Wednesday, January 31, 2007

How many candidates?

What are there now? Sixteen? Seventeen? Huckabee in, Kerry out I think brings us to 18.

Let's try: Republicans: Guiliani, Romney, McCain, Huckabee, Hunter, Brownback, Gingrich, Pataki, Thompson and Hagel.

Democrats: Biden, Clinton, Vilazon, Kucinich, Dodd, Obama, Edwards and Richards

On the Democratic sideline is still Al Gore - who probably could be a serious challenger to Hillary. And, while I've included Guiliani on the other aisle side, and I think he has a real chance to win, I now question whether he wants it. He certainly hasn't lept in full force, and one has the sense that the train is leaving the station.

Richards brings a good resume to the race, and from a distance, seems to have done a nice job as Govenor of New Mexico. However, announcing the formation of his committee on the same day as Hillary may prove to be a portent. I would say she currently has a 40:1 journalist entourage advantage. If they aren't following you around, they aren't writing about you, filming you or blogging about you.....

Kucinich is left of Breznev, makes Hillary look centrist and won't go far. Edwards - still interesting. Has been building real grass roots - may get some early primary leverage.

Gingrich is sensationally bright with a commanding view of the issues, but probably should be someone's Secretary of State or Chief of Staff. I doubt that he is electable. Brownback - I don't know - may become the sweetheart of the religious conservatives, but I just don't see him advancing. Kind of a Bill Bradley type.

Let the games begin...

Saturday, January 27, 2007

Presidential race

I saw Duncan Hunter on TV. I remembered seeing him before, talking about some economic issue.

I also remember that it definitely was NOT a conservative position....


Making my (almost last) trip from Conshocken to Leesburg last night, I again noticed the speed traps on Highway 15 in Maryland - immediately north of Fredricksburg.

You were warned.

Wednesday, January 17, 2007

Whether the economy II

Oil today below $52 per barrel. There are few things that can be more positive for the economy than that.

Flip side - weak earnings report last night from Intel; terrible earnings from home builder Lennar this morning.

Historically, weak housing plus weak homebuilding equals recession. Not clear now, with export markets booming, unemployment still very low (probably a lot of the construction workers now out of work are illegals, so they don't show up in the unemployment numbers), and still attractive interest rates, along with rising financial assets from the recent market run.

My bet - the Goldilocks economy.

Tuesday, January 16, 2007

Life and death II

New developments. First, it now turns out that a part of the life extension showing up in the data is a dramatic reduction in breast cancer. And even more thought-provoking is the possibility that the cause of the reduction is the decision by millions of women to stop taking hormone supplements, which have been widely prescribed for decades for menopausal symptom relief, among other indications.

Hormone Replacement Therapy (HRT) has come under considerable attack in recent years. If this new trend in reduction in new cases of breast cancer continues (it is likely that this new result will cause even more women to stop HRT or never begin) then we'll see another jump in life expectancy.

In an unrelated story, sales of resveratrol, a health food store product supposedly capturing some of the medicinal benefits of red wine, have zoomed after studies showed longer life in rats taking the product. Do not discount the odds of living well into your nineties....

Sarbanes-Oxley - New Developments

There are a number of significant new developments in the world of Sarbanes-Oxley. First and most important is litigation: Free Enterprise Fund v. Public Company Accounting Oversight Board, which seeks to have Sarbanes-Oxley ruled unconstitutional.

I'm a long way from a constitutional scholar, but it seems to me that the Free Enterprise Fund is making an excellent case. They make several points in their case, including that the PCAOB can levy fees and fines on its own - which is a power traditionally reserved for the legislature. As an example, the IRS - which many of us would argue is insanely powerful - can't raise taxes - Congress must legislate a tax increase. PCAOB can raise fees on all public companies at will.

This is course will take years to work through the courts - but may prove to be the fatal shot.

A more near term change comes from the Committee on Capital Markets Regulation, which points out that Sarbox has imposed massive costs on the economy, and a regulatory regime so hostile that foreign companies, which used to visit the previously friendly American capital markets, have decided to raise capital elsewhere. The notable statistic is that of the ten largest public offerings in 2006, none occurred in the U.S.

This leads to unusual bipartisan support, as Democrats like Senator Chuck Schumer see the incredible tax revenue stemming from Wall Street diminishing in the future join conservatives who favor more lassiv-faire markets. While not in the first hundred hour program championed by House Democrats, legislation to amend the well-intentioned but economically poisonous Sarbanes-Oxley legislation.

Finally, the SEC is continuing to postpone Section 404 requirements on smaller capitalization companies - in recognition of the shocking cost to create mounds of paper to satisfy a "standard" that was developed before the widespread adoption of personal computers, networks and the Internet. This documentation requirement provides virtually no value to anyone, does little or nothing to prevent fraud, and imposes an ongoing maintenance cost. In a zany feat of logic failure, the SEC concludes that small companies can't cost justify it - but that it is important for larger companies - where costs routinely exceed $10 million of hard-earned shareholders' money per year - should continue compliance.

Hope for the litigation; write your Congressman for the legislation.