna-Be-Plumber (he seems very vice-presidential, don't you think?), Obama has quietly been building a small but steady lead here, now at about 6%.

5.  Win Pennsylvania.  There was a poll today that showed Obama up by 4%.  Almost all of the others in the last few days have been double digits, and the average is around 10%.   Pehaps this is competitive and only the campaigns know this and have decided to keep this from us so as not to ruin the end of the movie.  More likely the McCain campaign knew that it had to propagandize the winnability of Pennsylvania in order to avoid having the fight called a week early, and the Obama campaign's active response is just the latest example of their discipline, follow-through, beaucoup cash and learning from prior mistakes such as New Hampshire. 

6.  Yes, there's more.  Even with all of these, with OH and PA and FL and MO and NC, McCain still needs to beat Obama in either Nevada or Colorado or New Mexico, all states where Obama has 6.5 to 8 point leads.  Colorado and New Mexico have been steady for some time and Nevada is another place where Obama's lead is steadily growing.

That's 13 states out of 16 in play that McCain has to win.  This in spite of being outspent 3-1, out-volunteered by more than that, out-loved by the media (except Fox, of course), and in spite of record-busting early voter turnout that seems to be heavily in Obama's favor.

Here's what Obama has to do.  He only needs to do ONE of these.

1.  Win Florida, where he leads by 2 to 3 points, and any one of 12 other states in contention.

2.  Win any two of these three:  PA (10% lead), VA (7% lead), OH (6% lead).

3.  Win Colorado and 1.) either OH or PA with 2.) either New Mexico or Nevada.

4.  Win Virginia, Colorado, New Mexico and Nevada.

Here are some ways to contextualize this:

- Obama can actually lose FL, OH and PA and still win.

- At most, he needs to win 4 of 16 states still in play.

- He doesn't need to win any states in which he currently leads by less than 6.5 points.

- He doesn't need to win any states in which he has less than 50% of the vote.  In other words, McCain has to win every single undecided voter in some states - an absurd notion, of course - and still have to convince a significant number of Obama voters (who haven't voted already) that they should change their minds.

There are simply too many holes in the dyke to plug.  So, really, the only chance McCain has is if the polls are HUGELY wrong.  Which is what we will likely be hearing through the weekend, as there is no other argument to make.   And because everyone in the game other than the Obama campaign has an interest in keeping the storyline going full-bore through Tuesday night and, hopefully, beyond. 

(We'll talk about a tie later, just for fun).

Malintent

Here's an interesting story from Fox News on Tuesday September 23, 2008.   The United States government is testing a program, called MALINTENT, that will monitor and analyze facial features and other physical data to evaluate an individual's intent to do harm to others.  The sensors would be used at airports, stadiums and other places where large numbers of people congregate or pass through.

It's a fascinating example of how the future keeps arriving more quickly and how our ability to digest these developments has a hard time keeping up.   Orwell and Huxley come to mind, of course, as well as the pre-crime in Philip K. Dick's short story The Minority Report, which was made into a Spielberg film.  (As far as we know, the government hasn't enlisted psychics into the program, so we still need to use scientific tools of measurement.)

If you want to feel more calm about this development, please ignore the name of the agency conducting the research: The Human Factors Division of the Directorate of Science and Technology of the Department of Homeland Security.   I think they managed to combine state fascism, communist bureaucracy and general dehumanization with that one.  A different kind of Triple Crown.

The best part of the story is the video link, which is six-plus minutes.  The first half is a pitch made by the folks selling the mobile facility in which to conduct the tests.  The second half is a few examples of the test in action. 

There is a funny moment (nobody laughs) when the interrogator asks the subject who is about to attend a conference whether he plans to detonate an explosive at the event and then whether he plans to illegally record the event.  So maybe this is really about copyright infringement rather than human safety.

The tension in the story and especially the video is that there is a point at which you think - I can't write about this, it's a joke or a skit.   But it's not.   

And the most interesting implication for the future has to do with the never-ending battle between offense and defense.   ICBMs vs. missile defense shield.   Spam vs. filters.   What kinds of implants, distractors and feedback scramblers will be developed to combat this technology?  Or are we approaching the end of the age of lying? 

Don't Wake the President

Where have you gone, George W?
Our nation rolls dumbfounded eyes at you, woo woo woo.
--Apologies to Simon and Garfunkel, Joe DiMaggio and Mrs. Robinson.

I'm a Will Rogers kind of guy when it comes to politicians.  I try to find what's best in them, no matter the evidence to the contrary.

I've engaged in this exercise for the last seven years with our President.   But here we are in a tectonic financial crisis that is scaring the hell out of the citizenry and the elites and before last night's address he had barely enough to say to fill a tweet.    

Not that we're upset.  Have you noticed how nobody is complaining that the President is not taking charge?   He's like the guy in upper management who you want to appoint as Director of Toner Cartridge Procurement so he can't break anything that matters.  Even the White House puzzles over how much they want him involved.

The low point last week was not the bankruptcy of Lehman or the AIG buyout or the huge drop in the Dow.  It was when the President said he was going to stay in Washington to monitor the situation.  "No!," we all said to our TVs and aggregators.   "Please, go to Alabama.  Go to Florida.  Monitor it from there.  Go to Cuba.  Have a mojito and read The Old Man and the Sea.  Or at least finish The Pet Goat."

Speaking of 9/11, the current financial panic makes for an interesting temporal bookend to the terrorist attacks for President Bush.  A lot of Americans, even many who didn't vote for him, hoped for true leadership then.  Our need made it easy to be duped. 

Some will say that this is exactly what the Republican power brokers had in mind - a completely ineffectual President, a balance-of-powers-tipping coat tree on which to hang executive orders and other actions from the back offices, measures that would never make it through Congress and mostly won't face judicial review. 

Perhaps that was the plan.  It is noteworthy that in this crisis, as in the other, the strategy seems to be to push through the chosen solution as quickly as possible by using fear as a weapon, thus discouraging review or dissent. 

President Bush's speech last night placed the original responsibility on foreign investors, which given the open-spigot monetary policy of the United States Federal Reserve is laughable.   Much of the rest of the description of events in his speech was reasonable and useful, so of course it was intentional to start by blaming foreigners.  Economic terrorism, I suppose.

Toward the end of the speech he outlined a doomsday scenario for all Americans should we not agree with his administration's plan.   So once again, fear.   The Bush administration has had nothing to fear but the absence of fear.  One could argue that our own White House has generated the true, lasting domestic terrorism with its fear-mongering, its propaganda, its lies.   And now we're asked to trust them, for old time's sake?

In any case, what we're seeing now from President Bush is the real gauge of his abilities, his giving of that last full measure of mediocrity.  What I've learned and what I'm applying to my decision in November is that mediocrity is lethal. Sometimes it's just a slower demise than others.

You may say that if I insist on insulting the man, at least show respect for the office.  I say, tell him that.

I Have a Financial Dream

In Thursday's New York Times is a very useful story, the first story I've seen that actually digs into the investments of a particular firm, using numbers to explain the challenges of arriving at an accurate value for the homes underlying the mortgage-backed securities.

But I think we can do it.

I'm thinking about the country's response to the terrorist attacks seven years ago, and the mobilization of the private sector and citizenry when the governments failed us in Katrina.  I lived in downtown Manhattan in September 2001.  The way that we responded will stay in my memory more strongly than the attacks themselves.

You can't tell me that we would not be able to come to a fair valuation for most of these assets if it was the highest priority.  We could supply enough credit in short-term no-interest loans to keep the oil in the financial engines for a week or two while we put the country on an economic war footing and flooded the housing markets with unbiased experts called on to serve, to come up with a fair medium-term value for every house at risk.   Then feed that information up the chain. 

A massive project, but doable, especially with modern information technology.   This is the same country that 67 years ago totally transformed its economy to equip the Allies with the materiel required to win World War II.   This country has so many great stories to offer the world - let's give it another one.

But it's not a high priority, because if we can actually arrive at a fair number, it's likely that the number will be too low for the financial companies' liking.  The administration wants to be able to get away with buying assets from the firms at a price near the firms' most wishful valuations.    Fed Chairman Bernanke said that we should be buying assets not at current value but at hold-to-maturity value, or what we think they might be worth when the markets recover.

That gets the financial companies more off the hook and gives them more money to put back into the credit markets (or, we worry, their pockets).  An argument can be made that if the Treasury buys these assets at bargain prices the firms won't get enough cash to be able to recover.  So then find some creative path, mix a sale package with loans that have repayment terms such that companies have a chance to recover and then re-pay the Treasury at higher rates down the road when the firms are able to profit on more sound risk-reward decisions.

This is a much more sensible way to "punish" the financial firms than to try to restrict or take back the compensation of the CEO's, which is understandable emotionally but can't be legal and would certainly lead to lawsuits that would drain energy and probably cost us all a lot of money.   Don't banish the financial leaders to their villas in Grand Cayman.  Compel them to become part of the solution.

There is an opportunity here not only to cleanse the markets of all the garbage from the last six years but in fixing the problem to choose a path that demonstrates a new and better way to mix government and the private sector, to pull us together, to make all of us richer in more ways than one.

How Stupid Do You Think We Are?

Imagine you have a cousin, Merrill, whose idea of an investment strategy is to go to the track with $100 of his own money and then borrow another $10,000 so he can bet on a horse called Five-Year ARM in the third race.

The horse finishes out of the money and your cousin's mortgage payment is due tomorrow.  So he goes to collect a $10,000 debt from your other cousin, Bear, who unfortunately is coming out of a casino where he just left his last $100 plus another borrowed $10,000 on the blackjack table. 

Bear's car payments are due, along with the first installment on yet another gambling loan.   So they both go to your third cousin, Morgan the bookie.   But along with earning an honest living he's made bad bets every NFL Sunday and owes his brothers about $10 grand each plus the next guy up on the bookmaking ladder a lot more than that.  And this guy is calling your cousin Morgan on his cell phone as we speak.

Your cousins realize that there is no money left to borrow, so it's time to beg and steal.   Merrill and Bear and Morgan march to your Dad's house.  They tell their Uncle Sam that unless he takes on their debts that his nephews and grandnephews and grandnieces will all die or be killed, that the family as he knows it will collapse.

Your Dad says, "Sure, boys.  Let me talk to my boy John Q."

Your Dad calls and says, "You need to bail out your cousins."

"Why, Dad?  Did some tragedy befall them, some hundred-year financial flood?  Was there a quantum exception to the laws of risk-reward or supply-demand?  Were they true and just in their actions but fell upon unforeseeable hard times?"

"No, son.  They just thought they had a chance to get a lot of something for next to nothing and now they're broke without anything even a pawnbroker would want." 

" Not sure I can do that, but I'd like to help.  What do they have as collateral?"

"Nothing."

"They don't have any assets?"

"Yeah, but there's no way of knowing if they're worth anything."

"Sounding better all the time, Dad.  Well at least I might be able to buy cheap and make a profit if things turn for the better."

"Not exactly.  They want to value them on the high end if you're going to pay them off, and then if there's a market for them later they want to keep the proceeds."

"So you're saying that if their assets are worthless I should pay them and if they are worth something I should pay them.  And they keep the assets.  I'll just take responsibility for them and they'll collect the dough."

"Yes."

Would you say A.) Sure, Dad.  It's only fair and there but for the grace of God and a few brain cells, a conscience and a bottomless margin account go I.   Or B.)  Um, no.  Blood may be thicker than water but it ain't dumber.

Your government is hoping you'll go with A.   Oh, and they expect that you're ok with adding six to twelve zeroes to the end of those numbers.

President Paulson

So now, in an interesting game of Presidential Succession Leapfrog, the guy who is sixth in line is at the head of the class.  The Secretary of the Treasury is about to run everything in the economy outside of the  Department of Agriculture (or perhaps this week we'll collectivize the farms as well).

Aside: This was supposed to be a humor piece, but can I stop to ask whether it's just me or is that picture scary, I mean in a "They're wearing Totalitarianism in Washington this season" kind of way?  I used to see Secretary Paulson in pictures and feel soothed.  Now I'm not.   But maybe that's because he's about to have more financial power than anyone who has ever lived.

Anyway, in addition to that worry is another, which is that we may be starting a third family dynasty.  Bush, Clinton and now Paulson.  Henry's brother Pat ran for President many times, usually coming in a close 93rd, but haven't we had enough of the family thing in government for at least a few generations?

Oh, you say that they're not brothers, they spell their last name differently.  Well, first of all, that's part of the conspiracy. And second, that's just like you educated elites to try to ram down the throats of us regular folk things like spelling and deduction, and reason and science.   

The good news is that we no longer have to worry about who we choose in the upcoming election.  Both candidates may keep Paulson on the job.  Four More Years. Four More Years.

Where have you gone, Paul H. O'Neill?

The Fat Tax

This past week, the State of Alabama announced a plan to increase monthly health insurance premiums for state employees who are obese.  Media coverage questioned this, focusing on the complex nature of obesity, including the genetic predispositions of body type as well as some of the other conditions that will trigger the supplemental expense, including high blood pressure, high cholesterol and high glucose levels.

Of course it's problematic to punish someone because of a genetic predisposition.  There was less discussion, though, about the growing predisposition of the government to legislate against and punish lifestyle choices, and that's the trend that feels most creepy.   (That and the unasked question of how much the pharma industry was involved in this development).

We've moved our Victorian morality show from street drugs to smoking to eating, and with the trans-fat legislation on both coasts along with this Alabama initiative we're hitting the offenders at both the dealer and user levels. 

The links between obesity and a number of serious health problems have been demonstrated repeatedly.  I find the sedentary nature of our technocracy troubling and certainly want a nation full of fit, healthy citizens.   But I also believe that people shouldn't walk three-aside on crowded city streets and I'm not petitioning my local government for relief.

I am not a libertarian.  I think there are many places where the collective can render superior results for society.   But I don't want my government to get in the business of telling someone to eat less or pay.   We're supposed to be about choice in this country.   Let people do what they want more or less and we'll pay a certain price for it, some more than others, but the alternative is far worse.   

Where does it end?   A calorie-added tax?  An ice cream assessment?  How about a gas tax on beans?  And why not other behavior choices?    Stress is more detrimental to the collective health than obesity.  We can use the toll-lane approach and strap transponders to our bodies.  When our systolic pressure reading goes a certain percentage above baseline we have to pay a blood-pressure toll to our local police force or first responders.

We can measure the indicators for anger and legislate a tax when we get red-faced.  A lack of confidence could be assessable, or passive-aggressive behavior, or addictive tendencies.   How about a negative attitude, or excessive contemplation?

Go ahead, laugh.  But imagine reading in your newspaper, in the 1950s, an article about the first American suburbs, such as Levittown. Imagine some op-ed lunatic ranting about how in 50 years time this would lead to locked communities that would tell you how high your grass could grow and the exact width of the slats in your picket fence.

Or that your grandchildren living in San Francisco would someday be considered criminals for failing to separate recyclables from trash.  You'd just shake your head and turn on Milton Berle.

So check back in ten years and see what they're telling us we can't do then.

Google's Cattle Call

Tuesday's Chronicle reports that an analysis by two German zoologists of more than 8,500 Google Earth satellite images from around the world suggests that cows at rest tend to orient themselves towards magnetic north.   

It has long been known that some animals have magnetite particles in their brains, which act as a kind of compass.  But this is the first suggestion that the phenomenon may also be true for large land mammals.

What has not long been known, but is being suggested as a result of these findings, is that this is an effort by Google to gain dominion over not just the human race, but also "over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth." (Genesis 1:28)

The zoologists found that 2 out of 3 cows were oriented towards magnetic north.  What the story did not say is that it is believed that 1 in 3 cows have shifted their orientation towards Mountain View, California, the location of Google's human corporate headquarters.

It is alleged that cows are being fed edible parcels of text sent from Google servers to bovine clients on ranches and feed lots throughout the known universe.  These cookies are returned to the servers via the cow's grazer browser. 

Whether this is intentional, or what Google plans to do with the information is unclear.  Google officials did not return unplaced phone calls.

The zoologists did not comment on speculation that takeout coffee is being supplemented with magnetite particles in order to align customers towards Magnetic Starbucks.   Of course, there are so many of them in all directions that an interior compass would only become disoriented.

Microsoft Buys Powerset

For all the acquisitions that involve lengthy and painful negotiations, here's one that seems to have interested Microsoft fairly quickly and its easy to see why. InfoWeek today reports that Microsoft (NSDQ: MSFT) is planning to buy search startup Powerset for an undisclosed sum. Kudos to Barney Pell and team.

Powerset was written about even before its launch and even BusinessWeek writes an article entitled: Powerset: move over Google in September 2007. TechCrunch writes about its coming launch in April of this year.

In Hoover's article, he writes about what Powerset brings to the Microsoft table: "a new line of attack against Google, and one that doesn't rely on quickly gained economies of scale like an acquisition of Yahoo would. Instead, Powerset brings new technology to Microsoft: semantic search."

More on semantic search from Hoover's piece:
"Semantic or natural-language search relies on sentence structure, syntax, dictionaries, and thesauri to extract meaning from text, rather than relying on how heavily Web pages are linked to one another to determine the relevance of search results. Under Powerset's hood is decades-in-the-making natural-language processing technology the company licensed from the Palo Alto Research Center, formerly of Xerox (NYSE: XRX)."

The Valley of Happiness

The May issue of Atlantic Monthly cites a study by the National Bureau of Economic Research which suggests that happiness and psychological well-being decrease as we approach our late 40s, after which we become happier again.   Life apparently is a big U-shaped valley of joy. 

500,000 Americans and Europeans were selected for the study, which was published in January 2007.  According to the results, American men are least happy at age 49, American women at 45.  Maybe AARP should change their slogan to "Happiness Begins at 50."

By the way, Europeans are getting progressively happier while Americans are becoming less happy (is it all dependent on currency exchange rates, or just that they don't have King George leading their countries?).

As a 45-year-old American male, I thought about the downward slope of the next four years and decided that if I am entering the shadow of the valley of happiness, pastures are nevertheless rather green and my cup still runneth at least half-full.