Monday, October 01, 2007

Daily Headliners--Religious Right threatens third party run, Romney pumping campaign with his own money, Dow rises amid contradictory earnings reports

I've got some interesting Daily Headliner stories here.

Religious Right threatens Giuliani with third party run: This New York Times story really shows the conflict that is taking place within the Religious Right wing of the Republican Party;

WASHINGTON, Sept. 30 — Alarmed at the possibility that the Republican Party might pick Rudolph W. Giuliani as its presidential nominee despite his support for abortion rights, a coalition of influential Christian conservatives is threatening to back a third-party candidate.

The threat emerged from a group that broke away for separate discussions at a meeting Saturday in Salt Lake City of the Council for National Policy, a secretive conservative networking group. Participants said the smaller group included James C. Dobson of Focus on the Family, who is perhaps its most influential member; Tony Perkins of the Family Research Council; Richard A. Viguerie, the direct-mail pioneer; and dozens of other politically oriented conservative Christians.

Almost everyone present at the smaller group’s meeting expressed support for a written resolution stating that “if the Republican Party nominates a pro-abortion candidate we will consider running a third-party candidate,” participants said.

The participants said that the group chose the qualified term “consider” because it had not yet identified an alternative candidate, but that it was largely united in its plans to bolt the party if Mr. Giuliani, the former New York mayor, became the nominee. The participants spoke on condition of anonymity because the Council for National Policy meeting and the smaller meeting were secret, but they said members of the smaller group intended to publicize the resolution.

The key point here is that the Religious Right was been able to elect one of their own--George W. Bush--to the White House. For seven years, Bush has governed the country in a conservative fashion, providing the Religious Right with an incredible opportunity for influencing the Bush White House on policy issues they favor. But for the 2008 presidential elections, it is not social issues that will dominate presidential politics, but rather the war in Iraq, and the Bush administration's failure to resolve the war. This is the issue that a pro-abortion Republican presidential candidate Rudy Giuliani is selling to conservative voters--The 9/11 President. That angers the Religious Right, where they may see their own White House influence diminish with a Giuliani administration. In fact, there is no Bush-like candidate that the Religious Right could happily support among the top tier candidates--Giuliani is pro-abortion, Mitt Romney is a Mormon, John McCain is too much of a panderer, and who knows what Fred Thompson believes in. And that is where the grumbling within the Religious Right is starting.

Romney pumping campaign with his own money: I found this story through TPM, where the original source is from the Washington Post;

When former Massachusetts governor Mitt Romney closes the books on his latest campaign finance report today, it will reveal a slow but steady shift from a candidacy built on thousands of individual donations to one relying increasingly on his own personal fortune.

Top Romney advisers said last week that they expected his campaign to raise almost $40 million in the first nine of months this year. And though they have not released a firm figure, they expected that Romney will have supplemented those contributions with nearly $15 million of his own money.

Romney's candidacy has quietly morphed into one of the nation's first hybrid campaigns for a major-party presidential nomination: one that is neither a traditional bid built on individual donations nor a self-funded effort such as those launched by billionaires Steve Forbes and Ross Perot.

"Romney is something different," said Jennifer A. Steen, a Boston College professor who has written a book on self-financed candidates.

But what is really interesting about this WaPost story is this little detail regarding Romney's money that is going into the campaign;

Romney launched his campaign with a showy Jan. 8 event at the Boston Convention & Exhibition Center, placing 400 of his biggest supporters in front of phones and asking them to devote the day to raising money from friends and contacts around the country. The event yielded $6.5 million, a huge haul for a single day's effort.

Ron Kaufman, a top Romney adviser who attended the event, said it sent a powerful message to potential supporters who might have wondered whether Romney would simply run on his personal fortune.

"As self-funding, big-spending candidates have proven, it doesn't get you anything," Kaufman said. "The bottom line is: The way to be a candidate for president is prove you can put the organization together, prove to the voters that you've earned the right to be a serious candidate for president. You've got to earn it; you can't buy it."

After that event, Romney punctuated that message, telling reporters that it would be "akin to a nightmare" if he were forced to contribute much of his own money to his presidential effort.

By the end of the first fundraising quarter, which closed on March 31, he had posted a headline-grabbing $21 million total, helping to vault him into the top tier of candidates seeking the GOP nomination.

That figure was critical to establishing Romney as a viable candidate. As almost an afterthought, the campaign revealed that the candidate had also put $2.4 million into his campaign account. When asked about it by a Boston Globe reporter, an aide stressed that the money was a loan to the campaign, not a gift.

Over the next three months, the balance between the money Romney raised from contributors and the money he drew from his own accounts began to shift. His fundraising haul dropped to $14 million, compared with the $17 million total of one of his top rivals, former New York mayor Rudolph W. Giuliani and the more than $32 million taken in by Sen. Barack Obama (D-Ill.). But Romney also lent himself an additional $6.5 million.

At a news conference, he signaled that his message about the role his bank accounts would play had shifted. "It would be nice not to have to loan or contribute to your own campaign, but the reality is, if you want to have a strong campaign that gets out there and can talk across the nation, you're going to have to do what's necessary," he told reporters.

Do you see the contradiction here? When Romney first started his campaign, he claimed it would be "akin to a nightmare" if he were forced to contribute money to his campaign. In fact the Romney campaign pushed this notion that Mitt Romney had to earn the GOP nomination, rather than trying to buy the nomination with Romney's personal fortune, rumored to be between $190 million and $250 million. And what does Mitt Romney do, but loan the campaign $2.4 million in the first quarter fundraising, and then another $6.5 million in the three months after the quarter ended. In addition, the Romney campaign reverses itself, with Mitt Romney now saying that "you're going to have to do what's necessary" if you want to run a strong campaign. In other words, Mitt Romney is trying to buy the GOP nomination.

But it gets even better. Going back to the WaPost;

[As] Romney prepared to release his third-quarter numbers this week, he began hinting that he will be using even more of his own money. He presented at an event in California a new rationale for doing this -- far from the "nightmare" he had described earlier -- telling supporters that, by dipping into his pocket, he would not be "beholden to any particular group for getting me into this race or for getting me elected."

What a frickin' hypocrite.

Dow rises amidst contradictory earnings reports: This contradiction doesn't make any sense. Let's start with the MSNBC story, titled Dow closes at new record to start 4th quarter;

NEW YORK - Wall Street began the fourth quarter with a huge rally Monday, sending the Dow Jones industrial average above 14,000 and well into record territory for the first time in 2 1/2 months. Stocks were buoyed by a growing belief that the worst of the credit crisis has past.

While the beginning of the new quarter was an incentive for institutional investors to buy, the market was also encouraged that the worst might be over from the summer's credit and stock market turmoil. And new economic data might nudge the Federal Reserve toward another interest rate cut at its Oct. 30-31 meeting.

Investors bought financial shares on the belief that the industry has generally weathered the recent credit market upheaval. Both Citigroup and Switzerland's UBS AG issued third-quarter profit warnings, but indicated the current period might see a return to normal earnings levels.

[....]

According to preliminary calculations, the Dow rose 191.92, or 1.38 percent, to 14,087.55.

The Dow surpassed its closing record of 14,000.41 set in mid-July, and moved into record territory, rising as high as 14,115.51 and eclipsing its previous intraday high of 14,021.95 set July 17.

Broader market indexes also rose sharply. The Standard & Poor's 500 index rose 20.29, or 1.33 percent, to 1,547.04, nearing its all-time trading high of 1,555.90, also reached in mid-July. The Nasdaq composite index rose 39.49, or 1.46 percent, to 2,740.99; the tech-laden index remains well below its high of 5,048.62, reached in 2000 when it was bloated by the dot-com boom.

Now let's go to this MSNBC story, titled Citigroup warns earnings will fall 60 percent;

NEW YORK - Citigroup Inc., the nation's largest financial institution, warned Monday its third-quarter earnings are likely to decline 60 percent, as it takes more than $3 billion in writedowns for securities backed by underperforming mortgages and loans tied to corporate buyouts.

[....]

Citigroup will write down about $1.4 billion on funded and unfunded loan commitments when it announces its third-quarter results. It will record losses of about $1.3 billion on the value of securities backed by subprime loans. Citigroup will also record a loss of $600 million in fixed-income credit trading due to market volatility.

And here is this MSNBC News story, titled UBS to write off billions amid credit woes: reports;

SINGAPORE (Reuters) - Switzerland's largest bank, UBS , is expected to warn on Monday that it has written off billions of dollars on fixed-income assets, making it one of the biggest casualties so far of turmoil in world credit markets, the Financial Times and Wall Street Journal reported.

UBS, which ousted its chief executive, Peter Wuffli, in the wake of losses at an in-house hedge fund in July, is set to replace its investment banking head, Huw Jenkins, the reports said, fuelling speculation that UBS might be altering its strategic course away from investment banking.

Citing people familiar with the matter, the FT said UBS was expected to say it has written down its fixed-income portfolio by more than 3 billion Swiss francs ($2.6 billion), triggering a third-quarter loss of at least 600 million Swiss francs.

The Wall Street Journal reported UBS was projecting a third-quarter loss of 600 million to 700 million Swiss francs based on a writedown of 3 billion to 4 billion Swiss francs.

We have two of the biggest financial corporations each reporting billion dollar losses, and Wall Street traders are popping champagne corks and singing "Happy days are here again" while the Dow shoots up 191 points to go above 14,000. It is like Wall Street is desperately wishing for any sort of good news that they're celebrating the bad news as being good. Both Citigroup and UBS losses were attributed to the subprime mortgage mess, which resulted in the housing bubble and bust over the last six years. The housing market woes are still with us. So I'm wondering if this Wall Street celebration is a bit premature yet....

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