The Washington Post last week took a double barreled shot
at Fannie Mae (and Freddie) cheering on the House Financial Services
Committee’s narrow (30-27) passage of the bill its Chairman, Jeb Hensarling
(R-Tex), drafted to dismantle Fannie Mae and Freddie Mac and turn over the
nation’s mortgage finance system to the large commercial banks. The newspaper
also ran an op-ed piece cheering on the Bob Corker (R-Tenn.)-Mark Warner (D-Va.)
Senate bill which does the same but would add a new federal entity to play some
of F&F mortgage role.
I sent the Post the following letter on its cheers for
dissolution of Fannie and Freddie is not a surprising position for the Post,
which has consistently been against the two. But endorsing a Tea Party solution
to mortgage finance seems to be a shocker.
Is your institutional
memory so short that you forget what occurred just a few years ago, when the
large commercial banks and investment banks--went around the Fannie/Freddie
systems, unimpeded by clueless and compliant Bush financial regulators--and
produced and foisted on the nation almost a trillion dollars in in poorly
underwritten subprime securities, which soon failed?
The big financial
institutions sold those worthless bonds throughout the world and helped make
the US real estate implosion an international financial debacle.
And please don't forget
this new "private capital" which you seek mostly would come from the
large banks which enjoy numerous federal subsidies for their working capital.
Your back of the hand to
the nation's preference for fixed rate loans by using the "jumbo
market" (large dollar loans which Fannie and Freddie by law cannot
securitize) as an example, fails, too.
inevitably carry a higher interest rate, have far less liquidity, and tend to
support far wealthier individuals than those in the middle class for whom those
rates and terms would be too much for their budgets. The Post would leave them the
adjustable rate (ARM) option into which banks would love to push all
Was the writer wearing a
tri cornered hat while preparing this editorial?
I know the Post won’t
print my letter or most anything else which challenges
their smug attitude toward the GSEs. (As I keep noting, I still am waiting for this
national newspaper to print its first word—repeat—first
word about last fall’s federal court decision which declared “summary
judgment” in the cases of Frank Raines, Tim Howard, and Leanne Spencer, Fannie
officials who were falsely accused nine years ago of engaging in securities
fraud and then hounded from their corporate positions.
Last fall, Federal Judge Richard
Leon, 8 years after the fact, threw out those charges based on specious but venial
allegations made in a report by Fannie’s former regulator, the Office of Financial
Housing Enterprise Oversight (OFHEO), which are the same folks down there,
today, but using a different agency name, the Federal Housing Finance Agency
Hensarling Committee’s Questionnaire
The aforementioned House
Financial Services Committee has sent out a survey to a variety of media sources,
including the folks who run “Restore Fannie Mae,” the new website (http://www.restorefanniemae.us/).
The Committee is asking
responders a variation of, “What is positive about Fannie Mae and Freddie Mac?”
In trying to answer this
myself, I started with the following approach.
to capture the trillions of dollars each has invested in the nation’s mortgage
markets since the beginning of this century, the millions of families helped
and to note—as Congress pretends there are plenty of other options just waiting
to the F&F rubble to be cleared out so they can jump in and try and serve
the American public as well—that Fannie and Freddie have done more for US housing
and families than any two other US companies combined.
thought that was a pretty good place to focus until I talked it over with a
very intelligent friend. He sent the following to me and I will defer and bow
because his work is so much more specific and savages some of the illusions which
most anti-Fannie folks still hold close.
my very smart friend’s (pithy) response.
I agree with the observation that
nobody else has helped provide mortgages to the extent that the GSEs have. But
I don't think bludgeoning with large numbers is the way to go (apart from the
fact that some people say that the large numbers show that the GSEs dominate
the market too much).
Rather than raw volumes, I would be
inclined to emphasize particular benefits the GSEs bring -- and they are legion
but include: adequate supply of FRMs, liquidity in the MBS market, TBA,
document and other standards in the market, providing safe products to moderate
income households, etc., etc.
And consider what happened when the
GSEs were put in the penalty box (post 2004) on the eve of the biggest
catastrophe in modern housing finance:
"Fannie and Freddie only bought
mortgages of homeowners who were likely to make their
monthly payment. That kept a lot of people locked out of their
dream. Some couldn’t afford a down payment. Others had lousy credit."
"But the new mortgage lenders in
California wanted to change all that. They wanted a chance to offer anyone a
"They saw their opportunity when
Fannie and Freddie became entangled in an accounting scandal and lost
their dominance of the mortgage markets."
'When you look at an industry that
was driven by Fannie Mae and Freddie Mac for almost two decades, suddenly
you don’t have the leaders of the industry even around. They are in the
'We thought that was a huge
opportunity to do some of the things we wanted to do, which is change the
"All Bill Dallas needed was someone
to take Fannie and Freddie’s place, someone with huge amounts of cash who
would be more willing to bend the rules."
"Who took over? Wall Street."
(Source: CNBC, A House of
One of the biggest benefits of the
GSEs was tied up with what is called, in shorthand, the taxpayer bailout
(although, of course, the GSEs were not bailed out -- as I am too painfully
aware as a shareholder).
It might seem counter-intuitive to
say it (particularly, to a Tea-Bagger) but believe it or not, the benefit of
the GSE model may have been seen most clearly in their failure. If one thinks
about it, this should not be too surprising since it shows the benefit of a
catastrophic government backstop.
The government only stepped in when
the GSEs had lost their capital -- $60 to $85 or so billion in market cap for
Fannie Mae, depending on where one makes the measurement. It took a market
catastrophe for the government to get involved but when the catastrophe
happened the GSEs were a convenient and efficient focused mechanism for the
government to limit the damage of the general catastrophe.
Consider what happened: Taxpayers
put $187 billion into the companies -- admittedly a big "Ouch"
figure. But by June of this year, the net cost was down to $56 billion as a
result of $132 billion in dividend payments. The net taxpayer cost is likely
heading to zero and maybe into positive territory -- the taxpayer could make a
profit on the deal (so much for the charge on Hensarling's website that the
GSEs are the biggest bailout in history particularly when one remembers the
totally un-recouped $200 billion S&L disaster).
What is never considered is what the
taxpayer (and the nation and the world) got in return in addition to the money
being paid back.
By being able to support the GSEs'
MBS, the Treasury was able to isolate a large part of the fallout from the
mortgage finance meltdown. By its support of GSE MBS, Treasury was able to
quarantine a virulent disease spread by Wall Street so that it did not infect
the larger market (though it certainly crippled that which it infected).
Thanks to the support of the
taxpayer (whose support is now being paid back), not a single penny, not a red
cent, was lost by investors in GSE MBS by investors in Fish Bay, Wisconsin, or
in the village of Narvik, Norway.
These were disparate (and,
eventually, desperate) towns, along with thousands like them. devastated by
Wall Street sharpies, as documented by the wonderful CNBC 2009 documentary, A House
of Cards, which squarely laid the blame for the
mortgage meltdown where it belonged -- on Wall Street, the rating agencies and
the criminal lending outfits concentrated in Orange County, CA, one of the
conservative bastions of the country and adopted home to the chicken-hawk
icons, John Wayne and Ronald Reagan.
Yes, the epicenter of the subprime
contagion was not the two GSEs on the banks of the Potomac but the market
fundamentalists of Orange County ("This was the pulse of the subprime
industry, the nerve center." -- CNBC). Needless to say, Orange County did
not gain this primacy in subprime lending through some do-gooder CRA or goals
mandate imposed by Barney Frank and friends.
That this was an incubator of the
subprime virus should not be a surprise since it was also a locus of the
S&L crisis a generation earlier (along with, on that occasion, the great
states of Texas, Florida, Oklahoma and Arizona -- surprise, surprise).
Treasury was able to limit the
contagion by supporting the GSEs' MBS. Imagine, in the alternative, trying to
do this through the country's top banks -- JPM, Citi, Wells, BAC, Goldman,
Morgan Stanley, etc., -- with operations spread throughout the world and God
knows what sorts of investments on (or off) their books and intricate
relationships with global counter-parties.
It was bad enough that these players
(throwing in, also, failed Bear Stearns, Lehman, WAMU and Countrywide) shit in
the somewhat-circumscribed sandlot in which they were confined to play (by GSE
prowess rather than the regulations that had been lifted in GLBA in 1999); it
would have been infinitely worse if the sandlot in which they crapped had been the
overall market rather than a confined space within it. If Hensarling and
company had their way the whole market would become shitable.
I hope some of the people who voted
for the Hensarling bill or will be asked to support it if the House Republican leadership
brings this mess to the floor remember the views of my very smart friend!
paraphrase something I said in my last blog, “Can the House be this
$#*&^%$ dumb” and not recognize the asininity and thoughtless ennui
represented by the Hensarling bill?
the nation’s largest banks and financial institutions—which can’t seem to control
themselves from breaking laws and regulations--really the best stewards for the
nation’s mortgage finance system?
Reportedly, the nomination of Rep. Mel Watt (D-SC) to
become the Director of the Federal Housing Finance Board (FHFA), the
Fannie/Freddie safety and soundness regulator, may come to the Senate floor next
week. I don’t know if the R’s will force a 60 vote approval or Majority Leader Harry
Reid (D-Nev.) can negotiate the easier “majority”—51 votes--treatment he got
for Michael Cordray to head the Consumer Financial Protection Board (CFPB).
Watt wins the vote with the lesser standard, but likely
won’t get his new SW 7th Street job, if he needs the greater total.
I’ve written this before, but let me reiterate, I liked
Watt when I lobbied him and thought he was an intelligent, good Congressman (meaning
responsible). None of that marks the 20 year House Financial Services Committee
veteran as a mortgage finance and securities expert/manager, able to analyze
policy tradeoffs and competing industry interests.
Mel Watt will have to grow into that person, but—using
traditional DC standards--the deficit doesn’t disqualify him.
If he’s started to educate himself in those ways, more
power to him because it will reduce his inevitable uncertainty and policy
When/If he secures the position, I strongly suggest that
Mr. Watt arm himself with the finest, mortgage finance and a securities deputy
he can find and quickly hire that person.
(With all due respect to Cher, “It ain’t me, Babe!”)
Sure, Congressman, bring your Hill office assistant with
you, but I doubt if anyone on your current staff or on the Financial Services
Committee has the myriad requisite skills you will need in a specialist/deputy.
Look possibly toward Wall Street.
Once at FHFA, a smart deputy can help Watt avoid
“capture” by either the White House—which appointed him and to whom he is
somewhat beholding—or the FHFA staff, whom he can’t trust because (I suspect)
part of their agenda not only isn’t his but isn’t in “conserving the two companies,”
as their agency charter reads.
Watt could assume some White House independence, as Ed
DeMarco consistently proved, meaning Watt occasionally can make his own calls,
if he displays a tough enough demeanor and chooses, occasionally, to bring his
own mind and heart to bare on policy calls not what he hears from the Treasury
or the WH.
Lastly, if the Senate smiles on Watt’s appointment, he
might have to worry about Ed DeMarco possibly returning to FHFA, which DeMarco’s
civil service status permits. That would create major issues and staff schisms
for any new Director.
But, DeMarco, if he’s as intelligent as I think he is,
should just run to the nearest conservative think tank.
Congressman Watt might well expand his educational horizons
by reading my blog to alert him to historic games played by OFHEO/FHFA before
he ever considered the job and how they got away with it. Some of those
officials still are there, now burrowed into the very protective civil service
woodwork. He should add the “Restore
Fannie Mae” site to his reading list, too. http://www.restorefanniemae.us/
Just because the material won’t always agree with the
White House and/or orthodox thinking doesn’t mean it holds no value for a new
Director. Both sides might alert him to issues/ perspectives his team won’t.
This job—if the “Congressman” (they never lose the title)
secures it--won’t be a sinecure and, as I’ve often counseled those heading into
raging combat, Watt should strap on his “big boy pads!”
and Games With Media Stalwart
A reporter whom I greatly admire has engaged in some
political/industry byplay with me, on one issue, and a related one with some
friends who brought me into the reporter’s “quiz.”
Most recently the reporter suggested that F&F advocates
needed to explain, “Why most countries with solid homeownership rates didn’t
rely on a government related secondary mortgage market execution for most of
their mortgage financing?”
My answer was quick, “Because most countries’ commercial
banks are not as larcenous as those in the United States, which have the sorry
track record to prove it.”
And I am not referring just to their PLS garbage
securities escapade five years ago.
The second part of my answer is that few of those
countries have a history of long term fixed rate financing, which Fannie (and later Freddie) have
provided, since the late 1930’s.
Back to bank perfidy. Look recently at the variety of US
regulatory fines the banks have paid and for what gross offenses, which
violation allegations still are pending, and you tell me if you feel confident--as many on Capitol Hill do---at handing over
the nation’s primary and secondary mortgage markets to the large commercial
Mortgage violations left and right among big banks,
tilting the London Interbank Borrowing Rate (LIBOR) on which many adjustable
rate mortgages were indexed, laundering drug money for Mexican gangs, and doing
business with Muslim extremists are just a few government allegations against
the nation’s largest financial depositories.
Congress %#$@&* serious?
Here is a good place to link two articles on recent bank
behavior, the first from David Kocieniewski in the New York Times and the second in the Washington Post by Harold Myerson.
Less cosmic, but quite revealing, was exclusive the exchange I had
with the reporter when I expressed my concern over Senators Bob
Corker(R-Tenn.)and Mark Warner (D-Va.) and
their major new mortgage finance proposal. Most observers know the Senators want to dissolve Fannie Mae and Freddie
Mac and replace them with a newer federal agency the Federal Mortgage Insurance
I suggested to the media person that the two Senators
weren’t well enough versed in mortgage finance and securities markets to understand
their own bill or the manifold impacts on related industries, mortgage prices,
the TBA market, MBS history, and the general need for a strong guiding hand
that F&F always presented, save their PLS acquisition mistakes (mistakes
that current regulation prohibit and which cannot occur, save change to their
His quick response, slightly paraphrased, was, “How many in
Congress do you know who do?”
He had me. I couldn’t name any, which also is a scary thought.
note. I still am waiting for someone to explain why the C-W’s FMIC
needs a crushed F&F to move forward, considering the two could easily repay
the Treasury (as they soon will) and just become another securitizer using the
I wonder if the answer is that the two represent “scalps,” which C-W and
others need to parade before the naïve settlers to show them Congress really
does hate those “Indians?”
Others are Saying?
I came across this column after I finished the above
blog. I am linking it for you because the author--PIMCO’s Scott Simon--agrees
with many of the things I’ve written in the past, although not totally on
Back from California and “granddad” land; brain still
catching up with body from those quick round trips. Upon landing in San Diego,
we had some excitement, when a flight attendant announced, “Everyone, please, remain
in your seats. We have a medical emergency and the EMTs will come aboard to
deal with it.”
Passengers glanced around for heart attack victims or
very pregnant women and found none. The attendant then asked “passengers John
Smith and Ed Jones (my made up names) to come to the front of the aircraft.” When
Jones and Smith went forward the two men promptly were arrested by police,
handcuffed and stuffed into two cruisers, according to my observant granddaughter
sitting next to the window.
Since we were in southern California, I looked to see if
I could see CHIPS “Ponch,” Jon, or Detective Joe Friday and his partner, but no
such luck with TV cop sightings.
blog and a half ago, I touted the “Restore
Fannie Mae” website, misstating that it was the creation of the Gibson Dunn
law firm, which had filed one of four prominent shareholder lawsuits against
the Treasury for its 2008 Fannie/Freddie takeover.
I corrected the record/myself/my blog, when I found out
that the man behind the website is Thomas Stoddard, with whom I’ve now had a
chance to speak at length.
I feel confident enough in our discussion to highlight
and support what he is doing (and also made some suggestions about how best to
raise to raise site operational money without creating the impression that
funds raised might go to his own pockets).
Thomas’s heart and head are in the right place re the
F&F issues and I encourage people to frequent his website and enjoy the
content. (In ways, it’s superior to some old man’s blog yammering about the historical
dissing of Fannie Mae.)
past week, Secretary Jack Lew greatly disappointed in his disjointed CNBC
interview, implying that F&F still are financial basket cases, waiting to
This is the email I sent CNBC host Steve Liesman after
his Lew interview.
I liked it (the Lew
interview) but the Secretary, neatly and by design, overlooked a few elements.
Fannie and Freddie
largely have "repaid" the Treasury for taxpayer funds invested and
what little remains will be returned within a year or sooner. They both did so,
paying double the interest rate on dividends (10% versus 5%) which TARP-
assisted banks paid).
For the past five years,
the entities also oversaw the nation's primary and secondary mortgage markets
because the only viable alternative--the nation's large banks--failed to step
up and replace the two as mortgage investors (the guys at the end of the line
who holds the financial liability).
The Secretary implied
that F&F still were train wrecks waiting to happen, but he quietly
overlooked that in the past five years, both have grown capital, raised fees,
only put pristine loans on their books, and have had their "affordable
housing missions," i.e., large percentage of their annual business for
low, moderate and middle income families in underserved areas," take away.
Many of the preceding facts are due to their current regulation.
Nobody that I
know--including myself, an active blogger on the subject--is asking for any
change in F&F's regulatory regime, just that the two be allowed to compete
as any other mortgage investor without any special ties to the federal
government andafter they have totally returned all amounts
"borrowed" from Treasury.
In other words, they
should treated like every other TARP-assisted financial institution.
(I would be happy to
discuss this issue further--on or off camera--with you or your producer.)
Hensarling’s GSE Bill and Other Things
In last week’s hearing,
many conservative “usual suspects” paid homage to Financial Services Committee
Chairman Jeb Hensarling’s (R-Tex) newest bill to do away with Fannie and Freddie.
Let me go way out on a
limb and suggest the Chairman’s bill
won’t pass the Congress in God’s lifetime!
At a similar, same day,
non-congressional dog and pony show to support the “bipartisan” Bob Corker
(R-Tenn)-Mark Warner (D-Va) bill, both Senators dumped on the Hensarling
approach, while tub thumping their own. It was Senator Mark Warner’s turn to claim
that C-W would “end private gain and public loss” in the mortgage market.
Warner’s naivety knows few
bounds since his legislation paves the way with
major new large bank federal subsidies for the behemoths to take control of
the US primary and secondary mortgage markets, while he blathers that his bill
will bring “private capital” back to the market.
Read and understand your
bill, Senator Warner!
I challenge Warner and
his staff, just as I have others, to show when/how—before their 2008
Bushwhacking—the federal government ever picked up Fannie & Freddie losses allowing
the companies to benefit.
“conservatorship” debacle saw F&F stocks drop below a dollar a share and
the companies expropriated by the Treasury, an action currently being challenged
in court in several law suits.
Neither of these guys
has yet to show me they understand mortgage finance or that their bill is
anything but one gigantic troll for campaign bucks with a proposal they
describe as “subject to change and improvement!” That‘s and inside-the-Beltway green
light for, “If you don’t like it, but pledge us enough campaign support, we likely
can accommodate your needs.”
I heard that Jeb Hensarling
may have some opposition in his Texas Primary. The Chairman might want to make sure
that all of the money he anticipates from the financial services and housing
groups doesn’t leak to his opponent because of Hensarling’s extreme
positioning— rhymes with “Tea Party”--on important issues.
Links to Other Fannie and Freddie Commentary
·Nationally syndicated real estate columnist Ken
Harney tells why he thinks talk of the F&F legislative demise is premature.
Law professor Richard Epstein produced a superb review of the new
legislative interest in F&F as well as the shareholder lawsuits filed
against the Treasury. (This article was recommended to me, on the same day, by
blog reader Robert Mae and Thomas Goddard. Good choice, men!)
finally, a thoughtful piece from my friend and former colleague, Rob Zimmer, who
now represents a group of community lenders, reminding Congress and others that
we are facing a rising interest rate environment—a macro condition in which few
of them have made policy--and what that means for all of their mortgage
machinations, not just replacing Fannie Mae and Freddie Mac.
In the welter of good news last week, I blew it and incorrectly wrote that a new website, strongly advocating for restoring Fannie Mae and Freddie Mac, was the creation of the Gibson Dunn law firm, which had filed one of the four new lawsuits challenging the 2008 takeover of Fannie and Freddie.
I since have learned that Gibson Dunn has nothing to do with the website..
My apologies to the Gibson Dunn law firm for associating them with this endeavor--which seeks to rally F&F allies and raise money to back its efforts--and anyone who may have contacted the site offering support or, worse, a financial contribution.
When I first became aware of my inaccurate attribution, I posted an initial concern on the blog's "Comments" section.
I've since been told by a senior lawyer (not from Gibson Dunn), managing one of the four suits, that the person behind the web site may be one Thomas Goddard (sp?), of whom I know nothing.
The site's creator may, indeed, be a major Fannie/Freddie advocate, but I personally can't attest to that because I never have encountered the gentleman and can't find any information about him. (If you have any, please share it with me?)
So check the site if you want, but be slow to pledge anything until you become convinced of the site's and Mr. Goddard's (sp?) bona fides.
I go on vacation for one week and the GSE flood gates
open up (much like the Thursday/Friday skies above Rehoboth Beach, Delaware)
and out comes both heavenly manna and some “caca.”
Naturally, the first are three new shareholder lawsuits
aimed at the US Treasury’s 2008 takeover of Fannie Mae and Freddie Mac. They
join an original legal action, arguing the same principles, filed previously by
the Seattle based Hagens Berman law firm (lead Washington partner Jennifer Connolly).
The “caca” is House Financial Services Committee Chairman
Jeb Hensarling legislative effort to, yawn,
do away with Fannie and Freddie, push back the nation’s clocks and history
about 80 years and pretend that commercial banks still want to make mortgage loans
without the federal government’s financial backing.
Jeb is heading down the wrong PATH!
The Chairman is in for a big surprise when his upcoming hearings
produce little support for his efforts save from his conservative committee brethren
and the usual leaning-right think tanks.
“Y’all agree with me on this, don’t you boys?”
Financial Services official Amen chorus: “Aye, aye, aye…. (Applause).”
channeling his best Elvis: “Thank you, thank you very much!”
Lawsuits Reflect Fresh Interest/Action
Gosh darn, right, these lawsuits are important and they
would be even if two of the more prominent jurists in American, Ted Olsen and
David Boies, weren’t steering them.
As I commented to friends, it forces issues to get raised
in a grand manner that a small typo ridden blog hitting similar themes could
never hope to secure.
It’s not easy beating Uncle Sam in court but it can’t
hurt to have famous advocates and deep pockets arguing that Hank Paulson misused
or abused his authority to cast Fannie and Freddie into conservatorship and played
fast and loose with the companies resources in so doing.
I have no idea to what astronomical amount the four suits
accumulated damages could accrue, but—at some point—someone in power might
suggest it’s easier/smarter to settle than to let that whole ball of string unravel.
Lawyers in each of those firms, as well as the litigants
represented, draw media attention and know lots of people on Capitol Hill. I
would be very surprised, if the merits of their case (and the merits of F&F
both before the takeover and today) don’t’ get shared with Senators, House
Members, and their staffs.
That also means squadrons of new, different, and
important people trying to build support for anti-government case.
Since “campaign time” on Capitol Hill is all of the time,
Fannie and Freddie support money should flow into some congressional campaign
accounts, always an important factor.
Ted Olsen’s Gibson Dunn law firm already has created a
website to make the broader Fannie Mae (and Freddie Mac) case and raise funds
to revitalize the mortgage giants.Here is an excerpt from theirdetailed
website, which is a must read.
“Funds will help
promote the restoration of Fannie Mae and Freddie Mac through advertising
campaigns, web development, legal services, and any other means necessary.”
Sure that thinking could backfire, but the lawsuits are
based on perceived sins of people no longer in DC or near office, let alone in
office. For Many in Congress, there is small sympathy for those
But, for reasons I often have discussed, F&F’s public
understanding, support, and esteem is almost as low as Congress' own—despite lots of contrary pro GSE arguments—and, from my perspective, attention,
public debate and squabbling only can help illuminate some of the GSE distortions
forced on the nation and perpetuated by ideologues and business
There were lots and lots of people hurt in the
conservatorship move, along with major systemic damage, these lawsuits easily
could bring additional “copycat” lawsuits, some of which will be dismissible,
but others won’t and that just amps up the attention and focus about how Fannie
and Freddie might have been screwed over in the Bush era by a vengeful partisan
GOP agenda, nicknamed “Project Noriega,” first revealed in the Bethany McLean,
Joe Nocera book, “All the Devils are Here.”
Yes, that was last week’s “Who will be Ben Bernanke’s
successor?” rumor, assuming President Obama gets to name BB’s heir.
London bookies have Larry Summers high on their bet list,
with odds only slightly lower than Janet Yellen’s (meaning less likely to get named).
But how many mistakes could President Obama make if he
chose his old friend Larry and passed over Yellen, the extremely well respected
current Fed Vice Chair? Only about a million.
Let’s see, she is super capable, with vast experience,
knows the Fed system and how to make monetary policy, probably has a few
enemies but not many, is a woman in an Admin still suffering from too few X
chromosomes and Larry Summers is……..Larry Summers.
Egotistical and insufferable are labels which go with
Larry no matter where he hangs his hat. Common enough in DC but many Hill
people like their Fed Chairman to ass kiss not thumb their nose.
This Administration can’t want Summers, somebody whose
ego is so big that everything about him becomes “about him” and not what’s best
for the nation’s economy or international central bank goodwill.
If Bernanke chooses to leave, then I don’t think Summers even
gets all of the D Senate votes let alone the handful of R’s he would need for the
60 vote approval. (Many of the female Democrat Senators will have issues with