The Ponderings of Woodrow

Why today mattered...

Today I am struck by the complexity of our lives.

This morning, my wife gave birth to our 3rd son; and both mommy and son are healthy and happy as I write this. As I sat holding my newborn son, most likely our last, I was overwhelmed by a feeling of gratification. Gratification that I have a wife who supports and understands me, and who so beautifully and intelligently serves as the foundation of our family. Gratification for three healthy children. Gratification that I'm fortunate enough to have the means to support them in a way that will provide them with every opportunity. Gratification for the overwhelming support my colleagues and friends show me every single day.

My personal gratification was counterbalanced by the historic nature of today's inaugural festivities. To see millions of Americans descend upon the Capitol to show support for President Obama, to see the hope for great change physically manifested in a wave of citizens as diverse in ethnicity, age, sexual orientation and personal beliefs, was a powerful thing. And certainly President Obama delivered a speech worthy of his standing as an accomplished orator.

...So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive ... that the city and the country, alarmed at one common danger, came forth to meet [it]."

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

But I couldn't help and think about the exorbitant costs being incurred, well north of $150mm according to the latest tally. Was today historically significant? Yes. Did we deserve a day to celebrate all that's still great about our nation? Certainly. But isn't there something obscene about spending $150mm on pomp and circumstance at a time when our nation is at its most precarious in generations? My friend Howard Lindzon said it best:

It would have been a great idea to therefore cancel the first, biggest and dumbest party of the administration for an "America has a surplus party" one or two years out if all goes well.

We are the Capital One Society. Pleasure now.

I have seen zilch that shows me we are willing to push off the "pleasure now" philosophy from our new President. Even if he talks about it tonight, he sure wont be taken seriously buy me.

Color me skeptical.

And then on top of all that, I see the market by which I make my living completely give up the goat. I've never before felt so unhappy to be right about the way things are going, and where I fear they're continuing to head. Today's market action was negative on many levels, another day of indiscriminate selling across all sectors, caps, valuations and relative fundamentals. We broke key technical support levels and saw the financials lead the way down. Even the most balanced market prognosticators understand that financials need to find their bottom before the market can begin to heal; and yet we saw carnage in the sector today: Bank of America (BAC) down 29%, Citigroup (C) down 20%, J.P. Morgan (JPM) down 21%, Wells Fargo (WFC) down 24%. Even State Street (STT), thought to be a relative safe haven in the sector, lost almost 60% of its value as problems in its commercial paper business may necessitate a capital infusion. With each passing day more people realize the crutches and cliches that helped make their investing careers are just that, crutches and cliches that fail to support Mr. Market when we're in unprecedented times.

So as I get ready to call it a night I'm left thinking about the complexity of perspective, and wonder if tomorrow will prove any less conflicting.

Disclaimer: At the time of writing, neither the author nor the firms affiliated with the author maintained a position, long or short, in the publicly traded companies mentioned or any related instruments. The author and the firm reserve the right to alter their investment positions at any time in the future. The content on this site is provided as general information only and should not be taken as investment advice. Content should not serve in any way as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author. Any action taken as a result of information or analysis on this blog is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Why there MUST be a debate tonight

Should they, or shouldn't they?

As news broke last night that the potential $700B bail out was falling apart thanks, in part, to John McCain's involvement in urging for an alternative proposal, it seemed we were very close to postponing, if not outright canceling, the first of the scheduled Presidential Debates.

McCain had already signaled his intention of skipping the debate earlier in the week:

"I am calling on the President to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself," Mr. McCain said in New York on Wednesday afternoon. "It is time for both parties to come together to solve this problem."

McCain's critics immediately cried foul, implying that he was using the dire financial crisis to his political advantage. Obama's critics were equally offended by his retort that the debate should go on, complaining that he was using McCain's bipartisan overture against him.

The Argument Against Debating Tonight

I was having a conversation this morning with one of my partners, Monty, who is - by far - one of the sharpest and most reasoned minds I have the pleasure of associating with. Were it not for him, we wouldn't have been half as defensively positioned as we've been in the face of this crisis. And, for the most part, we see eye to eye on life's big issues. I say all that because he and I appear far apart in our view of the debate.

His view is that neither Presidential hopeful should take the stage tonight. He reasons that regardless of whether McCain's overtures were politically motivated, it was the right decision because the future leader of the free world [whether it be Obama or McCain] needs to have a direct hand in shaping the solution to our current crisis. I can't disagree with his logic, McCain and Obama are acting U.S. Senators and one of them will be the POTUS. To not have input on what's transpiring now would be a disgrace.

Another good friend of mine [who wants to remain anonymous] reminded me that "elections aren't won or lost on debates, they're just dog and pony shows to help the media get some ratings points." While I don't entirely agree with his jaded premise, I do understand his point that debates, in and of themselves, aren't always the most important variables in the election equation.

Why I Disagree and Think We MUST Have a Debate Tonight

Despite the very rational arguments against having a televised debate tonight, I'm strongly in favor of the debate forging ahead as scheduled.

Reasons for forging ahead:

1. It's the largest audience the candidates will have prior to the election -- History shows that the first debate is always the most watched. Furthermore, 70-80 million Americans will be watching tonight's events which is, inarguably, the widest reach either candidate will have to stake his claim to the highest office in the land
2. Debates HAVE played an enormous role in close elections -- The polling numbers indicate an incredibly close race. Many voters remain undecided. History has shown that televised debates CAN be major factors in tight races. Let's not forget that Ronald Reagan and Jimmy Carter were neck and neck in the polls until the debates.
3. The American people deserve a place at the table -- Putting off or canceling a debate at a time of crisis would send the wrong message to an American voting populace that feels underrepresented already. What kind of message would it send if our candidates held off addressing the American people in order to solve a financial crisis that most voters view as a "Wall Street" problem? Misguided or not, a LOT of Americans feel that way, and we can't ignore the will of the people.
4. Oration and debate are critical skills for a competent world leader [or at least SHOULD be] -- Call me an idealist, but I still believe that the POTUS should be able to convey a strength of character and ideals on the largest of stages. He should be able to stand before the world and evoke a sense of calm, a sense of trust and, most importantly, a sense that he's a leader of men. I would never hire someone that couldn't articulate their views clearly and concisely, why should it be okay for the most powerful elected official in our country to lack those skills? As I type this, I'm staring at copy of Abraham Lincoln's Speeches and Writings sitting on my bookshelf, is it unreasonable to think we could again have a leader as eloquent?
5. We may actually see our candidates go off script, for once -- Tonight's debate is supposed to focus on foreign policy and national security. That said,  I would be shocked if Jim Lehrer [tonight's moderator] doesn't find a way to make our financial problems a central issue. Debate preparation is a science unto itself these days, I realize. But if there's going to be a moment when Obama and McCain have to think on their feet and speak off the cuff, it's tonight. We're in the midst of a historic financial crisis and neither man has all the answers [because there are no answers, yet]. Let's see how they handle themselves at a time when there is one central issue that most voters care about, and no stump speech or party line with which to stand behind.
6. Postponing under the guise of dealing with the financial crisis is disingenuous [or would at least be perceived that way] -- The idea that debating would take either Senator out of the ongoing financial bail out discussions rings hollow, in my view. It would be one thing if both Obama and McCain were busy handling their Senatorial duties in lieu of other campaign obligations, but how many days (and votes) have they missed on the campaign trail? It's reasonable for them to hit pancake breakfasts, church socials, and rallies in key electoral blocks day in, day out, but not reasonable to address the key issues on the grand stage? Non sequitur.
7. Debating doesn't preclude the candidates from being involved in the process -- These men are used to appearing in three or four states in a single day and how many countless appearances? How many people on staff do they have? Is there a chance they're not connected 20 different ways to what's happening back in Washington? Realistically, they could bury their heads back into this bail out discussion the second they're off the podium, while flying in their planes back to D.C. and as they're being chauffeured back to the Congressional offices.

I realize I may be coming across as an idealist [when I genuinely pride myself on being a realist]. But I've always felt that the office of President of the United States should be held by someone capable of greatness. I find it impossible to reconcile the notion that the leader of the United States can't be both a person of character and a polished orator. Why can't we have it all? Has it gotten to that point where it's no longer reasonable to expect our POTUS to be more intelligent, more articulate, more inspiring than most? I certainly hope not. Could tonight's debates end up an unmemorable blip on the long election trail? Perhaps. But given the uncertainty surrounding our economy, the myriad questions [many without answers] facing us in the days and weeks ahead, wouldn't it be fantastic to be blown away tonight by one of these men? To be shown that, in fact, one of them really is capable of greatness? I'll be watching, and I'll continue to hope until the last of those 90 minutes.

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. Content should not serve in any way as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author. Any action taken as a result of information or analysis on this blog is ultimately your responsibility. Consult your investment adviser before making any investment decisions.