His campaign has received significant contributions from insurance/banking presidents and vice presidents (if he were still a viable candidate I’d compile a list).  For those who don’t know, he is the senate banking committee chairman and has always tried to push pro big-bank legislation through.  From Wikipedia:

The Center for Public Integrity has criticized Dodd for “being the leading advocate in the Senate on behalf of the accounting industry.”^[7][8] Political consultant and commentator Dick Morris wrote that Dodd had received more from accounting firm Arthur Andersen than any other Democrat and bore responsibility for trying to shield accounting firms from investor fraud liability in cases such as the Enron scandal.^[9]

It comes as no real surprise that he is now trying to mangle Bernakes calls for a short term fiscal stimulus package into a need to bailout the subprime mortgage investment bankers.  From Bloomberg:

Jan. 23 (Bloomberg) — Senate Banking Committee Chairman Christopher Dodd proposed creating a federal program to buy “very distressed” mortgages at steep discounts as part of economic stimulus legislation being developed in Congress.

Of course he spins it by talking about the poor borrowers who will be helped by a re-fi into a 30 year amortizing mortgage… but the reality is many of the subprime borrowers won’t be able to pay the 30 year amortizing payments either.

Bailing out banks, and letting some people keep their house (with a higher payment then they currently have) could be an acceptable goal. The real issue is that Dodd is pushing this through as a response to Bernakes call for short term fiscal stimulus.  This proposal may help in the medium or long term, but would do almost nothing for the economy over the next 24 months.

For those who don’t know, InTrade contracts are worth $100 if they win.  McCain contracts are currently trading at $51 each, implying the market believes he has a 51% chance to win.  I don’t have any complex deligate what-if tables that explain why I bought these, but here are some of my gut feelings on current InTrade pricing:

 I believe intrade users have a front runner bias that is not justified.  Perhaps there are a significant number of users who are buying contracts for later bragging rights to their friends down the road.   I don’t think McCain is above 50% right now as the contracts imply.

Romney: I purchased these contracts at $24 because I believe he is closer to 30 or 35 percent to win.  The Jan 20 Rasumussen poll  shows him winning Florida with a 5 point margin.  Rasmussen has the best polling track record this election season (especially in Iowa).  If Romney wins Florida (a winner takes all delegate state), I believe his 2:1 delegate lead will leave them tied for the GOP nomination. 

Edwards: I bought these contracts at $1.  For no quantifiable reason, I think he is about a 1:30 chance which makes these very profitable.  Polls and election swings are just not predictable enough to be pricing him at 1:100 (not trying to upset anyone, but I’d guess there is a 1:100 chance at an assasination attempt against one of the front runners… 1% Edwards makes no sense to me).

Paul: I bought these at $1.80.  I don’t think the expected return on these is as good as Edwards, but again I think Paul is above 55:1 to win.  One small Hickup in the McCain campaign could send many voters towards Paul.  Huckabee supporters could also find a logical fit in Paul if they could look past his foreign policy.  The crashing economy and dollar could also be a benefit to his conservative fiscal policy stance.  There is also a chance of a scared-to-lose-to-Hillary switch that could be flipped if the the “70% of the US opposed to Iraq war statistic” gets brough back to GOP discussions.  Paul has a 5 to 10 percent base in almost every state, and that alone should put him above 50:1.

The market was set to open about 6% low when Bernake dumped tens of billions of dollars on the market via lowering the fed funds rate a giant 75 bps.  The energy companies are getting hit the hardest with PetroChina down about 10%.  Berkshire Hathaway B piece stock was down nearly 15% in futures trading, but the Bernake printing press pulled it back up to a 4% loss.  Google is starting to look like an attractive buy to me, with the P/E falling to 45 (price = $572).

I believe a bad economy helps Hillary on the Democratic side and Romney on the Republican side.  Rasmussen polls have shown these two to be the leaders on the economy.  John Edwards, Fred Thompson, and Ron Paul need to put their campaigns to work to capitalize on this.  This is a final glimmering opportunity for the fringe.

General Growth, one of the largest Real Estate Investment Trusts, pushed a press release out today entitled “General Growth Responds to Recent Statements in the Press and Blogs”.  I have never heard of a company of this size issuing a press release in response to bloggers (good for us!).  The release is mostly boring stuff about how they will be able to pay their debt obligations in the face of a faultering economy, but I thought I’d quote this last part for truth.  Hopefully someone reminds me to revisist this in a year so we can see if the press passes really deserved to “get yanked”:

 Bernie Freibaum, Chief Financial Officer of General Growth, said, “we do not like to publicly respond to unwarranted and untrue allegations, but we must do it in order to protect the interests of our Company’s constituents. We wholeheartedly agree with Barry Vinocur’s reaction to this situation, which he published in his newsletter today. Mr. Vinocur is the highly regarded editor and publisher of REIT WRAP, a daily subscription service that is purchased by virtually all institutional investors in REIT stocks. Mr. Vinocur said that ‘raising the possibility… that a company might file bankruptcy–especially in today’s environment–is very serious stuff. Moreover, is there any knowledgeable individual who would suggest there’s even a remote possibility that GGP might file bankruptcy?’ ”

“Finally,” continued Bernie Freibaum, “Mr. Vinocur adds ‘that the editors signing off on this crap should have their press passes yanked.’ “