Gay Conservatives Denied ‘Official’ Spot at Texas GOP Convention

From KUT in Austin I heard the following.

The Texas Republican Party has denied the Log Cabin Republicans a space at next week’s state convention. Log Cabin Republicans represent gay conservatives and supporters of marriage equality in the party.

Log Cabin Republican Executive Director Gregory Angelo says the state party denied the group’s application for a booth at the convention because, as homosexuals, they disagree with a plank in the party platform. The plank reads, in part, that “homosexuality tears at the fabric of society.”

“It was our obligation to let the voters of Texas know and to let members of the Republican Party in Texas know that that language is in the party platform and it is being used to intentionally exclude gay Republicans from formal participation in the state GOP convention,” Angelo says.

A state party is not purely a private club.  We learned that early in the civil rights struggles for black Texans.  In Smith v. Allwright (1944), the Supreme Court ruled on a challenge to a 1923 Texas state law that had delegated authority to state conventions of political parties to make rules for their primaries. It ruled that the law violated the protections of the Constitution because the state allowed a discriminatory rule (no “negroes”) to be established by the Democratic Party.  However, homosexuals are not being excluded here per se – in fact, the Log Cabin Rs who were elected delegates will be in attendance and will be voting.  They will not be allowed a “booth”.

My own view of this bolded language in the Texas Republican platform is that it is wrong as a matter of fact and deeply prejudiced as a matter of practice. It is prejudiced as a matter of practice because no individual homosexual could be judged upon her own gifts and graces if her self-identification as a homosexual tears at the fabric of society.

The plank will not scare off any Rs in TX.  Those who disagree with it will think it is a low priority and those who agree with it will strongly approve.  There is a difference of enthusiasm here.

QB noted those of us who don’t think consenting private sexual conduct is a moral issue do so by reason of a libertarian slant.  He made the case that while he did not believe there should be legal consequences for CPA sex, same sex marriage was not itself private conduct.  This plank morally condemns private conduct and, I think, even status.  While codifying this moral condemnation into law is not a requisite, I think it would be a natural result, because it happened historically.

Imagine yourself on the platform committee of the Texas Republican Party.  Do you vote for or against this plank?  Do you argue for or against it, and if you do, do you argue on moral or political grounds?  Do you think it is an important plank or a throwaway?





Morning Report – More mixed economic data 5/30/14

Vital Statistics:

Last Change Percent
S&P Futures 1911.2 2.1 0.11%
Eurostoxx Index 3240.5 -5.7 -0.18%
Oil (WTI) 102.9 0.2 0.19%
LIBOR 0.227 0.000 -0.11%
US Dollar Index (DXY) 80.45 -0.121 -0.15%
10 Year Govt Bond Yield 2.44% 0.00%
Current Coupon Ginnie Mae TBA 106.8 0.0
Current Coupon Fannie Mae TBA 106 0.1
BankRate 30 Year Fixed Rate Mortgage 4.13


Markets are down small after some disappointing consumption data this morning. Bonds are taking a breather and are down small.
Personal Incomes rose .3% in April, while spending fell .1%. Inflation remains in check. The income number was in line with Street expectations, while the spending number was not. March’s spending number was revised upward from .9% to 1.0%. University of Michigan Consumer Confidence ticked up slightly to 81.9, although it came in lower than expectations.
The ISM Milwaukee report leaped to 63.5 from 47.3 a month ago, while the Chicago Purchasing Manager’s Index increased from 63 to 65.5. These numbers beat expectations handily. April has had some very divergent economic indicators, with the weak industrial data points to some of these other strong indicators.
Refis dropped to 37% of all closed loans in April, according to Ellie Mae. Average FICOs ticked up a point to 726. Average days to close a loan fell to 39.
With rates falling over the past month or two, where are we going to get a wave of refis? The conventional wisdom is 4% mortgage rates. Remember, however the concept of prepayment burnout, which means that each successive dip in rates has less of an effect on refinance activity, mainly because the pool of people with a refinancable mortgage shrinks. That said, home price appreciation is counteracting that effect as people who were underwater last year and unable to refinance are able to take advantage of it this time around.
More speculation on what is going on in the bond market. Interestingly, according to Commitment of Traders data, speccies are increasing short exposure – the bears are fading the rally, not capitulating. Interestingly, the Fed’s balance sheet actually shrunk over the past week – not by a lot – but still it is surprising. At the end of the day, absent some sort of valid technical explanation of the strength, you have to believe the stock market is telling you one thing and the bond market is telling you another.

Morning Report – Terrible revision to Q1 GDP 5/29/14

Vital Statistics:

Last Change Percent
S&P Futures 1911.2 2.1 0.11%
Eurostoxx Index 3240.5 -5.7 -0.18%
Oil (WTI) 102.9 0.2 0.19%
LIBOR 0.227 0.000 -0.11%
US Dollar Index (DXY) 80.45 -0.121 -0.15%
10 Year Govt Bond Yield 2.44% 0.00%
Current Coupon Ginnie Mae TBA 106.8 -0.1
Current Coupon Fannie Mae TBA 106 0.0
BankRate 30 Year Fixed Rate Mortgage 4.13


Markets are higher after some mixed economic data. Bonds and MBS continue their rally.
First quarter GDP was revised downward to -1% (the Street was at -.5%). Obviously the Street is happy to accept the weather excuse and give the market a mulligan. Personal consumption rose 3.1%, and initial jobless claims fell to 300k.
Pending Home Sales increased .4% month-over-month, but fell 9.4% year, over year. They rose .5% in the Northeast, 4.7% in the Midwest, fell .7% in the South and fell 2.6% in the West.
What is going on with bond yields? The economic data has been “meh,” not weak, so why are we below 2.45%? Not sure, most explanations feel like justifications, not reasons. It could be nothing, but keep in the back of your mind that the bond market is telling you something, and you’ll find out the reason for the strength later on. For LOs, this is a good time to wake up borrowers that missed out on refinancing last fall, or buyers who were hoping for a better rate.

Freddie Mac has a new housing index (similar to the NAHB’s Improving Market Index) which shows strength in housing markets. They call it the Multi-Indicator Market Index, and it uses 4 indicators to create the index: purchase applications, payment to income rations, percent of borrowers current on their mortgage, and employment. Nationally, the index shows that the recovery has largely stalled. According to Freddie Mac Chief Economist Frank Nothaft: “Less than half of the housing markets MiMi covers are showing an improving trend, whereas at the same time last year more than 90 percent of these same markets were headed in the right direction.” Since we know that delinquencies have been dropping and the job market has been improving, the culprit is purchase applications. Between higher prices and higher mortgage rates, buyers, especially first time homebuyers, are getting sticker shock. That said, the index ignores cash purchases, and you have to take that into account, so the index is undoubtedly overstating the weakness. Here is an example of the index for Miami and the National MiMi:

There were 48,000 completed foreclosures in March 2014, up 5.9% month-over-month but down 10% year-over-year, according to CoreLogic. Approximately 720,000 homes in the U.S. are in some state of foreclosure, compared to 1.1 million a year ago. The foreclosure inventory is largely concentrated in the judicial states of Florida, New York and New Jersey. Over the past year, the number of seriously delinquent homes fell from 2.33 million to 1.86 million.


Morning Report – Luxury building continues to perform well 5/28/14

Vital Statistics:

Last Change Percent
S&P Futures 1908.5 -0.7 -0.04%
Eurostoxx Index 3241.4 -2.9 -0.09%
Oil (WTI) 103.9 -0.3 -0.25%
LIBOR 0.228 -0.002 -0.98%
US Dollar Index (DXY) 80.49 0.139 0.17%
10 Year Govt Bond Yield 2.47% -0.05%
Current Coupon Ginnie Mae TBA 106.8 0.2
Current Coupon Fannie Mae TBA 105.9 0.2
BankRate 30 Year Fixed Rate Mortgage 4.18


Markets are flattish on no real news. Bonds continue their rally, with the 10-year bond trading at 2.47%. MBS are up as well.
Mortgage Applications fell 1.2% last week, as purchases fell 1.1% and refis fell 1.4%. The 10 year bond yield fell a basis point over the week. Refis were 52% of all loans, and ARMs are now 18.5% of the total dollar amount of loans (though only 8.4% of units, so these are mainly jumbos).
Obama has nominated San Antonio Mayor Julian Castro to lead HUD. This is more or less a political appointment, as Castro is viewed as a rising star in the Democratic Party. His confirmation in the Senate should be smooth, and the nomination should not imply any major policy changes out of HUD.
Homebuilder Toll Brothers reported second quarter numbers this morning, and it looks like things are still going swimmingly on the luxury end of things. Revenues rose 53% as deliveries increased 67% in dollar terms and 36% in unit terms. Remember, Toll Brother bought Shapell Homes, so these aren’t necessarily apples-to-apples comparisons. ASPs increased 22% (!) on a year-over-year basis to $706,000. Shapell’s footprint is affluent Coastal California, so that accounts for some of the big jump in ASPs – most other builders are reporting increases in the 9% – 12% range.
Toll CEO Douglas Yearley had this to say: “Demand over the past year has been solid, although relatively flat, compared to the strong growth we initially experienced beginning in 2011, coming off the bottom of this housing cycle. We note that last cycle’s recovery, in the early 1990s, began with a period of rapid acceleration, followed by leveling, before further upward momentum. We believe that we are in a similar leveling period in the early stages of the housing recovery with significant pent-up demand building.”
That said, the Fed is still worried about housing, as the sector continues to grow as expected. Unfortunately, the Fed doesn’t have a lot of levers to deal with the underlying issues: low household formation and tight credit. Again, all real estate is local, and the problems are mainly in the Northeast, which is still dealing with a large shadow inventory of foreclosures. In areas where this has been dealt with already (California), there is a tremendous amount of building.

Morning Report – a tale of two real estate indices 5/27/14

Vital Statistics:


  Last Change Percent
S&P Futures  1904.4 7.5 0.40%
Eurostoxx Index 3241.0 0.6 0.02%
Oil (WTI) 104.3 0.0 -0.04%
LIBOR 0.23 0.001 0.22%
US Dollar Index (DXY) 80.33 -0.065 -0.08%
10 Year Govt Bond Yield 2.54% 0.01%  
Current Coupon Ginnie Mae TBA 106.4 0.0  
Current Coupon Fannie Mae TBA 105.5 0.0  
BankRate 30 Year Fixed Rate Mortgage 4.16    


Markets are higher this morning after some good economic data. Bonds are surprisingly up. 
Durable Goods orders rose .8% in April and March was revised upward from 2.6% to 3.6%. The Street was looking for a drop of .7%. That said, ex-defense orders were down .8%. Ex-transportation, durable goods orders were up .1%. 
In other data, the Markit Purchasing Managers Index came in at 58.6, a strong number. Consumer Confidence rose to 83 in May, and the Richmond Fed Manufacturing Index was flat at 7. I think we got more economic data this morning than we got all of last week.
We have a couple of real estate indices this morning as well. The first is the FHFA Home Price Index, which rose .7% in March. According to FHFA, prices are back to July 2015 levels and we are within about 6% of the previous peak. We have a tremendous dispersion of strength between regions, where the Pacific division is up 18% over the past 5 years, while New England is down a couple of percent. 


The Case-Shiller index rose 1.24% for March. Prices are back to mid-2004 levels, according to the index, and are still about 20% off their peak in 2006.


So, according to FHFA, we are within 6% of the peak and prices are at mid 2005 levels and according to Case-Shiller, we are within 20% of the peak and prices are at mid 2004 levels. Who is right? The answer is both. Case-Shiller is a broad-based index, while FHFA is narrower. The FHFA index only looks at homes with a conforming mortgage, which means it excludes jumbos and cash sales, which have been historically distressed properties, although that is changing.



Mohammed El-Arian weighs in on what is going on in the bond market. Speculators are net short Treasuries in a big way, and pension funds are redeploying stock market gains into the bond market. That makes for a tight market. You could almost feel the stops getting triggered a couple of weeks ago when we broke out of our 2.6% – 2.8% trading range:




Always-thoughtful Gary Shilling talks about how a financial crisis in China could be the catalyst for a massive “risk-off” trade, which would mean the rally in bonds could last longer than people think. Note that mortgage REITs (one of the biggest investors in mortgage backed securities) are leaning that way.

Bites and Pieces: The Celery Edition

Hi all,

My better half recently celebrated her 13th 29th birthday. As per usual, I make a dinner in her honor and we have a friend or two over. This night, it was just the fabulous Ms. Cox. The request was for something on the lighter side, including a chilled soup. So, I went with the idea of soup, salad, a light entree and dessert. I was supposed to make a fabulous caramel corn from Bluestem (our favorite KC restaurant), but ran out of gas. I abbreviated it by making spiced nuts and serving them with a wedge of blue cheese (Rogue is fantastic for those who haven’t tried their cheeses).

Soup was easy. I planned on asparagus, but didn’t see anything I liked, so shifted to a cucumber, mint and yogurt version (Epicurious has the link). The main was easy too. Scallops have become a favorite of ours. Just get some hot oil (clarified butter is amazing), sear them, and add to a base. I planned on a mango sauce as we had a couple that were sitting around. Too long as it happens as they’d gone rotten under the skins. A roasted tomato sauce subbed nicely.

The salad is my reason for writing this post. Etto is an Italian restaurant in DC with a starter they call Celery, Celery, Celery and Walnut. The Post recently, umm, posted their recipe. This is one that takes you to $100 per person dining at a $5 per plate cost. The ingredient list is deceptively simple: celery, Chinese celery, walnuts, cheese and dressing. The Chinese variant is typically cooked, but has a great flavor. It takes a surprising amount of time to prepare, mainly as peeling celery takes awhile. It kept clogging my Oxo peeler, but was worth the wait.


6 – 8 celery ribs, outer side peeled and thinly sliced (about 1 cup)

1 cup chopped celery leaves from inside of the bunch (use the rest to make stock)

1 cup chopped Chinese celery

1 ½ cups chopped Chinese celery leaves

½ cup toasted and chopped walnuts


1/3 cup olive oil (use the good stuff)

1 tablespoon fresh lemon juice

1 tablespoon fresh orange juice

½ tsp. salt

½ tsp. black pepper

2 oz. pecorino Romano cheese, shaved into curls



Toss it all together and have fun. I tossed the celery and leaves, whisked together the olive oiive oil, juices, salt and pepper and tossed that all together, put onto plates and topped with cheese. It can’t hurt to reserve a few of the leaves as a garnish.

Weekend Open Thread (Long Version)

Happy Memorial Day weekend to all; I just got back from a trip to visit Mike Teng and family in Tampa. As a result I slept like a log last night and missed the meteor shower (although I’ve heard it was a bust, at least in this part of the country).

Here is a fun little ditty that I thought you’d enjoy.

Have a great time this weekend–

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