You may recall the horrific story from Black Friday, when a Wal-Mart worker was trampled to death by a mob of frenzied holiday shoppers. This inspired the holiday cards my brother made (you might say a certain outlook on life runs in my family…). He made 17 different cards based on the same drawing, with different quotes from Jesus and Santa for each person he gave the cards to. Here are scans of two of them. I’ve asked him to email the text of the other quotes he came up with so I can add them to this post.

Black Friday 2008: “I dunno, Jesus… I think supporting ‘Buy Nothing Day’ would be bad for the economy…” - JDK 2008 Black Friday 2008: “I dunno, Jesus… I think supporting ‘Buy Nothing Day’ would be bad for the economy…” - JDK 2008

Black Friday 2008: “Do you think it’s time we ‘fessed up and told everybody we’re not real?” -JDK 2008 Black Friday 2008: “Do you think it’s time we ‘fessed up and told everybody we’re not real?” -JDK 2008

• Improved database security
• Internationalization
• Most (maybe all) of Brian Hsu’s feature additions
• Simplified approach to displaying all the photos in an album (you won’t need the salbumphotos tag anymore)
• Automated scheduled album syncing
• Various new tag options
• And, of course, bug fixes

Since it’s a full re-write, it will need some testing, so I’ll release it initially on my site only, as a beta version. So stay tuned - look for it in 2-3 weeks.

About 13 years ago, I photocopied this ad from a 1966 issue of Time magazine. I was in grad school doing some research, I think on the Vietnam war, and couldn’t help but notice it. It’s almost as over the top as the old Saturday Night Live fake ad for speed. I thought I lost the photocopy years ago, but found it in a box in my basement the other day.

The image they’re going for with Mary is interesting - it looks like half her outfit is a school uniform, and then the baggy sweater and beads are hip but still fairly conservative.

If you can’t make out the “Note to Mothers” at the bottom, it says:

Note to Mothers: Exhaustion may be dangerous - especially to children who haven’t learned to avoid it by pacing themselves. Exhaustion opens the door a little wider to the bugs and ailments that are always lying in wait. Sugar puts back energy fast - offsets exhaustion. Synthetic sweeteners put back nothing. Energy is the first requirement of life. Play safe with your young ones - make sure they get sugar every day.

What makes this especially insidious is that it’s the exact opposite of the truth:

Studies have shown that downing 75 to 100 grams of a sugar solution (about 20 teaspoons of sugar, or the amount that is contained in two average 12-ounce sodas) can suppress the body’s immune responses. Simple sugars, including glucose, table sugar, fructose, and honey caused a fifty- percent drop in the ability of white blood cells to engulf bacteria…[and] can reduce the ability of white blood cells to kill germs by 40 percent. The immune-suppressing effect of sugar starts less than thirty minutes after ingestion and may last for five hours.

It looks like Prague is also a good city for drainspotting. I mention this because we’re planning a trip to Prague next summer. Maria is going to be in charge of a group of Villanova students who will be there to study for a summer semester. Maria will be there for two months with the boys, and I’ll join them for the last few weeks (so I need to save up all my vacation time between now and then).

Don’t worry though, I’ll look up from the ground every now and then to see what else the city has to offer

I’d like to especially thank all our friends who got our business off the ground this summer by being our first customers. We really appreciate your support. (See this post if you’re wondering why we’re closing the business.)

Another interesting tidbit is Nebraska 2nd congressional district, where Omaha is located. Everyone has their eyes on Missouri and North Carolina, which are still too close to call. But for the first time ever, split electoral votes may come out of Nebraska:

Nebraska and Maine are the only states that can split their electoral votes, although it’s never happened. Two of Nebraska’s five votes are awarded to the winner of the statewide election and each of the other votes are awarded to the winner in each of the state’s three congressional districts.

Obama targeted the 2nd District’s electoral vote, opening three campaign offices in Omaha and registered thousands of voters.

McCain has already won Nebraska’s four other electoral votes by winning 57 percent of the state’s vote, but in the 2nd District McCain’s led Obama by only 569 votes Wednesday. And a recount is possible in the District once 10,000 provisional and absentee provisional ballots are counted.

The Obama campaign was looking at multiple possible scenarios where they might end up with a 269-269 tie in the electoral college - like winning Kerry’s states plus only Iowa, Nevada and New Mexico. So they were looking to Omaha (Obamaha) to put him over the top. Obviously that’s not a concern at this point, but if Obama wins Omaha, it’ll be interesting to see how all the TV networks try to figure out how to adjust the display of their electoral maps to show a mixed result from a single state

A while back I mentioned the town of Obama, Japan. Here they are celebrating Obama’s victory, in a way that only the Japanese can. Presumably the Hawaiian theme is because he was born in Hawaii.

To determine if you’re a likely voter, pollsters will typically ask if you’re registered to vote, if you intend to vote, and if you voted in the last election (in this case, the last Presidential election). They typically give the most weight to your answer about voting in the last election, so they consider past behavior a better indicator than stated intentions. Some will also ask if you know where your polling place is located, as an additional screen. In this election, with enthusiasm sky-high among the African-American community and young voters - both in favor of Obama - pollsters aren’t as sure about how to screen for likely voters. Gallup dealt with this dilemma by simply publishing an additional set of results - one using their traditional likely voter model, and one that counts you as a likely voter strictly by whether you say you plan to vote. What’s interesting in the final Gallup poll yesterday was that the results of the two models converged - both give a roughly 11 point advantage to Obama. (If you’re curious, back in August Nate Silver wrote an astute critique of how Gallup screens likely voters, arguing that it could be substantially underestimating the ultimate impact of unlikely voters).

Silver also wrote back in May that “youth turnout in the primaries increased by 52 percent as a share of the Democratic electorate.” This was part of an analysis of what the electoral map would look like if Obama could substantially increase turnout among young voters and the African American community. Silver went on to say:

The ability to bring new voters to the polls remains Barack Obama’s most significant electoral advantage, both relative to Hillary Clinton and John McCain. Indeed, current polling may already be underestimating Obama’s strength against McCain if it does not account for improved turnout among Democratic-leaning groups like young voters and African-Americans, who have participated in record numbers in this year’s primaries. If Obama can parlay that advantage with a strong ground game, he very much could redraw the electoral map.

Running counter to this argument is Gallup’s results published yesterday, showing no indication of an overall surge in youth interest in the election over 2004 levels. But in terms of the final outcome, they give themselves some wiggle room by saying “[voter mobilization efforts by the campaigns] can convince people with little motivation or interest in the campaign to actually vote on Election Day.” Gallup’s assessment of youth interest contradicts other evidence, but if Gallup is right, this is where Obama’s massive get out of the vote effort may prove decisive. In 2004 the Democrats registered new voters in much greater numbers than the Republicans, just as they have for this election, but in 2004 they didn’t turn out their voters nearly as well as the Republicans.

The actual turnout numbers for young voters and African American voters are what will make the difference between a narrow Obama win and big one.

The other thing to keep an eye on is the significance of the huge number of early voters. The national numbers for early voters are about 10% higher than 2004, with Democrats submitting 1 million more early ballots than Republicans. And the LA Times reports: “In three swing states — North Carolina, New Mexico and Colorado — the number of voters who have already cast their ballots has reached more than 70% of the number who voted there in 2004.” The question is whether the campaigns are simply banking votes early, or if the early votes are presaging even bigger - and equally lopsided - turnout numbers today, Election Day.

Most of the major polls have Obama up between 6-8%, which I think is about right. In 2004 I made predictions for the 13 swing states, and got 10 of them right (and since two of my wrong predictions were Ohio and Florida, I got the outcome wrong too). I’m not going to do a state by state breakdown again, as there are now lots of people already doing it, with skills and resources beyond mine. Instead, I’ll point you to political scientist Larry Sabato’s Crystal Ball map, which I think looks just about right. He has the electoral college going to Obama 364-174 (I credit Sabato for coloring every state blue or red, and not wimping out like many of the others making predictions, by leaving the close states as uncounted tossups).

Even if there is a big Obama win, be wary of pundits using the word “landslide.” While there is no hard and fast definition, if you look at the 3 elections since WWII that are generally considered landslides (Johnson v Goldwater, Nixon v McGovern, Reagan v Mondale), the popular vote gap between the winner and the loser was around 20%.

If Obama overperforms his poll numbers in states where he is very closely behind McCain, he could turn some red parts of Sabato’s map blue: North Dakota, Nebraska’s 2nd district (Nebraska divides it’s electoral votes by Congressional districts), Georgia, Indiana, and Montana. If he significantly underperforms, then this is what possible winning electoral maps look like for McCain.

• Except for the stock market, on every issue that came up relating to economics - taxes, health care, education, international trade - McCain again and again sang the praises of unobstructed free markets. In good times, the underlying message people would hear in this is “opportunity.” But with the markets in chaos and a severe recession looming, this kind of laissez faire message instead communicates “risk.” Leaving aside for the moment the pros and cons of his particular proposals, it’s the wrong message in a time of economic anxiety.
• McCain didn’t do himself any favors by letting his inner Grandpa Simpson shine again this debate. The split screen used on the major networks didn’t work in McCain’s favor:
  

  In politics it is generally not considered a good sign when voters are laughing at you, not with you. And by the end of the third and last presidential debate, the undecided voters who had gathered in Denver for Democratic pollster Stan Greenberg’s focus group were “audibly snickering” at John McCain’s grimaces, eye-bulging, and repeated references to “Joe the Plumber.”

  I watched the debate on PBS, which did not have a split screen, so I missed most of McCain’s scowls and tongue juts. This morning I saw clips online with the split screen, and it leaves a very different impression of several key exchanges.

• I’m generally not a fan of David Brooks, but he had the best observation I’ve heard so far summing up the overall tone of the debate: McCain had some good attacks, but it was like watching someone lob cannonballs into a redwood forest. Obama is amazingly unflappable. Aside from McCain’s “get government off our backs” message, there was no coherent theme tying together any of the points he tried to make. His overall approach was scattershot (Fallows has another good piece from a few weeks ago that relates to this, as it typifies McCain’s campaign in general: On strategy and tactics).
• This YouTube video - a debate between Batman and the Penguin from the old Batman TV show - pretty much sums up last night’s debate: who is Batman, really? And why do we always see him around criminals? The Penguin even says “my friends.”

The sad truth, however, is that subprime is just the first big boulder in an avalanche of asset writedowns that will rattle on through much of 2008. An overhang of subprime-like assets, at least as large, is sitting in corporate debt, commercial mortgages, credit cards, and other portfolios. Even municipal bonds may be at risk. Loss estimates of $400 billion to $500 billion barely get you halfway where.

We are accustomed to thinking of bubbles and crashes in terms of specific markets — like junk bonds, commercial real estate, and tech stocks. Overpriced assets are like poison mushrooms. You eat them, you get sick, you learn to avoid them.

A credit bubble is different. Credit is the air that financial markets breathe, and when the air is poisoned, there’s no place to hide.

Here is a crude gauge of the credit bubble. Not long ago, the sum of all financial assets–stocks, bonds, loans, mortgages, and the like, which are claims on real things–were about equal to global GDP. Now they are approaching four times global GDP. Financial derivatives, a form of claim upon financial assets, now have notional values of more than ten times global GDP.

The soaring ratio of credit to real output is a measure of leverage, or financial risk. Think of an inverted pyramid. The more claims are piled on top of real output, the more wobbly the pyramid becomes.

…By March [2007] I was convinced that the bubble was vastly greater than I had imagined… I expected the mother of all crashes by mid-2008 or so.

My only complaint to Maria was that I wish she had gotten the book about 2 weeks earlier! It would have motivated me to finally take my retirement savings out of the stock market - something I’d been considering for a while now. I was waiting only because I hadn’t made the time to research where else to put it. Now I’m seriously regretting not having acted sooner. At this point I think I’ll cross my fingers for at least a modest recovery before pulling out.

The reason I was thinking about pulling out - well before the recent turmoil - was because of an article I read four years ago, which I was able to dig up just now, thanks to the wonders of The Google:

Mr. Logue [who retired in 1994], a Massachusetts Institute of Technology graduate, decided to go back and check his own records. Would he have done better investing his money than the bureaucrats at the Social Security Administration?

He recorded all the payroll taxes he paid into the system (including the matching amount from his employer), tracked down the return the Social Security Trust Fund earned for each of the 45 years, and then compared the result with what he would have gotten had he been able to invest the same amount of payroll tax money over the same period in the Dow Jones Industrial Average (including dividends).

To his surprise, the Social Security investment won out: $261,372 versus $255,499, a difference of $5,873.

It’s an astonishing finding. The DJIA represents blue-chip stocks. Social Security invests in US Treasury bonds. Over long periods of time, stocks have consistently outperformed bonds. So, you would think that Logue’s theoretical stock investments from 1950 to 1994 would have surely outpaced the return on government bonds.

The fact that they didn’t illustrates one of the hard truths about stock investing: Timing matters.

Although Logue started pouring money into Social Security in the 1950s and early 1960s, some of the best years for stocks, he hadn’t accumulated a lot of money.

So the gains of his theoretical stock portfolio would have been limited.

By the time he had substantial sums, the market swooned for long periods. From 1965 to 1982, for instance, the DJIA made no progress. Logue retired before the real run-up in stocks in the latter half of the late 1990s.

My sense is that my market timing will likely match Mr. Logue’s. The 1920s saw a market boom, followed by the Great Depression, and the stock market didn’t regain its values from the 20s until the mid 1950s. Then the markets stagnated from the mid 1960s to the mid 1980s, before taking off again in the mid 1990s. My hunch is that we’re following this pattern again now, so we’re in for another 20 to 30 years of poorly performing markets (as noted in the Morris quote above, there are likely still other shoes to drop, from derivatives based on credit card debt, commercial real estate, etc). There probably won’t be another boom until around the time I retire. I’ll likely be better off (both psychologically and financially) with my retirement money somewhere other than the stock market.

Eidan on the Awakening statue at Villanova

Eidan and Kai on the Awakening statue at Villanova

Eidan on the Awakening statue at Villanova

Kai on the Awakening statue at Villanova

Kai on the Awakening statue at Villanova

Eidan plays dead on the Awakening statue at Villanova

Last month I killed some time with the boys at Villanova for about an hour, while we waited for Maria to finish a meeting. They gravitated to the “Awakening” sculpture, known more commonly as the Oreo. We ran around on it for about 30 minutes. Then it was on to the pine trees nearby, where we tried to knock down pine cones by throwing already fallen pine cones at them.