The Michigan Daily - michigandaily.com

Wednesday, September 24, 2008 - 5A

. Trouble on Wall Street gives
Obama lead in latest poll

SPEAKING OUT

Voters cite economy
over war in Iraq as
top campaign issue
By DAN BALZ and JON COHEN
The Washington Post
WASHINGTON - Turmoil in
the financial industry and growing
pessimism about the economy have
altered the shape of the presidential
race, giving Democratic nominee
Barack Obama the first clear lead of
the general-election campaign over
Republican John McCain, accord-
ing to the latest Washington Post-
ABC News national poll.
Just 9 percent of those surveyed
rated the economy as good or excel-
lent, the first time that number has
been in single digits since the days
just before the 1992 election. Just
14 percent said the country is head-
ing in the right direction, equaling
the record low on that question in
polls dating back to 1973.
More voters trust Obama to deal
with the economy, and he currently
has a big edge as the candidate who
is more in tune with the economic
problems Americans now face. He
also has a double-digit advantage
on handling the current problems
onWall Street, and as aresult, there
has been a rise in his overall sup-
port. The poll found that, among
likely voters, Obama now leads

McCainby52percentto 43 percent.
Two weeks ago, in the days imme-
diately following the Republican
National Convention, the race was
essentially even, with McCain at 49
percent and Obama at 47 percent.
As a point of comparison, neither
of the last two Democratic nomi-
nees - John F. Kerry in 2004 or Al
'Gore in 2000 - recorded support
above 50 percent in a pre-election
poll by the-Post and ABC News.
Last week's near-meltdown in
the financial markets and the sub-
sequent debate in Washington over
a proposed government bailout
of troubled financial institutions
have made the economy even more
important in the minds of voters.
Fully 50 percent called the economy
and jobs the single most important
issue that will determine their vote,
up from 37 percent two weeks ago.
In contrast, just 9 percent cited the
Iraq war as their most important
issue, its lowest of the campaign.
But voters are cool toward the
administration's initial efforts to
deal with the current crisis. Forty-
seven percent said they approve
of the steps taken by the Treasury
and the Federal Reserve to stabi-
lize the financial markets, while
42 percent said they disapprove.
Anxiety about the economic
situation is widespread. Just over
half of the poll respondents - 52
percent - believe the economy
has moved into a serious long-
term decline. Eight in 10 are con-

cerned about the overall direction
of the economy, nearly three-
quarters worry about the shocks
to the stock market, and six in 10
are apprehensive about their own
family finances.
Two weeks ago, McCain held a
substantial advantage among white
voters,includingnewfound strength
with white women.In the face of bad
economic news, the two candidates
now run about evenly among white
women, and Obama has narrowed
the overall gap among white voters
to five percentage points.
Much of the movement has come
among college-educated whites.
Whites without college degrees favor
McCain by 17 points, while those
with college degrees-support Obama
by 9 points. No Democrat has car-
ried white, college-educated voters
in presidential elections dating back
to 1980, but they were a key part of
Obama's coalitioninthe primaries.
The political climate is rapidly
changing along with the twists
and turns on Wall Street, and it
remains unclear whether recent
shifts in public opinion will funda-
mentally alter the highly competi-
tive battle between McCain and
Obama. About two in 10 voters are
either undecided or remain "mov-
able" and open to veering to anoth-
er candidate. Nevertheless, the
close relationship between voters'
focus on the economy and their
overall support for the Democratic
nominee has boosted Obama.

Among white voters, economic
anxiety translatesinto greater sup-
port for Obama. He is favored by
54 percent of whites who said they
are concerned about the direction
of the economy, but by just 10 per-
cent of those who are less worried.
The survey also found that the
stronginitialpublicreactionto Alaska
Gov. Sarah Palin, McCain's running
mate, has cooled somewhat. Overall,
her unfavorable ratinghas gone up by
10 points in the past two weeks, from
28 percent to 38 percent.
She remains broadly popular
- 52 percent of voters view her
positively - but there have been
some notable declines. Over the
past two weeks, the percentage of
independents with favorable views
of Palin dropped from 60 percent
to 48 percent. Among independent
women, the decline was particu-
larly sharp, going from 65 percent
to 43 percent. Her favorable rat-
ing among whites without college
degrees remained largely steady,
but among those with college
degrees, it dropped nearly 20 per-
centage points.
The survey also showed some
backsliding in enthusiasm among
McCain supporters. Overall, most
supporters of each presidential
candidate said they are enthusi-
astic about their choice, but 62
percent of Obama supporters said
they are "very enthusiastic," com-
pared with 34 percent of McCain's
supporters.

FBI investigating if fraud played a role
in mortgage debacle, Wall Street crisis

Musician Magdalen Hsu-Lion performs at the Kerrytown Concert House last night-
During her performance Magdalen discussed her personal.experiences with racism,
homophobia and living with a disability. The events was sponsored by the Spectrum
Center as part of Bisexuality Day.
Telescope belonging to
Einstein found in shed

Securities and Exchange
Commission also opens up
fresh round of investigations
By CARRIE JOHNSON
The Washington Post
WASHINGTON - The FBI is investigating
whether fraud played a role in the troubles at
Fannie Mae, Freddie Mac, Lehman Brothers
and American International Group, bring-
ing to 26 the number of bureau investigations
of institutions tied to the mortgage debacle,
according to two sources familiar with the
developments.
At the same time, the Securities and
Exchange Commission has opened more than
50 investigations into disclosure and valua-
tion of housing-related investments at banks,
insurers and credit-rating agencies, Chairman
Christopher Cox told the Senate Banking Com-
mittee yesterday.
The wide-ranging probes are operating at
different stages of development and no charges
are imminent, according to sources, who spoke
on condition of anonymity because they were
not authorized to discuss the issue.
A half-dozen current and former government
lawyers cautioned that mortgage-related cases
presented significant challenges for investiga-
tors because of their complexity, which they
said surpassed even the five-year-long probe
into wrongdoing at Enron.

"The reason is theyinvolve securities - that
are all but incomprehensible even to sophisti-
cated investors," said Timothy J. Coleman, a
former Justice Department official who over-
saw the government's corporate fraud task
force. "The other problem is that there is no
obvious crime that was committed here. It may
be that people who invested in these mortgage
securities misunderstood the risks. But it's not
at all clear they were the result of a misrepre-
sentation."
The news of fresh investigative interest
comes as lawmakers fiercely debate the merits
of a Bush administration bailout package that
would help lenders unload more than $700 bil-
lion of uiderperforming assets on a taxpayer-
funded entity.
Public outcry over the rescue plan is
heightening calls for accountability in cor-
porate suites. Lehman Brothers filed for
bankruptcy protection earlier this month.
Mortgage finance companies Fannie Mae
and Freddie Mac are operating under the aus-
pices of the federal government, and insurer
AIG recently received .a federal loan of up to
$85 billion in return for government control
of the company. The FBI investigations of
those companies, reported last night by the
Associated Press, are preliminary and may
not uncover any evidence of wrongdoing, the
sources said.
A Freddie Mac spokesman declined to com-
ment. Representatives of the other three com-
panies did not return calls seeking comment.
Richard Kolko, a spokesman for the FBI,

said the bureau would not discuss the sub-
ject of an investigation. Authorities have been
quiet in part because the number of cases fluc-
tuates and because of the sensitivity of the
stock market, which has fluctuated wildly in
the past week.
To date, the highest profile criminal cases
related to the housing crisis involve two for-
mer Bear Stearns managers indicted in June on
fraud charges for allegedly misleading inves-
tors about their fund's financial health and two
onetime Credit Suisse brokers accused this
month of conspiring to win higher commis-
sions by misrepresenting an investment's risk
to clients. Both cases took many months for
prosecutors to assemble.
One of the challenges for investigators is that
companies themselves were among the biggest
losers in the debacle, writing down billions of
dollars in losses and sometimes plunging into
bankruptcy protection.
"If there's anything you want to carefully
examine and put together, it's a criminal case,"
said Andrew Weissmann, former director of
the Justice Department's Enron Task Force.
Stephanie A. Martz, director of the white-
collar crime'project at the National Association
of Criminal Defense Lawyers, said it would be a
mistake for prosecutors to rush to indict entire
companies and draft legislation raising crimi-
nal penalties as they did in Enron's collapse
six years ago. Instead, she asserted that poli-
cy-makers should focus on closing regulatory
loopholes and figuring out why no one caught
the problems sooner.

JERUSALEM (AP) - Albert
Einstein's long-lost telescope, for-
gotten for decades in a Jerusalem
storage shed, goes on display this
week after three years and $10,000
spent restoring the relic.
The old reflecting telescope is
cumbersome by modern standards,
but a demonstration for The Asso-
ciated Press showed it still works
well enough to see five of Jupiter's
moons and stripes on the surface of
the huge planet.
The legendary physicist . who
famouslytheorized relations among
energy, speed and mass received the
telescope in 1954, the year before
he. died. It was a gift from a friend
named Zvi Gizeri, who probably
made it himself, said officials at the
Hebrew University in Jerusalem
where the public will be able to view
the telescope starting tomorrow.
Einstein, who was a co-founder
of the Hebrew University, willed
his records to the school. There
were rumors through the years
that he also left a telescope, but it

took modern sleuthing and some -
luck to find it.
The long black tube about eight
inches in diameter and 6 feet long
stands on a base experts say may
have been taken from the German
army. It was this unique base, rec-
ognizable in a picture of Einstein
with the telescope, and a signature
from Gizeri on one of its mirrors,
that confirmed its authenticity in
2004, when abiologist named Eshel
Ophir made the connection.
The forgotten.telescope was first
discovered in a storage shed in the
late 1990s by a computer specialist
at the Hebrew University. But he
did not recognize it as Einstein's,
and left it in the shed.
Ophir made the connection
by accident, initially mistaking
another forgotten telescope for the
famous physicist's. After searching
through the archives and photos,
Ophir realized the real Einstein
telescope was actually the one his
colleague had found unceremoni-
ously years earlier.


$25 bil. automaker loan
* to go before Congress

WASHINGTON (AP) -- A
House budget plan expected
to be considered by Congress
includes funding for $25 billion
in loans for Detroit's automak-
ers, congressional officials said
yesterday.
Rep. David Obey (D-Wis), who
leads the House Appropriations
Committee, said funding for the
loan program would be included
in a stopgap spending bill to keep
the government running after
Congress recesses for the election.
The bill is expected to be consid-
ered this week.
General Motors Corp., Ford
Motor Co., and Chrysler LLC
have pressed for the loans to help
the industry modernize assem-
bly plants and build more fuel-
efficient vehicles. Auto executives
lobbied for the loans last week on
Capitol Hill.
Obey said he was "not a fan of
the American auto industry, and
I'm not a fan of this provision." But
he noted that Congress had autho-
rized the loans, which will require
$7.5 billion in appropriations, in
last year's energy bill.
Obey said modest adjustments
would be made to help speed up
the loan program but there would
not be changes to bring more flex-
ibility to the program. Automak-
ers want the loans to be applied to
a broader number of vehicles and

fuel-saving technologies.
Sen. Carl Levin (D-Mich.) said
in a statement that the fund-
ing "should help to keep auto
jobs in Michigan and in the U.S.
and begin moving us toward the
advanced vehicle technologies
that are critical to our companies'
competitiveness in the global
market place."
Levin called it a "long and hard
bipartisan effort by the Michigan
delegation to obtain funding for
government loans."
Congress authorized $25 bil-
lion in loans in last year's energy
bill but has not funded the plan.
Lawmakers included the loans
in the bill to hglp auto compa-
nies and their suppliers meet new
fuel-efficiency standards of at
least 35 miles per gallon by 2020,
a 40 percent increase.
Since the energy law was
signed, the Detroit car companies
have struggled with a weakened
, economy, limited access to credit
and declining sales.
The government interest rate
for the loans would be about 5
percent, providing about $100
million a year in savings for every
$1 billion the companies received
in loans. The companies have
poor bond ratings, meaning they
would only qualify for double-
digit interest rates on the open
market.

Elevate your expectations.
Model Now Open
400 E. Washington St.
at the corner of
Washington & Division
734-998-4400
Reserv " " 0 " 4E~ee- - Sco
H--,

p