Happy Friday.

Some interesting developments since earlier this week when Al Franken seemed like Mr. nice guy when it came to challenging Coleman ballots. As of this posting, according to the Minneapolis Star Tribune website, with 64% of votes recounted, Franken has made up 95 votes to close to within 120 votes of Coleman. It should be noted, however, that this number is with Franken challenging 848 of Coleman's ballots and Coleman challenging 821 of Franken's. Remember that all challenged ballots get removed from the count until they can be assessed by the canvassing board.

Nate Silver explains:

Meanwhile, the number of ballot challenges -- cases in which one or both candidates appeal an initial ruling my local elections judges -- has increased significantly. Among ballots added to the Secretary of State's totals since last evening, the Franken campaign has challenged 7.5 out of every 10,000 ballots, and the Coleman campaign 7.2 out of every 10,000. These figures are more than double the number of challenges on the first two days of the recount process.

Interestingly, contrary to what the tally is showing, the Franken campaign earlier today claimed that the difference between him and Coleman is actually under 100 votes.

...the Franken campaign claims the true difference is much less than that when you take into account disputed ballots that aren't included right now in the totals but are likely to be resolved pretty easily by the state canvassing board.

Even if a challenged ballot is taken out of the total recount pool for the time being, the Franken campaign thinks it has an idea of what the numbers will eventually look like based on the opinions of the election workers at the individual sites -- and they think the real Coleman lead right now is less than 100 votes...

How can this be? Check out this video from The Uptake to get a sense of just how liberally Coleman is challenging, no doubt to give the illusion that he has a wider lead than he actually does.

Clearly all these votes will be placed in Franken's column ultimately, it's just that in the short term there's no downside to Coleman's challenging them and the upside is the illusion of a bigger lead than he truly has. Nate does see a downside in the long run, however:

The disincentive to challenge ballots is precisely this sort of thing -- challenges that look so ridiculous that they'll weaken your ability to take the moral highground. If the Coleman campaign is on the ball, they'll be ready to show similar frivolities from the Franken campaign as well. The Uptake also reports that the Secretary of State is also taking under advisement a proposal to make all challenged ballots available for public viewing on a website.

Votes are still being counted in CA-04, which is the race between Charlie Brown (D) and Tom McClintock (R) for John Doolittle's seat. As the count has continued, the vote margin, which has consistently favored McClintock, has been sort of fluctuating within 1000 or so votes. Today, we've gotten some good news from the Brown campaign: now that provisional ballots are being counted, Charlie has pulled to within 359 329 votes.

This just in via e-mail from Todd Stenhouse, Charlie's campaign manager:

Including provisional ballots just reported from Nevada County, the race is now closer than it has been at any point since election day---Charlie has now closed the gap to just 359 votes! [...]

Every day, we are hearing that election day provisional ballots, thousands of which have not yet been tallied, are breaking for Charlie by substantial margins in Placer, El Dorado, and Nevada Counties.

This news is particularly sweet considering McClintock's sort of premature declarations of victory e-mails over the past two weeks.

Again from Stenhouse:

Earlier this week, our opponents arrogantly and falsely proclaimed "the fat lady hasn't begun singing yet, but she's on stage and wearing a McClintock button."  

As he watches his lead evaporate, McClintock knows this opera is far from over.  And that singer has gone backstage to re-accessorize.

Nice.

This race is closing fast. Just 2 days ago, the margin was 592. The key here is that for Charlie to win, every single vote needs to be counted but at this point, between lawyers and staff, that is an extremely expensive proposition. Please send Charlie some love HERE to make sure every single ballot is counted and to prepare for what may be an extended recount.

[editor's note, by Todd Beeton]David Dayen at calitics has the update that it's actually now down to just a 329 vote spread.

In May 2006 Timothy Geithner, president of the Federal Reserve Bank of New York and Barack Obama's likely choice for Treasury Secretary, gave a speech to the New York University Stern School of Business Third Credit Risk Conference. You can read the full text here. Some excerpts:

Credit derivatives have contributed to dramatic changes in the process of credit intermediation, and the benefits of these changes seem compelling. They have made possible substantial improvements in the way credit risk is managed and facilitated a broad distribution of risk outside the banking system. By spreading risk more widely, by making it easier to purchase and sell protection against credit risk and to actively trade credit risk, and by facilitating the participation of a large and very diverse pool of non-bank financial institutions in the business of credit, these changes probably improve the overall efficiency and resiliency of financial markets.

With the advent of credit derivatives, concentrations of credit risk are made easier to mitigate, and diversification made easier to achieve. Credit losses, whether from specific, individual defaults or the more widespread distress that accompanies economic recessions, will be diffused more broadly across institutions with different risk appetite and tolerance, and across geographic borders. Our experience since the introduction of these new instruments--a period that includes a major asset price shock and a global recession--seems to justify the essentially positive judgment we have about the likely benefits of ongoing growth in these markets.

Despite the benefits to financial resilience, the changes in the credit markets that are the subject of your conference have also provoked some concerns and unease, even among those on the frontier of innovation and the most active participants in these markets.

These concerns are based in part on uncertainty--a candid acknowledgment that there is a lot we do not yet know about how these instruments and the increased role of nonbank institutions in these markets will affect how the financial markets are likely to function in conditions of stress. [...]

Let me conclude by reiterating the fundamental view that the wave of innovation underway in credit derivatives offers substantial benefits to both the efficiency and stability of our financial system.

Sounds like change we can believe in!

Update [2008-11-21 17:28:12 by Todd Beeton]:Bloomberg is reporting that Geithner at Treasury is a done deal.

President-elect Barack Obama picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary, with Lawrence Summers getting a senior White House role, a Democratic aide said.

Obama is also likely to nominate New Mexico Governor Bill Richardson as Commerce Secretary, and to announce his picks on Nov. 24, the person said on condition of anonymity.

Get ready for an onslaught of annoying media analysis now that the New York Times has confirmed that Hillary Clinton will be Obama's Secretary of State.

Here's Bob Woodward from the transcript of this weekend's taped Chris Matthews Show:

Being president is about control, and tell me who ever controlled Bill or Hillary Clinton. They can't control each other. ... I think it's because Warren Buffett and Paul Volcker and others have convinced Obama, 'You're going to have to focus like a laser on the economy. That's issue Number One. And give Hillary and Bill the world.' ... I think people are fantasizing or smoking something if they think Joe Biden's going to call Hillary Clinton up and say, 'This is what we want you to do.'

Spare us.

Look, the Clintons are certainly big players in the Democratic party - not really surprising given that Hillary's a Senator and that Bill is, you know, a former President.

And a huge amount of the Clinton's public image is a media creation, fabricated disproportionately from a crowd of celebrity journalists that have lived and breathed DC for decades.

Do I think the Clinton's are perfect? No politician is. But I do think Hillary Clinton will make an excellent Secretary of State. I also have complete confidence that the man we elected President doesn't share the Village's view of an administration as a huge, real-life game of Risk.

Wow, according to Markos, by my giving Research 2000 the "Zogby Award" for their 2008 polling, I've committed a "serious accusation" in that I "claim that Research 2000 cooked its numbers" in their polling. Yikes, no fun with that guy until he gets his needed vacation...

One of his commenters gives a good definition of why Research2000 gets the award:

Sounds Zogby-like to me (without needing the hyperventilating accusations in response). Markos, why dig? Every criticism I made about the polls sample turned out accurate-- end of debate. In the public poll of polls tracking I did, I wound up not even weighting Research 2000's numbers, once they slid to the middle. They helped formulate my opinion of taking the average and giving an even allocation of the undecideds for predicting a 6.4 margin for Obama.

It is useful to turn to looking at whom among the national pollsters got it right. Mark Blumenthal has the list, but doesn't give the bragging rights, so I will rank them, according to getting closest to the 6.6 margin and the candidate amounts breaking ties:

1.   CNN/Opinion Research
1.   Ipsos/McClatchy
3.   Democracy Corps
4.   Fox News/Opinion Dynamics
5.   Pew Research
6.   ARG 
7.   Harris Interactive
7.   IBD/TIPP
8.   NBC/WSJ
9.   Rasmussen
10.  You/Gov Polimetrix
11.  Battleground (Lake)
12.  Research 2000
13.  Diego/Hotline  
14.  ABC/Washington Post
15.  Marist College
16.  CBS/NYTimes
17.  Reuters/C-SPAN/Zogby
17.  Gallup
19   Battleground (Terrance)

Opinion Research and Ipsos/McClatchy each only missed the final number by .4, so they get the top award. Democracy Corps got the margin pretty close, but was off by more with each candidate. The dog, loser, is Battleground's Terrance. What a humiliation. This is the polling group that nailed it in '04, and was the top in '96 as well. The runner-up dog is Gallup. Their "expanded voter" model was a failure, and Zogby, lol.

I'm at a conference co-hosted by Politico and The University of Southern California that is looking back on the election from the perspective of Obama and McCain campaign advisors. It's a  really interesting post-mortem on the election, which I'll write about more later. In the meantime you can watch along HERE.

After more than a week of back and forth -- will he offer it, will she accept it, we now know not only that Barack will officially offer Hillary Clinton secretary of state, but now The New York Times is reporting that Hillary Clinton will indeed accept the job.

Hillary Rodham Clinton has decided to give up her Senate seat and accept the position of secretary of state, making her the public face around the world for the administration of the man who beat her for the Democratic presidential nomination, two confidants said Friday.

Mrs. Clinton came to her decision after additional discussion with President-elect Barack Obama about the nature of her role and his plans for foreign policy, said one of the confidants, who insisted on anonymity to discuss the situation. Mr. Obama's office told reporters Thursday that the nomination is "on track" but Clinton associates only confirmed Friday afternoon that she has decided.

"She's ready," said the confidant. Mrs. Clinton was reassured after talking again with Mr. Obama because their first meeting in Chicago last week "was so general," the confidant said. The purpose of the follow-up talk, he added, was not to extract particular concessions but "just getting comfortable" with the idea of working together.

A second Clinton associate confirmed that her camp believes they have a done deal. Senior Obama advisers said Friday morning that the offer had not been formally accepted and no announcement will be made until after Thanksgiving. But they said they were convinced that the nascent alliance was now ready to be sealed.

Update [2008-11-21 15:7:18 by Todd Beeton]:Some context on all the back and forth from Ben Smith:

A Democrat close to Hillary says that the reported ambivalence about taking State was real.

She "said 'no' then 'yes,'" I'm told.