Newly released state-by-state approval numbers for President Obama suggest that in 2012 he could face fewer options for assembling an Electoral College majority and increased pressure to capture racially diverse states. As a result, Colorado, Virginia, North Carolina, and Florida, among others, appear to be evolving into critical battlegrounds on the campaign map.Nice.
The polling results, released earlier this week by Gallup, underscore both the stability of each party’s Electoral College base and the shifting roster of swing states that could decide the 2012 contest.
In all, the compilation shows that Obama’s approval rating exceeds his disapproval rating in states with 301 Electoral College votes--well down from his 365 total in 2008 but still enough to win. That total, however, includes North Carolina, where Obama’s approval and disapproval ratings are virtually even, and Georgia, where Republicans remain skeptical that he can seriously compete, despite signals from his reelection campaign that it intends to. If those two are removed from the list, the states in which Obama’s approval number exceeds his disapproval rating provide exactly 270 Electoral College votes, the bare majority needed to win.
President Barack Obama is facing mounting doubts within his own party about his re-election prospects, with fellow Democrats beginning to ask if Hillary Clinton would have made a better president.I coulda told you that!
The Federal Reserve sent investors lurching from worry to hope as it warned that the economy would remain weak for some time but said it was prepared to take further steps to shore it up.See also LAT, "Dow gains 429 after remarks from Fed."
The Fed's statement, which included plans to keep interest rates near zero for at least the next two years, ultimately sent the Dow Jones Industrial Average up 4%, its biggest daily gain since March 2009. Yields on Treasurys dropped as money poured in.
Trading was chaotic. Investors were initially discouraged by the Fed's announcement just after 2:15 p.m. EDT, disappointed that policy makers didn't announce any new initiatives and disheartened by the Fed's gloomy appraisal of the economy. That sent the Dow down more than 200 points within minutes.
Then, just as quickly, the market rebounded as traders focused on a phrase low in the Fed's statement, which said the central bank had discussed a "range of policy tools" that it was "prepared to employ." That prompted speculation that the central bank might soon step in with additional measures aimed at spurring the economy. In the last hour of trading, the Dow shot up 500 points, closing with a gain of 429.92 points, or 4%, at 11239.77. In Asia Wednesday morning, Tokyo shares opened higher, rising 1.9% at the start of trading.
The downgrade of the U.S.'s credit rating sparked a global selloff on Monday, pushing the Dow Jones Industrial Average to its sharpest one-day decline since the financial crisis in 2008.Interesting how Treasury securities remained a safe haven. That can't go on forever.
In scenes reminiscent of three years ago, selling accelerated as the day went on, and investors were forced to sell to meet margin calls from lenders demanding more collateral. The Dow ended the day down 634.76 points, or 5.5%, at 10809.85, its lowest close since last October. Trading volume of stocks listed on the New York Stock Exchange hit the fourth-highest level in history.
It was the Dow's biggest percentage drop since December 2008 and its sixth-largest point decline ever. Other major stock indexes also fell heavily. Traders also dumped corporate bonds and industrial commodities.
Investors fled to the traditional refuges: gold, currencies of safe-seeming countries such as Switzerland, and, ironically, the very securities that Standard & Poor's downgraded on Friday, U.S. Treasury bonds. For most investors, Treasurys seemed a lot safer than stocks.
Tuesday morning in Asia, Tokyo shares opened lower, falling 3.4% in the first minutes of trading.
The Financial Stability Oversight Council, a group of U.S. regulators led by Treasury Secretary Timothy Geithner, held an emergency conference call Monday afternoon to discuss the financial-market volatility, a person familiar with the call said.
"There's probably as much uncertainty as we've seen since 2008," said Eric Pellicciaro of asset manager BlackRock's Fundamental Fixed Income division, which has $612.5 billion in assets under management. "There's a general feeling that policy options are few and far between. There's a feeling that fiscal austerity is coming at the worst possible time."
U.S. Treasury bonds' status as a haven seemed intact in Asia on Monday, as yields fell despite Standard & Poor's downgrading of Uncle Sam's credit rating on Friday.More at that link above, and see, "What the U.S. debt-rating cut may mean for markets":
It may have helped Treasuries that Asian stocks were broadly lower, as some investors bailed out ahead of European and U.S. equity trading.
The 10-year Treasury note yield slid to 2.50% in late Asian trading, down from 2.56% on Friday.
Shorter-term yields also fell. The two-year T-note dropped to a record low 0.26% from 0.29%.
If investors dump Treasuries, where would the money go?RELATED: At CNBC, "No Chance of Default, US Can Print Money: Greenspan" (via Memeorandum).
They don’t have a lot of options if they want to keep their money in something relatively safe.
The bond markets of other countries still rated AAA -- including Germany, Canada, France, Finland and Australia -- are far smaller than the U.S. debt market. The appeal of Treasuries in part is their great liquidity, meaning it's easy for investors to instantly buy or sell bonds.
What’s more, Europe has its own worries: The continent’s government-debt crisis has worsened in recent weeks, with investors now fearing that Spain and Italy could be forced to seek European Union bailouts, following the paths of Greece, Ireland and Portugal over the last 15 months.
Some investors are likely to run to gold, another classic haven. Gold has been streaking this year, rising 16% year-to-date through Friday, to $1,648.80 an ounce.
Haven’t Treasury interest rates been falling lately, anyway?
Yes. Investors have been pouring cash into Treasury securities since mid-April, driving interest rates down, as global economic growth has faded. The rate on the 10-year Treasury note, a benchmark for mortgage rates and other long-term interest rates, fell as low as 2.40% last week from 3.59% in mid-April.
Because worries about the economy have only worsened in recent weeks, many analysts believe that any jump in Treasury rates related to S&P’s downgrade could quickly bring a torrent of buyers into the market, happy to snag higher yields.
“The fundamentals of U.S. and global growth are weakening, and that’s a fertile time to be in Treasuries” as a haven, said William O’Donnell, head of Treasury-bond strategy at RBS Securities.
Contrary to what the Obama Democrats claimed, the face-off in Congress did not mean that the nation’s politics were “dysfunctional”. The politics of the US were functioning precisely as the Founding Fathers intended: the legislature was acting as a check on the power of the executive.I discussed the political angle previously, "Time for Institutional Reform? Well, Only When Democrats Are Losing." But read Daley all the way through. Progressives argue that "politics is broken" when the people revolt against the socialist political class. If folks want to fix what's broken they need to look at what we're spending. Are we going to cut spending and reduce the size of government? It'll take a helluva lot more than downsizing defense. But America's Obama-Democrat-Socialists are impervious to reality. The reckoning is coming in 2012. Folks always say this election is "the most important election in my lifetime." I usually don't, but with the credit downgrade and America's military abusively stretched thin around the globe, my normal optimism is found wanting.
The Tea Party faction within the Republican party was demanding that, before any further steps were taken, there must be a debate about where all this was going. They had seen the future toward which they were being pushed, and it didn’t work. They were convinced that the entitlement culture and benefits programmes which the Democrats were determined to preserve and extend with tax rises could only lead to the diminution of that robust economic freedom that had created the American historical miracle.
And, again contrary to prevailing wisdom, their view is not naive and parochial: it is corroborated by the European experience. By rights, it should be Europe that is immersed in this debate, but its leaders are so steeped in the sacred texts of social democracy that they cannot admit the force of the contradictions which they are now hopelessly trying to evade.
Until recently, most observers believed the American economy was in a slow recovery, albeit one with very disappointing job growth. The official figures on gross domestic product showed the United States economy grew to a record size in the final three months of 2010, having erased the loss of 4.1 percent in G.D.P. from top to bottom.PREVIOUSLY: "Commerce Department Downward Revision on GDP Growth, 2007-2010."
Then last week the government announced its annual revision to the numbers for the last several years. New government surveys indicated Americans had spent less than previously estimated in 2009 and 2010 on a wide range of things, including food, clothing and computers. Tax returns showed Americans even cut back on gambling. The recession now appears to have been deeper — a top-to-bottom fall of 5.1 percent — and the recovery even less impressive. The economy is still smaller than it was in 2007.
In June, more American manufacturers said new orders fell than rose, according to a survey by the Institute for Supply Management. The margin was small, but the survey had shown rising orders for 24 consecutive months. Manufacturers in most European countries, including Germany and Britain, also reported weaker new orders.
In a USA TODAY/Gallup Poll taken hours after the Senate passed and President Obama signed the deal, 46% disapprove of the agreement; 39% approve. Only one in five see it as a step forward in addressing the federal debt.And a surprisingly good discussion at the clip. I'm not familiar with Beverly Gage, but she nails it with her comments on the absurdity of Obamania. And Harvard's David King needs to be fact-checked. He says America hasn't been this polarized since the 1920s, and Judy Woodruff calls him out. He then clarifies with a reference to congressional polarization starting in the 1970s, and that sounds more accurate.
The dyspeptic view may reflect less an assessment of the plan's particulars than dismay at the edge-of-a-cliff negotiations to reach it.
"Most people assume that whatever came out of this horrible process was pretty crappy," says Joseph White, a political scientist at Case Western Reserve University in Cleveland who studies budget policy.
WASHINGTON—The Senate approved—and President Barack Obama immediately signed—the long-awaited deal to raise the nation's debt limit Tuesday, as the battle shifted to how a special committee created by the measure will cut the deficit by $1.5 trillion.The president could send a stronger signal of defeat than a private bill-signing. Jimmy Carter is smiling somewhere.
The Senate voted 74-26 for the package, which raises the government's borrowing limit by $2.4 trillion and cuts $917 billion in federal spending. A fiery debate is likely over the next step, the bipartisan panel, and how much of its $1.5 trillion in deficit reductions will come from tax increases and how much from cuts in safety-net programs.
Meanwhile, Democrats in particular were eager to move beyond the debt-limit fight and tackle the issue of jobs, which they consider friendlier political turf. Mr. Obama signed the bill in private but used his public comments to try to shift the focus to the economy.
There is little to like about the tentative agreement between Congressional leaders and the White House except that it happened at all. The deal would avert a catastrophic government default, immediately and probably through the end of 2012. The rest of it is a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery.
It is not yet set in stone, and there may still be time to make it better. But in the end, most Democrats will have no choice but to swallow their fury, accept the deal and, we hope, fight harder the next time.
And at Wall Street Journal, "Leaders Agree on Debt Deal":
After weeks of partisan wrangling, President Barack Obama and congressional leaders reached a deal Sunday night to raise the government's debt ceiling while cutting spending by about $2.4 trillion, avoiding a government default but setting the stage for months more of stormy debates over how Washington taxes and spends.Also, "White House Issues Fact Sheet on Debt Deal."
The Senate and House are expected to vote on the deal Monday, so the agreement still needs the support of many House Republicans, who have proven a restless, independent group in recent days. But if it passes the House and Senate, it culminates an extraordinary display of political and economic brinksmanship, coming just days before the government could have been unable to fully pay its bills.
The deal would raise the debt ceiling by $2.4 trillion in two stages, and provide initially for $917 billion in spending cuts over 10 years. A special committee of lawmakers would be charged with finding another $1.5 trillion in deficit reduction, which could come through a tax overhaul and changes to safety-net programs.
If the committee doesn't find at least $1.2 trillion in savings, or Congress doesn't adopt its proposals, a pre-set array of spending cuts would kick in, including cuts in military spending and Medicare payments to health-care providers.
More at New York Times, "McCain vs. the Tea Party" (via Memeorandum).
Is the old John McCain back?And Senator McCain's "bizarro" moment today on the Senate floor:
The fiery, independent version of the Republican senator from Arizona took to the floor of the Senate Wednesday morning. Demanding “straight talk,” Mr. McCain accused conservatives of abandoning reason by opposing the House Republican leader’s plan to resolve the debt crisis.
Mr. McCain mocked Tea Party-allied Republicans in the House for believing — wrongly, he said — that President Obama and Democrats will get the blame for a default if Republicans refuse to increase the nation’s debt ceiling.
By that flawed logic, “Democrats would have no choice but to pass a balanced budget amendment and reform entitlements and the Tea Party Hobbits could return to Middle Earth,” he said, quoting a Wall Street Journal editorial.
“This is the kind of crack political thinking that turned Sharron Angle and Christine O’Donnell into G.O.P. nominees,” he jeered, referring to two losing Tea Party candidates for the Senate in 2010.
And check Los Angeles Times, "Stubborn debt-deal problems plague Boehner and Reid."
Also, at National Journal, "Six Similarities Between the Boehner and Reid Debt Plans."
