Tuesday, October 30, 2012

Can't Vote for Mitt

My GOP Apprehension:
It’s Not All About Mitt

Some D and R Differences; Sorry Mitt, But I Can’t Vote For You

In the past few days, as the Romney and Obama campaigns charge after the White House, Senate, House seats and local offices, I heard smarmy Ann (“I’ll say anything for TV time”) Coulter call President Barack Obama a “retard.” Donald Trump again offered his “Obama is foreign born” bull pucky. Former New Hampshire Republican John Sununu dropped his thinly disguised “racial bomb” when explaining why General Colin Powell endorsed Obama (they’re both black). This prompted Powell’s former chief of staff, bravely to blast the GOP and Sununu calling them “racists,” with his longer more accurate statement, “My party is filled with racists.”

Indiana Republican Richard Mourduck--running for Senate--announced that his God welcomes babies born via rape of the mother. I won’t even bother to talk about the biologically challenged Missouri Republican Rep. Todd Akin, another Senate candidate, who assured the world that women have a hidden body switch to shut down baby making during a “legitimate rape.”

I can’t leave out, (according to his campaign) “right to life” advocate Rep, Scott Dejarlais (R-Tenn), a married medical doctor, who cajoled his mistress--one of at least four mistresses according to local news reports--into having an abortion.
Dejarlais now is running for re-election with an endorsement from a different mistress. (Can’t make this stuff up.)

Mitt Romney did not utter any of those comments, nor did he criticize the people who did, including the hypocrite Rep. Dr. Dejarlais, which is a major reason for the title of this blog?

Many, but not all, Republicans share common tenets. (My R friends will tell me if I am mistaken.)

Partial GOP List

Here’s is my not exhaustive GOP preferences list:

 prevailing disdain for the federal government;

 strong belief in right to life for fetus, but less support for babies once they are born;

 dislike and distrust of minorities;

 inherently not comfortable with minority group priorities

 dislike or distrust of feminists or other aggressive women demanding parity with men;

 oppose legislative efforts to deal with racism, sexism, sexism or other forms of inequality, since they question whether many of those conditions even exist;

 oppose most forms of gun control, including sale of combat weapons;

 oppose all but the most minimal regulation of commercial activity—at any level of government--no matter how risky or dangerous the practices;

 an overwhelming belief that the “market” is the best arbiter of any product, service, price or commercial activity;

 affinity for a large military and “muscular” foreign policy;

 fear of China’s business and military might;

 silent endorsement of “boys will be boys” behavior;

 engage in insensitive and occasionally inaccurate public dialogue about sex matters; (suggesting fixations or personal problems);

 admire the “law of the jungle” or “survival of the fittest,” but disdain for Darwinism/Evolution and much of the science surrounding it;

 not wildly supportive of environmental or “global warming” issues;

 support state voter suppression campaigns in the absence of any evidence of voter fraud;

 support tax cuts, especially for the wealthy, as a universal elixir for all ills;

 believe that the most effective government level is the government physically closest to the population;

 generally believe that the Bible and the US Constitution are sacrosanct and require little if any interpretation;

 generally opposed to activist judges and courts;

 strong advocacy for states rights over federal authority, except Florida in the year 2000;

 and few concerns about Church-State relations, believing that the US is a “Christian nation”;

 unfailing support for the society’s “haves”;

 not wild about the United Nations or its smaller members wielding influence;

 Want to believe that large commercial banks represent “private capital,” despite the fact that most of their $7 trillion in deposits/working capital spring from a $5.3 billion inadequately funded federal insurance fund, which can’t possibly cover all of the personal/family/business savings in banks, if there was a massive failure.

Not Universal and D’s Have Their Blind Spots

Now every Republican isn’t into all of those and I suspect I missed a few other shared beliefs, possibly some salient ones. But those I have noted provide a pretty fair profile of the “GOP gestalt.”

If I listed average Democrat descriptors--in the same categories--most items on the list would contrast with GOP traits, from a little bit to a whole lot.

D’s would believe in the federal government’s ability to manage or solve fiscal, social, and commercial problems; think the wealthiest among us should pay more taxes, because they have benefited more; D’s seem less fearful of diversity and change; are more skeptical of total faith in “the market,” since the latter has been responsible for some truly and costly diabolic behaviors, designed not to favor the least among us but concentrate wealth in the hands of the “haves”; most D’s believe in the efficacy of strong federal regulation and consumer protection; also they far less agitated over their fellow American diverse religious beliefs and choices.

What Mitt Does for the GOP and Why That Concerns Me

I have no personal animus toward Mitt Romney. I never lived in Massachusetts, never attended Harvard, am not anti-Ivy, and don’t care if he fantasized that if he was Hispanic he would be the next President. I don’t have the significant wealth the Romney family enjoys and don’t run in the social circles in which they move.

Through my entire Washington career, working in and with Congress, at two financial regulatory agencies, and at Fannie Mae, I have engaged successfully with a number of Mormon public officials and I have been exposed to the Latter Day Saints faith. I believe their religion (including mission and tithing) makes them just another positive variation of Christianity.

Romney also might be a decent President and I have written that Mitt Romney may have more success sooner than Barack Obama bringing back our national economy because he will have a supportive Congress to work with him. Obama won’t.

But……with the decided rightward tilt of the GOP and the purging of moderates, if Romney wins election next month, he would be forced with little alternative, to flood the Executive Branch with men and women who are very comfortable espousing and embodying that list of GOP positions I developed.

The Romney-Ryan team has not been straight or transparent with the American people, offering meager campaign platforms and pliable position papers, displaying a lot of venom but little substance.

On most major issues, Governor Romney has espoused both sides of the question.
Just what does he really believe about tax reform, deficit reduction, and immigration, let alone Medicare and Medicaid?

The sweetest plum that could fall into Mitt Romney’s hands is the power to appoint two and possibly three Supreme Court justices who will serve for life and buttress a Robertson, Scalia, Thomas SCOTUS majority possibly for the next generation.

Rove, Koch, Adelson Channeling Right Wing $$ Millions

I will vote for Barack Obama because I don’t want the Nation’s Capital or courts filled with acolytes of Karl Rove, the Koch brothers, and Sheldon Adelson, if not frequent WH consultative visits from those individuals.

I don’t believe “corporations are people.”
This “new Conservative cabal” is just the “old Conservative cabal,” who served George W. Bush 10 years ago.

It will try and push us—and the world—backward to an era which can’t exist anymore and can’t be recreated, the United States of 60 years ago, still pumped and bristling from leading and reshaping the world after our World War II victory.

In presidential Debate #3, Romney said that “we can’t kill ourselves out of our nation’s foreign policy problems.”

We already are the world’s greatest military power, spending more on our armed forces than the next 10 sovereign spenders. But who believes the “new” Republican Party jingoism--which wants to boost defense spending two trillion additional dollars in the federal budget--agrees with that logic? (“Nothing like a good war to get the economy…..!”)

The GOP calls for building more barriers to keep out “illegals” plus shipping many back to their countries of origin; standing up militarily to China in the Pacific; giving Iran, Russia, and other bothersome countries a little of our nuclear middle finger.

Sounds great on a campaign stump but it’s a very risky and destabilizing foreign policy.

An Obama victory won’t sanitize the Congress of all of its extremists, right and left, but it will keep most out of the Executive branch.

Barack Obama, warts and all, offers more to America and the world. He’s the better choice to be our next President.

Maloni, 10-30-2012

Happy Halloween to all of you "kids" and VOTE next week for which ever candidate rings your chimes!!

Friday, October 26, 2012

Mortgage Liquidity, Liquidity, Liquidity

(Warning, this is a lengthy blog. I felt it was necessary to remind people of the value of the pre-subprime Fannie and Freddie, mostly before 2005, and the new reasons justifying consideration of the former GSEs ongoing national value as private entities. I could have broken it into two parts, but feared the loss of continuity. Thanks to my friend and former Bank Board and Fannie colleague, Gwenn Hibbs, for her legal and cynical eyes.)

President Obama and Mitt Romney are neck and neck, with less than two weeks to go before the Nov. 6 election.

The hard core votes for each man should balance and, if news reports are accurate, the race will be decided by women and those currently “undecided.”

The women and “Undies” driven by major social issues probably lean to Obama; those who care about the economy will lean to Romney, especially when they realize the former Massachusetts Governor will have a friendly Congress to work with, which Obama likely won’t.

I’ve blogged enough about the presidential election, so I want to turn to a more familiar matter, since it is an issue confronting the next Administration and Congress no matter who comes out on top.

What should America’s secondary mortgage market look like?

Right now, nobody cares because everything seems OK, with the federal government backing all the main players. But because of those taxpayer risks and costs, both political parties argue a change is needed.

A couple of developments have occurred which I believe lean heavily in a direction which won’t surprise many blog readers, but might open an eye or two among those hoping to make national mortgage policies.

Bye-Bye Uncle??

Can we ever get the federal government out of the conventional mortgage market? How might Fannie Mae and Freddie Mac make that happen?

A major part of the answer, first, is forcing the world to look at Fannie Mae anew, after decade of horribly bad press--much of it sensationalized and inaccurate--which started with a major lie. The negative momentum picked up as subsequent Fannie officials lost billions on very low quality mortgage investments and drove the enterprise into the ground.

Since then, matters have changed producing facts which checkers will find irrefutable.

As creatures of the federal government, since the Bush takeover in 2008 and now managed by the Obama Administration, Fannie Mae and Freddie Mac have managed 75% of all new conventional mortgage loans, which lenders sell into the secondary mortgage market. In fact, they’ve had the same market share—or slightly larger--for over three years.

It’s safe to say, Fannie and Freddie are the nation’s secondary market, because nobody else wants to manage it, given the responsibilities.

The only other industry large enough to take this mission from the former GSEs and their federal overlords is the commercial banking industry and bank actions scream they don’t want the job.

The Big Banks

Right now banks are happy; banks do not want to hold any conforming mortgages on their books, which the federal government doesn’t guarantee, nor do they appear to want to challenge F&F for the systemic obligation to keep money flowing on a steady basis throughout the nation—“in good times and in bad”-- by acquiring mortgage loans other institutions originate, i.e. the role of a secondary market maker.

The Federal Reserve’s two month old “Quantitative Easing 3” (QE3)—which the Fed hopes will stimulate the economy with its monthly $40 billion purchases of bank-owned mortgage bonds so banks have lower cost mortgage money—has freed billions of bank capital for mortgage lending and at low pass through rates for mortgage borrowers.

But many banks have chosen not to belly up to that free bar, saying they don’t have the staff to handle all of the potential new business those low rates can produce.

Maybe true--yet easily fixed--but the banks ain't bragging about the ton of cash they earn through arbitrage, putting the bond proceeds in overnight Fed accounts (about $1.5 trillion earning 25 bp) or buying Treasury securities.

With their actions, the banks display risk aversion and cite the pre-2008 real estate fiasco to justify not making bold new mortgage moves until the dust settles on what bank regulators as well as their own boards of directors expect.

F&F Still Chugging

At the opposite extreme in their current “quasi-government” lending role in the past three years, Fannie Mae and Freddie Mac—with Fannie carrying a larger burden of the two—have securitized nearly 8 in 10 of conventional mortgages originated in the United States.

In a harbinger of future black ink, both recently have posted solid earnings and publicly announced that no further Treasury financial help was needed in the near term.

Pouncing like a Soviet era apparatchik, the US Treasury then announced it was going to sweep every dollar the two earned, not just charge them the usurious 10% dividend on borrowings for its assistance. (Banks needing help only were charged 5 %.)

But the market operation's die is cast.

If  Banks continue to sit on the sideline (and why should get change, if they are being given such easy Fed money?), Fannie and Freddie in their ersatz form still will dominate the mortgage market, as policy makers wring their hands over that reality.

Please note, too, the F&F success is based on supportive—and at times strait jacket regulation—imposed by their safety and soundness regulator, the Federal Housing Finance Agency (FHFA). That agency requires that F&F only process low risk well. Underwritten mortgage loans. The mortgages have lender warranties affirming that borrowers have the means to repay those loans.

That kind of control was absent when Fannie got into deep trouble.

Why Fannie II?

Supporting my suggestion for a brand new look at something old is:

--Fannie and Freddie are a tested secondary market system well known to consumers and lenders;

--Fannie and Freddie have much improved oversight;

--There are no obvious or willing successors;

--Because of other governmental changes, most lower quality mortgages no longer go to F&F as conventional loans, but directly to HUD's  FHA guarantee insurance program;

--and most important to some, the “evil Democrats,” who used to freak the GOP, are long gone from Fannie Mae.

Now before all of the smirks and grins appear on wizened faces, contemplate this “wild card,” which few people in the nation’s capital seem to know and understand.

For the second time in five weeks--issuing a “summary judgment” decision in an eight year old shareholder lawsuit accusing former Fannie officials of violating security laws--Federal Judge Richard Leon found there was no evidence in the thousands of pages of testimony and filings which showed that Tim Howard, Fannie Mae Chief Financial Officer (CFO), did anything to break any securities laws or had any information that Fannie Mae broke those laws.

Previously, Judge Leon issued the same “summary judgment” decision” (dismissing him from the suit, as he did Howard) to Frank Raines, who was Fannie Mae’s Chairman and CEO from 1999-2004.
As my late mother used to cynically ask, "What’s that have to do with the price of tea in China?”

Lies and Damn Lies

Well Mom, and the rest of you chuckling, pointing fingers or rolling your eyes, those legal decisions mean that the single most devastating attack on Fannie Mae now has begun to unravel, because its only was a fabrication shaped less by reality and more by Fannie's business and political enemies, succored by the Bush Administration.

Worse, it fostered a situation, where good managers were forced out and Raines’ and Howard’s overmatched successors broke from the successful Fannie Mae norm--purchased unsound Alt A mortgages, ‘No Doc loans” (documentation), and worthless Wall Street originated subprime mortgage securities--and doomed the company and its shareholders, adding grist for the haters.

In 2004, as reporters and authors have documented, the Bush Administration utilized a variety iof actors and tactics and facilitated a Fannie Mae jihad (overused term, but quite accurate here).

A brewing conflict between Fannie and its sophomoric regulator then called the Office of Financial Enterprise Oversight (OFHEO)--renamed FHFA in 2008 legislation--pivoted around the company’s belief that OFHEO lacked technical competence and industry understanding.

In a thinly veiled retaliation, OFHEO issued a damning 2004 report alleging Fannie officials violated federal accounting rules, fooled investors, and used the manipulated numbers to support large yearend bonuses or as company opponents were quick to politically reduce it to (paraphrasing) “Fannie cooked their books and paid themselves big bucks.”

Fair Weather Friends

Company denials and solid rebuttals failed to assuage official Washington. When federal regulators imply fraud and deceit, the Capitol’s meek run to the sidelines while the feint of heart figuratively leave town.

That happened to Fannie Mae which immediately began to lose congressional, industry, interest group, community and consumer support, especially when the Bush SEC affirmed OFHEO’s finding.

By the end of 2004, Frank Raines resigned and Tim Howard did too.
Their successors, chosen by the Fannie board and the Bush White House, were not quite ready for prime time and made disastrous business errors leading to colossal failure and a Bush Administration 2008 takeover.

But the OFHEO report was false and the SEC confirmation equally so.

Professional careers, personal lives, and reputations were savaged and a well run institution, which was a major underpinning of the country’s mortgage system, stopped being so well run.
Given all these considerations, I believe that a review of what Fannie and Freddie did for the nation, leading up to 2005, argues for a “re-privatized” Fannie Mae and Freddie Mac, especially when the reviewer keeps one eye on Judge Leon’s findings doing the objective examination.

In all of the Fannie hate spewed it’s too easily forgotten--before the 2004 regulatory attacks and disruption began—that Fannie Mae worked successfully with a variety  of lenders and efficiently provided hundreds of billions in systemically safe and affordable mortgage financing, crowned by the ready availablity of the much desired 30 year fixed rate mortgage and its 15 year sibling.

I contend that only some ideologues will fail to see that times have changed and nobody wants the federal government up to its eyeballs in the conventional residential real estate market.

A Fannie in Your Future

Fannie and Freddie can be resurrected to serve what everyone hopes will be a housing surge that can produce economic activity and jobs across the country.

Done thoughtfully, after a statutory transition period to get from here to there, a President and Congress might agree that safe secondary mortgage market efficiency can emerge again without Uncle Sam financially standing behind it.

The new Fannie Mae and Freddie Mac must agree to a Treasury repayment scheme and going forward without federal financial support or lifelines.

I think even the nation’s major banks truly would love to have “new” institutions to which they can transfer the mortgage risk inherent in every loan eligible for Fannie/Freddie purchase.
They certainly do that now but with the federal government taking all of the risks. (Why is it that Conservatives never accuse the banks of “privatizing the profits but putting the risk to the federal government?”)

Congress Needs to Work Smart, Not Mean

Remaking Fannie Mae along these lines will bring private capital back into the mortgage market, faster than anything else Congress can create with that objective.

No matter what the Congress says in statute, I know that “Mr. Market” in the future could look back to 2008, when Fannie and Freddie and big and small financial institutions were helped by Uncle Sam. Those institutional investors still could assume that the mortgage sector is too big to fail and the feedral government will just write checks the moment there is trouble.

None of us can erase that history, so the market will just have to learn the hard way if the Congress declares in law that Fannie and Freddie or other major mortgage investors are not backed by the federal government and then acts accordingly.
With continued expert oversight, the federal government can get out of financial responsibilities for every conventional mortgage which Fannie and Freddie could finance.

The lender and systemic familiarity with Fannie and Freddie still exists. The solid regulation—keeping bad loans out of the process--is in place. The demand is growing. The efficiency is there and Judge Leon has provided a new perspective on well know actors.
All that is missing is an Administration and Congress trying to reinvent the wheel and opt for an easy transition from the old government model to one minus Uncle Sam’s copious support.
Official Washington talks the “private mortgage real estate capital is needed” talk, so now it should walk the walk.

President Obama or Governor Romney, think about what I’ve proposed and get back to me!!

Maloni, 10-26-2012

Monday, October 15, 2012

Hear Me Roar; Just Don’t Tally My Deficit “Savings”

I am surprised how many of my Democrat friends continue to think President Obama is a shoo-in because he holds slim leads in crucial Electoral College states.

I don’t see it that way, even if Obama is leading in some states.

I think that Mitt Romney--warts and all (referring to his public policies which don’t quite add up whether it’s tax reform or deficit reduction)--has Obama and the Democrats on the run going into tomorrow night’s debate.

But there still is hope, if enough light can shone on Mitt's policies and positions.

Truth is a big issue for the Romney campaign, claiming it not telling it.

Hear Mitt Speak Out of Both Sides of His Mouth

Mitt Romney and Paul Ryan consistently have accused President Obama of not telling the truth and Romney’s proxies, including former GE CEO Jack Welch, are accusing the Administration of putting out phony employment numbers, despite several prominent GOP policy and political wonks saying Welch is all wet.

Romney already has said that he doesn’t hold with everything that his supporters believe (Trump on “Obama is foreign born”) (Todd Akins’s belief that women can flip a secret body switch and hold off the unwanted rape results) to name two.

He has not commented yet on Rep, Paul Broun (R-Ga.), a senior Republican on the House Space, Science, and Technology committee, who last week called all modern science, regarding evolution, a “lie from Hell.”

Its tough getting Mitt Romney to stick to what he supports or doesn’t; maybe that will change, since his views seem diverse and manifold, which is a nice way of saying they don’t add up.

Tomorrow night and in coming weeks, I hope Mitt Romney will give some details on his own platform, instead of just why he thinks Obama’s policies are bad.

Although now on Obamacare, Romney has backtracked from total rejection (“I am going to repeal it on Day 1”) to identifying major provisions he likes, specifically protecting people with pre-existing conditions and coverage for their children up to young adulthood. (So, what’s he against?)

His retreat was just before he backtracked and flipped on his disdain for the 47% of all Americans who are wedded to their federal benefits and wouldn’t support him for President. He ate that one, too.

Republican Romney this year has backed several GOP state efforts to suppress voter where there has been little or no history of same, but I doubt if he’ll shout that from the roof tops. (State courts have put on hold until after the November elections two of those efforts.)

Romney has been up front about opposing the Obama relief for the automobile industry, which seems to have worked for the auto industry, its workers, suppliers and the US

Treasury’s coffers, as well as allowing “The Big Three” to make attractive and competitive vehicles (which I guess still should play well in Ohio, Michigan, and Illinois and places where they like American cars).

I have a suggestion for President Obama  and that is to promote these videos  showing Mitt, who claims he will end federal deficit spending, making expensive promises to various audiences around the United States, saying:

--He will not cut Medicare for seniors and near seniors;

--He will not cut social security benefits for the same group;

--He will build 15 new ships every year, including three nuclear submarines and return America’s military to some previous level of strength he claims has disappeared;

--He will reduce tax rates by about 20%

--He will provide more money for job training

--He will close various tax loopholes and deductions (unstated), but not the mortgage interest deduction, the deduction for charitable contributions, nor any of the other top 13 US tax expenditures.

They appeared conveniently on the October 9 Jon Stewart’s “The Daily Show.”


Bloomberg News, hardly a tool of the Democrats, also carried an article claiming that Romney’s tax plan--despite claiming that he won’t give tax relief to the “rich”--appears to provide $86 billion in tax cuts to folks making more than $200,000 per year. (See following link to Bloomberg article.) Experts believe the Romney tax plan would require major new taxes on the middle class, if Romney hopes for any serious deficit reduction goals.


When asked how all of this spending will still produce significant deficit reductions, VP Candidate Paul Ryan tell Fox News (also on this Stewart video), “It will take too much time to explain it.”


Maybe President Obama or even Candy Crowley will ask Governor Romney to clear up some of this confusion during tomorrow’s debate and tell the nation, once and for all what he proposes to do, specifically, if elected President and who gets to benefit and who gets the pain? Then let the fact checkers have at it.

It does sound like the Romney-Ryan ticker is resorting to a lot of malarkey, but you decide.

Maloni, 10-15-2012


Monday, October 8, 2012

Tora, Tora, Tora

Can Obama Claw Back Into the Race?

Barack Obama should have just ignored whomever advised him on debate eve, “Mr. President you have it all over this poser; go easy on him so you don’t look like a heavy.”

Obama’s re-election campaign may not survive his lackluster performance during the first presidential debate. Sure, there are two more presidential debates (and the one and only VP debate), but in two weeks Obama likely earns a draw because he goes to the other extreme to avoid looking soft, again, and instantly becomes “that guy!” You know the one who everyone tells you not to be?
Barack Obama did more than just give CPR to a dying Romney presidential effort, he put the “paddles of Life” on GOP races and interests all across the country.

Even that may not have been the worst thing which Obama’s fecklessness produced.
That, I believe, was the doubt he placed in the minds of “independents” and even some Democrats, inclined to hold their noses and vote for him, when he hadn’t totally won their hearts and votes.

I know hind sight is 20-20 but as smart a man as the President is—and certainly likes to project—he did some dumb things in the first debate, like not putting his foot on Romney’s throat figuratively and leaving there all night.

Can Obama still win? Certainly, but he’s made the race much closer and much harder for himself.

Romney as I wrote last week was determined to make himself more likeable and appear more thoughtful and succeeded in doing that with those who doubted him on both counts.

Mitt May Be More Likeable, But He’s Still BSing

What Romney didn’t do and hasn’t done—and I still hope this matters to the American voter desperate for help—is to end the misstatements about his beliefs and policies.

If voters care, that con job behavior makes the former Massachusetts Governor look shallow, lacking substance and core principles. He's just another political opportunist looking for a place to chill.

Mitt’s a chameleon at best and a liar at worst.

As a friend noted, “He’s a guy who was born on Third Base and thinks he hit a triple.”

(BTW. Here’s the kind of candidate Romney coattails can sweep into office.)


Romney has changed his tune and positions more than newlyweds mimicking the Kama Sutra.
He’s been flailing around cursing one thing or another trying to find which stands get him the presidential politician’s Holy Grail, an Electoral College edge.

If you’re for or against something, be patient Mitt soon will join you.

If Obama can expose Romney’s broad inconsistencies, he can exploit Mitt’s and the GOP’s weak points, about which even Republicans were worried not too long ago.

Romney scored well despite making misleading statements about his tax, economic, and healthcare plans, as well as misstating his belief that opening factories overseas doesn’t produce tax benefits. (I kept wondering—after claiming his Bain experience didn’t export jobs—how Mitt was so familiar with the issue and wrong, as it turns out.)

The fact checkers caught all that but, according to polls, not a lot of potential voters seemed to react.

Flipping and Flopping: Now, About that 47%

After reaping editorial Hell, with R’s and D’s smacking him, the former Governor did the math or had someone do it for him and realized that those 47% he demeaned in his cash pitch to wealthy GOP donors are voters he’ll need to defeat an incumbent President.

Following the debate, “Flipper Romney” went into a major “I was against you, now I’m for you” mode and backed off his infamous, patronizing and ideological obscenity (paraphrasing) “47% of the American people are so tied to their federal benefits that they refuse to fend for themselves.”
The Governor has been vague, at best, on his economic reform policies, his proposed deficit reduction, which federal program he would cut, why he wants to spend even more then the military wants, and exactly how his tax reform plans will work.

To many of those he says that it is wise not to let his opponents know his plans, but it’s the American people who are asking these questions not some hypothetical political adversary.

The AEI Ain't Independent/Non-Partisan

I laughed when Romney—fighting back against Obama and other Democrat claims--said the Romney/Ryan his “no details, may not add up” tax plan, was superior to the President’s because it had been endorsed and verified by an American Enterprise Institute (AEI) “non-partisan and independent study.”

Haff gaff, Gag, choke, barf!

“Non-partisan and independent,” that's certainly the Gospel, just ask AEI board members Dick Cheney and Newt Gingrich.

I think the AEI may now require tri-cornered hats at all of their meetings, which still resemble a coffee klatch of the Junior L:eague' men's auxillary.

Housing interests may remember some other AEI “non-partisan and  independent” reportage—which seemed to start in and then quickly return to the Republican playbook--when the AEI, relying on fallacious statistics supplied by the “Brothers Grim,” Ed Pinto and Peter Wallison, suggested that Fannie Mae loaded up on poor performing mortgage loans during the 1990’s, when Jim Johnson was Chairman and CEO.

The congressional and media Right lapped up and carried that “non-partisan and independent work,” too, except it was a “no sale” with the President’s Financial Crisis Inquiry Commission, the Federal Reserve Board, and many others, which rejected these AEI shibboleths, in writing and by name. (For those wanting them, I’ll provide links that counter the AEI claims.)

These institutional rebuttals of AEI cant didn’t need rhetoric to shout down the AEI contentions, they merely pointed to facts. Fannie Mae’s public financial records—contrary to the AEI broadsides—showed that Fannie had very few mortgage defaults and no net loan losses in those years.

That positive record extending well into the next decade, when Frank Raines succeeded Jim Johnson, despite the intentional mischaracterization of the assets the company acquired.

I asked earlier if President Obama can reboot his campaign and win this election.

Put on the Heavy Pads

Of course he can, but he needs to put on his “big boy football uniform” and go to work kicking his opponent hard and continuously, primarily where Romney is vulnerable.

Like news of his tax returns, the former Governors’ policy proposals by design still are vague and brief, so people won’t know what he’s for or against, until he gets in office; the Romney tax plan still looks unrealistic and a boon to the wealthy, no matter how many words he uses to pledge “rich won’t pay more”; the large insurance companies seem the winners in Romney kill “Obamacare,” parts of which Romney now says he likes after months of excoriating it; and his Medicare schemes, once again, seem to benefit the big insurers not the public.

Where Is the Obama Support?

The President’s performance may have been flat, but Obama’s leadership on the auto industry rescue should continue to resonate in Ohio, Michigan and Illinois, especially since Mitt opposed it.

Romney’s Medicare schemes--relying on insurance and medical interests, which seldom have been consumer friendly--should repel Pennsylvania and Florida voters, not to mention his hazy, fuzzy etch-a-sketch federal budgets slashes.

Romney’s changing immigration façade—no matter how many times he fantasizes about being a Hispanic or Latino (without mentioning that his grandfather moved the family to Mexico because that country didn’t enforce monogamy laws and allowed Grandpa to enjoy five wives)—can’t help him with minorities in California and Texas.
Today, smiles adorn the GOP and Mitt Romney. It’s up to President Obama to bring back those tears they were shedding 10 days ago.

Maloni, 10-8-2012

Thursday, October 4, 2012


Obama Looked bad; Gives Romney/GOP Major Opening

I wish I could report otherwise, but the President seemed unprepared or uninspired in his debate last evening with Mitt Romney.

I suspect that we won’t know until next month if this tilt produced any real electoral support for Mitt Romney, but it sure had to buck up sagging Republican egos worried that Mitt not only can’t win but would cost the GOP congressional seats.

Not that Romney overwhelmed Obama with facts and substance—I suspect the “fact checkers will find several flaws in what the former Massachusetts Governor said—but foremost, I believe Romney earned points on the “likeable scale” and he raised troubling doubts about Obama’s record that might sway some voters. (See fact checks link below.)




The President nibbled at the edges and several times I expected him to go “medieval” on the pontificating Romney, who touted the virtues of the private sector and his business experience, as if the nation hasn’t been through all of that, but Obama never fired his guns.

I guess it helps to be born rich and still be rich, but--to me--Mitt couldn’t quite sell his concern for middle class people.

Among familiar GOP stomping grounds, Romney had the gall to jump on the President for the “Dodd-Frank,” financial services reform legislation passed in the wake of the 2008 debacle involving Wall Street firms and the nation’s (and the world’s) largest banks.

Obama did not rebut the Romney view effectively.

But that truth starts with Senate Minority Leader Mitch McConnell early in the Obama era pledging that he will anything to deny Obama a second term. That alone promised a lot of GOP obfuscation and legislative opposition.

The Senate Republicans—and almost their entire House fellow party members—followed through and pummeled almost all Obama initiatives or watered them down so that they have little meaning, with Dodd-Frank is a perfect example.

The nation’s largest financial institutions—after supporting Obama in his 2008 race—balked at what became Dodd-Frank (DF), named for Rep. Barney Frank (D-Mass) and Sen. Chris Dodd (D-Conn.), and actively tried to gut the proposal in both chambers, succeeding in my view.

It’s worth reminding people that, initially in 2008, many in the community supported candidate Barack Obama but his post-election move to regulate the business in the wake of the 2008 financial meltdown caused them to revert to form and unload tons of cash on the Republican Party and its candidates in the 2010 congressional elections. This institutional trend continues today, except for a few Democrat big givers in New York's financial world.

In well documented news stories, what this GOP/financial industries cabal couldn’t disassemble on the Hill, they roughed up and diluted in the regulatory process.

Romney's “Qualified Mortgage” reference really is a big banks and related players story, wanting the regulation to be as permissive as possible yet with enough constraints so they have to do very little lending to those with lower credit or income profiles.

DF created a new consumer agency—that title alone made it a target of the banks—that was required to define what constitutes a safe mortgage investment. The Fed, always with a protective eye on its member bank and bank holding companies, issued a possible draft, which the new agency head apparently didn’t like, ergo the delay.

President Obama also missed an opportunity when discussing “Obamacare” and the beneficiaries of the Romney proposed substitute, which are the big insurance companies.

Had Obama done a better job of linking Romney and the GOP with the big banks the big insurers, and big oil, the debate could have been an Obama slam dunk, but he didn’t and it wasn’t.

Was Barack Obama sleep walking and reading his recent poll numbers too much?

What Are the Big Banks Doing Now to Help, Anything?

Had the President read other parts of the news, he would have seen two relevant and disturbing trends, which scream pigs at the trough and system gaming.

Major financial institutions are reporting record profits through 2012's third quarter and doing very well making big bucks on the mortgage loans they do write.



These are the same banks which have explained to the media that the Fed’s recent QE3 easing—with its massive purchases of mortgage backed securities filling their coffers with fresh capital—can’t be used for mortgage lending because that would overwhelm their capacity to respond to consumer mortgage demands.


Hey guys, aren’t you in the money lending business? How about hiring more staff, or is work force capacity a “straw man?”

The truth revolves more around the big guys serving only pristine borrowers and continuing to arbitrage their money, investing in safe Treasury or bank overnight investments which pad that bank bottom line.

Throw that into your campaign President Obama, since nobody sympathizes with bankers and money people save Mitt and his GOP merry men/women on the congressional committees which shield them.
Let’s see, big banks, big insurers, big oil, lies about who benefits from Mitt’s tax and healthcare plans. Yes Barack Obama missed some golden opportunities last night.

Those of you saying, “Well, there are more debates,” don’t bet your ranch on it since Obama will fight the last debate in the next one (forgetting for a moment the coming Biden-Ryan wrestling match) and likely come off snarky and belligerent.

For a guy battling his Bain image as a “job killer,” I think Romney bared his neck to the President—but didn’t get it chopped off--when the Governor (paraphrasing) said that he knew from his business experience that “you don’t get a tax break for opening a factory overseas.” Hmmm!

The President should have knocked that one and Mitt out of the park.

The Washington Post—Still Silent

No, I have not heard yet from the Washington Post which I berated for failing to cover any aspect of the recent court decision by federal judge Richard Leon to grant summary judgment to former Fannie Mae CEO Frank Raines, removing Raines from a shareholder lawsuit, based on allegations of securities violations, because--after 8 years--Leon found no proof to sustain the allegations.

I suggested that the Post may be too sensitive to admit—by refusing to run any in depth story—that the Judge’s decision could begin to undo some of the false but still malignant charges which business and political enemies hurled at Fannie for years. That pitching list included the Washington Post.

Please share with me any ideas you have about ways to convince the Post that it should report on the Leon decision.

If the Post ever did, the paper then should go back examine the anti Fannie Mae skullduggery which occurred in the early years of the last decade. It might open some eyes, primarily for those in Congress who still will debate this matter in coming years.

I think a fresh look at the sand-in-the gears role the George W. Bush Administration played—in concert with Fannie’s banking industry and ideological foes—would make for a substantive Post column or op-ed piece.

Maloni, 10-4-2012

Monday, October 1, 2012

Shame on the Washington Post
That Newspaper Can Do Better

Letters, We Get Letters, We Get Stacks and Stacks……..

I remain upset—and angry—that the Washington Post refuses to report on its news pages the fact that federal Judge Richard Leon issued a summary judgment ruling to Frank Raines in a plaintiffs suit claiming violations of federal securities rules.

Judge Leon said that he found no evidence linking Raines, Fannie Mae’s former CEO from 1999 until 2004, to those complaints.

The shareholders action—started eight years ago--was based on two federal financial regulatory agency reports from that same year, which suggested the Fannie securities violations, one report came from Fannie’s immediately regulator in 2004, the Office of Financial Enterprise Oversight (OFHEO) and a was done by the Securities and Exchange Commission (SEC).

As noted at the time, both agencies may have been part of a GOP cabal to destabilize and shutter Fannie Mae and Freddie Mac. (This was—called “Project Noriega”—and initially discussed in Bethany McLean’s and Joe Nocera’s book about the 2008 financial debacle, “All the Devils are Here.)

The Wall Street Journal, the New York Times, and Bloomberg News all have carried some reference to the Leon finding, but not the Washington Post, despite the fact that it involves a prominent local individual who worked at a major local company, a company employing thousands of area workers, and which continues to be the reliable foundation of the nation’s secondary mortgage market.

Maybe the Washington Post editors see--as I do—the elements in the Leon decision hearing record that could force people to re-examine and change their opinions of Fannie Mae which has been demonized for most of the past 10 years.

Below are two epistles which I sent to the Post--late last week--urging news coverage of the court ruling. The first was sent to the “Letters to the Editor” site, with a copy to the Post Ombudsman and the second, exclusively to the Ombudsman.
My communications eventually may cause a 1000 flowers to bloom, but to date I haven’t seen one blossom.

Maloni Letter to Washington Post (copy to Ombudsman):

A week ago, Judge Richard Leon granted summary judgment to Frank Raines, former Fannie Mae CEO, dismissing him from a shareholder law suit, filed almost eight years ago, alleging securities violations at the company.

To date, the Post--which seemed regularly to enjoy berating Raines and Fannie Mae in its news stories and editorially--has ignored reporting on the Leon decision.
Could it be that this court finding calls into serious question many of the erroneous arguments thrown at Fannie Mae (and Freddie Mac) by business and conservative enemies, with some of those same themes picked up in Post editorials?
The Court concluded that no facts in the voluminous hearing record could sustain charges against Raines.

Even before the Judge Leon's finding, there was evidence that certain Bush financial regulators, including Fannie Mae's own regulator in 2004--the Office of Financial Enterprise Oversight (OFHEO)--since renamed the Federal Housing Finance Agency (FHFA), employed a variety of questionable tactics and worked in concert with Fannie's political opponents to hobble the company.

Post editors should be ashamed that they cannot find space to report something positive about a former Fannie Mae executive who the paper regularly pummeled.


Maloni Email to W Post Ombudsman:

I copied you on the letter I sent to the Post editor decrying the fact that it has nothing printed nothing about the referenced court decision, a week after it was announced.

Stories on the decision have appeared in the WSJ and the NYT, but nada in the Post.

I know there is an anti-Fannie element at the Post but, news still is news, especially when it involves a local company and a local resident, who has been pilloried in Post editorials.

I retired from Fannie eight years ago and have stayed retired, not working for anyone in the mortgage finance or PR field. I am most familiar with all of the details of the pre-2005 Fannie. I was no longer there when Dan Mudd became Chairman and went on his subprime follies.

In a financial services blog that I write occasionally, I have heavily criticized those post 2005 decisions and the company's actions.

Those sins, incorrectly, often have been visited on Raines and others who were long gone.

Choosing not to parse, opponents, using the bogus OFHEO report-- which a slavish SEC endorsed (shortly after Raines sent a strongly worded letter to Andrew Card, which the WH CoC viewed as impudent—and launched a political and media blitz (35 or so WSJ editorials) from which the company never recovered. (Once again, in my view, that also paved the way for Raines inexperienced successor to make calls dooming the company.)

For me, the OFHEO/SEC actions, much of which were rebuffed in Leon's decision, were the keystone to the later attacks on Fannie, albeit it a campaign which had been going on for years. Those regulatory reviews—rebuffed by Leron--allowed the "bad guys" to say "and they cooked their books to pay themselves huge bonuses."

Rejecting those claims of securities violations is embedded in the Leon decision, if one goes through the thousands and thousands of reports and notes which are part of the case file.
Another thing worth bearing in mind is that the issue of "what will be the US secondary mortgage market structure?" is not going away.
Right now, because of the subprime history and takeover, nobody--D or R--will look at the early Fannie Mae model (pre--subprime purchases) as a possible future market solution, with better regulation and caps on earnings.

Those of us who have studied the mortgage market know, absent some federal involvement, there will be no 30 year mortgages, since most banks can't hedge them and prefer not to make them, unless they are first sent to Fannie and Freddie and securitized with their guarantee.

If you have an opportunity to weigh in on the paper printing my letter, I hope you will consider these related issues.



Watch the Presidential debates, October 3!

Maloni, 10-1-2012