Are We Done Here?

I sort of think we are done here, by which I mean it seems highly likely that Barack Obama will be the next President of the United States.

This is my gut reaction after watching the second debate between Obama and John McCain.

I'll elaborate more when I have time (and on that note, apologies for the relative blog silence of late. Work, as one might imagine, has been absolutely nuts over the last few weeks).

The bottom line tonight is that McCain needed to either have Obama make a gargantuan blunder or McCain had to have some sort of breakthrough performance in which he was able to significantly outshine Obama. Neither happened.

Speaking of Embarrassing...

Last month, I pointed you in the direction of "Our American Prayer", a video in which a variety of movie stars and pop stars were, it seemed, praying to Obama. I still think it's creepy, but today I came across something else that out-creeps "Our American Prayer". Take a look:



This strikes me as wrong on a number of levels. First and foremost, though, if you view this on YouTube and click on the "more info" link, you'll find the following description of what you have just watched:

Sing for Change chronicles a recent Sunday afternoon, when 22 children, ages 5-12, gathered to sing original songs in the belief that their singing would lift up our communities for the coming election. Light, hope, courage and love shine through these nonvoting children who believe that their very best contribution to the Obama campaign is to sing.

Sing for Change was a confluence of hard work, good will, and shared vision. Inspired by ideas raised at a grassroots Obama fundraiser, a music teacher, Kathy Sawada, and the children composed and rehearsed the songs in less than two weeks. Several musicians heard of the effort and volunteered to accompany the children. Parents and older siblings designed and provided the T-Shirts and the banner. There's a first for everything, but rarely do so many firsts come together at once: for the children and their parents, this is their first performance, first video, first banner, and first involvement with grassroots work on a presidential campaign.

As Sunday approached, a neighbor volunteered a home. Production wizards got wind of the project and offered their help in recording it. The likes of Jeff Zucker, Holly Schiffer, Peter Rosenfeld, Darin Moran, Jean Martin, Andy Blumenthal, and Nick Phoenix rearranged schedules to participate. When Jeff Zucker went to pick up the camera package, Ted Schilowitz happened to be there and offered a RED camera set up on a Steadi Cam.

What we accomplished in a few hours on a Sunday afternoon embodies the nature of the Obama campaign: its grassroots inspiration, its inclusiveness, its community building. People pitched in quickly for a cause that resonated with them. There were not many conditions: "Think this is a good idea? Want to help? Great. Sunday at 12:00." At the heart of the project were 22 children and their music. The willingness of all involved to come together for them was a testament to our hope, unity, courage, joy and belief in the future represented by these children.

So let me quickly indicate just a few of my issues with this:

1. Some of these children are as young as 5 years old. Is a 5 year old (much less the children here who are between the ages of 6 and 12) really able to make a conscious political choice for himself or herself? I would argue probably not, and if you grant me that, how are these children not being used as political pawns by their parents and others involved in producing and disseminating this?
2. Given that this can be found here on Barack Obama's official website, Obama and his campaign therefore shares the responsibility for promoting it.
   
3. Heavily involved in apparently every aspect of this was Jeff Zucker. Jeff Zucker also happens to be the President and CEO of NBC Universal, which encompasses not only NBC News, but also MSNBC. That strikes me as a blatant conflict-of-interest at worst -- a clear indication of the bias held by the man atop NBC News and MSNBC at best.
4. While I obviously cannot prove this point, I would be willing to bet an awful lot that if this video featured children singing for John McCain (or George W. Bush), the liberal community would be in an uproar about the exploitation of children, etc. And I would bet even more that the phenomenon would be featured prominently on Countdown with Keith Olbermann, an MSNBC primetime show. (Yes, Jeff Zucker's MSNBC).

I'm sure I could come up with more reasons why I find this offensive, hypocritical and (with apologies for the repetition) creepy, but I'll stop here. I'd be curious to hear via the comments function what you think. Let me know!

Embarrassed Republican

Today, I am horribly embarrassed to be a Republican. The stubborn refusal of House Republicans to pass the Rescue Bill was extraordinarily wrong-headed. I understand sticking to the "conservative principles", but there are times when the urgency of the situation requires action that may run counter to one's instincts and/or convictions. This was one of those times.

Do these GOP legislators -- most attorneys by trade, I suspect -- truly believe that they know more about the financial system than Hank Paulson or Ben Bernanke (to say nothing of Warren Buffet and the other "experts" consulted on this)??? If these financial minds are telling you that this must be done, one should put aside partisan concerns, constituent complaints and simply do what is right for the country -- reelection be damned. I can assure them that their constituents will be a hell of a lot more angry tomorrow when their 401(k) has been devastated or when they can't get a loan of any kind. This is such a huge mistake. Think of the Democrats who likely acted counter to their beliefs after 9/11 for the greater good. This is the closest thing we've had to a financial 9/11, and the GOP has failed the country.

Republicans can kiss whatever fleeting hopes remained of maintaining the White House goodbye, (not to mention both Houses of Congress), and I am sad to say that it's deserved.

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Update (4:15pm): Republicans are pointing to the speech that House Speaker Nancy Pelosi gave on the House Floor prior to the vote as part of the reason the bill failed to pass. I will let you watch her speech for yourself below, but I do want to note that her remarks truly were mean-spirited, partisan and uncalled-for. There was absolutely no reason to make such a speech prior to what needed to be a bipartisan effort to pass the bill. Secondly, it was dishonest, blaming all of the problems in the financial industry on the Bush Administration. Any honest observer will acknowledge that, as I posted here last week, there is plenty of blame to go around. Certain portions at the root of the current crisis began during the Clinton Administration. (Take a look at this New York Times article from 1999 if you need corroboration). Speaker Pelosi knows this, and her choice to take the disingenuous cheap shots she took -- and to do so when she did -- was despicable.

With that said, her ugly rhetoric does not -- I repeat, does NOT -- serve as an excuse for the Republicans who abdicated responsible represenation in voting against this bill (or for the Democrats who did the same thing, for that matter). This was a moment in which those in the GOP voting "no" simply needed to swallow their pride and, as the saying goes, "man up".

Here is Pelosi for you to see and hear for yourself:

Slipping Away

This election is beginnig to slip away from John McCain. To be clear, I wouldn't necessariliy argue that the election was ever firmly in his grasp, however he has managed to keep things close and competitive so far. I had thought things would remain very tight heading into Election Day, and until yesterday, I would probably have predicted another long election night with no winner declared until early the following morning. But now my gut feeling is that it's getting ugly out there, and more worrisome for McCain, I don't think the prospects for a comeback are very good. A few primary contributors to McCain's current predicament:

1. McCain's campaign suspension and return to Washington last week were widely viewed as a political stunt, and one that now appears to have backfired.
2. Initial post-debate reaction seemed to hold that either McCain had been slightly better or that it had effectively been a draw. Either way, that's likely a net win for Obama. Why? Because as the one trailing in the polls, McCain has the burden of significant outperformance on him, and it would be difficult to argue that he significantly outperformed Obama Friday night. Secondly, the foreign policy area was perceived as Obama's possible weakness. By holding his own in the debate, he probably alleviated concerns some voters may have had about his commander-in-chief qualifications. Over the weekend, though, a quasi-consensus developed that Obama had, in fact, won the debate outright -- from a stylistic a perspective as well as a substantive perspective.
3. Sarah Palin has derailed. McCain's choice of Palin, initially a wildly successful political move, may come back to haunt him. In the immediate days following Palin's selection, the Republican base was both excited and relieved. The media buzz surrounding the selection effectively buried the positive reactions to Obama's convention acceptance speech, and questions about her experience (or lack thereof) had the (unintended?) effect of reflecting the experience question back onto Obama. The wheels began to fall off during Palin's interview with Charlie Gibson of ABC News. Though he was condescending and arguably looking to trip her up, the result was nonetheless a perception that she had been a bit shaky in her performance. If the Gibson interview was shaky, her interview with Katie Couric of CBS News last week, however, was an unmitigated disaster. The impression likely left on those who watched the interview was that of someone who is in over her head -- not the impression the McCain wants to leave with a 72-year old nominee. The stakes were enormously high for her convention speech a few weeks ago, and she delivered a game-changing performance. If it is possible, the stakes are even higher now for the vice presidential debate on Thursday, but my confidence in Palin's ability to again deliver a game-changing performance is lacking, and the choice of Palin as a running mate is quickly beginning to look like a big mistake. Palin can turn this around, but she'll have to be nearly perfect on Thursday night.
   
4. The media continue to aid Obama. Ironically, he might not need their help, but nevertheless, the media bias in this election is rather striking. Talking heads on television, op-ed writers in newspapers -- these are people who have enormous power in terms of driving the national conversation, and they have consistently driven that conversation in a decidedly pro-Obama, anti-McCain fashion. (The New York Times has been particularly shameful). This shows no sign of abating any time soon, and it simply adds to the litany of factors now making a victory for McCain unlikely.

Obviously a lot can happen in the next 36 days, but as I write, McCain has likely reached the lowest point of his General Election campaign to date. At this point, I simply don't see a way that McCain will be able to make enough of the uphill climb necessary to turn things around. I suspect this may begin to snowball, that we'll see continued movement towards Obama in the coming weeks, and that on November 4th, we might be going to bed early.

(If this morning's news is any indication, chances are I'm in for another crazy week at work. I will try to chime in when possible, but wanted to get these thoughts "out there" before the "fun" at work begins)...

The Great Unknown

I took the opportunity in my weekly SpliceToday column this week to discuss our country's current financial crisis. I cannot recall a period of time in nearly nine years on Wall Street when I'v been busier or more stretched to the limit. As I prepare to head into work today, there is still no agreement on a bailout (or rescue -- see below) plan, and my Blackberry was buzzing last night with news of Washington Mutual's failure and subsequent acquisition by JP Morgan. These are crazy times...and it ain't over yet. Hang in there!

Without further ado, here's my Splice column...

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It’s been an extraordinary two weeks in what was already a rather exceptional year in the financial services industry. I work “on Wall Street.” In nearly nine years in this business, I have seen some significant ups and downs—September 11th, 2001 most notable among them. 9/11 was traumatic for this industry, but in reality the trauma was primarily psychological or emotional in nature. The last two weeks have also been psychologically and emotionally jarring, but in this case, the financial system of our country has been shaken on a fundamental and systematic level. As I write, both presidential candidates have returned to Washington to work with President Bush and their fellow members of Congress so that the federal government can provide some sort of solution to the current crisis.

It would be reasonable to assume that because I work on Wall Street, I’d be able to offer a unique perspective on what we now face. Yet in many ways, I know as much (or as little, as it were) as anyone else. The extent to which the specifics of the current situation surpass my understanding points to a crucial element of how it is we got here: we as a country, we as taxpayers, we as investors and even we fellow financial services industry workers have been betrayed by the reckless, irresponsible and, yes, greedy, actions of a very few individuals.

So, what exactly is it that I do? Put in the simplest terms, I am a salesman. My job is to convince institutional investors (mutual funds, pension funds, hedge funds, etc.) to buy and sell stocks with my firm. If I am successful in convincing such an entity to begin doing business, I then become something of a relationship manager, by which I mean that my job evolves into maintaining the customer’s business and, whenever possible, increasing the level of that business over time. To do my job effectively, I need a solid understanding of the financial markets—the stock market specifically. My customers do not need my advice on what to buy and sell. They are trained to do that themselves, or someone above them directs their transactions accordingly. What they do need and rely on, though, is my knowledge and feel of when to buy and sell their stocks, and what sort of result they can anticipate once their trade is complete. They count on me to alert them to important news not only about the specific stocks they are trading, but also about the markets in general. Information is vital to success in my job, and the ability to effectively communicate that information is the real key. These last two weeks have been as volatile, uncertain and unpredictable as any I’ve experienced, and without a doubt, everyone’s abilities have been put to the test.

The rollercoaster ride began in earnest earlier in the year, as Bear Stearns fell apart. We shook it off, though, only to watch in amazement again this summer as Fannie Mae and Freddie Mac teetered on the brink of failure, saved by a bailout from the federal government. Smart analysts had months ago warned that Lehman Brothers was in danger, noting the similarities between Bear and Lehman, and the uncomfortable correlation between the types of investments and debts weighing on both firms. While most believed there was no way that Lehman could (or would be allowed) to be “the next Bear,” early this month the writing was on the wall. The reasons for Lehman’s eventual failure are still being sorted out, but the impact of that failure had immediate repercussions.

There was panic. There was panic from customers who watched, ashen, as their portfolios lost value and their year-to-date gains disappeared. I saw very conservative, well-respected and cerebral investment firms engage in what I can only believe was true “panic selling.” There was panic from those entrusted with overseeing the very system now facing a real crisis. As is often the case, here too the panic largely resulted from the many, great unknowns. I certainly don’t know how much more toxic debt lies buried in the books of financial firms across our country, but there is no reason why I should know. More alarmingly, however, the men and women in charge of the very firms nearing their demise didn’t truly know the extent of their remaining exposure either. The SEC, the Federal Reserve, the Treasury Department—none truly knew the extent of the catastrophic precipice on which we found ourselves. Emergency actions were implemented such as a ban on the short selling of stock—something I could never have imagined as I had chuckled in the past on hearing of various emerging markets’ complete and total bans on short sales—or sometimes on selling at all! I’m not laughing any more.

The Thursday after Lehman filed for bankruptcy—in the midst of the most tumultuous week of trading I had ever seen—I had my only moment of true panic. Bear was gone. Lehman was now gone. Merrill Lynch was effectively gone, having been acquired days earlier by Bank of America. That left only two of the handful of Wall Street giants we had for so long been accustomed to: Morgan Stanley and Goldman Sachs. I remember vividly that Thursday as I watched the share price of Morgan Stanley plummet with a velocity and an intensity I’ve never witnessed. Tens of millions of shares of the stock were trading every hour, and early that afternoon, it appeared Morgan Stanley was headed for a Bear- or Lehman-like fate. In the space of only 30 minutes, Morgan Stanley’s stock had fallen more than 50 percent, at one point flirting with single digits. It was only the breaking news of the plan being hatched by Treasury Secretary Henry Paulson that rallied the markets, taking Morgan higher with it.

This small example points to the importance of what the media have taken to calling “the bailout plan.” I think a more appropriate moniker is “rescue.” We’re beyond bailing out. Bailing out is only a temporary stopgap. Bailing out invokes images of buckets fighting a losing battle against a vast amount of water. What we need is a rescue. Coast Guard helicopters, life boats, whatever it takes! Honestly, I can hardly believe I’m writing this. As a Republican (and a Republican primarily for fiscal reasons), the idea of increased government intervention or oversight on the nation’s economy is absolute anathema to me. With that said, it is my firm belief that Democrats and Republicans absolutely must come together to pass some version of the Paulson plan—and sooner rather than later. I hope it will be the most responsible plan possible with respect to the role the government will play in the financial industry in the future. I hope the Democrats won’t take advantage of the vulnerable situation we’re in to insert more government controls than are absolutely necessary. I hope the taxpayer will bear as little of the burden as possible, and that they will stand to reap the majority of the benefits of the plan’s potential upside. But I don’t feel as though now is a time to be picky, and I don’t think now is a time for partisanship.

Say what you will about President Bush, his speaking ability or anything else, but he was excellent when he addressed the nation on Wednesday night. In clear (if sobering) terms, he effectively laid out the facts of the present situation, and skillfully explained much of what led us here. As Bush said:

“The government’s top economic experts warn that without immediate action by Congress, American could slip into a financial panic, and a distressing scenario would unfold: More banks could fail…The stock market would drop even more…The value of your home could plummet. Foreclosures would rise dramatically…More businesses would close their doors, and millions of Americans could lose their jobs…it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.”

He’s right. This is unprecedented, and it’s dire. There is more bad news out there and more pain to come—the extent of which we just do not know. So the unknowns remain, and as unfortunate as it may be, a rescue from the federal government has become the best of a limited number of terrible choices. Those supposed to know don’t know. Those responsible for not letting this happen have let it happen. The actions of a very few have the very real possibility of dragging down all.

Remember, I’m no financial expert, but I do read the markets, and I do know my clients. The markets, my clients and my gut all agree that drastic action is necessary. Inaction is not an option. The sooner we swallow this pill, the sooner we can begin to heal. Take it from me—I’ve got a front row seat.

(This post can also be seen at Splice Today: http://splicetoday.com/).