ONLY IN AMERICA

With Barack Obama's election as President, United States of America has once again taken a great leap forward and regenerated itself as a nation that changes with time and adapts to new conditions. A nation despite all its faults and checkered history is ready to stand up and correct itself again- a sign of a great nation.

Another great moment in history was when Abraham Lincoln was elected President in 1860. Despite all opposition, he abolished slavery through Emancipation Proclamation and the 13th constitutional amendment. This caused the pro slavery South to rebel, forming the 'Confederate States of America' which led to a bloody civil war. Ultimately, Lincoln and the American people succeeded and that was a historic time when America regenerated itself.

November 4, 2008 was another historic day. Who could have imagined a mere sixty years ago that America where African Americans were not allowed to share the same bench, the same seat on a bus or a drink from the same fountain with their white country men and women, would elect an African American as their President.

Only in America is it possible for any citizen to rise to such heights. Europe steeped in its history of class system and Asia with its dynastic history can only marvel and admire America for its leap forward. No wonder the whole world celebrates Barack Obama's victory, which in fact is America's victory. This is possible ONLY IN AMERICA.

PREDICTION - OBAMA TO WIN 353 DELEGATES TO MCCAIN'S 185

Check out CNN's electoral map today at:

http://www.cnn.com/ELECTION/2008/calculator/

This currently gives Obama 277 delegates to McCain's 122 with 87 Toss Ups. They way current polling trend is going, Obama is likely to win from the toss up column, Nevada, Colorado, Florida, Ohio & North Carolina and McCain Montana. That gives Obama 353 delegates to McCain's 185.

Some McCain states are becoming doubtful of late i.e. Indiana & Montana, but I am inclined to leave these in McCain's column. The popular vote gap may not be so wide, probably between 4 to 6 %.

Barack Obama should win at least 353 delegates if not more and that is a margin of 65:35.

Political Critic: http://politicalcritic.com/ is giving Obama 378:160 margin

Henry Paulson's Blunder

The financial crisis the world is currently experiencing was exacerbated by a single event - the collapse of Lehman Brothers. By allowing this to happen, Paulson caused chaos in the world markets creating the necessity for billions of dollars of tax payers money to be pumped into banks and financial markets.

Henry Paulson will be remembered for this single largest blunder of his life. Had he acted swiftly and not decided to let Lehman collapse, the inter-bank lending freeze that followed could have been averted. For fear of total loss, banks around the world stopped lending money to each other and that halted the entire financial system.

Banks and financial institutions suffering from sub-prime crisis would still have needed capital, but the extent and urgency to act virtually overnight would not have been there. Governments around the world are now risking trillions of dollars of tax payers money.

Henry Paulson was probably a good CEO of Goldman Sachs under the system that has since collapsed and is discredited. But for him to manage the $700 billion bailout with a handful of his former Goldman colleagues is a serious conflict of interest. These funds should be managed by an independent agency comprised of people with no vested interests.

I still believe that Bush Administration should have availed the services of Mr. Warren Buffet to manage the bailout and he probably would have even made some money for the taxpayers. Some may say that Mr. Buffett too has vested interest as he invested in Goldman's recently. I believe that is small change for Mr. Buffett and he is above all this anyway.

Let Warren Buffett Manage the Financial Bailout

Congress is rightly concerned about how and who will manage the bailout. There is no doubt that banks should not be given blank checks at arbitrary pricing for their toxic assets. Also, the Senior Executives of banks benefiting from the bailout must also agree to forgo bonuses for a number of years.

The markets need a quick positive signal from Congress, delays could bring down the entire financial world. Congress should pass a simple bailout package without getting bogged down into the hows and whys. They should request Warren Buffett to manage the entire bailout package. He is the shrewdest investor and will drive hard bargains with banks before giving them a dime. Let him impose conditions as he deems fit. He is already of the opinion that bankers will have to give up bonuses for a while.

Going by Warren's track record, an investment of $700 billion of tax payers money will probably come back to the treasury as $1 trillion. All he needs is a handful of good people to help him manage this.

The Financial Bailout and its Implications

Enough has been said already about greed, big salary and bonus payouts to senior executives of banks. The situation is where it is - precarious and needs to be addressed urgently. Treasury Secretary Henry Paulson has been running around for the last couple of weeks trying to avoid a 1929/30 style financial meltdown and all credit to him for his deft handling of the situation so far.

The current proposal before the Congress is to approve an emergency fund of $800 billion (with no apparent upper limit) to be managed by Treasury Department to buy toxic mortgages and exotic paper from banks for cash in order to provide liquidity to financial institutions. Despite the loud protests of Congress, almost everyone knows that this bill will pass and funds will be made available.

Congress may wish to place an upper limit, so this does not become an open ended commitment. Paulson himself suggested in the weekend talk show interviews that amount needed could exceed $1 trillion. This is almost equal to the amount spent on Iraq war to date. So wither plans of ending the war to save money to spend on social programs.

The Congress should also consider putting a mechanism in place that any bank benefiting from this fund will agree to freeze the salaries and bonuses of top 5% executives until such time as the treasury holds their toxic paper. Once the paper is sold, the restriction is lifted. Also, Congress should consider setting up a three member committee of reputable citizens with financial experience who will approve any bonus payments to top 5% executives of banks and financial institutions benefiting from this fund. This may seem draconian, but it is important to give a sense to tax payers that bankers will not start paying themselves huge bonuses until such time as their money is tied up in toxic assets.

The wider implications of the bailout are much greater. The national debt already ballooning out of control will exceed $11 trillion. No one knows how this will ever be paid down or how many decades it will take to bring it down to the level it was eight years ago. Treasury will probably end up printing more money and that could cause serious inflation, erosion in value of dollar and a possible shift from Dollar to Euro as the world currency. High inflation will result in high wage demands by unions, resulting in even greater inflation, mortgage foreclosures and credit card debt defaults.

I hope Paulson and Bernanke are considering all those eventualities and are ready to tackle what is to follow.