MAJOR PAPERS:

• The Wall Street Journal reported that it is the Bush Administration versus Democrats versus Republicans to decide the strategy to stabilize Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac. The Administration's plan would let the Treasury Department advance a credit line and the opportunity for the government to buy equity in either firm. A package is expected to pass but not before the political and economic ramifications are battled out. Democrats and Treasury want it to be a part of a housing rescue plan; Republications oppose it.
• The Clinton Foundation, headed by former President Clinton, believes it has a pricing agreement in place that it expects will make malaria drugs affordable and available to millions of poor people worldwide, the Wall Street Journal reported.
• The Financial Times reported that UBS AG (NYSE: UBS) and Liechtenstein's LGT Group will today be accused by U.S. Congressional investigators of using the "cloak of bank secrecy laws" to help American clients evade billions of dollars in taxes.

OTHER PAPERS:

• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) is talks to acquire Barr Pharmaceuticals Inc (NYSE: BRL). The price tag is said to be between $7B and $7.5B.

The ever-incisive FT columnist Martin Wolf reminds us that while globalization's prize is plus-sum (everyone gains), as opposed to zero-sum (Country A gains only if Country B loses), it is not perfect sum (there are costs) nor egalitarian sum (everyone gains equally).

The biggest advantage of globalization, in Wolf's view? The spread of prosperity, including a wider distribution of innovation and bigger opportunities for profitable exchange/trade. Also valuable, although not guaranteed, Wolf says, is increased political stability in previously impoverished countries.

Globalization marches on

Further, in the globalization era's first decade, the United States can't do anything to halt the flow of ideas, and the diffusion of knowledge, skills, technology systems, and so forth, Wolf argues. Or at least the United States can't do anything decent to stop globalization.

I have not decided who I am voting for yet. Or maybe it would be more accurate to say I have decided on multiple occasions only to become undecided again. While some will see me as fickle, or worse, others may be in the same boat.

I am also continuing to think about what difference any of the candidates can make on the economy, and based on these musings, where to invest. My current belief is that none of them will have a profound impact on our economy.

There are no financial wizards among them. Here is the shocker though: I like all three candidates, or at least can find some good in each of them. Each of them is a fighter, and I believe each one of them brings certain skill sets to the job. There are also things about each candidate that are inescapably negative. Clinton has so much baggage, Zsa Zsa Gabor would be jealous. Obama does not have the experience and he has a degree of arrogance (right sweetie); McCain is an old stick-in-the-mud who, as a long-time senator, has spent more hours with lobbyists than almost anybody, though he is pretending otherwise.

Where does this leave me from an investment perspective? My first choice, for stability with moderate growth and dividends, remains the defense sector. I wrote Defense sector rolls over S&P 500 for 8th straight year a while back and I still think that it is the most secure. Here's why:

A) None of the candidates will want to appear soft on defense when we are at war, and all three have made threatening remarks in some country's direction to make sure the electorate knows that.

B) The War in Afghanistan and Iraq rages on, and even the most optimist view is that a draw-down will take years.

C) Even if all war ceased immediately, the upgrading and replenishment of the hardware will cost billions of dollars and most of the defense contractors have that in their backlogs now. Chasing Value: General Dynamics & Raytheon -- The defense does not rest

In the latest chapter of "Politicians must have something to say about everything," Hillary Clinton wants you to know that she doesn't like the fact that Exxon Mobil (NYSE: XOM) traded down after after reporting $11 billion in quarterly earnings.

Senator Clinton -- whom I would vote for by the way -- said that "There is something seriously wrong with our economy when Exxon's record $11 billion in quarterly profits are seen as a disappointment by Wall Street."

Then, in a twist that reminded me of watching a poorly coordinated fellow slam an ice cream cone into his forehead, Clinton added that this was further proof that the gas tax should be suspended.

Has Senator Clinton seen the number of SUVs on the road? And has she noticed that 60% of people are obese? I promise you they didn't get that way by walking everywhere to save money on gas. Given the state of the federal budget -- and the increasing concern about the impact of fossil fuels on the environment -- we shouldn't be doing anything to encourage increased use of fuel.

A separate issue that may of interest to investors: some analysts have suggested that Exxon is actually understating its profits -- and boosting capital investments -- in an effort to appease politicians. If that's the case, the stock may be cheaper than it appears at first glance.

The Associated Press reports that Bill and Hillary Clinton made $109.2 million in the years since they left the White House. According to Drudge Report, Bill was the big winner. Details include:

They paid $33.7 million in Federal taxes and gave $10.2 million to charity. I would not be surprised if Clintons have had the most successful post White House cash-in of any presidential couple. No wonder she wants to get back there again. Think of how much more she could make after being president!

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Whatever your political ideology happens to be, I think we can all agree on one thing: Given the complex economic issues currently facing our country -- many of which will continue to be important for the foreseeable future -- our next president must be someone who understand economics.

To that end, the latest issue of Barron's looks at the backgrounds of each candidate (subscription required), showing something troubling: McCain's financial expertise is pretty much limited to having married a rich woman. That's a good strategy to be sure, but not necessarily the best background for someone charged with dealing with the current mess. Advising struggling homeowners to scan the obituaries in search of newly widowed socialites might not go over well.

Then there's Barack Obama whose experience in the market is, according to Barron's, pretty much limited to having once lost $13 thousand on stocks acquired through a blind trust. Barron's writes that "Small wonder he's giddy to raise taxes on interest and dividends. Obama has little skin in the game ... He's as insulated from his own dividend and capital gains proposals as a penguin is from the cold."

Hillary Clinton's net worth is very high, but she owns little stock. Her experience on the board of directors at Wal-Mart (NYSE: WMT) is intriguing but, looking at the available information, one thing is clear: None of these candidates can be considered an economics expert, something that we badly need, although George W. Bush's MBA from Harvard did little to avert the current mess.

Perhaps we'll get our economics expert from the other half of the presidential ticket. Private equity titan Mitt Romney is rumored to be a possible pick for John McCain, and there is some speculation that Barack Obama could pair up with New York Mayor Michael Bloomberg.

There's an old adage that you've got to give sometimes in order to receive. Nowhere is that more true than in modern-day politics where the level of candidate scrutinization had reached epic heights. While no politico myself, I do recognize a savvy move when I see one, and I think I just spotted one.

Obama just released his 2000-2006 tax returns into the public domain and is now urging Hillary Clinton to do the same. Why subject your filings to the public sphere? This armchair pundit believes that Obama knows something about the Clinton filings and is upping the ante to push them to the same level of disclosure.

But once we've got the filings, what do they tell us about Obama? Well, Bloomberg is taking the Obamas to task for not quite giving as charitably as they could. In an article out today, Bloomberg writes that the Obamas gave less than 1% of their 2000-2004 income to charity.

While kudos should be given to the Fed for trying to do whatever it takes to shore up the banking system, what is a bit more worrisome is how both Barack Obama and Hillary Clinton approach the problem. Obviously they started out by blaming President Bush for these problems.

According to an AP report:

"Now we are in the soup and we better get ourselves out of it before the consequences get drastic," Democratic presidential contender Hillary Rodham Clinton told reporters. Barack Obama said: "History will not judge President Bush kindly for his failure to act in a way that could've prevented or alleviated this economic crisis."

Does Obama think that the President could have prevented the entire economic crisis, had he acted differently? In fact I postulate that one of the major reasons that Wall Street is in the current situation is because of a precedent taken 10 years ago by then Treasury Secretary Robert Rubin. He bailed out his Wall Street buddies after they were set to lose billions in bad investments in Asia, among other places. Go figure that after they get saved once, they go ahead a decade later and continue to make investments without taking into account risk. They knew that they could get away with it because they would get bailed out. And guess what? They are going to get bailed out.

The fact is that the Fed, by injecting liquidity, is doing exactly what it should be doing to try and get the banking system back on track. Many economists believe that had the same strategy been implemented in 1929, there never would have been a Great Depression. Back then they took money out of the system and companies went bankrupt. The Fed is making no such mistake this time.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/17/08.

Walt Disney Co. (NYSE: DIS) held its annual shareholder meeting last Thursday, and a couple interesting things were discussed, according to a Hollywood Reporter piece.

Apparently, a mutual fund manager challenged management regarding a controversial miniseries called The Path to 9/11, claiming that Disney has decided not to exploit the project on home video because of political considerations. I vaguely remember this miniseries, but it seems to have been critical of President Bill Clinton, and since his wife is running right now, well, maybe the decision was based on not interfering with whatever momentum she may (or may not) have. The mutual fund guy said CEO Bob Iger has been a donor of Clinton (as one can imagine, Iger denies that politics are involved here).

I am really not sure if this guy has a legitimate point or not, or what his bias is, but let me say this -- if the miniseries did really cost $40 million, then it should be out on DVD, period. Shareholders should be angry about that. Content is king, new distribution platforms are the kingdom, and if this miniseries is controversial, then it might bring in a little bit of cash to the Mouse's coffers. Now, I obviously realize that not releasing the miniseries isn't going to break Disney -- but I do want the company to aggressively exploit any and all content, especially one that cost $40 million to generate.

Tuesday's primary victories in Ohio, Texas and Rhode Island gave Sen. Hillary Clinton, D-New York, about all her campaign could hope for: solid performances and a chance to close the delegate gap in the next primary, in Pennsylvania on April 22.

Still, the delegate math remains rough for the candidate seeking to become the first woman nominated for president by a major U.S. political party. Sen. Barack Obama, D-Illinois, leads in delegates, 1477-1391, including pledged superdelegates, according to a Washington Post tally, and the Clinton campaign's strategy will now be to try to close the delegate gap to 60 or so with a win in Pennsylvania. Two caucuses, Wyoming and Mississippi, occur before the Pennsylvania primary, and Sen. Obama is expected to win each and increase his delegate lead heading into Pennsylvania.

In 187-delegate Pennsylvania, the demographics favor Sen. Clinton -- she's leading in statewide polls there - - and the Clinton campaign likes its chances. Pennsylvania has a large working class -- which, along with women voters and Latin-Americans, forms the bulk of Clinton's base. If Sen. Clinton registers a solid win in Pennsylvania, she can make the case that although Sen. Obama has the delegate lead, she has won in the major states of New York, California, Texas, Ohio and Pennsylvania, and probably would have won in Florida, had the delegate count been included in the Democratic Party's nominating process. That big-state coalition, and the fact that she's the candidate of the working class, would be two strong philosophical points as the campaign attempts to secure pledges from the to-date 353 un-pledged superdelegates. (Note: The number of un-pledged delegates is likely to decline by the end of the primary season on June 3.)

Maybe it took the prospect of going down to an inglorious defeat to a relative political novice to get Hillary Clinton to loosen up.

In the last 72 hours, the New York senator has appeared on both "Saturday Night Live" and "The Daily Show." On both appearances, she was calm, relaxed and natural, qualities that have been decidedly lacking in her campaign. The question heading into today's important Texas and Ohio primaries is whether this new -- or is it new, new? -- Hillary will resonate with voters.

The latest Zogby polls shows that Clinton is leading challenger Barack Obama 47% to 44% in Texas. Both candidates are deadlocked in Ohio at 44%. "The latest polling numbers are promising for Clinton, but with 8% of likely Democratic voters undecided in Ohio and 7% undecided in Texas both candidates have work to do today," writes Jessica Fargen of the Boston Herald. "Texas offers 228 delegates, Ohio 164."

Obama's honeymoon with the media -- which lasted an unusually long time -- also is coming to an end. The Illinois senator's campaign has stumbled somewhat in how it responded to criticisms that its opposition to NAFTA -- a critical issue in Ohio -- was less than genuine. Moreover, his one-time political benefactor Antonin Rezko is on trial for political corruption in Chicago.

But this rebound from Clinton may be too little too late. Unless she stuns political pundits and wins huge, pressure will mount on her to quit the race.

In an appearance on NBC's Meet The Press (NYSE: GE), political analyst James Carville cited analysis that would please a political scientist regarding the factors likely to shape the 2008 presidential election, as his prediction was consistent with the most accurate theory regarding voting behavior. (Note: Carville has provided political advise to Sen. Hillary Clinton's campaign to secure the Democratic Party's 2008 nomination for president.)

Carville said that objective economic events in this election cycle favor the party out of power. Those objective economic events? The housing slump, higher energy and food costs, and anemic job growth, conditions that are "presenting real economic hardship for many Americans." (Or as Carville would put it, in the 2008 election, as in the 1992 election, "It's the economy, stupid.")

Hillary Clinton must win by gargantuan margins in next week's primaries in Ohio and Texas or else her campaign for the Democratic presidential nomination will be over, according to her husband former President Bill Clinton and other political pundits. The odds of that happening are daunting.

Polls show that Clinton, who has lost ten straight contests to Obama, is losing ground to the Illinois senator in Ohio and that she is virtually tied in Texas. Over the past few months, Clinton's support has eroded among almost every demographic group and there is no sign that is going to change.

These days, Clinton exudes all of the charm of a middle school disciplinarian. Her recent outburst that Obama should be "ashamed" of himself for sending out misleading advertising mailers is a case in point. Factcheck.org, which argued that she has some valid points, argued that Clinton is no slouch in stretching the truth in her advertisements either:

What's the new president - - Republican or Democrat -- likely to face after taking the oath of office in 2009?

Daunting fiscal problems -- and right at a time when Congress may have to consider more fiscal stimulus to jump-start the U.S. economy, one economist observed.

The biggest problem, economist Glen Langan said, will be the federal government's budget deficit. The United States is on-track to record a $200 billion deficit in Fiscal 2009 and a $241 billion in Fiscal 2010 -- and that's if the U.S. economy doesn't fall into a recession, Langan said, citing Congressional Budget Office data.

"The baseline CBO projections present a large budgetary task for the new president, but by itself it's not an impossible one, absent a major recession. The problem is there's no money available to tackle any other problems, including ones a Democratic president would address -- health care, energy policy, education and infrastructure. And don't forget the Iraq War, anti-terrorism efforts, and potential mortgage assistance programs," Langan said. "If there aren't changes to the tax code, given the current revenue structure and tax rates,to say the next president's hands are tied regarding new programs, would be an understatement."

The New York Times reports that Hillary Clinton is giving off signals that her campaign for President could be nearing an end. It's hard to know if this veil of tears is just Hillary using the crying gambit -- as she did in New Hampshire -- in the pages of her hometown newspaper. But as she acknowledges in the article, running for President is a marathon from which the fittest political athlete emerges victorious.

The Times article helps highlight a critical difference between Clinton and Obama which may explain why Obama is proving himself to be the fitter of the two Democratic candidates. With Clinton, it appears that the voter's job is to help her to realize her ambitions by giving her money or votes. By contrast, Obama presents himself as the vessel for achieving voter's hopes. In short, with Hillary it's about what voters can do for her. And for Obama, it's about what he can do for voters.

The effect of these different approaches is that Clinton appears tired as she struggles to break an 11 state losing streak in the upcoming March 4th primaries. It's as though she needs the voters to give her the strength to keep going and that evidence of insufficient support saps her strength. By contrast, Obama looks like he hasn't really broken a sweat as he goes from victory to victory.