Republican John McCain has failed to convince the majority of Americans that Barack Obama is a tax-and-spend liberal who lacks the intestinal fortitude to face our country's enemies. In a show of desperation, the Arizona Republican and his running-mate Sarah Palin are now trying to link Obama with former Weathermen leader William Ayers, even though the New York Times and other news organizations have pointed out that the two men knew each other casually. That's why tonight's debate in Nashville is critical.

McCain, who is favored by many investors, is facing some pretty daunting odds. According to the latest NBC News/Wall Street Journal poll, 49 percent of voters said they would vote for Obama compared with 43 percent for the Arizona senator. That's up from a two-point advantage two weeks ago and mirrors other polls, according to the Journal. To be fair, the survey does have a margin of error of plus or minus 3.8 percentage points. Obama has wiped away McCain's lead with independent voters.

Investors should not underestimate the anger in the hearts of voters. The credit crisis has wiped out tens of billions of dollars in value to the retirement nest eggs of the American people. Most people don't understand why the government needed to extend a $700 billion lifeline to the financial services industry. They become even angrier when three former chief executives of American International Group Inc. (NYSE: AIG) blame one another like a bunch of two-year-olds for the firm's collapse. The Dow Jones Industrial Average dropping below 9,500 scares them even further.

It is against this backdrop we are holding this election. Obama has been able to convince voters, including this one, that he can deliver tax relief for the middle class. But Democrats should not rejoice quite yet. McCain excels at these town hall meetings. Moreover, some of Obama's support in polls comes from people who are too embarrassed to admit that they don't want to vote for an African-American candidate.

Americans crave leadership during these times of economic crisis. Since Wall Street has failed to provide, it's unfortunately up to our elected officials.

This post is part of a series in which TheStockAdvisors.com asked financial experts to name their top stock pick if McCain or if Obama wins the election.

"One stock that could get a November bounce should McCain win is seismic firm CGG Veritas (NYSE: CGV); the Republican mantra has been 'drill, drill, drill' and this company helps find out where to do that," says Bill Martin in his BullMarket.com.

"If McCain wins office and is able to get Congress to pass his drilling initiatives for offshore drilling (one stronger than the bill that was just recently passed by Congress), the first step will be to find where exactly this oil is located.

"That is where French seismic company CGG Veritas comes in. It calls itself 'the world's leading international pure-play geophysical company.' The company was born in January of 2007 as the result of a merger of the former Compagnie Générale de Géophysique and Veritas DGC.

"The company provides seismic data and services to the oil and gas industry, and manufactures seismic equipment through its Sercel subsidiary for sale to other seismic companies.

"The company conducts seismic surveys on a contract and multi-client basis. The job entails acquiring, processing, and interpreting land and marine seismic data, and producing images of the subsurface in multi-dimensional and multi-component formats.

"Those pictures are used to identify new oil and gas structures and manage existing reservoirs. It also has up to 40 land-based teams that can be put in the field and can work in a variety of terrain.

"With CGG Veritas's stock beaten down -- despite solid earnings and guidance -- and trading at an attractive valuation, a McCain win could be the cure to its recent ills."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

This post is part of a series in which TheStockAdvisors.com asked financial experts to name their top stock pick if McCain or if Obama wins the election.

"If John McCain becomes president, look to Elbit Systems (NASDAQ: ESLT); this company is one of Israel's top defense companies," explains high-technology and science-focused sector stock specialist Gregg Early in his The Real Nanotech Investor.

"Elbit is well respected throughout the world for its skilled work in a variety of defense sectors. It has significant operations in North America, Europe and, of course, the Middle East and the sub-continent of Asia.

"Its big growth sectors now are UAVs for defense/intelligence work and hardware and software upgrades for aircraft and helicopters, the latter being a core to the company's business for years.

"With the global economy slowing down, many nations prefer to hang on to their aging equipment rather than buy new, expensive fleets, train pilots and retrain all the service and maintenance workers.

"This company is already growing but a President McCain, who's a former military man and who sees the strategic value of our close ties with Israel as a fulcrum in the Middle East, would likely find key companies in the region to reward as an example of what cooperation with the U.S. can do. And defense is the best place to start."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

In an interview with Reuters, Senator John McCain mentioned Warren Buffett and former eBay (NASDAQ: EBAY) CEO Meg Whitman as possible choices to succeed Hank Paulson as Treasury secretary: "I think it would be someone that Americans would recognize that would inspire trust and confidence. There's people like (Cisco chief executive) John Chambers, there's people like Meg Whitman, there's people like Warren Buffett."

That certainly would be interesting as, in addition to being the greatest financial mind in the world ever, Buffett is also a hardcore Democrat and a supporter of Senator Barack Obama.

It's also almost inconceivable that Buffett would leave Omaha and Berkshire Hathaway (NYSE: BRK.A) to go wrestle pigs in Washington. Buffett's pledge of substantially all of his fortune to the William and Melinda Gates Foundation demonstrates his commitment to charity and improving the world but there is nothing in Buffett's history to indicate he would want to spend his days devoted to matters of public policy: he enjoys investing.

So why would McCain bring it up? He probably just wants to look more competent and open-minded on matters of economic policy -- and name-dropping Buffett is easy because he knows nothing will ever come of it.

Much of the focus in tonight's vice presidential debate will be on whether Democrat Joe Biden or Republican Sarah Palin says anything stupid. Odds are fairly good that one or both of them will stick their foot in their mouths in front of millions of TV viewers.

Though I am a political junkie, I am hoping that tonight's festivities are gaffe-free. The economy is in such a horrible state that Democrats and Republicans have to raise above partisan politics. In particular, they need to do something to address the heart of the problem -- the millions of people facing foreclosure. Many of them are there because they purchased homes they could not afford. I have heard all of the talk of letting the market correct itself and of moral hazard. That's simply not good enough.

I find it difficult to believe that the U.S. government lacks the resources or the know-how to figure out which homeowners should be helped and which should be left on their own. Why is it so impossible for the U.S. Congress to include some relief in the $700 billion bailout to Wall Street for homeowners? Housing advocates and some bankruptcy judges are arguing that judges should have the power to change the terms of mortgage contracts for people who have sought protection from their creditors. That seems like a sensible idea to me.

Unfortunately, I am not expecting much substantive talk about the economy tonight. Palin, the governor of Alaska, is being kept away from the press after making a fool of herself in some recent interviews. The Tina Fey caricature of her as a loudmouth hick appears to be taking hold. Polls indicate that most Americans believe she is not qualified to be president. John McCain is the only one who seems to think otherwise.

This morning markets in Asia fell about 4% -- a relatively muted response to the 7% drop in the Dow Monday. Should we trust our increasingly fragile global financial system to the 73-year old gambler who claimed a victory in yesterday's failed vote on the bailout bill? One poll suggests that the answer is no.

A September 29th Gallup poll found that Americans have the least trust in the Administration's ability to handle this financial crisis and the most in Senator Barack Obama (D-IL), 47. Here is the percentage of Americans who approved of how various people were handling the economic crisis:

• Barack Obama (46%)
• Democratic congressional leaders (39%)
• John McCain (37%)
• Republican congressional leaders (31%)
• Hank Paulson and George Bush (28% each)

Senator McCain, a former POW, gambled on taking money from corporate interests, on appointing Sarah Palin as vice president, and on choosing Phil "Americans are Whiners" Gramm as his chief economic advisor -- the same guy whose bill to deregulate the Credit Default Swap (CDS) market helped get us into this financial catastrophe.

Our national decision is less than six weeks away.

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

If John McCain wants my vote he must dump Sarah Palin and fast. Judging by the latest polls showing Barack Obama moving ahead and gaining traction, I'm not the only one that feels this way. The outcome of the election is key to investors worried about a range of issues including the $700 billion federal bailout of Wall Street.

Obama may lack the experience I would hope to see in a presidential candidate but to quote a friend and fellow McCain supporter "Sarah Palin is an idiot and the only way she should be allowed in the White House is if she buys a tour ticket." This is not a unique sentiment given the Sarah Palin must go stance taken by conservative columnist Kathleen Parker of the Los Angeles Times. She says her cringe reflex is being exhausted.

I do not like Obama's proposals on capital gains taxes, a windfall oil profits tax, new government programs and several other issues, but the idea of Palin being second-in-command is a joke. And speaking of jokes, if I have misjudged, and McCain and Palin win the election, then Oprah will be surpassed as the wealthiest female in the entertainment industry. The new titan will be 30 Rock and former Saturday Night Live star Tina Fey who will be racking up fat paychecks based on the never ending material supplied by Palin.

Let me get this straight: the Democrats are backing George Bush's $700 billion rescue plan that Republicans oppose. These are strange times.

House Republicans have many gripes with the plan. They are pushing to fund the recovery of financial services companies with private capital. Others are raising worries about the cost and the timing of the rescue. These are all valid questions.

Then there's the presidential campaign to consider. John McCain is threatening to skip tomorrow's presidential debates unless a deal on the bailout is reached. Maybe Republicans are throwing up roadblocks so McCain can swoop in and solve the impasse, looking presidential in the process. Barack Obama is also using this bailout for his political gain.

Meanwhile, Democrats are pushing for relief for cash-strapped homeowners. So far, they are not getting much sympathy from the Bush administration.

Treasury Secretary Henry Paulson recently said "the vast majority of foreclosures in this country ... are coming from people who either don't want to stay in their home, took out loans they couldn't afford as the result of irresponsible lending practices."

That's bologna, according to the Center for Responsible Lending, which says that the vast majority of people want to stay in their homes and could afford to if the courts were allowed to modify mortgages. Consumer advocates back the idea as do most Democrats. Bankruptcy judges think it's a good idea as well. The mortgage industry and some fiscal conservatives oppose this provision, arguing that it rewards people for making bad investment decisions.

At perhaps the most critical moment in his presidency, George W. Bush looked into the teleprompter tonight and warned the American people that very bad things would happen to the economy unless Congress passed the $700 billion bailout for Wall Street.

Kudos to Bush's speech writers. He explained the credit crisis fairly succinctly. Of course, he neglected to mention that his administration's opposition to sensible regulation laid the groundwork for the financial maelstrom. That's an issue, though, which will be debated by historians for decades to come.

Details of the bill are still being hammered out. The administration has agreed to caps on executive pay on firms who seek assistance. Some sort of plan to give taxpayers an equity stake in firms that the government helps also seems likely, according to a The New York Times.

The president had little choice but to reach across party lines because members of Congress were not buying the bill of goods being sold by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. Paulson, in particular, showed remarkably poor political instincts by insisting that the bailout be approved as written. Whoever told him that Congress would give him a $700 billion blank check was crazy.

Meanwhile, the crisis is becoming the top issue of the presidential campaign. Republican John McCain today suspended his presidential campaign and called for Friday's presidential debate to be postponed. This is a stunt. McCain and Barack Obama do not sit on the relevant committees dealing with the crisis. Their presence in Washington will have little impact on the development of a deal.

Postponing the debates is an especially bad idea. The American people need to hear the plans McCain and Obama have for the economy. My colleague Peter Cohan points out that McCain has said many things about the economy such as "the fundamentals of the economy are strong" which he probably now regrets.

It looks like SEC Chairman Chris Cox still has his job -- this despite John McCain's call to fire Cox. And what has Cox done for us lately? He's banned short selling on 799 financial stocks for the next 10 days, according to the Wall Street Journal [subscription required]. The SEC's temporary ban on short selling won't help deal with the underlying problems causing this 100 Year Crash -- but it won't make them any worse.

Short selling is one way to bet against the decline in a stock's share price. A short seller borrows shares from a broker and sells them at that market price. SEC rules give the short seller three days to obtain custody of those shares. The short seller profits by buying back the shares at a lower market price to repay that stock loan. So-called "naked shorting" -- when the short seller never obtains custody of the shares -- is considered abusive. By banning short selling, the SEC is trying to interrupt a negative feedback loop about which I posted yesterday.

This loop helped shorts profit from a decline in investment bank shares. How so? All the bad news has been driving down their shares so much that ratings agencies downgraded the investment banks' debt. Since that debt was insured through the $62 trillion Credit Default Swap (CDS) market, the downgrade threat boosted CDS premiums requiring the investment bank to post collateral in the billions. This put even more pressure on the investment bank to raise capital, driving down its shares even more.

Is the market getting you down? You want it to go up, right? Well, you better settle in and brace yourself for even harder times as an individual investor. That is, if some pundits are correct about the direction of share prices. According to this CNBC page, a Dow of 8,000 is now in play, and gold might be set to strap a rocket on its back and propel itself up to $1,500 per ounce over time. I'm not sure about the gold, but a Dow of 8,000 almost feels like a logical rest stop at this point (but that might be emotion talking). In the end, none of us can tell the future.

I can, however, share with you a wish. And it isn't just my wish. I'm sure there are others out there who have already said this. And, yes, this wish is coming from someone who owns The Walt Disney Corporation (NYSE: DIS), The Coca-Cola Company (NYSE: KO), and General Electric (NYSE: GE). I own them for the long term (except for a separate trading position in GE which completely failed and may turn into another long-term asset), so maybe this wish isn't so mysterious. I want to go back to that "happy" time of October of '87. I want to see the Dow drop over 20% in one day. Preferably, I'd like to see it drop 25%, on Cloverfield-monster-sized volume. How many points would that be? As of this writing, it would be roughly 2,670 points.

What, am I insane? About as insane as the idiots who decided to become risk sponges, I suppose. In all seriousness, we need a crash. We need a reset, a reboot. We need a lot of panic on the street, and a spiking VIX ($VIX.X), to at least begin a bottom formation. If you think we're going to form a bottom without pain, you're wrong. And if you think, at this point, that we can form a bottom without a crash, well then, I won't say you're completely wrong on that count, but I will say that a crash would be better.

The New York Times reports that Morgan Stanley (NYSE: MS) CEO John Mack approached Citigroup head (NYSE: C) Vikram Pandit on Wednesday about a merger. It quotes Mack as saying "We need a merger partner or we're not going to make it." Fortunately, Citi rejected Mack's advances -- I say fortunately because Citi has enough problems of its own without taking on Morgan Stanley's. Why is Morgan Stanley, which just posted a $1.43 billion profit, in such desperate straits?

It's a brilliant negative feedback loop that short sellers are exploiting to enrich themselves as Wall Street collapses. Here's how it works: the hedge funds sell the stock of 'Bank A' short -- borrowing the shares at a higher price and hoping to pay back the stock loan with shares repurchased in the market at a lower one. As the Wall Street dominoes tumble, investors ask who's next and they sell the shares of the next domino to fall.

That decline leads ratings agencies to lower their debt ratings on a bank which boosts the rates it pays in the $62 trillion market for Credit Default Swaps (CDSs). Those higher rates force 'Bank A' to come up with billions in cash which it doesn't have -- raising fears of a collapse and further depressing 'Bank A''s stock price. And the cycle begins anew until 'Bank A' finds a merger partner or goes bankrupt. This short-selling work is very profitable, but it is also destroying the global financial system.

Last weekend, the U.S. government decided that it would let Lehman Brothers Holdings Inc. (NYSE: LEH) fail -- leading to history's biggest bankruptcy -- valued at $639 billion. But that was fine because the government said that people knew Lehman was in trouble. Of course, people also knew since August 2007 that Bear Stearns was in trouble, but that didn't stop the government from forking over $29 billion of taxpayer money to bail it out. And people knew for years that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) were in trouble -- but that did not stop the US from pledging between $200 billion and $800 billion to nationalize them.

But this morning, we discover that the government has crossed over the line in the sand it drew over the weekend -- it will loan $85 billion of taxpayer money -- at a variable interest rate starting at 14.5% -- Libor, which doubled yesterday from roughly 3% to 6%, plus 8.5% according to the Wall Street Journal [subscription required] -- to avoid what would have been the $1 trillion bankruptcy of American International Group (NYSE: AIG). In exchange for this two year loan, according to the New York Times, the Fed gets as collateral all the $1 trillion of AIG's assets plus warrants to purchase 80% of AIG stock.

The incompetence of this government is breathtaking. On Sunday, it could have loaned AIG $40 billion to keep its credit rating from getting downgraded. It refused to do so -- trying to force JPMorgan Chase (NYSE: JPM) and Goldman Sachs Group (NYSE: GS) to help raise private financing -- and credit agencies went ahead and downgraded AIG on Monday. Now, instead of a bridge loan which would have tided AIG over until it could sell some assets to raise capital, the government is making a two-year loan that is twice as big. And we, the taxpayers, are likely to own this pile of assets that may be worth far less than the $1 trillion stated on its books. If there's any good news, the stated collateral is more than 10 times the amount of the loan.

Today, we are taking a break from politics as usual, and that's a good thing.

Republican John McCain and Democrat Barack Obama have called a truce in their increasingly nasty and bitter campaigns to honor the victims of the 9-11 terrorist attacks seven years ago (my, how time flies). They are both scheduled to address a forum on public service being held in New York City, which will be covered by the cable news networks.

It is appropriate that the campaigns call off their attack dogs on the anniversary of the worst terrorist attack in U.S. history. Heck, this would have been a good idea anyway, even if 9-11 never happened. The campaign rhetoric has been at a boiling point. For instance, Obama had to defend himself against charges that he was using the phrase "lipstick on a pig" to insult McCain's running-mate Sarah Palin. I don't think it was sexist and MSNBC's Keith Olbermann pointed out that McCain used the same phrase to attack Hillary Clinton.

The New York Times reports that Wall Street investment banks -- including UBS AG (NYSE: UBS); whose vice chairman, Phil "Americans are Whiners" Gramm resigned as chief economic advisor to John McCain -- have been helping foreign hedge funds dodge U.S. dividend taxes. The good news is that the amount of lost taxes looks to be in the "mere" hundreds of millions -- a tiny amount when you consider the record $490 billion deficit we face for 2009.

The tax dodging scheme -- dubbed "dividend enhancement" -- is complex and UBS was not alone in pushing it. The New York Times reports that Morgan Stanley (NYSE: MS), Lehman Brothers (NYSE: LEH), Deutsche Bank (NYSE: DB), Merrill Lynch & Co., Inc. (NYSE: MER) and Citigroup, Inc. (NYSE: C) joined UBS in this scheme to sell complex financial products that enable offshore hedge funds who get dividends from U.S. stocks to dodge the 30% dividend tax.

But UBS is continuing to look more and more like a shady enterprise. First, it gained notoriety for its brazen policy of dumping Auction Rate Securities (ARS) from its own books into the accounts of its unsuspecting "private banking" clients. It has since settled those charges. And now it stands accused of helping a hedge fund, Maverick Capital, bilk the U.S. government of "$95 million in dividend taxes from 2000 through 2007," according to the Times.