• Our Client Appreciation Dinner is going to be Thursday, November 18 at San Francisco ’s Palace hotel.  Invitations will go out shortly. This engraving is from the hotel’s letterhead well over 100 years ago.  At the bottom in small type it says “At the end of the trail stands the historic new Palace Hotel in San Francisco .”
• One of our clients is Associated Bank, over 130 years old and with $23 billion in assets.  They’ve added nearly $100 million in new warehouse commitments since June, and they’re looking for more business.  They’re national in scope, and they want their mortgage banking customers to have a minimum of $2 million in net worth. If you’re interested, you can contact Matt Wolfe, Director of the Mortgage Warehouse Group at matt.wolfe@associatedbank.com.  Associated is based in Green Bay , Wisconsin but their warehouse lending group is based in Chicago .
• The San Francisco Chronicle had an article on the new Lethal Injection Chamber at San Quentin, and when you look at the architectural drawings, you notice that it has a break room!  A break room?? So the guards can have donuts and coffee and talk about Sunday’s football games? The article got even funnier.  The Death Chamber also has bigger windows and “better sightlines” for the witnesses.  And finally, the new facility has been wired with speakers so that the prisoner can broadcast his last words by a wireless microphone.  Aren’t good sightlines really just for baseball stadiums, and who really cares about the prisoner’s last words?
• Let’s say you want to buy $5 million of mortgage backed securities, and your choice is (a) Security-A, a 4.5% FNMA MBS trading at 101 or (b) Security-B, a 4.5% FNMA MBS trading at 101.5.  Can you imagine why you might buy Security-B, paying more for the same security?  The answer is that you might pay more if the average loan balance was much lower.  If Security-A has loans with an average size of $400,000 and Security-B is made up of loans that average $100,000, won’t the one with bigger loans have more prepayment risk?  On smaller loans, don’t the closing costs diminish the benefit of refinancing?  Bank treasurers and CFOs think about all sorts of stuff like this.
• Detroit is even more obsessed with volume than mortgage bankers, but with automakers, it actually makes sense.   The auto industry has enormous fixed overhead like giant factories and massive assembly lines, so the volume obsession makes sense.   But mortgage bankers don’t have massive infrastructure to support, so their obsession with volume doesn’t make all that much sense.
• Lots of you know and work with Tim Hayes , VP of Warehouse Lending at U.S. Bank, and we hear that his son Brett Hayes is the catcher of the future for the Florida Marlins.   Doesn’t Brett look like he’s having more fun than if he’d followed in his father’s footsteps and become a banker? Tim, is it true that your father played for the Cleveland Indians?
• I visited my daughter last week, and her college roommate is a very nice Chinese girl who was raised in Jamaica , and get this, she sounds just like Bob Marley!  She’s very petite, very sweet, and when you ask her something like “So, do you like going to school here?” it’s kind of disorienting when she says “Yah, mon!”

• Aren't we all craving some direct, candid messages from our politicians these days?  Whatever your political persuasion, you've got to hand it to guys like Jerry Brown of California and Chris Christie of New Jersey who speak their minds. Brown and Christie might be polar opposites politically, but their direct and candid approach to political discussions is refreshing.

• In 1985 Wayne Huizenga founded Blockbuster Video, and in 1994 he sold it to Viacom for $8.4 billion.  Last week Blockbuster filed for bankruptcy, proving that knowing when to sell is often the most important ingredient in becoming wealthy.                      
• We've mentioned specific AVM and identity fraud services before, but Randy Ruegger of Corelogic reminds us not to forget about them.  We recently got a demo recently and were impressed, particularly by the fact that their system uses four separate AVM models, which Randy tells us greatly increases their hit ratio and accuracy across the U.S.  Our Mike McAuley worked with Randy in his past life as a warehouse lender, so we know that he knows his stuff.  You can contact him at rruegger@corelogic.com to learn more.
• One of several corrections we got on Denny McLain: “For the record, Denny served up (literally) homerun no. 535 to Mantle, not no. 536. It got him past Jimmy Foxx on the all-time list, and at the time, he was #2 behind only Ruth (Aaron, Mays, Robinson and Killebrew all surpassed him before they retired).  Bill Freeman was the Tiger catcher that day, and he told Mantle what kind of pitch McLain was going to throw. Mantle didn’t believe him at first, letting the first pitch go by for a strike. Freeman told Mantle what the next pitch would be, and Mickey then hit it out of the ballpark. McClain tipped his cap and winked at Mantle as Mickey rounded third.
• Here’s Denny McLain meeting David Eisenhower (now a tour guide) and his wife Julie Nixon in 1968.  Nixon’s daughter looks sort of okay in this side-profile, but straight on, she looks frighteningly like her father. Can you imagine marrying someone who looks like Richard Nixon? Especially a woman.  And look at young Eisenhower wearing a tie to a ballgame.  What a dork. The old guy in sunglasses is Tigers Owner John Fetzer. McLain had already won 30 games when this photo was taken, and Fetzer is thinking, “McLain’s going to ask for a huge raise after this season, but screw ‘em.  It’s not like he can become a free agent or something.”
• Curt Flood changed all that the next year when he sued to become a free agent.  By the way, in the 1950’s the McClymond’s High baseball team featured Curt Flood in center, Vada Pinson in left and Frank Robinson in right.  Flood had a major league lifetime average of .293, Pinson’s was .286 and Frank Robinson averaged .294 with 586 homers.  When these three were freshmen, there was a senior on the basketball team named Bill Russell who went onto a bit of sports fame himself.
• I attended a football game at Dickinson College and happened to sit next to the Chief Risk Officer for Farmington Bank.  Mike Schweighoffer ’s job is at ground zero in terms of managing a bank, and he was a fascinating guy to chat with.  We talked about all sorts of risk (and managed to watch the game as well) and later I thought of something I should have asked him about, and that was Complexity Risk. With so much going on in a bank, it seems that figuring out how each activity intersects with every other part of the bank can be overwhelming.  How can you do it? How can bank Directors do it?
• As an A’s fan, I rarely read about the across-the-Bay Giants, but Saturday night’s game against the Rockies really showcased legend-in-the-making Troy Tulowitzki. All Troy Tulowitzki did was knock in the game-winning run with a 10th-inning double. Which was after he knocked in the tying run with an eighth-inning double. Which was after he'd given the Rockies a fifth-inning lead with a two-run homer. Tulowtzki’s September totals improved to 15 homers and 40 RBIs with a few days left in the month.   To get an idea of just how remarkable that is, there are only five other teams that have gotten as many as 15 homers out of the shortstop position ... all season!
• Can we get a little help here?  When the batter drives in a runner, that’s a run batted in, or RBI, right?   So first, do we write that he got a RBI or should it be that he got an RBI? Second, what’s the plural of one RBI?  Do we say “He got three RBIs”, or is it “He got three RBI”, with the implicit plural being part of the R?  People, I’m just trying to be grammatically correct.
• After a stellar career as a central banker and working absolute wonders administering necessary medicine to the U.S. economy in the early '80s, former Fed Chairman Paul Volcker seemed to largely drop out of sight for more than two decades.  Now, he's probably the most refreshing voice in the world of finance.   One of the many things to like about him is that when people say he’s head and shoulders above anyone else, you can take that literally!  Volcker is 6’-10” and is always the tallest guy in the room.   Don’t you love it when Volcker is standing next to Rahm Emmanuel, the guy on the far right? In an extemporaneous speech at the Federal Reserve Bank of Chicago last week, Volcker lambasted much of what's been ailing our economy and Wall Street these days.  For example, “The financial system is broken.  I think it’s fair to still use the term…...  We know that parts of it are absolutely broken, like the mortgage market, which only happens to be the most important part of our capital markets and has become a subsidiary of the U.S. government.” 
• We’re starting to look at the level of missing or trailing docs when we do FOCIS Reports.  Everyone’s always busy closing new loans, but you must pay attention to your trailing docs.  We’ve seen companies where this has gotten out of control, and it’s not pretty.

                                                               *    * Here’s an idea for all you would-be screen writers.  First, you have a Chinese girl who speaks like Bob Marley, and you dump Hannah Garrett and give her an African-American roommate who was raised in Shanghai and has a Chinese accent.  Then you have a white girl in the same room who was raised in South Central L.A. and talks ghetto gangsta talk. You put them all in a freshman dorm and the rest of the movie will pretty much write itself.  And if you think it’s a really dumb idea, hey, Hot Tub Time Machine made millions! Garrett, Watts & Co. Helping lenders increase revenues, control costs, and better manage risk

• Mike McAuley   (281-250-2536)
• Corky Watts  (408-395-5504)
• Joe Garrett   (510-469-8633)