There's about a month to go.

With the VP debate over, the media will now breathlessly announce moves in the national Presidential polls.

The media does this because it is part of the 90 second WOW factor: the polls' moves get the viewer's attention, and the media has led the viewer to believe that these polls are meaningful.

But in truth, the national Presidential polls have little predictive power because every four years we forget that the President is elected by the Electoral College vote and NOT by the total popular vote.

The United States is the ONLY nation with its leader elected in this undemocratic manner. Three times in the nation's history, the Presidential candidate who won the popular vote has been denied office by the winner of the electoral vote (2000, 1888, and 1876).

By focusing on the results of the national polls, the media is simply telling us what the popular mood is, and what the popular vote total would likely to be if the election were held on the day the poll was taken.

This year, 270 Electoral College votes are needed to attain the Presidency. Based on state polling, states are assigned to candidates as being "Safe," meaning the state is fully expected to go for one of the candidates, "Likely," "Leans," and "Neutral or Toss Up."

For example:

Texas is safe for McCain -- California is safe for Obama
Georgia is likely for McCain -- Maine is likely for Obama
Indiana leans towards McCain -- Oregon leans towards Obama.

Typically, Presidential candidates do not campaign for the popular vote but
for the electoral vote, and especially for the electoral vote in Neutral or Toss Up states.

To follow the true ebb and flow of the Presidential election, follow the state polls and the standing of the candidates in Electoral College projections. Pay special attention to the states that are listed as Neutral or Toss up College projections.

I believe the election will be decided by the electoral votes of just six states: Colorado, Florida, North Carolina, Nevada, Ohio, and Virginia.

Your key states may be different, but that is the beauty of handicapping the election yourself instead of depending on the media.

Several sites that collect all available national and state polls and visually display Electoral College projections are

Pollster.com,
Realclearpolitics.com,
Fivethirtyeight.com,
Electoral-vote.com,

Other sites can be found by Googling.

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The headline announcing this blog series says "conversations about Maine issues", but it it appears that I and the other bloggers are broadcasting messages, with very little response coming back.

In one post I suggested that "sign season" is about visual pollution from campaign signs, and that it represents a disrespect for voters. Are you as concerned as I am about people making voting decisions just based on these silly signs that litter our streets?

What about shoplifting at Micucci's -- or any other local business?

And how much industrial noise is acceptable in residential parts of our city?

The Press Herald has given all of us an exciting opportunity with this blog. Will you use it?

So far there has been one failed attempt to provide some sort of temporary solution to the mortgage problem. To their credit, enough members of the House (both Democrat and Republican) refused to be stampeded into approving a hasty mishmash of a bailout bill that included irrelevancies such as a huge grant for ACORN (known for its creative and sometimes illegal crusade to register voters, alive or dead or even fictitious) added to the bill by the Democratic leadership.

To be sure, is now anxious over the huge numbers of calls that their constituents have made over the last few days. Popular sentiment is reported to be overwhelmingly against any immediate bailout of those financial institutions viewed as contributing to the mortgage mess through greed and/or mismanagement.

Since over ninety percent of consumers are making mortgage payments regularly and on time, it is understandable that so many of them are questioning why their tax dollars should be spent shoring up those organizations that have glaringly shown their inability to handle financial matters in a responsible manner.

There are many in the media, in the current Administration and in Congress eager to pass some sort of legislation; after all, it is an election year and a thorough examination of the problem will reveal that issues have been building - and ignored or blocked - since the Carter Presidency. There have been numerous career politicians involved in preventing attempts to impose regulatory restraints upon the mortgage industry over the past four years and further publicity will only expose campaign contributions, "sweetheart deals" and other embarrassments for the Washington elite.

The public has been deluged with frantic warnings of returning to the Depression era, financial meltdown, destruction of America's credit base and other catastrophes that will ensue unless immediate action is taken. There is indeed a looming problem, for unless credit is stabilized many businesses will face bankruptcy without a line of credit to guarantee payroll and operating expenses. Unavailable credit will also create pressure for many households. But severe problems require carefully constructed solutions and most of all leadership.

Tonight the Senate is scheduled to vote on a revised plan that is reportedly more friendly to the consumer and less focused on aiding Wall Street, hedge funds and investment banking. Massive problems require carefully constructed solutions and, just as important, leadership. This will not be found from those heading Senate and House Banking and Finance Committees, who have for the last several years insisted that there were no problems with Fannie and Freddie and who have blocked numerous attempts to impose regulatory restraint on the practices of those two organization.

And this is not the time for partisan politics.

It is time for our elected representatives to do their duty for the people, not for those entities who buy their attention through large campaign contributions and lobbying efforts.

It's the 1st of October, the day after Rosh Hashanah and a few days after the New Moon. Late flowers still bloom in the gardens and along the roadways here in Midcoast Maine. The old Ash tree is in full color, a purple than defies description, while the red maples light the edges of the fields. A bit of wood smoke hangs in the early morning chill, and the Autumn sun brings a far off light that seems too thin to hold much warmth.

This year the summer garden was an explosion of produce; a delicious bounty throughout the growing season. There are more stray tomatoes to be picked and the beets are superlative this year. Hidden acorn squash gather in the pucker brush, but to me they seem like money in the bank. Actually, I feel better about them then any money I would have in the bank, but that's another matter.

Autumn arrived officially last week, so we have met the end of summer and now embrace the dark half of the year. The nights will be longer than the days for the next six months, until the Spring Equinox tips the balance once again. The Autumn months are the time between the steamy, hot Summer and bitter, cold Winter; a time of transition. Here we get ready to nestle down and settle in for the long, cold months. There is wood to stack, food to store, windows to wash and plants to repot and bring in. We heat with wood, and it's all dry and paid for. We're one of the fortunate few that have no heating worries this year. How I wish it was true for more Mainers. But we know it gets cold every year, so we plan ahead.

The economic crisis and the election are on my mind. I have strong opinions and feelings and I try to remember that I cannot control the outcome of these situations. My energy is better spent planting the garlic for next year's harvest. I can make compost and weed my gardens. I wave at the migrating geese and blow kisses to the last monarch as it drifts over the trees and out of sight. I wonder at our ignorance and shutter at our stupidity.

I'm glad I'm here to witness this time of change. The future generations will look back and laugh, in amazement and disbelief. We are seeing the end of an era and the beginning of a new phase in history. I only hope that the future generations will have learned from our mistakes, because they will certainly be paying for them.

So in this time of endings and beginnings, I will pull the dead plants and nuisance weeds from my life and plant anew. Crocus, for color and hope in the Spring, and garlic for strength and health. I remember that all endings are only new beginnings and I have faith that this too shall pass.

Now I'll go and find my 4 year old neighbor and teach her how to plant some bulbs.

OK, the bailout plan went down in flames.

Let me get one big misconception out of the way: the proposed bailout would NOT have allowed people to live in their houses and pay no mortgage payments. (I heard that gem in Ri Ra) It was NOT the people who were being bailed out.

As I explained in my blog post on Friday, the plan dealt with bailing out banks, mostly New York and foreign banks with branches in the US that had the poor judgment to buy mortgage derivates. These banks bought lots of this stuff, but their smart MBA trainees could have told them that:

1) Housing prices in certain parts of the US cannot go up at 15%-25% a year without retreating someday, leaving people with a house worth much less than their mortgage

2) If you give people 100% mortgages with no credit check, many of those mortgages will fail

So, how many of those Trillion dollars of derivatives are bad?

Absolutely no one has any idea.

Our Portland mortgage is probably in a derivative package because we refinanced in 2004, and since we have never missed a payment, it may be classified as good; the so-so mortgage in the package is thus called because several payments have been late, but does the existence of a weak or failed mortgage with a good and a so-so mortgage make this derivative without value? Hardly.

Banks hold these derivatives as assets and collateral against which to borrow and then lend massive amounts of money. Seemingly to down play the credit crisis, the Press Herald ran an article Saturday proclaiming that people still were getting car loans; the credit crisis is not YET about car loans (but WILL be if not contained).

The crisis right NOW is about massive loans called commercial paper and lines of credit that make the American economy function.

Last week, Maine DOT was unable to auction $50 million in transportation bonds because no one was lending that much at a normal rate. Maine was offered 9% on the bonds instead of the normal 3.9%. There is talk on the web about large corporations that cannot buy supplies and make their payrolls because many depend on short term loans to tide them when they have cash flow problems such as when customers pay slowly.

Derivatives are structures meant to reduce risk. If the "bad" mortgage in the package fails, the so-so and good mortgages would still give the derivative value. The banks bought derivatives knowing THIS risk. Thus, the banks should NOT be rewarded for their folly for failing to see the weakness of the housing market. Banks should act like any other player in the stock market, and, since they cannot sell these derivatives, the banks should hold this paper to maturity.

The true crisis in the economy is liquidity -- the banks holding the derivatives cannot use the derivatives as assets and collateral to make the economy run.

Secretary Paulson originally framed the liquidity crisis by proposing a buyout of the derivatives, and the Congress walked in lockstep with that concept. The result was a public uprising on both the right and the left.

Congress needs to do what it failed to do over the last 10 days; it needs to consult the top economics in the US and the World -- no economists were consulted as of Sunday -- and Congress needs to THINK OUTSIDE THE BOX.

LIQUIDITY CAN BE RETURNED TO THE MARKET WITHOUT

BUYING THESE VOODOO INSTRUMENTS AND WITHOUT

THE GOVERNMENT REWARDING THE BANKS' INVESTORS

My solution: the Federal government should authorize the Federal Reserve Bank to LEND up to $700 billion to banks IN THE US holding these derivatives at an interest rate that is slightly higher than the normal rate. Banks would be required to use the mortgage derivatives as collateral for this loan. They would have to hold these derivatives to maturity or replace them with an asset of equal value.

This simple action is guaranteed to instantly return much of the needed liquidity to the US market with no complicated Federal ownership of mortgages, banks, etc. There would be no smell of socialism.

Finally, two things:

1) The Federal government needs to return to the problem of the sub-prime crisis by dealing with people who bought houses to LIVE IN and freeze their resetting Adjustable Rate Mortgages (ARMs) for 12 months. This will allow the homeowners the time to change to a traditional 30 year mortgage. The Feds should not rescue people who bought houses, condos, etc. to flip.

2) The stock market must be re-regulated. Banning naked short selling in any stock is absolutely essential; continuing the current ban on all short selling of the basket of financial institutions and troubled institutions is also essential.

3) The mortgage market must be re-regulated. The transparency of financial statements that resulted from the enforcement of Sarbanes-Oxley must be extended to complicated financial instruments such as derivatives and the more than $45 trillion of credit default swaps.

Prosecutors considering whether to retry Robert LaPointe on manslaughter charges will likely wait to see what sentence he gets in November for boating drunk, in a crash that killed two people ... He has no criminal record, but the state will ask the judge to consider his driving history, which over a period of 22 years includes 22 speeding convictions, four convictions for failing to stop for a police officer and two license revocations for being a habitual motor vehicle offender, according to Massachusetts state records.

Source: http://pressherald.mainetoday.com ...

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