Monday, March 20, 2017

Happy Spring to All

First they came for the Socialists, and I did not speak out—
because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out— 
because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out— 
because I was not a Jew.
Then they came for me—and there was no one left to speak for me.

Martin Niemöller (1892–1984) was a prominent Protestant pastor who emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps.

Benjamin Franklin: “We must, indeed, all hang together or, most assuredly, we shall all hang separately.”

GSE News and Trump Antics

I’m back in the frigid East after a week of sunny California weather. I missed most of the constant media coverage of the very strange Administration and its leader, President Donald Trump.

Here’s a brief GSE activities review. Later, I’ll get to the national and international politics segment—but, for Fannie and Freddie, it’s all Mnuchin and the courts, still.


Hooray for the Independent Community Bankers of America (ICBA) for its 2017 legislative agenda supports a GSE capital restoration plan to free the GSEs and return them to their more traditional role of supporting lenders in a variety of ways, as well as Realtors, homebuilders, and most importantly the public with the copious amounts of mortgage liquidity they provide, albeit still operating with the equivalent of federal manacles.

The major housing trades—like the Realtors, Builders, and MBA—all have jello-like or weasel worded GSE endorsements. None are simple and say what they truly think, feel, and want, as the small bankers decidedly have.

The housing industry big guys have the caveats and “Yes, but…” explanations, which invariably mean, “It’s all about the GSEs market control and revenue, which we want to diminish going forward.”

Yet and still, the MBA is leading the other two trades by their association noses.

The GSE Court Cases

--Anyone reading the available mortgage media—which I didn’t last week—knows more than I do about what’s happening on this important front.

The Administration’s opposition last week to the Consumer Financial Protection Bureau (CFPB), claiming its structure is unconstitutional has relevance for the GSE regulator, the Federal Housing Finance Agency (FHFA), structured similarly, to face the same charge from the Trump Administration.

Selfishly, I'd hate to secure a GSE victory at the expense of the nation losing CFPB, which I think stands alone in its ability and willingness to support the many financial, credit, and product hassles the US buying public faces.

--It would be a surprise if the GSE plaintiffs in the Appeals Court decision seek and “en banc” review from the entire Court, having lost out with Judges Ginsburg and Millett, as solid as Judge Brown’s minority opinion was.

That leaves the Supreme Court, with its current 8 members who could just split, suggesting plaintiffs might want a full slate of Justices present if the highest court is willing to take up their appeal, meaning waiting for Judge Gorsuch to win his Senate approval.

--The Collins case in Texas and the Hindes-Jacobs case before Judge Sleet in Delaware are could produce some positive GSE news but my sense--absent something dramatic form Secretary Mnuchin--investors are getting tired of the wait, the constant DoJ opposition—which we all hoped the Trump Admin/DoJ would cease—and the tone of the budget discussions which suggest there will be lots of pressure to reduce some very popular federal programs (which work in Red states, too) and husband federal revenues.

The other slice of history I share this week is my belief that nothing ever happens on any schedule GSE advocates want; dates slip, court procedures--which seem sure things--aren’t; bold talk about the importance of GSEs and housing to jobs and economic recovery, disappears into the atmosphere—and GSE investors confuse their hopes and beliefs with the cold, cruel world of political and legal calculus!!

I believe that’s why GSE stocks are so soft and in fact are down in recent sessions. Some investors are war weary, losing faith, and want out at any price close to what they paid. (That also could be a wonderful buying opportunity for some but I wouldn’t treat it as such, because of the uncertainty which most of us have witnessed.)

--I loved the Gretchen Morgenson article from last week (reading it two days after it appeared!) and she’s right, those pending dates might reveal something of the Admin’s GSE plans—if they exist--but they also could quickly pass by with the last set of dividends being swept and AG Sessions’ DoJ still fiddling, if not opposing, release of some 10,000 documents, which many people think merely expose the clay feet and dodgy and possibly illegal behavior of the Obama Treasury and Justice Department. (Makes one wonder why this White House would withhold any and not drown Judge Sweeney’s Claims Court in those documents?)

(BTW. Keep reading David Fiderer’s ongoing work on these matters, available on GSE Links. It’s first rate and insightful.)

The last thing on my GSE agenda is lessening the worry that any future tax cut will narrow the value of the remaining GSE DTAs and make current matters worse. I don’t buy that and would look for this issue to be factored in—when and if—Mr. Mnuchin offers a recap plan.

With the DTA matter getting resolved in discussions with Treasury and the GSE plaintiffs. DTA tax changes won’t stop/slow/sink the GSE ship IF Secy. Mnuchin re-launches it.

President Trump; a 3 Month Perspective; Problems not Solutions, Lies not Truths

Since his inauguration, the world has seen President Trump’s office display wild insecurity and administrative disorganization, proffer several weird allegations, the POTUS’s thinner skin displayed more often, more conspiracy allegations than a year of “X-Files” broadcasts, and lots of GOP confusion and unhappiness, while just flummoxing those who didn’t vote for him.

Is this a preview of the coming Trump years? I am not a Trump fan, as noted, but hoped for far more cohesion from him and his short staffed team.

In the past two weeks, alone, DJT accused Barack Obama and others of wiretapping his Trump Towers political HQ, despite the rejection of those claims by the House and Senate GOP Intelligence Committees, the FBI, and many prominent congressional Republicans; issued his second “immigration plan” to keep “undesirables” out of the United States--which once proudly described itself as a “nation of immigrants”—and this one, like the first, shot down by federal judges; showed his rude/crude ass to Germany’s Andrea Merkel, despite her nation being a solid US ally in Central and Eastern Europe (maybe DJT's pissed because Germany kicked out his grandfather for refusing to do his military service, i.e. like grandfather like son?); embarrassed himself by accusing the British government of being party to his fantasized non-existent  wiretapping which never happened, according to all of those GOP sources (not including Sean Spicer and “Kellyanne Conwoman,” who insist it happened because “The Donald” said it); and then---there is his first Budget.

Anyone surprised that the Billionaire’s first budget  went after many programs benefiting the poor and elderly, when  he wants to boost military deficit spending, despite no true evidence that the latter needs all of that growth?

Candidate Trump railed against escalating drug costs, so where is his effort there? He campaigned for massive infrastructure spending because our community facilities are falling apart, but where is his plan for that? He talked about support for the elderly but he’s cutting “Meals on Wheels.”

I like Public Broadcasting System and National Public Radio—two major Trump budget victims—but buy two less fighter aircraft he wants and pay for a year or more of each of PBS and NPR, plus more meals delivered to the elderly.

Ditto close one of those dozens of unneeded US military facilities--which the DoD doesn’t want, but local politicians do--and we’ll save those three programs and maybe the Women’s Infant and Children healthy baby nutrition funds, also due to be slashed.

He campaigned against “Obamacare” and said his “Trump care” would be better, fairer, and less expensive, but it looks like it actually will knock millions off the medically insured lists and drive up costs for those lower income families still eligible? (But, the insurance companies should do very well, thank you.)

Interesting to note that his new OMB Director, Mick Mulvaney admitted, DJT’s campaign promise of “insurance for everyone” will not happen, since Trumpcare won’t offer universal coverage. Jot down one more prevarication.

Last week, when the “non-partisan” Congressional Budget Office—with executives all hired by the House and Senate GOP majority leaders—pointed out those Trumpcare unhappy political facts, the President,  Sean Spicer. OMB Director Mulvaney, et al, began institutionally trashing the CBO, using Chapter 1 of Trump’s playbook, “If you can’t beat them, lie about them.”

In the GOP's eyes, why was the CBO resolute and responsible in the past--when it dumped on Obama initiatives--but suddenly, incompetent now, when it points out Trumpcare flaws?

Vladimir Putin couldn’t have paid any other human being enough to do so much damage to US domestic and foreign relations, as well as slander so many of our societal institutions, as “the Donald” has… and he’s barely been in office three months.

I know a lot of people like our President and remain optimistic, but my hope is that he will level with the American people and explain—in some kind of cogent and sustained detail—his budget objectives, his foreign policy plans, his belief that his “Wall” will keep people out, and—finally--discuss what’s in it for the American people if the Russians suddenly are his and the GOP’s new “besties?”

As the US President, rather than Donny Jr's and Eric’s father, I believe DJT is better off assuming Russia's government and its leaders are pariah and have nothing the US needs or wants, even if Trump Inc. hopes to build hotels, resorts, and casinos in Putin-land.


Trump the presidential campaigner:

"I'm going to be working for you; I'm not going to have time to go play golf," Trump said during a 2016 event in Virginia.

Trump the President:

CNN reports President Trump plays at least 10 rounds of golf in his first 60 days on the job.

Sure he can golf, occasionally, but these Mar-a-Lago golf rounds are costing taxpayers millions every weekend DJT –who reportedly watches lots of television during the week--visits Florida with his family and friends.

Maloni, 3-20-2017