Sunday, November 1, 2009

The World of Mortgages and Financial Services

I still am looking at the “return of FM Watch’ and trying to figure out something more than the obvious.

The Mortgage Insurers, which always had a prominent role in the anti-GSE campaign, must worry that a reinvigorated Fannie and Freddie would figure out a way to do business without them or to dramatically lessen their role. Freddie came within a hair’s breadth of doing that some years ago and I doubt if many consumer group would mourn the industry’s diminution.

Ditto the appraisers. Having nothing to do with Andrew Cuomo’s deal with the GSEs, which could get undone my Congress, when you have access to as many mortgage loans as the former GSEs have, you can do a pretty good job of estimating property values and finding a way to charge a helluva lot less than $400 to $500 appraisers do currently. And that doesn’t include the games lenders play with some of their “captive appraisers” and multiple and duplicative consumer charges.

So, this must all about the future and keeping markets inefficient and consumer costs high?

I am sure that it won’t be too long before some anti-Fannie/Freddie allegation is leveled at the companies by the usual suspects on the Hill, in the media, and the right wing think tanks. (Knowing the straight arrows who run these shops now, I suspect the charges will be “littering” or “breaking the Sunday blue laws,” something heinous like that.)

That salvo will be FM Watch’s opening round.

we're still left with the reality that Fannie and Freddie are puppets managed by the Geithner Treasury. If FM Watch is ready to take on the Treasury, their member organizations must have their own ducks in line and don’t require Treasury or Obama good will or else why would you “pee on the Pope?”

Dede Scozzafava and Conservative Politics

Shortly after this blog gets out, we’ll know who won the special election in New York’s 23rd congressional district race, between Conservative/Republican Doug Hoffman and Democrat Bill Owens. But, already we know who lost, New York Assemblywoman Dede Scozzafava, the original the Republican Party candidate—until this past Saturday—who suddenly dropped out after getting embarrassed, denied resources and forced to resign by the GOP’s national right wing. (BTW. Is there any wing left in the GOP, but the right or the righter?)

It would be fitting, but not significant to the Democrats control of the House, if Democrat Owens somehow still wins this traditionally Republican seat—since Scozzafava still will be on the ballot and could draw votes from the conservative Hoffman. It sure would be a shot at the intruders, like Sarah Palin, Tim Pawlenty, and Newt Gingrich who reversed himself—in a two day stretch--going from Scozzafava to Owens. These non-New Yorkers saw fit to stick their noses into this local, meaning New York decision, and meddle.

The “GOP Wingers,” who love to preach the sanctity of local control (remember Florida in 2004/5), but only practice it when it serves their agenda, decided they knew better than the New York Republican Party who the republican should be in the 23rd District race and threw their collective weight against Ms. Scozzafava, causing her to come unglued and bolt.

That’s what’s going to happen to conservatives who aren’t conservative enough! Win or lose on Tuesday, we can expect more of that from the “national” conservatives, who will use their “pro-life, anti-gay, pro-business, pro-war, anti-government (except when they run it and balloon deficit spending by $6 Trillion) standards to influence getting the “right kind” of Republican candidates to seek office.

I wonder how many of these conservatives know the “Horst Wessel?”

(Early Sunday evening, as I put the blog to bed, Dede Scozzafava endorsed her former Democratic opponent Bill Owens.)

The Beat Goes On

Rush Limbaugh, one time hydrocodone and oxycodone abuser (for his “back pains”) and right wing Poobah, again is challenging President Obama’s fealty for the nation. This weekend Limbaugh claimed that the President and the Democrats are trying “on purpose” to destroy the United States. What won’t these say next? (Hey Rush, did the drugs fog your memory, where were you between 2000 and 2008 when some really danger stuff was carried out?)

Many Democrats whisper among themselves about their fear that some yahoo driven by the haters Limbaugh, Beck, O’Reilly, and the “fair and balanced” Fox News hot air machine air machine, might try and do serious harm to the President.

Now, I am wondering if the reverse may not be the equally true situation.

Debate,town hall meetings, the Internet, elections, our free press, and the First amendment traditionally have been our national safety valves for letting off partisan steam. But the right wing seems to be trying to change that. Why they think they are immune from the rhetorical and soemtimes physical violence which they espouse?

This batty crew could trigger some left winger to lose his mind and kill someone just as easily as they could rattle a conservative.

Eight years of George Bush and the type of federal government that Rush, Beck. Fox, Haley Barbour, Boehner, Palin, Newt, Pawlenty, Fox News and others want, is what gave us two wars, non-existent financial regulation, attempts to gut the Constitution and trillions in deficits.

That’s what the Democrats inherited fromt he Bush Administration.

Ten months into the Obama Administration, with a Congress voted by the people who threw out the GOP, the conservatives now complain that the Democrats don’t care for America, presumably as much as the GOP cares for the country?

If there is justice, all of the “moderate” Republicans will caucus in a phone booth and let the conservatives have their way and let the resulting “mass” become a true long time minority party—blissfully claiming you are welcome in their big tent—unless you are from labor, support government regulation of anything, don’t believe in the Bible, support “a public health care option,” are non-white, gay or lesbian, don’t support guns in church, school, or national parks, and a growing list of other minimum GOP litmus tests.

Left wing Democrats are a nuisance, more likely to turn on each other than to pull off anything spectacular. The right wing conservatives are dangerous, violence prone, and deceive themselves that they are the true Americans and those who oppose them are not.

I believe that any number of these “entertainer provocateurs,” like O’Reilly, Limbaugh and Beck, think their act is just a harmless game and that people won’t rise up and do violence based on their incendiary partisan assaults.

I think they are wrong and I hope I am.

Maloni 11-1-2009


Lawrence said...

billy you sure make sense! keep it up lfl

Anonymous said...

off topic, but this is as good a place to rant about this as anywhere. What is up with Treasury trying to block Fannie from selling its Low Income Housing Tax Credit (LIHTC) holdings to Goldman...perfectly legal, but they are concerned about Goldman using the tax credits to offset their profits.
This deal makes sense for Fannie, which is unable to use the tax credits, being unprofitable for the near term future with its own losses as well as those of its pay out on the 'sharecropper' 10% payment deal with the Treasury and its generous loan modifications. And just to add insult to injury, we should recall that it was the recalculation of its accounting for the LIHTC credits that pushed Fannie into the arms of Treasury(when, as faithful readers might recall, the projected profits that the LIHTC would offset were no longer viable because of Fannie's projected losses). In the words of the witch in the Wizard of Oz...What a World, What a World!

Bill Maloni said...

Thanks, Lawrence. I hope I do and I appreciate your encouragement.

I consider myself a major cynic, but some of the stuff I'm seeing on the political front (not mortgage issues perse) is scary. I find the implications truly frightening, as I've tried to point out.
So we are clear, I am talking about guns and violence to achieve perceived partisan objectives.

Bill Maloni said...

I just talaked about the LITCs at dinner tonight.

Remember Treasury controls the companies and can do to them whatever they want and few people on the Hill will say "boo." i also suspect that neither company has the guts to go to court over their rights to sell the tax credits.

But,tax credits always have been available from those who have (and can't use) to those who need them and can pay for them.

Why Fannie's possible sale of same, since they have no income against which to take the credits,
should raise flags, is all about the sensitivity this Administration feels about the company (and Freddie) and Wall Street, especially the latter.

Nobody complained when Fannie was racking up all of that stuff supporting state and local housing finance agencies, but somehow--just as Treasury (under Paulson) has denied them their First Amendment rights to communicate with Congress, some "Bigfoot" bureaucrat is going to opine that Fannie's legal sale of tax credits to Goldman or whomever is not permissisable.

At the end of the day, I suspect the tax credits sale should go through, with some type of tortured limitation or "study of the impact" proviso.

Here is Fannie trying to take advantage of a perfectly legal tax provision to strengthen its balance sheet and Treasury saying "No, we want you to be weaker and use more of the taxpayers TARP money."

Hey Tim, what a joke. Whether on the receipts or expenditure side, it's all your money!!!!!

The Progressive Pragmatist said...

What ever happened to the rights of minority shareholders? If the controlling shareholders of the GSEs were private entities, minority shareholders would have a slam dunk litigation winner against the majority shareholders for damaging the economic value of the GSEs. I guess no one believes it can successfully sue Uncle Sam. If they were being operated as real businesses, the GSEs could be earning billions every quarter by exercising just part of their pricing power. The Feds are using the GSEs and every other lever at their disposal to fight the "plunge protection" battle.

As far as the Goldman deal, the Feds may also be worried about the appearance of more coziness with that favored Wall Street player.

Bill Maloni said...

Well, as noted, until tested in court (which Fannie/Freddie companies won't dare try) the rights of the minority shareholders are in doubt.

Everyone can pretend they exist, but until successive judges/courts say so, those rights just are "theory."

Back in the halcyon days, a much bolder Fannie often talked about "suing" the government, but never did. So, I can't see the current companies doing it.

Goldman needs Treasury too much to upset their own apple cart.

Maybe some deep-pocketed "preferred holder" might want to try a lawsuit.