Friday, September 26, 2008

The First Obama-McCain debate and more housing woes

James Call: Expert! Not really an expert in anything, I am simply slightly better educated than your average American. Hey, let's face it: it's not hard. Just read for half a fucking hour. Onwards!

Our first question comes from "Kerrianne":

Who won last night's debate?

Well, that depends on who you ask. The polls won't really reflect this event until early next week.'s analysis is a narrow win for Obama based on certain key moments, but most of the mainstream media are saying it was a very narrow McCain victory, although certainly the "liberal" pundits are saying Obama while the "conservatives" are saying McCain. My personal analysis is that while Obama squandered an opportunity to deliver a knockout blow to McCain, the debate doesn't really change anything. I'll explain why below.

First off, full disclosure: I am for Obama. I hope this will not deter any of my right-wing friends who may happen to be reading this blog. I am for Obama, but politics is an art that I savor. Last night I watched the debate with people who kept flapping their liberal gums off and I couldn't hear half the fucking thing. I was so livid. Anyways...

It's important to realize that the punditry determined ahead of time that McCain would have "won" the foreign policy part of the debate no matter what. That John McCain is a foreign policy expert. As I've tried to explain before, this isn't true; Obama is very well versed in foreign affairs; John McCain doesn't know some basic facts. I'm sorry to harp on the leader of Spain issue, but I knew who Zapatero is, and I'm a fucking 29 year file clerk and musician.

If you don't want to read this whole bit, let's just say: McCain won vocal delivery, Obama won body language, McCain appeared angry and frustrated but also more passionate, while Obama came off as cool but also timid at times.

The narrative is that McCain is the foreign policy leader, and this is his campaign strength. He plays to the basic Reagan/Bush I & II "being a strong leader is attacking people with bombs" narrative. It's very effective for the average American who doesn't read. After all, "we'll fight them over there so we don't have to fight them here" sounds like a more secure policy than, well, we'll negotiate but not concede. Again, it isn't true, but what's true doesn't matter in politics. It's what's easy to understand. And Obama's foreign policy is not as soundbite friendly as McCain's (Soundbites are something Obama should be working on in general, and I honestly don't know why David Axelrod and whatshisname Plouffe aren't more insistent with him on this point. I also wonder the extent to which Obama has taken the time to watch the Reagan-Carter and Clinton-Dole debates).

Last night's debate was supposed to focus on foreign policy, officially, but in light of the economic meltdown, the economy had to mentioned. It was mentioned in the beginning, and right again at the end. Obama narrowly "won" these sections. Nonetheless, I feel Obama lost an opportunity to really go for the jugular, to call McCain on his campaign shenanigans of the past week, and to really ravage him on the issue of the economy. Instead, Obama demurred to Jim Lehrer and stuck to the script. I consider this a mistake because polling at rasmussen and elsewhere shows that the economy is the top concern of 44% of voters (around there), followed ny national security at only half that amount (22%). People are losing homes and jobs; do they give two shits about depressing-ass Iraq anymore? Not so much.

Obama in general missed a lot of opportunities to really rip into McCain, and in terms of language, McCain won the debate, for the most part. McCain constantly kept saying "Obama doesn't understand." He used that phrase at least 3 times. He also called Obama slightly naïve. This reinforces (perhaps) the "Obama isn't ready to lead narrative". Obama was very wordy, which perhaps deflected that message. He seemed prepared, but he should have spoken more slowly. That is what McCain did well: spoke slowly and delivered easily digested sound bites. Obama came off as more litigious. His language was also far too moderate. Most of the time he said McCain "misrepresented" his views. He would have scored far more points by saying, Olbermann-style, "Senator, you are LYING." That was my biggest wish for last night, that I did not get: for Obama to simply say LIAR, LIAR, STOP LYING over and over again. People respond to simple language!

Further, it would be a good opportunity to rile McCain himself up. In terms of body language, Obama clearly won last night, including the foreign policy bit. McCain came off as condescending and looked like he was getting pisssssssssssed whenever Obama nailed him. Obama came off as cool as a cucumber, and he finally stared directly in the camera for a bit, thank God. Plus, his smile is killer. He's gotta smile more often and speak slower. And check out McCain - it looked like his fucking head was going to explode at times. Seriously, watch clips of the debate where Obama is ripping McCain a new one, gently, and just watch McCain flare up. Honestly, this is why Obama should come on stronger at the next debate. I want to see McCain turn around and say "Listen you nigger, you don't know what you're talking about!" McCain's temper is legendary and off-putting in same way Nixon was off-putting. Obama's gotta taunt him a little bit more.

McCain did deliver the one kinda misty-eyed part of the night, about some mom of some soldier who died, but who cares. The debate was not a game changer. Obama won the crucial parts, while McCain won the foreign policy bits. The spin is not going to change.

And let's assume McCain gets, at best, a 5 point bounce come Monday, based on this debate, and the two are neck-and-neck again. Well, credit is frozen, and this coming Friday, a tremendous amount of people are getting laid off. I would guesstimate at least 100,000, although I could be wrong. There might also be a bailout bill by tomorrow, which will dominate the airwaves. It sounds like the Dems are caving to the House GOP and introducing some very piss-poor elements into this bill, meaning the bill will pass in a bipartisan manner but both parties will be in the doghouse with voters. Neither Obama nor McCain should endorse this bill.

I know the Congress genuinely wants to get the markets running again, but if I were Pelosi and Reid I would just say "fuck it" and let the bill collapse until we've got a new President and Congress - guaranteed to be far more Democratic. As an alternative to this, the initial funding of $350 billion being offered should be cut back perhaps to $50 bil, half the size of the past stimulus bill. Why risk political suicide over a terrible piece of legislation anyways? The markets are still fucked - credit is gonna be frozen or slow for at least 2 years.

Bottom line: the debate did not change the narrative. McCain still looks like an angry child and Obama looks like a weak adult. Obama needs to "seal the deal" by speaking more slowly, with far fewer pauses, and in more digestible soundbites. Just get the man stoned and make him watch the Clinton and Reagan debates, for fuck's sake. Oh well.

RECOMMENDED READING: has initially polling in that will cheer the Obama supporter; I hope they're right. But I'll be staying tuned to Republican-weighted in coming days for sure. Always prepare for the worst!

Our next question comes from "Tore":

Can you explain in james call layman terms (full of expletives and funny analogies) why the housing market is so fucked right now?

I'll give it a shot, you cunt.

Listen - I tried to explain this last time... all the liquidity (free cash) from the dot com bubble had to go somewhere, and the forces that be settled on housing - who knows why, market mob mentality probably - and decided that the value of housing would only ever go up.

So banks decided they could lend to even dumb fucks like me, people with lousy credit, because I mean hey, even MY house was going to keep raising in value, forever and ever, into the sky. Even if I lived 90 miles from my job in the middle of the country in a place nobody likes.

You could, until recently, constantly refinance your mortgage - take out a new loan and use it to pay off a large chunk of your old mortgage and go forward in life with a lower interest rate. Especially since the Fed Funds Rate, the kind of "master" interest rate for the whole country, was so low under Alan "Mother Brain" Greenspan, pretty much everyone could be all "Wheee this adjustable-rate mortgage means I can keep up with my house payments because my house value keeps rising, and totally supplements my shitty income from working in a sub-par job that I have because the union movement has been totally destroyed in this country" (a topic for later) and life was ok, although it was ALL based on debt - as well as personal credit card debt, a lot of the time.

And here's the thing - because mortgages were sliced and diced and repacked into CDOs (see last post), the rising tide lifted all boats, including the shitty ones, and the eventual rapidly falling tide sunk all boats, including the very sound ones. People with fine credit are rapidly losing value on their homes because the market has effectively decided that all homes are worthless.

There have been a few little bubbles where this is not true, and these are typically places people actually want to live. New York, San Francisco, Boston and a few others have been largely safe because people will always want to live in these areas, because shit actually happens there, and they are nice. Even then, we are now seeing falling real estate prices in SF, Boston, and finally even here in the Big Apple! (although losing 30,000 financial jobs in a couple of months doesn't hurt, either)

When will the market bottom out, so we can start buying homes (those of us with money or good credit, that is) and wait for the value to rise back up? No one knows. Part of the bailout plan is to use "reverse auctions" to determine the actual eventual value of toxic housing assets, which the govt will then acquire for slightly below that value, eventually making a profit, although this new house GOP throw-money-at-the-failing-banks-for-free strategy certainly fucks that up a bit.

But the bottom line is that no one really knows what these houses are worth anymore. Certainly there are some undervalued ones in the East Bay of SF and some still overvalued ones outside of Indianapolis. It will take years to sort out. Meanwhile, we're going to see the rise of a lot of multi-family homes in houses designed for the typical nuclear family, a few very clever real estate entrepreneurs make out like bandits eventually, and a severe tax burden for the rest of us. I do not expect the real estate market to pick up for at least 3 years, perhaps more like 5, and if we ever do get a "boom" again, not for another 10 years. And, hey, shouldn't we avoid more of these "booms"? Will we ever learn our lesson?

This is why history and economics lessons are so important - why Americans should get 30 minutes paid time off during each day of the workweek to read the newspaper. Of course, that's a Commie fag Old Europe idea, so instead I encourage all of you to read The Decline and Fall of the Roman Empire by Gibbons and just get ready for that shit.

RECOMMENDED READING: Just everything I posted yesterday. I don't know of any good books right now specifically on the credit woes affecting households on a micro rather than macro level. Hey, just talk to your family and friends! They're all losing their houses, pensions, and jobs, aren't they? No reading necessary, baby!

Expert out!

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