The State
of the Union—Meh!
I am kicking myself for missing last Tuesday’s season premiere
of “Justified,”
my favorite TV show. It eluded me not because I was glued to President Obama’s
annual SOTU message but because I succumbed to watching the Pittsburgh Penguins
outplay but lose to the Philadelphia Flyers, a National Hockey League game (3-2
Flyers in OT).
I had no plans to watch annual snoozer to the Hill. Base on
new reports, had I tuned into the speech, I might have done “a Ginsberg” and
nodded off seven or eight times.
I think the President is a nice guy—as most are/were-- but BHO
is overmatched, has little credibility, and no ability to produce against
anything he seeks legislatively, unless it’s waiving a white flag at the GOP,
which depending on the issue he might do.
Very little he said—all well leaked in advance—seemed
important to me.
OK, he’s allowed one last SOTU attempt to polish his legacy
but the U. S. exists in an international environment—where antagonist clash
daily, often with us and our allies—and its begs more than a few drive-by generalities.
I didn’t expect the President to announce the end of
F&F conservatorship, but “help a Brother out, Barack” give Mel Watt
something with which to work! (Maybe even
a line Mel can use this week, when he appears before a House Banking
Subcommittee, which has F&F repayment
denier Ed Royce (R-Cal.) on it.)
As I suggested to one notable GSE blogger, who enjoys a
major following, I don’t see any hidden Obama plan to leap out and “free”
F&F, just more FHFA edge nibbling, which is fine, as long as they don’t
chew away substance.
Obama’s (paraphrasing) “desire to work with the Congress on
GSE reform” line still pops up and PO's me, although some claim it embraces a delayed
stealthy BHO maneuver to move in the opposite direction, cutting F&F conservatorship
ties.
Who am I to rain on their parade? (But, I ain’t buying,
which makes me a rainmaker here and I suggest you bring your umbrellas.)
Just
Who Has the President’s Ear?
I desperately want to know who is advising the President on
these matters. Who is it that thinks mortgage consumers and families are better
off dancing to the rules of the nation’s largest banks and their allies?
I’ll keep banging that drum until I get an answer that
shows somebody in or close to the White House gets it. And that person makes
the connection between why the Admin’s financial regulatory agencies keep citing
violations and collecting multibillion dollar fines from the
people to which Obama says he wants to cede the national mortgage market?
The banks and the GOP are tearing what’s left of Dodd-Frank
to pieces on the Hill, right now—before his very eyes--and folks close to the
President are saying, “Give ‘em more, maybe they’ll stop?”
Who is the “Neville
Chamberlin,” downtown, watching those bank fines pile up and then whispering
to President Obama, “Oh, ignore that. They
really are good guys and we should help them corner what’s left of the mortgage
market they don’t control.”
Cheating or playing fast and lose is endemic to big bank
culture, someone needs remind the President of that.
The
Sound of One Hand Clapping
Last week, I featured a single subject in my blog. It was
an absolutely superb paper written by J.
Timothy Howard, Fannie Mae’s former CFO and 23 year employee, and one of
the smartest financial services minds I’ve ever encountered.
As the 600 or more who read it on this blog found out, Tim’s
paper was well written, cogently argued, and laid out simply his contention
that two former Treasury Secretaries committed possible malfeasance (Paulson)
and misfeasance (Geithner) in the handling of Fannie and Freddie from
conservatorship through the now heavily litigated “Third Amendment.”
He offers substantiations supporting his charges.
The paper was circulated to dozens of people who follow
these issues. In addition to this blog, it appeared on Investor’s HUB, the
“Restore Fannie Mae” website, TH717’s blog, and at least two other GSE related
blog sites.
I have heard many fabulous responses to Howard’s paper,
but—as of the night before this blog gets published--I have not seen one professional
media report of Howard’s work.
No newspaper, weekly publication, national, network or financial
website, covered it, despite having been given copies.
It’s should leap to somebody’s attention when the two
companies—and the national system they serve--are and have been screwed by
prominent Treasury officials, each of whom has written books trying to lionize
themselves—and somebody prominent says the Cabinet officers broke or bent the
law.
If Howard is right, Paulson was a partisan thug, who took advantage
of 2008’s financial/economic chaos, lied continuously, and botched his attempt
to implement a GOP ideological priority—ending F&F--at the expense of the national
common good.
Paulson didn’t succeed in dismantling F&F, as six years
of operational success and recent fabulous returns show, but he sure threw sand
in the gears and %^$#@&$ it up!
While Geithner, an arrogant former NY Federal Reserve banker
--misplaced in his Treasury nomination--made his own set of mistakes. After
huffing and puffing, threw his weight around, institutionally mugged F&F’s
regulator, taking the latter’s statutory authority, and then may have violated
the Constitution’s prohibitions against the federal government taking citizen’s
property.
Nope,
none of that looks like news to me, Rupert. What do you think Mr. Bezos?
Maybe, next week, we can get some thrilling industry poop
about non-bank mortgage lenders or, if we are fortunate, Vice President, oops,
I mean Secretary Castro will reveal some meaningless FHA statistics?
Banking
Oversight Hearings Coming
Both Senate Banking Chairman Dick Shelby (R-Ala) and HBC Jeb
Hensarling (R-Tex.) announced plans for vigorous oversight hearings on many/all
of the issues which sends Republicans running for Kaopectate, not surprisingly
will go after all things Dodd-Frank, the Consumer Financial Protection Bureau
(CFPB); Fannie and Freddie, partridges in Fed pear trees, and whatever else
they seek to scuttle.
The HBC also voted to give Chairman Hensarling individual subpoena power, so look out
Mel Watt. Maybe Jeb will use his new toy to go after some of those F&F documents
that Treasury is massively stamping “Secret”
to keep them out of the hands of plaintiffs’ lawyers?
Pull
up those lifeboats: no joke, someone last week told me Hensarling bought
his first house with the aid of an FHA loan, you know the loans provided by one
of the government mortgage programs Jeb loves to thrash and hopes will
disappear? Why not, he got his, if this report is accurate.
Good
News?
As Congress wrestles with itself and the President, the one
saving grace for F&F supporters is “Sticks and stones may break their
bones nasty threats never can hurt me.”
Despite the rhetoric you hear, I don’t believe F&F’s quick demise
is near the top of anyone’s “do it now” lists.
The 114th Congress is not going to move on busting
up Fannie and Freddie, roiling markets, and generally behaving like……rogue
elephants (get it?).
The congressional R’s need to show they stand for something
other than disassembling what they perceive as federal programs or anything
standing in the way of their “1%” allies.
That isn’t because they love F&F, but replacing the two
involves considering a plethora of GOP ideas all of which suck.
Oh, I mean they
have major shortcomings and flaws, not the least of which are the mammoth
problems that would injure 20% of the nation’s GNP--even with a lengthy transition period--if the government
tried to shift from the current form of popular mortgage borrowing to a new
system, new players and new business relations, one which benefits the nation’s Too Big To Fail
behemoth financial institutions.
That ugly,
indecisive, confusing, and no win Republican-driven political mess, is not something the Grand Old
Party wants to lug into next year’s congressional or presidential elections.
Congress both is growling and yawning. But, there are
billions and billions of dollars tied up in the court cases wending their way
with no known schedule or urgency.
But, those judicial decisions—when they come and their
appeals run out—easily could decide the shape and ownership for the nation’s
mortgage finance system and, even, continued existence of the 30 year fixed
rate mortgage.
What the
Pro-F&F Community Faces
And
What You Can Do About That
For a brief moment, forget that is Jeb Hensarling’s committee
page. These historical fabrications could emanate from any number of public
officials, Senators or Member of Congress. It just happens to be part of the
Chairman of the House Banking Committee’s website, which I assume it wouldn’t
be there if he didn’t agree with most/all of it.
The stuff is farcical to most people familiar with what really
happened to F&F leading up to an including conservatorship. But, for a
majority of folks “inside the Beltway” or even outside, this is the objectionable
robe F&F wear, an erroneous meme shared by dozens of policy makers in both
parties.
Those of you looking to “bell the cat” in communications
with your congressional representatives should use Hensarling endorsed
statements (on this webpage) as your target and evidence of the bizarre
thinking that’s at work in the congressional environment, in this case by a
very powerful Chairman with committee jurisdiction over the entities he
distorts.
Let every member of Hensarling’s Committee, D&R—and
your own Senator or Congress Member--know you are not buying the twisted
Hensarling spin on events.
Fight
back!
If Hensarling changes his page, you’ve scored a tiny
victory. If he gets more GSE bellicose, you have additional ammunition to use
against those ideas.
Apropos
of Speaking to the Hill
My thanks to David Sims (hope you are feeling better, DS!) for sharing with me items I
thought people might enjoy.
The first are links to messages shared by members of Investors Unite, who travelled to
Washington to meet with their congressional representatives and discuss GSE
issues and the court cases.
https://groups.google.com/forum/m/?fromgroups#!topic/freddienfannie/dEU9T29t5l4
https://groups.google.com/forum/m/?fromgroups#!topic/freddienfannie/6StCTNo_MJE
David also provided a link to the briefing IU and its
primary organizer, Tim Pagliara,
provided media and congressional staff before some of the visits.
Maloni,
1-26-2015
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