Seventy-seven years ago today, the U.S. House of Representatives passed the Smoot-Hawley tariff. Seventy-seven years ago tomorrow the knaves in the Senate followed suit, and seventy-seven years ago on June 17th the ludicrous President Herbert Hoover signed it into "law," thus helping to mire the world for years in a Great Depression.
Gore, by contrast, had served in Vietnam. He was a stable family man. He was regarded as a centrist Democrat, a foreign policy expert and a Blue Dog hawk on national security. And at that time, in that campaign, he delivered the following speech to the Center for National Policy on September 29, 1992. The point of the speech was to dent Bush 41’s unrivalled foreign policy credentials by making him look weak in the face of threats. That was no small task, given that the Gulf War was just about 18 months in the past and the US was still enforcing the no-fly zones over Iraq. Bush 41 had also ordered the 1989 invasion of Panama to deal with dictator Manuel Noreiga, a successful military operation that went off almost without a hitch.
The thesis of the Gore speech: Reagan-Bush had looked the other way and let Saddam Hussein become a terroristic menace and a WMD developer. They had ignored Saddam’s many operational ties to terrorists over the years so they could maintain relations with him and offset the threat from the mullahs in Iran. Reagan-Bush and then Bush 41 on his own had shown weakness in the face of the threat from Saddam’s Iraq, a weakness that was not offset even by the 1991 Gulf War victory. Gore’s speech was intended to make an issue of Republican weakness in the face of terrorism, and in the face of Saddam’s hard and verified connections to terrorism in particular.
Just so we’re clear on this, the 1992 version of Gore accused Bush 41 of lying by minimizing the threat that Saddam posed to the US and the world. The current version of Gore accuses Bush 43 of lying by overstating the threat that Saddam posed to the US and the world. A competent MSM would ask Gore to explain why he’s such a Goldilocks on such a difficult issue, if naked politics can’t explain it.
Now some of Gore’s charges may even be true. The pre-9-11 world was very different from ours with respect to how we view countries that harbor terrorists. President Reagan had even decried Israel’s 1981 raid on the Osirak reactor. But this is Al “he played on our fearrrrs” Gore we’re talking about. This is the same man who, in February 2002, promoted a “final reckoning” with Iraq only to turn against that same reckoning on the eve of its launch. This is the same Al Gore who in 2004 intentionally conflated the abuses at Abu Ghraib with official US policy to confuse the issue and undermine the war. This is the same Al Gore who denounced US war policy in in Jeddah, Saudi Arabia last year. This is the same Al Gore, 1992 and 2007, only…totally different. He’s grown into his own bizarro doppelganger as political sands have shifted from Democrats positioning themselves as credible hawks to isolationist doves.
Russia today is a much diminished version of the Soviet Union. The population of 140 million is shrinking because of a plunging birth rate, and falling life expectancy. The Russian GDP, at $900 billion, is less than seven percent of the United States (which has more than twice as many people). That, however, is an improvement. In the early 1990s, when economists and accountants got the first good look at the Russian economy since the early 20th century, it was found that the Russian GDP was about four percent of the U.S. GDP. Add back all the lost components of the Soviet Union, and you still don't have a GDP amounting to more than six percent of the American one. How did the Soviet Union achieve superpower status on such a thin economic base? They did it mostly with illusion, and an excessive arms budget that ruined the economy. Starting in the 1960s, the military got a priority on government spending, and permission to build an industrial complex that dominated the entire economy. This was part of a political deal, to keep one faction of the Communist Party in power.
With a GDP more than ten times the size of the Soviet Unions, the U.S. could spend five percent of GDP on defense, and far outspend the Soviet Union. Worse yet, Soviet accounting practices, like so much else they did, were opaque and self-delusional. It wasn't until after the Soviet Union collapsed that anyone could get an idea of how large the Soviet defense budgets were, and it turned out they were less than half the size of the American ones. Suddenly, a lot of Soviet military policies made sense. Russia bought lots of weapons, but did not have the money to maintain them, or even allow the troops to train with them. That was known, and in light of how the Soviet defense budget was set up, was understandable, and inevitable.
The really bad news is, most Russians are still not aware of how screwed up their Soviet era military was. There are two reasons for this. First, Russians take for granted how their armed forces operates. Russians complain about the brutality and incompetence in the military, but that's all they've ever known. Second, Russians remember fondly that their ramshackle armed forces defeated the Germans during World War II. What the Russians play down is how much the Germans lost World War II in Russia, rather than being beaten. The Germans made a lot of serious mistakes during the war, while the Russians got their act together. What Russians fail to realize is that the Soviet Union was an accidental, and largely imaginary, superpower. Russia has long employed large scale deception, and the Soviet Union continued this on a sustained basis. Military weaknesses (poor training and readiness) were hidden, and strengths (sheer number of weapons and troops) emphasized. But as was seen many times (from Budapest in 1956, to Chechnya in 1994), the Soviet military system produced little in the way of real military power. Soviet weapons, as impressive as they appeared to be, always came out a distant second when they were used against Western ones. The main thing that kept the Soviet military reputation going was the need of Western militaries to make the Soviet Union look strong, in order to justify high Western military budgets.
The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms.
As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive. The Soviet leadership was confronted with a difficult decision on how to adjust. There were three options--or a combination of three options--available to the Soviet leadership.
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Unable to realize any of the above solutions, the Soviet leadership decided to adopt a policy of effectively disregarding the problem in hopes that it would somehow wither away. Instead of implementing actual reforms, the Soviet Union started to borrow money from abroad while its international credit rating was still strong. It borrowed heavily from 1985 to 1988, but in 1989 the Soviet economy stalled completely...
The money was suddenly gone. The Soviet Union tried to create a consortium of 300 banks to provide a large loan for the Soviet Union in 1989, but was informed that only five of them would participate and, as a result, the loan would be twenty times smaller than needed. The Soviet Union then received a final warning from the Deutsche Bank and from its international partners that the funds would never come from commercial sources. Instead, if the Soviet Union urgently needed the money, it would have to start negotiations directly with Western governments about so-called politically motivated credits.
In 1985 the idea that the Soviet Union would begin bargaining for money in exchange for political concessions would have sounded absolutely preposterous to the Soviet leadership. In 1989 it became a reality, and Gorbachev understood the need for at least $100 billion from the West to prop up the oil-dependent Soviet economy.
How is that hearing going, Barney Frank?
Our markets turn their potential to you, whoo hoo hooWhat’s that you say, CFTC
A government agency must find something newsworthy to do, true true true{Fade out with some winsome guitar plucking, with a “goo goo g’joob” thrown in for good measure …}
We believe in the individual, in his wisdom and his decency. We oppose all infringements on individual rights, whether they stem from attempts at private monopoly, labor union monopoly or from an overgrowing government. People will say we are conservative or even reactionary. We are not much interested in labels but if we were to choose one, we would say we are radical.Nice.
alt="Price for 2008 Republican Vice-Pres Nominee(Others on Request) at intrade.com"Look at how much society is investing in cancer. In the absence of better care, 42% of everybody out there is going to get cancer. And half of those 42% are going to die of cancer. It’s the leading cause of death among Americans under age 85. So how much are we spending on drugs for cancer? We have a $12 trillion GDP [gross domestic product]. And we’re spending $15 billion. If I do that math, 1/800th of GDP for the leading cause of death. And people say cancer drugs are bankrupting America! Give me a break.1/800th seems about right to me. I'd rather spend my money throughout my life, not mostly at the very end of it. And households continue to make gains in buying power (except for healthcare and education, which are coincidentally the most heavily government subsidized sectors).
How many times have you paid $1 for a cup of coffee and after the clerk said, "thank you," you responded, "thank you"? There's a wealth of economics wisdom in the weird double thank-you moment. Why does it happen? Because you want the coffee more than the buck, and the store wants the buck more than the coffee. Both of you win.
Economists have long understood that two people trade because each wants what the other has more than what he already has. In their respective eyes, the things traded are unequal in value. But this means each comes out ahead, having given up something he wants less for something he wants more. It's just not true that one gains and the other loses. If that were the case, the loser wouldn't have traded. It's win-win, or as economists would say, positive-sum.
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That's why I worry when I hear politicians say things like, "I believe in free trade, but it has to be fair trade". That particular quote is from a presidential contender, Mike Huckabee, former governor of Arkansas.
The Exchange has listed a contract on Michael Bloomberg (Mayor of New York) announcing his intention to seek the Presidency of the United States in 2008 as an independent candidate. This contract can be found under Politics -- 2008 US Election -- Michael Bloomberg to run as Independent. This contract will settle (expire) at 100 ($10.00) if Michael Bloomberg (Mayor of New York) announces his intention to run for President of the United States in 2008 as an Independent candidate. The contract will settle (expire) at 0 ($0.00) if he does not make such an announcement. Expiry will be based on official and public announcements made by Michael Bloomberg and as reported in three independent and reliable media sources. Due to the nature of this contract please also see Contract Rule 1.9 Unforeseen Circumstances. The Exchange reserves the right to invoke Contract Rule 1.8 (Time Protection) if deemed appropriate. Any changes to the result after the contract has expired will not be taken into account - Exchange Rule 1.4 Please contact the exchange by emailing help@intrade.com if you have any questions regarding this contract before you place a trade.I've traded this a little bit, but am currently flat.
After the debate, the pundits were all agreed that Royal had scored some points, and even die-hard Sarkozy fans openly worried that Royal had bested their champion. The next morning, newspapers and radio stations still conveyed the impression that Royal’s performance had probably helped her. However, the trading pattern one could observe on NewsFutures and other prediction markets told a different story altogether. The price of Sarkozy’s contract actually rose a little during the debate and just after, as evidenced in the chart at left. The next morning, this gain held, even as political pundits on the radio stations were still praising Royal’s performance. The disconnect continued until the afternoon, when the results of a poll taken just after the debate showed that it was Sarkozy that had come out on top, confirming the market’s impression.
So, once again, prediction markets performed quite well in an electoral context. This, of course, won’t come as a big surprise to anyone familiar with the field.
Here is an apparent arbitrage:
Sell Clinton (bid is now 38.3), Obama (16.5), Gore (7.3), and Edwards (3.6) for a total of 65.7. Buy a contract for a generic Democratic win (ask is now 56.8). You pocket the difference (65.7-56.8=8.9). You have to pay out on the first contract if one of these four candidates wins, but in that case you are covered by the second contract. The only contingency in which you lose is if Clinton, Obama, Gore, or Edwards end up president as an independent or Republican candidate, which seems completely unlikely.
So why am I giving away this arbitrage opportunity for free? I must be either unsure of my analysis, or motivated by the search for truth rather than money. Your call.
"If a named individual from this group, 2008 US Presidential Election Winning Individual, receives his/her political party nomination, the named individual contract listed in this group will be merged into the relevant political party contract in the contract group named 2008 US Presidential Election Winner (Political Party).jck sounds like someone who makes money at Intrade/TS. Not a rare breed, but not common, either.
E.g. if the Democratic Party nominates Hillary Clinton as their candidate for the 2008 presidential election, all Open Interest (member open positions, not open orders) in the contract 2008.PRESIDENT.CLINTON(H) will be merged into the Democrats to Win contract in the contract group titled 2008 US Presidential Election Winner (Political Party)."
Therefore if you are short H.CLINTON and long "Dem to Win" your positions self-cancel.
For the nominee issue,I mean that it is possible for the initial nominee to be different than the final one,without being morbid for exemple:accidents happen,scandals happen etc...in that case the merging will not be reversed according to the rules and another candidate would be nominated who will also be subject to the merging rule except this time you do not have a long position in "Dems to Win",so you are no longer in an arb situation but a speculative short.
Another rule than can create havoc with this arb is in the notes:"In the unlikely event of the untimely death of one of the named individuals, all trades will be unwound and fees reimbursed to members accounts. (This only applies to contracts that have not been merged with a Political Party contract)."
This means that you won't get the proceeds of a short position on a non-nominated individual if he doesn't survive past the election results.To be sure we are talking long shots but in risk arbitrage one should try to anticipate most possibilities and read the rules carefully to see how they will be handled...This arb is fairly priced given transaction costs and cost of money,and i wouldn't do it for that reason.
