Let the trial balloons soar…

The time-honored way of vetting potential candidates for cabinet posts is to float their name in the media and then to gauge the reaction. If there is a fire-storm, the balloon is allowed to be shot down and never heard from again. With Obama holding a solid lead three-weeks short of election day, the balloons are starting to fly. Some is just media speculation, but expect to here more of this in the weeks ahead.

The first name we’ve heard floated for Treasury Secretary is Jamie Dimon, JP Morgan CEO. He’s a big Dem donor and has guided his bank through the credit crunch far more nimbly than most. Beats Warren Buffett or Paul Krugman…

Second stimulus plan in the works

Now that financial institutions have gotten their hands on untold billions and the automakers got their $25 bln, it’s time to grease the consumer with another check and perhaps a bridge or tunnel or two. The Democrats are busy churning out proposals to promise cash-in-hand for favored constituencies ahead of election day.

Pelosi has announced the need for a new package while Obama is unveiling a whole new economic program.

Blame Obama!

The fall in the McCain contract on I-Trade looks a lot like the Dow. Coincidence? YOU be the judge.

German finance minister under pressure

A sense of schadenfrude will come over some of our frequent commentators when they read this piece of the political travails of Herr Steinbrueck after some of his recent “mis-steps”.

Here comes the pendulum!

Under-regulation be gone! Over-regulation here we come! Having seen this movie countless times before, you can bet Capitol Hill will be piled high with legislation to regulate banks, brokers and mortgage lenders to within an inch of their lives. Throw hedge funds on the pile, even though they have been relative bit players in the credit drama. Barney Rank is taking the lead of hedge fund regulation, so have no fear…

McCain floats Buffett as potential Treasury Secretary

What a boob. John McCain is quoted on Reuters as saying he would consider appointing Warren Buffett as Treasury Secretary. He would also consider Cisco’s John Chambers and E-Bay’s Meg Whitman. At least the last two support him.

McCain he would “do everything” to support a stronger dollar. Particularly the US must “Stop mortgaging” our future to China. In the next breath, he calls for free trade, apparently without irony. He then went on to call for stronger climate change efforts. Way to play to the base, Maverick….

With that, I need a break. All the best, back in a few hours.

Pelosi wants second stimulus package

When she makes her way to the White House later this afternoon, Speaker of the House Pelosi will have a second stimulus package in her very expensive purse. One wonders if there is a bit of horse trading going on where Pelosi gives Bush his bailout in return for more fiscal stimulus. With Bush’s term coming to an end, it is hard to see him putting up much of a fight. More fodder for the deficit hawks to chew over…

Greens back down as November approachs

The earth may have a fever, but the Democrats in Congress have a headache; their ban on offshore oil drilling which is an enormous drag at the polls. With election day approaching, they’ve courageously chosen to let a 25-year ban on offshore oil drilling quietly expire rather than put the matter to a vote ahead of the fall elections. Lifting the ban will not have any immediate impact but it could blunt some of the long-term supply concerns facing the US crude market.

Schumer stalls dollar rally

Dealers are blaming “Microphone” Chuck Schumer for halting the dollar rally, as he told CNBC that he and the rest of Congress have not been briefed on any potential plan from Treasury to soak up toxic assets. Rumors had circulated earlier is that is how the plan first surfaced in the press, leaked from the Hill. Also undermining the dollar were headlines that no bids for WaMu had been submitted at its auction.

EUR/USD reached 1.4355 on the rebound after holding support in the 1.4270 area. 1.4385 is near-term resistance.

We’re all supply-siders now

Barack Obama may want to hike taxes despite a downdraft in the economy and equity markets but the Russians and Chinese are cutting taxes to try and lift their markets. Commentators have bemoaned the socilaist drift in the US as private industry lines up for government bailouts. Odd to see former (and present) Communists cutting taxes to spur markets while we veer in the other direction.