Who else is in the soup line that goes around the corner?

Wasn’t the cause of the current market disorder judged to be caused by (in no particular order): deregulation, leverage, loose lending standards associated with subprime lending, securitization, credit default swaps, CDOs and greedy investment bankers. How did GM and the rest of the American automakers sneak in there?

This is absurd. Seriously, who’s next? The problem with bail outs in general. When does the Fed turn off the tap? Nevermind that. How does the Fed turn off the tap. Look for everyone feeling the squeeze these days to at least line up to take a shot a freebie.

So I was hoping to be the only person in the entire blogosphere to not write about the 2008 Election. But I just can’t resist. Looks like there is going to be a record turnout at the voting stations, which is probably the most newsworthy item of the entire day!

Instead of writing about the outcome, I thought I’d just do a piece comparing the American and Canadian election process. The differences are numerous, but I’ll stick to the ones that amuse me the most.

My main beef about the whole American election process is that its somewhat anticlimactic. Here in Canada, we get an election called, and 3 weeks later, its done and dusted. There are just a few days of name calling (and subsequent apologies – ), but then its over. In the US, its like 2 years in the making! If you want crash TV and record turnouts, you’ve got to hit them hard and fast like us hosers! You’d think that in the age of instant gratification that the US would move to a faster product.

I’m also especially amused by the amount of consumer spending the election garners. There is an entire economy based on candidate products. That includes t-shirts, buttons, dolls, and so on. Its got to be worth a few basis points of the US GDP by the time its all said and done. Again, this election related consumer products (humorous or otherwise) generally don’t exist in Canada. Most t-shirts are home-made and are mostly embarrassing political statements than “team colours”.

I’m not even going to get into the whole “vote-for-your-riding-leader-not-the-guy-running-the-country” problem. America wins on that one.

The last stark comparison lies in the pre-election debate. The American debates comprise essentially of a bunch of deflected questions. The Canadian election bears the same deflections, but in both French and English – so that there is an opportunity for the French speaking candidates to sound stupid in English, and for the Anglophone candidates to sounds equally absurd in French.

In the end, both systems have their pros and cons, so we’ll just call it even as far as the scoring goes.

That’s pretty much the Reader’s Digest version of a comparison of US and Canadian elections. Alright, enough distractions, now get out and VOTE!

I haven’t been blogging much over the last few days. I suppose its because I’ve been busy trying to make sense of what is going on in the markets, as well as trying to figure out a way to create my own “soft landing” if things really get ugly.

Ugly? You mean things aren’t ugly already? Not in my humble opinion. The stock market is simply a forward looking instrument that helps us understand which way the economy is going to go. Its telling us that things are going to get bad and that its going to happen quick, just as the 30-something percent decline indicates.

I think the market is ripe for opportunities though. Even though traders prefer a bullish market, to me the volatility is appealing as well. We’ve had 3 or 4 thousand point swings in the DOW in the last month. If you played your cards right, you made a whack of money playing the field and taking a ride on the ups and downs of the October 2008 stock market. The stock market is not the only place where opportunities lie. This is a time when innovation takes its broadest steps. Sure there are going to be a lot of “dog” ideas out there, but there are going to be some great ones as well.

Everything seems to be happening so fast, so don’t blink. You wouldn’t want to miss an opportunity to be part of something great.

Today marks yet another day with of polar extremes in market sentiment. Down 400 before lunch, only to rally back nearly 800 points to finish up 400. Wild. I’m no pro, but I think that we’re in for this kind of volatility for at least a few more weeks. For those keeping track, the VIX hit another all time high today surpassing 80.

The massive de-leveraging going on in the market is probably substantially done, but I think that we haven’t seen a bottom yet. Let me rephrase that. I think that we’ve seen close to a bottom (if not already hit it), but it will be tested a few times more before there is any more meaningful upside to be had in the broad market. That might even take years. Who knows for sure? One thing I’m pretty sure of is that we’ve not even seen the results of any material corporate defaults yet, and I doubt that has been priced into the market. It is this risk that will cause us to linger around the 7800 to 8200 mark for quite some time to come. IMHO.

All the Fed’s band aids are spent. They’ve poured cash into the banks to restore liquidity. Now all we need is time for all of the Corp’s to jockey for position and see who is strong enough to survive.

Not me…

The S&P just closed under 1000 for the first time since 2003. Many pundits are saying saying that a 9-handle, or even an 8-handle are not out of the realm of realistic possibility. All of this after Bernanke said the Fed is ready to slash rates, as well as acknowledging that inflation is less of a concern with the “extraordinary stress” that is on teh economy. Let’s face it, rate cut or not, the market has plenty more room for downside.

It sure feels like they’re throwing everything at this problem (including the kitchen sink), but so far, the markets are not buying that any of it is a viable fix. So what is it going to take?

Today we did a quick upgrade to the main Swaplogic site with some new functionality that we call the Swaplogic Whiteboard. Much like any chalkboard or whiteboard, its a place to leave messages for yourself or for your Swaplogic Friends. Leave a reminder to yourself to pick up milk on the way home, or leave a status update for a member with whom you are working on a Swaplogic Contract. Leave a message about anything that you feel needs to be said (within reason!). When you are done with a message, the profile owner can erase it, just as you would on any message board. Whiteboard messages can also be kept private (only for the eyes of the profile owner).

For an example, check mine out right here:

http://www.swaplogic.com/whiteboard/dannyp/

As always, more to come…

OK, so I’m getting a bit nervous about the Paulson Bailout vote that happens with the Senate tonight and the House tomorrow. Its become quite clear that the folks in the Senate and the House were scared six ways from Sunday after a 738-point drop in the Dow on Monday, and they’re very unlikely to let that happen again (even though trying to manage stock prices is none of their business). I don’t think that there is any way that they will vote against the Bailout even though there is seemingly very few American taxpayers that support the plan. Oh well… onto the random thoughts.

Let’s all take a moment to thank all of the statistics geeks out there that were able to figure out that McCain is seven times more likely to die in office than Obama. Lets all go to the polls now.

In more election related stupidity, Sarah Palin gave the American voting public more reason to believe that she is an absolute political amateur. I am now rooting for McCain because, lets face it, the VP is the most plum job in America when you consider the actual work required to fill the role, and the entertainment value of Palin being in that job is too irresistible. Jon Stewart is drooling at the prospect and will likely sign an 4 year deal with a nice 4 year extension if McCain gets the vote.

When will the National Music Publishers’ Association learn? Someone please sell them the rope by which they will hang themselves already, will they?!?! I doubt Apple would take iTunes offline, but lets see the NMPA fill the payroll if that ever happens.

That’s all for now. See you in a couple of days after the House votes in favor of the biggest economic mistake in recent American history.

Yes, we’ve been busy! This marks the launch of our second Facebook application, Promise Me.

Promise Me (http://apps.facebook.com/promiseme/) is our first “real” application. We kind of considered I Declare to be our trial run or proof of concept (but we still hope people enjoy and get use out of it). We think that Promise Me is a very unique and useful application that truly aligns the Swaplogic philosophy with the functionality of Facebook.

Promise Me allows Facebook friends to create Promise Contracts between 2 people. Like I Declare, promises can be about anything, but they can’t be more than 160 characters in length. Promise your girlfriend that you will take her out for dinner this weekend. Promise your classmate that you’ll do your part of the project by the end of the day. You can even ask your friend to make a promise to you, like asking that your best friend promise to pick you up at the airport after you come back from a trip.

With Promise Me, your Promise Contracts are kept private (only you and your friend can see the details), but your Track Record of keeping or breaking promises is public – so make sure you live up to your word! This application is all about building a track record of accountability. For every Promise Contract you complete with positive feedback, you prove to all of your friends that your word is as good as gold!

Here’s a quick overview of how it works:

1. Pick a Friend, a Promise (160 chars) and a Deadline. If you are the one Giving the promise, your track record is at stake. If you are Requesting the promise, your friend’s track record is at stake.
2. A notification is sent to your friend requesting that they participate in the Promise Contract (they can accept or decline).
3. If accepted, the Promiser should do what they said they would do in the contract and fulfil the obligation to the Promisee
4. After the deadline passes, a notification is sent to the friend who put their track record on the line to remind them to give feedback on whether the promise was Kept or Broken
5. Each member’s track record is built based on the number of Completed Promises. Compete with your friends to see who is the most accountable for their actions!

We hope you enjoy Promise Me. Add it. Fan it. Tell everyone about it.

More apps to come…

Today the SEC announced a temporary ban on short selling of 799 financial stocks. This is, of course, a desperate move to create securities market stability. The ban will be in place until October 2. Its just delaying the inevitable, in my opinion. Without getting technical, long position holders in financials are going to be pissed because they have no temporary hedging vehicle in a market where one cockroach has turned into a thousand.

As, as I write this, I see a headline coming across the Bloomy saying that the Fed is going to buy Fannie and Freddie debt. Can we still short the dollar?

We are ƒµ©κεδ.

Edit @ 9:35 AM: Something smacks of convenient timing here. Look for WaMu, Morgan Stanley, Wachovia and all the other guilty parties to possibly take the opportunity to take a bath during this very convenient market opportunity (ie. before Oct 2).

For the last few weeks, we have been playing around with the Facebook Application Platform. The result: I Declare. This is the first of a few applications that we have in the pipeline, and we are quite pleased with the result. This is somewhat of a “proof of concept”, given that it is the first Social Network app we’ve built, but we hope its used and appreciated by all Facebook members.

I Declare (http://apps.facebook.com/ideclare/) is an application where Facebook members can make predictions and can let their friends vote on, comment on and discuss the outcome of your prediction (or, “Declaration” as we like to call it). Declarations can be about anything, but they cant be more than 160 characters long. Declare the next president. Declare your next math exam grade. Declare the outcome of the next NY Giants game. Declare whatever you want, just let your voice be heard and let your friends vote on how accurate you are in your predictions. Here’s how it works:

1. Make a declaration/prediction and pick a deadline for when it will be true.
2. Your friends can track your declarations, vote on their accuracy, and comment/discuss their merit
3. You build a track record of accuracy to compete and compare with your friends

We tried to keep the theme of our app in line with the Swaplogic mantra of being the premier social network for people wanting to share their personal and professional track records online, and I think we have succeeded. We hope you enjoy I Declare. Add it. Fan it. Tell everyone about it.

More to apps come…