Brief Notes

As if I needed another reason to vote Democratic in the fall, now McBush has decided he wants to solve the energy crisis by drilling off Avon. The NYT reports that Pres. Bush has joined Sen. McCain in this poorly conceived policy. Its not just that offshore drilling will have on shore impacts from industrial infrastructure and possible pollution. My real concern is that it slows our solution of the real problem, dependence on fossil fuels. Burning hydrocarbons is like spending your savings account. It can't be sustained. We need to find the energy equivalent of the property tax - a tax that just keeps on giving, year in year out and can't run out.

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As the election moves into the next phase it is interesting to see Obama campaign in NC and Va. The Democrats seem to believe they can win in the upper south or at least make McCain spend resources in areas that have been solid red.

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Great piece in the Atlantic Monthly June edition had a great article about the Obama money machine. It explains how it operates and how it grew from the Kerry campaign, through the 2006 elections into a combination of new technology and old school enthusiasm. This is a big part of the analysis that Hilary Clinton ran the last campaign of the 20th century while Obama ran the first campaign of the 21st. Of course that begs the question of what century the Republican candidate is living in.

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There is a really interesting decision coming up for each campaign. Each candidate must decide whether they will accept federal campaign funds. If they say yes then the are guaranteed a set amount of money but are limited to that amount. If they say no they can spend whatever they can raise or borrow. Both Obama and McCain have been advocates of federal support. Obama has been very supportive of federal campaign money in the past. McCain has his name on the most recent campaign finance reform bill.
The catch is that the federal funds are much less than Obama knows he can raise. If Obama turns down the federal money then McCain must follow suit just to try to keep up. Expect the McCain camp to try to pressure Obama into public money as the deadline approaches.
The Washington Post reports how McCain almost got caught in a trap by using the federal funds as "almost" collateral to his failing campaign last fall.

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Different subject - There has been a lot of talk about the role of speculators in the commodities markets lately, especially their role in high oil prices. The NYT seems to think speculators play an important role in markets by providing liquidity (cash to make the market move). Meanwhile Der Spiegal (in English of course) reports:

After investing in high-tech stocks and real estate loans for years, legions of speculators have now discovered commodities like oil and gas, wheat and rice. Their billions are pushing prices up to astronomical levels -- with serious consequences for ordinary people's quality of life and the global economy.

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The Foreign Policy projects a coming flood of foreign, especially European, investment in American industries. Not just buying US stocks but building factories in the US to build products for the export market. The proposed take over of Anheuser-Busch by a foreign brewer is just the tip of the iceberg. The cheap dollar makes this strategy very attractive.

I am not worried about rich Arabs; it’s the French who worry me.” This was the response from a businessman in Clovis, California, reacting to my comment that the U.S. government was concerned about the influence of foreign-owned sovereign wealth funds.

“Why are you worried about the French?” I asked.

“They just bought the largest company here,” he replied. “Life will now change for all of us—that company has been an important part of this community for years.” He was referring to Pelco, a Clovis-based manufacturer of video security systems that was recently acquired by Schneider Electric, a French company.

There is nothing special about Pelco’s sale; foreign companies buy American ones all the time and vice versa. This transaction was far smaller than the United Arab Emirates’ $7.5 billion investment in Citigroup or China’s $3 billion investment in the Blackstone Group, a major financial company. Except that this transaction is part of a trend that, though still largely unnoticed, will soon rear its head: The United States is poised to receive a massive—perhaps unprecedented—inflow of large- and medium-size European investors. Everything from corporate behemoths to family-owned companies are about to come to America on a corporate buying spree. Call it the Euroinvasion. Not only will many U.S. companies now have European owners, but the American marketplace will witness an infusion of new foreign competitors that will manufacture their products in the United States. They will use their new American base both to export to the world—including back to their own European market—and to serve the U.S. market from inside its borders. Such a trans-Atlantic shift will have an enormous impact on Europe’s levels of employment and exports. Inevitably, the move will also ignite a political firestorm on both sides of the Atlantic. European politicians will denounce the companies for “exporting jobs” to America, while U.S. politicians, already rattled by the threat of foreign competition, will be infuriated by what they will brand as “the foreign takeover of America.” CNN anchor Lou Dobbs will be foaming at the mouth.

You have to wonder if this will carry over into Outer Banks real estate, REALLY!
Ciao