3rd (and final) Presidential Debate — Foreign Policy

Thoughts?

George McGovern, RIP

Sam Houston Clinton chaired the D State Convention in ’72. He was General Counsel to the AFL-CIO and the TCLU. He was a “lawyer’s lawyer” who had won three notable cases in the US S.Ct., one of which you may remember; the reversal of Jack Ruby’s conviction. Sam looked like John Wayne and was a hero to most young lawyers in Austin.

In August 1972, the McGovern Campaign asked to meet with Sam. He set the meeting for my firm’s conference room and invited my partner and me to sit in, but not to speak unless spoken to. The Campaign wanted Sam’s views on how to carry TX.

Taylor Branch and a black woman whose name eludes me represented the Campaign.

Sam told them that the rural/small-town weeklies had not yet weighed in and they could be “had” for McG. He suggested a column ad, topped by a photo of McG stepping out of his B24, captioned “decorated WW2 bombardier”. The ad would stress that McG was the son of a Methodist minister, had won the DisFlyingCross, had always voted for gun rights, and would close with the pledge to help [D nominee for] Gov. Briscoe eradicate screw worms in TX.

The black woman laughed. “SCREW worms?” Sam patiently and colorfully described how these larvae were hatched in the nostrils, worked their way to the brain, and destroyed not individual cows, but herds. He explained that Briscoe and the TX D Admin were getting a cold shoulder from Nixon’s USDA, and that ranchers throughout the plains were suffering.

Then Branch said “We cannot say that about gun rights.” Sam pointed to McG’s voting record, which was pure SD and against gun control. Branch explained that it would not fly in L.A. Sam allowed as how he had been asked how McG could win in TX; polls showed Nixon would carry CA no matter what. The meeting ended and so did McG’s prospects of running a competitive race in TX.

Another of my mentor lawyers was Will Davis, a conservative D who, for example, wrote insurance law for the insurance lobby. Will authored the [in]famous McGovern Rules which changed the national D Party from boss run to unmanageable in that election, but which have survived pretty much in tact to this time. Even the Rs have copied some of the McG Rules reforms.

Those were my connections to that campaign. Also, I met his wife, who was gorgeous and charming. This is not apparent in photos on the net, btw. She was petite with curves in the right places and sparkling eyes and short honey blonde hair and a dazzling smile.

LaterSummer of ’78, he co-sponsored a bill with Goldwater to intervene militarily in Cambodia or Laos, I don’t recall. It was beaten down in the Senate as badly as the two men had been beaten for POTUS. McG was asked by someone how a former anti-war candidate could support an intervention war. He explained he was not anti-war. Some wars are just.

Morning Report 10/22/12

Vital Statistics: 

  Last Change Percent
S&P Futures  1426.5 2.5 0.18%
Eurostoxx Index 2544.6 2.4 0.09%
Oil (WTI) 90.51 0.5 0.51%
LIBOR 0.316 -0.002 -0.47%
US Dollar Index (DXY) 79.54 -0.083 -0.10%
10 Year Govt Bond Yield 1.81% 0.04%  
RPX Composite Real Estate Index 193.9 0.1  

Markets are up slightly in spite of weak guidance out of Caterpillar. CAT is forecasting a 5% decline in next year’s sales based on the weak global economy. This week is heavy with earnings reports with Dupont, Facebook, 3M, Coca Cola, Conoco, and Amazon.com. On the economic front, we will have the FOMC rate decision tomorrow and the first estimate of 3Q GDP on Thursday.  Bonds are down 25 ticks and MBS are down 6 or 7.

Mark Zandi of Moody’s is endorsing the the qualified mortgage rule. This rule should provide lenders some relief from litigation as long as the mortgage was underwritten in accordance with CFPB guidelines. As far as loans outside those guidelines?  They “will remain toxic water for most lenders.”

Many market participants are expecting the Fed to announce that treasuries will be included in future QE.  The Fed has already committed to buy $40 billion of MBS a month until unemployment is down and it surprised many observers by not including Treasuries in that statement. This caused MBS to rally way in excess of what the moves in the 10-year would predict.  In some ways, this would offset the buying that would be lost when Operation Twist ends this year.  Bank of America is predicting the Fed will buy $45 – $60 billion of Treasuries in addition to the $40 billion in MBS. 

Still, banks are understaffed as the volume of mortgage applications swells, where timelines are being stretched from the typical 45-days to 90. Banks undoubtedly believe that the current volume is being driven by refis, which they view as temporary.  The article goes on to say that mortgage rates to the consumer should be lower, but they do note the increase in guarantee fees. 

Ocwen and Walter Investment are teaming up to out-bid Nationstar for Rescap.  

The Bipartisan Policy Center is launching a Dodd-Frank initiative, where they try and do a “cost-benefits” analysis to Dodd-Frank. They frame it as a “stability vs growth” issue.