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I was amazed by this article when I read it this week in the London Review of Books, by Perry Anderson, a professor of history at UCLA, on the creation of the modern political landscape of Turkey.

'After Kemal' by Perry Anderson (wikipedia)

Other LRB articles by Anderson here.

Just read it on a website, and checked on CNN and NYT - Madelyn Dunham, grandmother of Senator Barack Obama, died this morning after a battle with cancer.

As someone who lost both parents and grandparents before turning 20, I can only offer my condolences to the Dunham and Obama families.

She was a little less than 48 hours from in all probability seeing her grandson elected President.   So sad.

--D.

Today is one of those days I wish I could hit 'back' on my browser and make a story I just saw go away.

NYT Obituary

I really should have written about my expectations for the obviously-coming and now-here collapse of the US sub-prime market.   I'm no economist but I do read various things (NYT, Atlantic, Economist, IHT, etc) that have been pointing out since 2007 that the US housing market was headed for a gigantic fall.    Anyone who followed the business press even at the margins as I do knew well in advance that there were a lot of people who were looking at some serious risk of losing their homes.  

I'm a coward when it comes to investing but for the last year I've not put a cent into stocks, putting my RRSP into cash and GICs, because it was also obvious that the only thing floating the US economy as high as it has been was the huge increase in housing prices - people used their homes like ATMs, piling up debt against their equity to add the new hot tub, remodel the kitchen, put kids through college, etc.

It really was a question of when, not if, this would all come back as pain.  Having a net negative savings rate for a while meant the US was spending more than they earned... this was great for the economy, but portended doom if the source of the money dried up.

And dry up it did in the last few months.  

I won't claim to have predicted how badly the investment banks on Wall Street did; it was obvious that the sub-prime industry was going to claim a large number of firms,  like Countrywide, who specialized in mortgages.    It was possible for some banks to foresee the collapse of sub-prime market - some banks and funds hedged or got out of the market in advance of the collapse - Goldman Sachs comes to mind, I believe (not that it did them any good, really).

Once you knew that mortgage-backed CDOs were looking like turning into papery pumpkins at some upcoming sub-prime stroke of midnight, it was also clear that insurers like AIG were going to suffer when all the hedges and insurance companies made to reduce risk, kicked in.   Again, I didn't think AIG would get hit as hard as they did, but it was pretty obvious they would get nailed.

One thing I also thought would happen (but hasn't yet) was the bond and debt rating agencies getting their asses reamed.  Moody's and Standard and Poor rated all the mortgage-backed paper, from AAA on down to junk.   Early on as things began to become unstuck, a number of articles I read pointed out that the rating agencies were probably looking at a lot of lawsuits that could seriously harm them - and if they were punished by the SEC or someone this could cripple the debt rating services they provide, and possibly require a massive re-rating of existing debt.    Any debt that was rated lower could then trigger massive selloffs - some entities are required by law to only invest in AAA-rated securites (municipalities?) and to have a huge chunk of paper drop from AAA to something lower would force them to be sold into a market where they were well below face value.

Another looming issue is the monoline bond insurers (link) - any failures of these would have huge impacts on the bond market. 

I don't think the worst is over yet.   Not by far.   The effect on the emerging markets (the BRICs - Brazil, Russia, India and China) is just biting - Russia is getting hit bad as it turns out all the huge piles of US dollars that Russia as saved against a economic bad day may have been out-borrowed by Russian companies.  But I haven't had the luxury of looking at this much - it's just mentioned consistently as a 'next up' in stuff I read.

So we'll see.

--D.

   
Ok, I got lazy and decided to WATCH the election and not write about it.

Vacation over.

So Mitt used the CPAC conference to save himself some money and sleep - with Huckabee draining support off on the right, Romney was stuck between the 'liberal' McCain and Huck, who scored with the social conservatives who never jelled for Mitt.

Given that Mitt spent a rumoured $35 million of his own money on his campaign, I can't think he wanted to be in a position to continue to spend his own money in an apparently vain quest for more delegates, when McCain had over half the total needed to clinch the nomination after Super Tuesday...

At this point I'm not sure what Huckabee is hoping for - apart from 'airing the issues' out, I can't think he's banking on snagging all of Romney's votes?   If he did, admittedly he'd start winning states, so I guess we'll see in the next few states how that might play out - but given I'd been hearing stories about Huckabee being short on cash, and the inevitable 'momemtum' stampede of support and dollars to McCain, I can't see Huckabee pulling in enough oxygen to keep his campaign in other than tread-water mode.

Of course there's still Paul and Keyes in the running, but apart from the libertarian and extreme social-conservative edges of the party, they just don't make enough noise to matter beyond speaking out on issues.   They won't be challenging for the nomination at the convention...

I think the next week or so will give a better idea what Huckabee is up to.  We'll see.

--D.

I saw something saying exit polls in Cali not good for Obaminator.   But given the lateness I expect it'll be tomorrow to know if it pans out.

Romney's getting smoked.

Got home to find out the details on Huckabee's win in WVA - seems that after McCain's delegates were 'a distant third' in voting after one round, they pretty much all swapped to Huckabee to avoid a Romney win.  Romney's campaign is predictably unhappy about this, claiming there must have been some 'backroom deal' - reminds me of the stories my don told me about how Frank Miller (link) beat Larry Grossman (link) for the Ontario PC leadership - when it was down to three (Miller, Grossman and Dennis Timbrell), some Miller people switched to voting for Grossman, eliminating Timbrell.   (The story continued that once it was Miller and Grossman, the rural support was shored up by allegedly pointing out Grossman's religion, which is left as an exercise for the student to guess at.)

In short, it was in McCain's interest that Romney lose and his people needed no deal with Huckabee to do what they did.

Looking forward to the results of the evening - without having looked at polls, I'll be dumb and say McCain will do the best on the GOP side and it'll be a mix on the Democratic side.   My upset pick is Hillary kicking Obama's ass hard in NY and Cali.   We'll see!

--D.

It's been interesting watching the progress of the US Presidential primaries over the last several weeks - while the Democratic primaries were pretty predictable in boiling down to Clinton vs. Obama, the Republican primaries were decidedly more of a crapshoot, at least to me.

I never thought Tancredo or Hunter had any serious base of support to tap.  They speak for the nativists in the GOP - I agree that the GOP is a multi-headed creature, a fusion of financial, national defense and social (theological )conservatives, along with a strong nativist contingent.   Grover Norquist would be a reasonable example of the first group - Norquist (link) is strongly conservative financially, but stays silent on religious/moral issues.  In the aftermath of the Terry Schiavo case, Norquist suggested that the social conservatives wing had ignored the general public opinion and hurt the party.      

Broadly labelling the GOP candidates as their 'faction', I'd say it looks like:
Defense: McCain, Giuliani
Financial: Romney
Social: Huckabee, Thompson, Keyes
Libertarian - Paul
Nativist - Hunter, Tancredo

The nativists dropped out first, fast and hard.    Next went Ol' Fred, whose lackluster campaign and apparent distaste for hard work and staying awake led him to shuffle off the stage post South Carolina.    Giuliani, with his 'Go Big or Go Home' bet on Florida to kickstart his run into the nomination failed to win big, and so went home.  Rather predictably, Giuliani endorsed McCain, the other 'defense' candidate.   The three main GOP contenders left (neglecting Paul and Keyes, apologies to both men) cover the three remaining 'factions' - defense (McCain), social (Huckabee) and fiscal (Romney).   The reaction of the hard-line right wing to each man has been interesting.

From time to time I like to read FreeRepublic.com (link) and get a overview of how the regulars there are reacting to various news stories.   In my view, they represent the footsoldiers of the hard-right wing.   For a long time, they were supporting Thompson as the Great GOP Hope as well as Tancredo and Hunter.    The collective opinion of the group shares the right-wing pundit dislike of McCain (bordering on abject hatred), labelled Huckabee a 'socialist', and so on.   Romney now has become the fallback candidate, with a number of posters stating they will stay home rather than vote for McCain in the general.

This represents a serious problem for the GOP - McCain seems to do best in polls versus both Clinton and Obama, but the impact of Freepers and their ilk's hatred for McCain could well lead to a sapping of grassroots support from the GOP 'base' of social conservatives.  This hatred was no doubt stoked by the endorsement of McCain by Gov. Schwarzenegger, who, as a middle-of-the-roader has earned nothing but contempt ('The RINOnator', etc.) from right wing partisans.

In a close election, it's vital that your supporters are energized and motivated to turn out - the Democrats have that in spades, but the GOP is in danger.   We'll see how things turn out, but McCain fundamentally is disliked by segments of the party base, who see him as the 'pick of the establishment' and may be prepared to punish the party by sitting this one out.

--D.

Well, I usually have a lot to say, so I guess either I get around to it or give up thinking about it.