Tuesday, November 4, 2008


So long sad times
Go long bad times
We are rid of you at last
Howdy gay times
Cloudy gray times
You are now a thing of the past

Happy days are here again
The skies above are clear again
So lets sing a song of cheer again
Happy days are here again

I think it’s safe to say that Barack Obama’s stunning victory can be grounds to drag out this “Tin Pan Alley” standard--which is most associated with Franklin Roosevelt’s the 1932 election win and subsequent Democratic victories--and begin to celebrate this new day for our nation and the world.

We still have about 10 weeks of George W. Bush and his cabal, but most of those appointees will melt away before “W” gallops into that helicopter on the White House lawn on January 20, 2009, and finally departs.

Obama and his team now need to ask themselves the question that military commanders have asked themselves, literally and figuratively, since time in memoriam, “We’ve taken this hill now what in the hell are we going o do with it?”

I won’t offer President-elect Obama my “to do” list, since I am sure that he has a long list of his own. But one idea which appealed to me came in a recent letter to the Washington Post from a college student’s father.

He suggested as long as the federal government is giving billions to Wall Street, why not take some of that money and “forgive every college student loan,” made during the Bush years, so these kids and their parents can put that money into the economy and not give it all to the banks, since their “Uncle” seems to be nicely taking care of those financial institutions.

Once you iron out the details, that idea makes a lot of sense to me, as long as we are “forgiving” some debts and throwing federal dollars around. I think that is a symbolic and solid investment in our future and removes some financial burdens for lots of middle class kids and their tuition-paying parents.

Those GSEs, Again

I hope that idea fares better than my “Find a way to use Fannie and Freddie” to help with the Treasury’s not yet undertaken, “but I promise you soon to be,” massive mortgage backed security asset sales that the Treasury has promised us shortly will be forthcoming, once they give all of their Wall Street friends the jobs and opportunities to move those failed “private label” mortgage backed securities, meaning non-Fannie Mae and Freddie Mac securities.

In the meantime, Fannie and Freddie sit on their hands, waiting for Henry Paulson to state unequivocally if the former GSEs debt—as the Bush Administration advertised--is backed by the federal government, which should bring mortgage arts down, or is their debt “almost/nearly, a scosh/kinda/maybe” backed by the full faith and credit?

Confusion over this fact just makes the job tougher for everyone in the market.

I wonder if it has occurred to the Hill Democrats, who invited “the GSE nationalization,” that nobody in the Bush Administration really seems to know what to do with Fannie and Freddie now that the companies have been subsumed by the government and our national mortgage market continues to suffer.

It appears that the Republicans’ only policy goal was to destroy Fannie and Freddie, as per the early Reagan mandate. Now that they’re put the companies in the crapper, the GOP is headed out of town and will let the new Obama Admin dispose of the bodies.

Even Ben Bernanke, last week, in his “we hate Fannie and Freddie but we need them” speech hinted at the reality. While Fannie Mae and Freddie Mac as corporate entities may not be needed, but their exclusive function as dedicated investors is needed to create and maintain the United States secondary mortgage market.

Until the Congress (re) creates a dedicated mortgage investor, we will continue to have flawed and illiquid conventional mortgage markets and unnecessarily high mortgage rates.

I still haven’t heard anyone rebut this analysis or offer a viable option, beyond letting HUD make every mortgage to American families.

Senators Obama and Biden. You have New Jobs, Dudes!

Congratulations Senators Barack Obama and Joe Biden, now Mr. President elect and Mr. Vice-President elect. May you both serve long and well and may this nation and the world enjoy the benefits of your success!

(While you haven’t asked me Mr. President elect, I would name Paul Volcker your Secretary of Treasury and Rahm Emanuel your White House Chief of Staff.)

Maloni 11-04-2008


CJ said...

Congrats Bill. Your man fought the good fight and came out victorious.

I'm taking my guns and going hunting with Palin.

Watch out for Rudy in 2012.


John M said...

Hi Bill,

Here's your morning-after quibble: "... are we going o do with it?"

That being said, I'll be very happy to scrape your GSE thoughts off the above and expose them on Doom (with my hearty objections, of course!)

John M said...

The re-post of the extract of this post is now up on Doom here.