Tuesday, November 16, 2010

Joe Smith

Many of the peripheral Mormon interests at Freddie Mac (yes, they once “ran the place”) thought that President Obama had answered their dreams (or fantasies) when he named “Joseph Smith” to be the new head of the Federal Housing Finance Agency (FHFA), Fannie’s and Freddie’s regulator.

Unfortunately for them, it is not “that” Joseph Smith of Latter Day Saints fame, just a plain old regular Joe Smith who has been North Carolina’s state banking commissioner.

I haven’t found a lot of people who know this Mr. Smith—and I certainly don’t personally—but one source said that he was a “consumer advocate,” which would be great assuming the Obama Administration lets him participate in Fannie and Freddie serious policy, at least until the 112th Congress chooses to put them in a shredder or whatever fate the powers in charge choose.

Assuming he gets confirmed, I think I can fairly state that none of Mr. Smith’s immediate predecessors approached their responsibilities with consumers as priorities. Armando Falcon, Jim Lockhart, and Ed DeMarco worried about their own image in town, F&F’s lobbying, F&F’s pr activities, F&F stock price and how to negatively impact those (see the late, lamented HUD IG report), F&F’s compensation (you get the picture), but not much about the “winners” in the GSEs mortgage activity, the American consumer.

So maybe FHFA Director Smith might consider those consumers and actually help F&F “conserve” resources, which supposedly is the job of the “Conservator.”

I hope someone alerts this Mr. Smith that he has some anti-GSE folks--and decidedly non-consumer advocates--among his inherited senior staff. Who are they? Oh he can just start looking at those who’ve been there the longest and I am sure he can uncover one or two (or maybe more) who fit that definition.

The new Director might be a convenient “beard” if the Obama Admin finds some reason to keep around the GSEs, besides the fact that they are currently funding 90% plus of the conventional mortgage market, and still waiting for the big banks to step up and play the secondary market role that F&F has.

Or, Mr. Smith could just be the funeral director of record, if the Congress and the Admin decide they need to abolish F&F and replace them with entities which don’t yet exist.

Stay tuned and here’s hoping that North Carolinian Joseph Smith is nasty street fighter, a fair regulator who wants to reinvigorate his GSE charges, and can appreciate that there was a successful Fannie/Freddie shaped mortgage finance world, before Wall Street created near worthless private label subprime securities. Post PLS GSE managers—along with financial service executives all over the world—bought the “garbage securities,” seeking elusive market share and yield, and undid a 20 year record of corporate good works.

My Team Appears to be Losing!

I feel like I am watching a slow motion train crash as the Obama Administration responds to steps on its story lines (when they exist) and flounders facing confrontational Republicans and Tea Party members two groups which never should be de-linked).

Fair questions for President Obama, since he seems to be on all sides of these matters.

“What is your view on the Bush tax cuts Mr. President? Just because the GOP won the House, does that mean we now can afford the lost revenue and disparity?”

“What does “tax compromise” mean, sir?”

BTW, which Democrats are challenging the new GOP winners over what the GOP's spending and deficit reduction priorities are?

The Republican agenda hasn’t changed since George W. Bush’s two terms and those ideas didn’t work then? Why are the D’s waiting until January to point out to the nation that the current GOP agenda is inconsistent and doesn’t have a snowball’s chance of passing mainly because they runs roughshod over GOP interests.

Does anyone really think all of those federal subsidies that the Republicans claim they want to ax really only go to Democrats or minorities?

President Obama, why wait until January to attack, the GOP isn’t waiting?

Watching this current ineffective political soap opera feels like my favorite football team trying, haltingly, to march down the field and score, but they keep being their own worst enemy, fumbling, dropping passes, or committing penalties game infractions.


During the 2008 Democratic primary, my wife was a major Hillary Clinton supporter. I liked Hillary but felt she had too many negatives and would lose.

Today, I can see where she might be a stronger candidate for President in 2012 than Barack Obama, even if the economy rights itself and unemployment comes down.

She has shown amazing toughness in a very tough job. She well could add Secretary of Defense to her resume, making her even more formidable. I also am not sure, if President Obama would want a second term.

Ironically, I don’t agree with the pair of pollsters, Pat Schoen and Pat Caddell, who suggested that Obama announce now that he will be a one term President and then just work on problem solving for the nation with no hint of any political priorities.

Sounds great but a “lame duck President” doesn’t have as much power as Messrs. Schoen and Caddell argue.

Who, in the Congress, would work with Obama if he announces early that he is out of the 2012 race?

“All the Devils Are Here”

I haven’t yet read “All the Devils Are Here,” the new book about the financial meltdown, by Bethany McLean and Joe Nocera, although Ms. McLean did interview me as part of her research. The book contains a good bit of insight on Fannie Mae and Freddie Mac and their political and institutional wars.

I have read several positive reviews of the work, including one that described it as the most detail rich of the growing number of books on the subject.

I told Ms. McLean that I hope her book is extremely successful and becomes a movie or a made for TV show, for very selfish reasons related to “feeding the cows to feed the crows.”

If the books goes TV or movie—I wish, I hope, I pray—and my tiny little part in this drama makes it into the final script, I want Antonio Banderas to play me.

Why? Because he’s Latin swarthy handsome, which I’ve been most of my life and he knows Selma Hayek and I want a personal introduction to Selma.

Remember them as lovers in “Desperado,” in which Banderas—as a vigilante—seeks to track down the Mexican drug king, who turns out to be his older brother? So, it’s simple, if Antonio plays me in an “All the Devils” movie, it’s a short step for me to ask him to introduce me to Selma. Book em’ Dano!!

Good luck to the McLean/Nocera writing team. Here's a wish for major book sales.

Maloni, 11-16-10

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