Monday, January 5, 2015

We're Back!!


I am glad 2014 is in the rearview mirror!


Let me wish New Year’s health and happiness to all those who read the blog, I hope your December went well.

Hello 2015, what’s taken you so long to get here? Except for the stock market growth and other slowly improving economic numbers, your predecessor—“2014”--produced some sorry, crappy results!

Big Partisan Storm Coming?

Congress is back in tomorrow (hide the women and children). We are headed for a whirlwind year—not just on Fannie and Freddie issues—so cinch your seat belt tight and get ready to rumble with the bad guys, since they will be out there in droves. 

Let’s start with some positive news, at least from my perspective. I think the case for F&F functioning in some traditional mortgage market capacity will grow, despite the GOP’s new control of Congress. 

Other good things 

Despite constant criticism from some quarters, it’s hard to argue that the economy is not improving and continues to produce jobs and positive numbers, not to mention lower gas prices. Charlie Krauthammer and George Will--who promises in his column that Bob Corker (R-Tenn.) is “the Senator to watch in 2015”--may denigrate those results (and have), but not a ton of others, especially when they compare it to the mess President Obama inherited. 

This positive backdrop will make Congress less edgy. The congressional GOP claims it wants to show the nation it can lead and make sound bipartisan policy, but overplaying its hand could produce political and economic setbacks, so I hope they’ll be cautious. 

The partisan reality is R’s seldom will garner the necessary 60 votes to override President Obama’s formal rejections. If the 47 D and D-leaning votes today in the 2015 Senate hold, with judicious Obama’s vetoes, the nation can avoid GOP designed structural chaos or misguided legislation.

For several reasons, I believe more people—media, policy makers, and the general public—have their ears and minds open and are willing to listen to the F&F case. 

Mainly, the Republican F&F mortgage plan options mostly suck and more people realize it. 

It sounds good for the GOP to say, “Let the banks do it,” except when their constituents understand the banks don’t want to do it, unless given new federal subsidies out the wazoo. And, importantly, banks don’t like to make and keep fixed rate loans on their books. 

GSE advocates are not all on the same wavelength, yet, nor are they together on employing the same tactics, but that situation is improving.
(I’d still want to know who TH717 identifies as his institutional “allies” and when he will come forth with the promised reports on some of the original OFHEO spoilers. Anyone who talks to him can ask him those questions for me.)

I don’t know TH717’s identity, but wish him well and hope he has real “backers” and is onto something substantive.
The more citizens and voters who get involved with policy discussions and communicate with and visit their Senators and Congressmen/women, the better the result.  

Look to next Tuesday, January 13, when some of Investors Unite 1300 members trek to Capitol Hill to pitch their case; hopefully, we’ll get some fresh feedback.

CBO and Tim Howard 717 

Getting a little micro, part of my optimism is the excellent blog work TH717 performed on the latest CBO report (see link below). 

CBO has had a GSE institutional erection (CBO doesn’t like them!) for at least 25 years and the current report’s findings are no different, but something happened on the way to the government printer and TH717 nailed and highlighted it. 

Along with the traditional GSE skewering, the primary CBO author found ways to say systemically good things about F&F and more importantly highlight the negatives about the various alternatives out there, mostly championed by R Senators and Members. 

That’s crucial because those challenges are not from the “usual” pro-housing/F&F, progressive suspects offering these views. 

Kudos to 717’s blog/work. Read his 12-27-2014 offering, if you haven’t, and use those CBO comments in your own communications.


Scalise and all that……

Expect a lot more scummy behavior and exposures of the GOP congressional ruling class as this year unfolds. Conservative R’s should remember, when you lay with dogs you get up with fleas. 

We’ve had one GOP House resignation, when a Michael Grimm (R-NY) confessed to tax evasion charges and said he is quitting. Grimm once threatened to toss an inquiring newsman off the Cannon congressional office building balcony. 

House Majority Whip Steve Scalise (R-La.), was media-outed for meeting years ago with White Nazi-leaning extremists.
Scalise’s actions were defended by no less than former (?) Klan Grand Wizard David Duke, who also expressed surprise that Scalise didn’t know the Duke acolytes, who Scalise addressed 10 or so years ago, were a white supremacist, neo-Nazi organization.

Scalise, hiding behind his personal religion’s dogma as proof he doesn’t identify with the Klan types, didn’t offer the best defense when you consider that so many recent convicted pederasts and defrocked child molesters shared that religion’s “shall nots.” Et tu, Steve? 

Now David Duke is extorting and threatening other R’s, saying he’ll name them as his friends and allies if they don’t suck up to and support Scalise. With friends like David Duke, who needs……..! 

Democrats are applauding DD, do your thing, man!! Spew those names and help the cause.

More Dogs and fleas 

In addition to Obamacare, immigration, more relief for the big banks, cuts in programs for the poor, and tax relief for corporations—and more--you know congressional R’s will go after anything remaining of the Dodd-Frank legislation, including the Consumer Finance Protection Board (CFPB), the brainchild of Sen. Elizabeth Warren (D-Mass.). 

Here, Sen. Warren, let me hold your coat while you pummel those guys!
This combat will be fun to watch as—with their Big Banks allies cheering--the GOP attempts to explain why neutering the CFPB really is helping little folks and consumers. 

(Irony: Had the GOP let Warren’s appointment to run the CFPB go through, they wouldn’t have had to face her, later, as a more powerful crusading US Senator, opposed to much the party supports.)

Delightful Miscreants Royce and Garrett

On the GSE front, the gift that keeps on giving, Ed Royce (R-Cal.), is going to go after the Mel Watt’s rental housing fund decision, according to a Royce staffer quoted in Inside Mortgage Finance.

Politicians don’t enjoy looking stupid, even when they cause of that situation. Royce looked plain clueless last year when he proclaimed that F&F hadn’t repaid US taxpayers anything, while ignoring the roughly $230 Billion with F&F’s DNA on it, which they’re shuttled to the Treasury’s General Fund.

“In for a dime, in for a dollar.” Likely, Ed, will dip into that stupidity well for more.

All the hits Royce took on his personal/constituent website, after his inglorious and wrong comments, apparently didn’t made him any smarter, either.

Garrett Claims GSE Lobbying

Obviously, Rep. Scott Garrett (R-NJ)—who wrote a complaining letter to FHFA Director Mel Watt about the GSEs lobbying--was too new or likely not important enough to get lobbied much by Fannie Mae, when he first arrived in Congress in 2003.

Or he would appreciate the stark contrast between how Fannie (and Freddie) once lobbied as compared to the passive “respond to congressional office inquiries, only” policy that now control F&F interaction with the Hill.

The fact that James Lockhart, F&F regulator in 2008--exercising God only knows what self-aggrandized authority-- ordered the two to curtail lobbying activities and staffs and even drop significant communications with the Hill. 

Go crazy with this, you constitutional lawyers.
The federal government, acting through Lockhart, effectively denied corporate First Amendment rights to only those two recipients of Treasury financial aid, a situation which persists today. 

No banks, investment banks, insurance companies or others were banned from Capitol Hill lobbying. (I’m sure those GOP sainted sources—with their fat campaign PACs--don’t bother Rep. Garrett with their active and pushy $$$$$ lobbying.) 

Congressman Garrett has adopted the subjective “pornography” approach to defining GSE lobbying, i.e., “I’ll know it when I see it,” to spur his hollow complaints, because the evidence he cites is pretty thin. 

Maloni looking back: “Go Medieval” 

Ennui doesn’t hit me often, but Garrett’s fantasies--“They’re lobbying me”--make me wish I once again ran what many people, years ago, believed was the finest lobbying operation in DC and I could show Rep. Garrett—or any other Senator or Member--real lobbying and grassroots outreach.

Back then, Garrett might have experienced dozens of his constituents contacting his office questioning his sensitivity and motives; at the same time,  an overwhelming number of phone calls might tangle his office telephone lines; he might have to react when some local media, editorially, questioned Garrett’s paranoia in the face of no real GSE lobbying evidence; or even have some of his large NJ campaign contributors, not to  mention a national trade association or two, spell out for him the importance of F&F mortgage operations to their local customers—often Garrett’s own voters--and his contributors’ job and revenue generating businesses.

That is part of what some others did when Ed Royce popped off, so errantly; not that I am suggesting anyone do the same with Rep. Garrett or any other hypersensitive or hypocritical public official.
Message delivered?
More Needed 

A few other pieces of this puzzle need to come to fruition this year, too.

The Obama Administration has to hold the line in 2015. The public must wake up to the threats to their  largely effective mortgage finance system as well as understand it is being harried by the selfish commercial and ideological interests, who—in part—have paid  $230 billion in federal financial regulatory fines in the past few years for gross behavior.

No matter their superior numbers, I don’t think a GOP majority will rush to disrupt the mortgage finance system just before crucial Senate and 2016 presidential elections, especially without a reasonable replacement.

The Lawsuits 

I cop the same uncertain plea as I did at the end of last year with “Third Amendment” and related cases in the hands of Judges who haven’t warmed my heart with their initial F&F decisions or public comments. Maybe that won’t matter when they make some final decisions but part of me (the cynic) thinks it will.

Judge Lamberth’s misguided call will trouble and annoy me to the end of my days or until it’s overturned by his more thoughtful peers. 

New GOP Lineup on Senate Banking

Here are the Republican Senators who will sit on the SBC in this session of Congress.

Richard Shelby, Alabama, Chairman
Mike Crapo, Idaho
Bob Corker, Tennessee
David Vitter, Louisiana
Pat Toomey, Pennsylvania
Mark Kirk, Illinois
Jerry Moran, Kansas

Tim Scott, South Carolina
Tom Cotton, Arkansas
Mike Rounds, South Dakota
Ben Sasse, Nebraska

Dean Heller, Nevada

(New members Cotton, Rounds, Sasse and Scott, all were elected in 2014; Scott, after appointed to fill a Senate vacancy in 2013.) 

Something New for the Next Few Blogs 

For reasons of fresh insight. Speculation, and change--as well as possible blog material—I want to encourage you to write to me or the blog (comment section) your 2015 GSE concerns, predictions, on any aspect or development in the F&F universe. Use any format, even just ask some questions.

Let’s see what we harvest from this intelligent and clever group of  blog readers. 

What Others are Saying?

Will President Obama mention F&F—in Phoenix on Thursday--when he previews his State of the Union in three cities this week and reportedly will address housing? (I am told “no.”) 


Yay, Michael Krimminger!! (Best piece, yet, written on the GSE court case principles. Absolutely outstanding and needs broad circulation and reading. Take a copy to the Hill, IU!)


McCain goes after Arizona TP. I don’t often agree with Senator John McCain (R-Ariz.), but he seems to be doing the right thing here.


Gretchen Morgenson, three weeks ago, writing in the NYT about the AIG case.

Morgenson wrote:

"Mr. Greenberg, the former chief executive of A.I.G. — the insurance company whose failure threatened to bring down much of the global financial system with it — is not the most sympathetic figure. But the lawsuit he has brought on behalf of Starr International, a large stockholder in A.I.G., seeking compensation for shareholder losses during those crucial days of the financial crisis, raises troubling issues." 

Maloni’s thought after reading GM is to suggest hedge fund managers, too, may not be "sympathetic," either, but their F&F case is as strong, if not a lot stronger than Starr's. 

Will our courts see that through the government’s disingenuous GSE smokescreen?

Harold Ford, Jr, in Roll Call. Former MoC squares it up.



Maloni, 1-5-2015


Unknown said...

FnF going free into 2015 ,IMO, thank for you ingenious comment.

Bill Maloni said...

Unknown, glad you liked it, but what did I say??

joseph slechta said...

Thanks as usual, Maloni!

Bill Maloni said...

It's my pleasure, Joe. Thank you for reading.

Qualified Observer said...

Please opine on the import of Mayopoulos' comments to the Atlanta Rotary:

Thanks, as ever!

Bill Maloni said...

QM--Two or three things to note.

The first is Fannie's CEO Tim Mayopoulos stated things that most of us have been saying/discussing for weeks or months.

That he stated them with vigor and with a tone of advocacy is more news than his words alone, although those proud CEO words are welcome.

Yay, TM.

It speaks well of Mayopoulus and whomever at the FHFA blessed his remarks, as is the standard practice.

Maybe, now, we can add regulatory flexibility to our list of GSE positives.

It would be nice to hear something similar from the President when he visits Phoenix this week or even from Director Watt, the next time he speaks.