Ladies, Gentlemen, Boys and Girls,
The AEI-HEN Circus is Back in Town
This is not Ringling Brothers but better, and it’s free.
It’s the AEI and Jeb Hensarling (R-Tex.) one ring extravaganza circus, where Jeb gets to endorse Peter Wallison’s latest thriller (yawn), how Fannie and Freddie ruined the financial world in 2008. (Psst. He's ignoring the past 6 years.)
And this folks--er, excuse me young man, watch out for the elephant dung heap; ok now go into your seat—once again was penned after PW’s underlying Ed Pinto research (I don't want to get freaky about this, but do most people remember that “Tonto” rode a spotted horse, also called a.....?)--who was “let go” by Fannie Mae many years ago—was and has been rejected by the Fed, the Treasury, the Federal Financial Inquiry Commission, and a host of financial columnists and writers, including prominent conservatives.
Someone noted that Ed’s research—and therefore one might assume Peter’s book--has more tire tracks on it than I-95. Oh, wait, that was my observation.
But Peter will be selling and Jeb will be affirming PW's accuracy, despite the fact that the HBC Chairman—in the last session of Congress--had a panel four ideologically diverse witnesses before him declare they were in agreement that F&F may have been a factor they did not cause that meltdown.
The promo for the event (honest and for real) says complementary copies of Peter’s book will be available. (I am assuming for free, but with the AEI you never know), but you might, repeat, might have to bring your own crayons.
Psst. This is the book Peter claimed was blasted by Left wingers writing reviews on the Amazon book site; Pete maybe this folks just didn’t like or believe rehashed hash?
(I can't take credit for the above artwork, borrowing it from another site, but I hope friend Peter appreciates its humor.)
Watt, a Disappointment Last Week?
If I am wrong with this next few paragraphs, I am sure I’ll hear about it from those who read the blog.
When asked last Wednesday about the possibility of the White House taking some aggressive action--via regulations, using the authority Watt months ago claimed it and he had to change the “conservatorship” rules and let F&F hold onto more of their income, Mel did his best Mad Magazine “Alfred E. Neuman--“What me worry?” and said it wasn’t his job to raise this matter with the White House.
It’s not your job, Mr. Watt?
Why isn’t it your responsibility Mr. Watt, who better?
Deep down, do you really believe that last year’s CWJC legislation, which the President keeps blathering about (and which most of your former CBC colleagues hate) is good for anyone but the big banks? Is it good for low and moderate income families; is it good for small lenders?
Think about what interests rose up last year when the bill came up for a vote in the Senate Banking Committee?
Honestly, I hoped for more from Mel Watt. I hoped this veteran 20-year congressional good guy, who had served on the Banking Committee and a senior member of the Congressional Black Caucus—who reportedly got his job through WH counsellor Valerie Jarrett because of those qualities—would step more and assert his gut instincts.
Others kept insisting that the Obama Administration is playing “possum” and will rise up, rectify past F&F conservatorship wrongs, and unleash the mortgage finance giants letting them return, partially, to the job they did pre-2004--before their quality managers were run out of government by ideological zealots--and since 2008.
I Expect More From Watt
Frankly, I hope in passing over Mark Zandi for a former black Congressman--who never came close to Zandi’s mortgage sophistication and knowledge—the GSEs were getting a new overseer who felt the pain in the minority community being cheated or denied homeownership chances by lenders seldom challenged by federal banking regulators. A man who would/will act on those faults.
When he went before the Hensarling (R-Tex.) HBC, didn’t Mr. Watt hear those congressional CBC voices espousing the many positives about the two entities he oversees and expressing their hope—on behalf of their constituents—that this Administration (as it has for most of the past six years) would stop “turtling” and eschew the GOP/big bank agenda to do away with F&F??
Let me make it simple, Mr. Director. Did you hear, with all of their deprecations, what those House Republicans were seeking, what type of mortgage finance system, controlled by which interests?
Well, it’s simple. You should be opposed to much of what they support.
The “worst week in Washington”—a sobriquet given every Sunday by editors of the Wash Post “Outlook” section—IMO, goes to Mel Watt, who during his HBC testimony the previous week, certainly didn’t produce a “Profile in Courage” and carried through this past week with the same “leave no tracks in wet mud” activity.
The good news is that Mel Watt has more time in town to reverse that image and urge the Admin to do the right thing.
Please remember, Director Watt, and broadcast far and wide the F&F that exist today are far more secure than those 10 years ago, when they started to drift with new managers in charge.
Jon Prior (@JonAPrior)
On rebuilding GSE capital, Watt said he isn't aware of talks in Treasury to do so, says not his "responsibility to start that conversation.”
Ironist in Charge
Treasury, i.e. the American taxpayers, will benefit when Fannie sells their several buildings in an around DC and eventually move into what was the site of the Washington Post newspaper on DC’s 15th Street, after that structure gets demolished and a new Fannie home constructed.
Depending whether the buyer of the iconic Williamsburg style “3900 Wisconsin Avenue Fannie HQ” uses it as is or re-sells it after it has been bulldozed (with some critics hoping Fannie’s charter would go with it), somehow the result will be multiple millions will go into the Treasury coffers.
Think about the incongruity, Mr. Bezos, the home city newspaper, once removed, will provide the new home for Fannie. The paper which trashed the company editorially every chance it got, even creating a few when opportunities weren’t ponied up to them, now housing the “Houser.”
My one hope, when the Fannie finally move in, is that someone finds the article/column/editorial--which still hasn’t made it into the WashPost--telling their readers that federal Judge Richard Leon, in 2012, dismissed the “securities fraud” charges against former Fannie executives Frank Raines, Tim Howard, and LeAnne Spencer Garmon.
It must be there somewhere, Mr. Bezos, it must be? I mean Fannie is a famous, if not infamous DC company, all the principals are local and certainly in the cases of Raines and Howard well known.
So, I am sure you’ll agree it was newsworthy and probably just slipped into somebody’s “burn can,” by accident of course.
Of course the Leon decisions screwed up the ongoing Post anti-GSE allegory but, hey, that couldn’t be the reason for this glaring now going on 3 year omission, could it Mr. B?
Washington Post Columnist, Charles Lane
Lane produces op-ed columns for the Post and is regular guest on Fox News. Last week, CL wrote a piece lamenting how much the federal government (Democrats and Republicans) devotes (wastes?) supporting home ownership. As evidence, he pointed out that home ownership rates have stayed pretty stead near 64% for 20 years, despite a fault a vault to 69% in in 2005.
He implied the nation needed a new perspective on home ownership and Washington was directing too much to support people who wish to buy homes noting the static the relatively static home ownership rates.
His column produced this Maloni LTE response, which—naturally--the Post didn’t print.
With his lament, today, about too much federal home ownership support, Charles Lane missed the bigger picture.
Home building and home ownership are tied to about 17% of the nation's annual GNP, in dropping or lessening the federal support for people wishing to buy homes, that large job generating segment of our economy gets whacked, because the banks will pick up the slack.
More important, why pick just on home ownership federal efforts?
If Lane is lamenting the failure of the home ownership rate to return to the 2005 levels or just to grow--he needs reminded the nation has spent trillions on defense spending, but we still have wars and US military personnel coming home in body bags; the nation has spent trillions on public education and we still have non-perfuming school producing kids who can't read; the nation has spent trillions on healthcare and health research and we still have young and old dying from diseases we can’t totally cure.
Should we all join the Tea Party, stop all of these outlays, plus many other worthwhile federal expenditures?
One last point, if the issue only is home ownership and the federal government listens to Mr. Lane and gets out of the way, the logical recipient of the entire primary and secondary mortgage markets are the large commercial banks.
This unworthy group, in 2005-2007--issued in their own names and labels (meaning no federal support of any kind)--and sold around the world, $2.7 trillion in poorly underwritten, falsely rated “private label mortgage backed securities" (PLS), which quickly failed making the US real estate deflation an international debacle.
Did I mention those same big banks—for a variety of transgressions-- have paid Uncle Sam more than $220 billion in federal financial regulatory fines in the past few years?
Careful for what you wish, Mr. Lane.
I confess that I don’t understand legal proceedings, overlapping jurisdictions, and such.
To date, I’ve dismissed Judge Lamberth’s decision (now being appealed) that there is no judicial review of federal regulatory cases; cheered Judge Sweeny ruling to muck through obvious Treasury and Department of Justice obfuscation of her “discovery ruling,” and last week saw Iowa Judge Robert Pratt punt—in essence—and buck the case back to Sweeney.
Pratt said that while he didn’t agree with the plaintiffs, he also didn’t know much about Fannie Mae and Freddie Mac, which to me is a shockingly scary admission for any judge working on the subject.
In reading about his proceedings, Pratt seemed very intellectually uncomfortable and didn’t want to consider/decide this case, which became the result.
Looking for more Sweeney, until we hear about the Lamberth appeal.