Loose Ends... Vol. V

Ok. So, I hope this will be an anomaly this week. I didn't get any other posts out there as I was traveling for business and then family reasons. This left me with little time to write anything this week much less the previously promised presidential candidate breakdown. But, enough excuses... I'll get to that this week. On to Loose Ends...

The biggest story on the national news front is Barack Obama's selection of Joe Biden (D-DE) as his running mate on the Democratic ticket. Biden has deep experience in the Senate and has twice attempted a run at President. Biden dropped out of the Democratic Primary on the night of the Iowa caucuses earlier this year as it was apparent that he had no chance. I think that Biden is a solid choice for Obama. He is outspoken, has deep foreign policy experience, and can be (at least somewhat) positioned as "different" from the rest of Washington's political class despite his 35 years in the Senate. I look forward to his speech Wednesday night at the convention. We'll see how the McCain campaign counters with their own VP choice (most likely) later this week. My money is on Mitt Romney. In other interesting election news this week, McCain took the lead over Obama in this Zogby poll. It's still early, but it is interesting.

In the financial world this week, the continuing saga of Fannie Mae and Freddie Mac scripted another chapter as their stocks tumbled roughly 40% (again!) on growing concerns over their need to raise capital and/or a government bailout of the GSEs. Fannie and Freddie have been labeled by many as "too big to fail" which should be concerning to everyone. This is a very complex issue, and a failure of either of them would send shockwaves through the economy. Unfortunately, I think that these problems are already manifest from years of malinvestment and misguided regulation (or perhaps the lack thereof). It's just a matter of when and how this will rear its ugly head. Perhaps a government bailout will ease the burden... but, perhaps not. Government intervention has a tendency to reward people in the right place and encourage other bad behavior. Don't you wish you were too big to fail? In the meantime, FED Chairman, Ben Bernanke, spoke at the Federal Reserve Bank of Kansas City's Annual Economic Symposium this week. Big Ben had this insightful comment for his audience, "... the financial storm that reached gale force ... has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment. Add to this mix a jump in inflation, in part the product of a global commodity boom, and the result has been one of the most challenging economic and policy environments in memory." Did he just now figure this out?

That's it for tonight - I need to get to sleep. This week I promise there will be more content!