April
20, 2015, “Sword of Damocles?”
Or Just
a “Damn Senate Sword?”
Countless hearts soared a few weeks ago, when Senator Chuck
Grassley (R-Iowa), Chairman of the Senate Judiciary Committee, burst onto the
GSE scene when sending two very tough letters to Treasury and the Department of
Justice, challenging the lack of openness and transparency in how the Obama
Administration was responding to the “Third Amendment” discovery challenges, in
Judge Margaret Sweeney’s order. It was a position first taken in a
well-regarded column by New York Times financial columnist Gretchen Morgenson.
(Holder)
(Lew)
Cue the breathtaking music…..today—Monday April 20--is the day that Chairman Grassley, in writing,
asked the Admin to provide answers to his questions.
Will Grassley get stiff armed and receive nothing more than
an extension request, get hit with some other delaying tactic, or receive
merely a mishmash or generic answers citing nothing more than the Admin’s right
to hold back documents, if it so chooses.
(I am
kind of hoping for the latter because that will piss off somebody on the Hill
and, possibly, give Grassley more ammunition to shine a bright light on this
travesty and try and force some long overdue honest dealing on the WH to
provide plaintiffs lawyers with the information those attorneys are seeking.)
If the Admin balks or otherwise delays, as one of my earthy
friends bluntly put it, “If Grassley has a ---- -- (slang for male erection) for the Administration over this and/or
other issues, the Chairman won’t accept the stalling—or a pack of
non-answers—and will have cause to flay the White House.”
Here is a link to a Grassley Bloomberg Television interview
last week, which I thought Bloomberg turned into a grand waste of the Senator’s
time, asking little about the core issue of the Obama Administration slow
walking court-ordered “discovery.”
We’ll know later today if and how the White House chooses
to respond to the Senate Judiciary Committee Chair.
(Update: As of Monday, 4-20, 8:30 PM EST, no response from DoJ or Treasury to Grassley's letters. This is not surprising as most all "deadlines" in Hill letter requests are missed, but--as suggested--going forward, we'll see how Grassley handles the slight, blowing it off or getting angry.)
(Update: As of Monday, 4-20, 8:30 PM EST, no response from DoJ or Treasury to Grassley's letters. This is not surprising as most all "deadlines" in Hill letter requests are missed, but--as suggested--going forward, we'll see how Grassley handles the slight, blowing it off or getting angry.)
Stegman
Dashes My (Faint) Hopes
Mike Stegman chose to grace the Financial Services Roundtable
(FSR) crowd with his presence last week and had the choice to deliver a fabulous
speech or give big financial company reps the same tired crap about the flaws
in the current system.
But, alas, poor Mike turtled at the end, crawled into (See link to particle transcript, below.)
The major cause of my disappointment is the following, which a
close-to-the-WH source swore were the remarks Mike, originally, had made up his
mind to deliver.
“Folks,
I’ll be candid. You and I know you don’t want to take over the primary and
secondary mortgage markets unless the Congress votes you a major
new (and additional) federal subsidy/benefit to protect you against your own
mortgage securities losses.”
“We in
the Obama White House—having lost sight of financial services history and our own
moral compass--are willing to give you that, because we like the big banks and
we hope if we bribe you, frankly, you won’t, once again, hurt us.”
“Some
in Congress are not willing to go along with our scheme because they believe it
bestows too much on the Too Big To Fail
institutions (or, if you pardon the gallows humor friends, “too big to jail”)
and won’t do enough for low and moderate income families (Shh, also known as traditional
and historic Democrat party supporters), who require some equitable mortgage finance
assistance that doesn’t tilt toward you providers.”
“Those
so-called independent congressional thinkers—all ten of them--say our approach rewards
the wrong people, costs too much; turns upside down an operational home loan system
that works; likely will add huge additional costs and uncertainty; and still
would leave Uncle Sam on the hook.”
“Nonsense,
we say. After all, look at our deft mortgage finance track record and our myriad
other policy successes in sensitive bread and butter domestic areas (not to
mention our foreign policy triumphs). Doesn’t that glorious record, politically,
suggest we know better? Doesn’t it, really, honest doesn’t it; can I get an
Amen from anyone?”
“Trust
us and our plan. If I, and other Obama insiders, prattle enough and crap on the
“unworkable” current mortgage finance model—which, despite our bumbling,
continues to function smoothly, darn it,—maybe the Hill policy makers will lose
their focus, buy our pig in a poke, and bequeath the TBTF institutions
everything you guys want but don’t deserve, and likely would abuse—if their
past practices are any evidence?”
“So,
Hell, let’s hear it for indecision, confusion and chaos, guys and girls, the
Obama way.”
Alas, Mike’s headlines would have been so much better had
he given my—er, I mean—his original speech!
Speaking
of Shilling for the Big Banks…
Rousing himself from solving the Iran nuclear agreement
problem, Sen. Bob Corker (R-Tenn.) lead a cabal of likeminded solons in arguing
the that Fannie and Freddie’s work on the common securitization platform (CSP)
was not moving swiftly enough and needs some, in the form on non-GSE talents to
aid them. (Senator Bob, do you want to
add those the same bank experts who royally screwed the US mortgage market 7
years ago and then—more recently-- tried to hijack the London Interbank
Borrowing Rate, LIBOR, index/apparatus to boost their earnings?)
Excuse me while I barf.
What is it that Corker and the other usual suspects don’t
understand about “COMMON”
securitization platform and its intended use??
This Obama plan is
deigned to create a single platform for all
security issuers—government and non-government—and to give access to everyone wanting to
be part of the system.
The estimated $300 million development costs have or will
be borne only by the two GSEs—as they were compelled to agree with--when the FHFA
forced them to create the exclusive special Delaware single purpose CSP
corporate entity.
Right now, the banks and other non-GSE mortgage security issuers
will get it when it is ready and likely free.
I am not sure what the Senators think will change--with the
addition of a few bank foot draggers,
looking out for their own industry interests—except more delay if two (or more)
antagonizing stakeholders are put together?
Are Corker and the other TBTF friends afraid that a new
Administration headed by someone not named Bush, Rubio, Walker, Cruz, Graham,
Walker, Paul, Christie or Palin (please, God, let her happen!) might decide the
entire exercise is/was folly and just let the CSP’s two real owners deploy it to
all mortgage finance system users, as they do now with their own technology and
software?
Fiderer “Heat Seeker”
Progress
Is the necessary catalytic synergy coming together to ignite David
Fiderer’s “heat seeking missile article?”
In the last blog I mentioned that David was finishing a
10,000 word shocker, aimed at exposing the corrupt role former Treasury
Secretary Hank Paulson carried out putting Fannie and Freddie into
“conservatorship” and precipitating the bizarre following events.
DF’s document has drawn interest from one major source and
interest from three others. I hope of them one chooses to sponsor his work and
give it grand attention.
He and the subject deserve the best and boldest
presentation. (See Paulson
reference, below.)
What
Others Are Saying
Paulson: “Are Fannie and Freddie still around?”
(Maloni: “Yes, despite your best efforts, you arrogant Son
of….!”)
Politico’s Jon Prior, quoting Hank Paulson (and a bunch of responding tweets):
_______________________________________________________
Washington
Post Accurately Nails Congress
The Washington Post, generated the best editorial line of
the week commenting on this Congress, in a lead editorial asking how an anti-big
campaign money Florida mailman, piloting a gyrocopter from a 60 miles away Gettysburg,
Pa. airport, could elude all elaborate and expensive federal security
protection and then land on the US Capitol lawn. (Hope ISIS, Al Queda, Korea, Iran, or the Russians don’t know about
gyrocopters!)
“Federal
officials may offer some boilerplate explanation about no security regime being
truly airtight, no matter its level of resources and funding. Maybe it is undeniable that the Capitol remains a
magnet for the unhinged, the unbalanced and the unconventional — and not only
for those elected to serve there.”
___________________________________________________
All
Hail Borowitz
|
|
_________________________________________________________
|
Lenders think GSEs still working
pretty well, says Brandon Ivey,
writing in Inside Mortgage Finance.
| ||
| ||
Star
Crossed?
Last week I commented on apparent self-inflicted conflict
wounds which MBA’s President David Stevens seems to incur. (A theme repeated below in this blog.)
This week among others, he’s been doing battle with a group
of pro F&F folks, who Stevens believes really are hedge fund stooges or a
cabal funded by big money, and now has banned them from his Twitter world
(whatever that drastic “tweeter” action means?)
That makes for good soap opera content, but the problem is,
David, It’s not accurate. They’re just regular folks.
The one principal--who months ago revealed his ID to me as
part of another GSE issue--is a working grunt and a long time F&F investor from
the Midwest--retired but, from familial necessity, still hustles for a
paycheck.
This innocuous antagonist likes to use graphics and animation
to make his mild didactic points. He has no financial or contractual connections
to any hedge funds, although I am sure he wished one would adopt him.
Lighten up, Mr. MBA—just as
sometimes a cigar is just a cigar--in those scary offshore mortgage waters, sometimes,
“There not be monsters out there.”
Investors
Unite--—It’s
Beef with David Stevens
____________________________________________________________
Morgenson,
in her column, Preaches Hoenig. (Is the
congregation listening?)
Call it out, Sister!
____________________________________________
George
Will in the Washington Post
Raisin
“Takings” with the SCOTUS; hope for GSE lawsuits?
____________________________________________________________
Maloni,
4-20-2015
13 comments:
you can add myself, mother, grandchildren and wife to the list of regular folks. I dare say they would wonder what a Cabal was. But they sure would understand that Hank Paulson letting insiders know he was going to cut shareholders heads off so fast they would not know until their heads hit the floor was not working for regular folks.
They would know that the TSY and WH work with a select group of financial people to control massage and manipulate markets.
They would know the POTUS uses regular folks and meddle class in his speeches Yet? He hides behind Executive Privilege
DM--I am sure your family benefits from listening to you discuss and debate these matters.
That's not an activity in which most families engage, congrats.
Bill, I second what DM stated. I'm just a regular Joe with a family, not a Hedge Fund. Just a long-term investor that believes in America and the rule of law!
BTW, my pseudonym G. (Gil) Buckman (Parenthood) is nothing more than an example of what's most important to me...family and being the best father I can be!
Looking forward to that 10k word missle.
GB--Me, too.I can't wait to see the reaction.
I just checked with Fiderer and he has it poised. He's weighing his options and I think, will pull the plug (light the fuse??) tomorrow or the next day on his chosen placement.
Up to the sponsor then when it appears.
Readers--I just put this 8:30 PM "update" into the blog's body.
(Update: As of Monday, 4-20, 8:30 PM EST, no response from DoJ or Treasury to Grassley's letters. This is not surprising as most all "deadlines" in Hill letter requests are missed, but--as suggested--going forward, we'll see how Grassley handles the slight, blowing it off or getting angry.)
So much for the venerable system of checks and balances.
Obama, who admires the Castro's, fears the Chinese and envies Putin is single-handedly showing the world that the word "democracy" is a joke and just like his secretly worshiped rivals, he too can govern without Congress or the Judicial branch, unencumbered, making judges and lawmakers the buffoons they are.
Anon--IMO, BHO's receiving far more abuse than he's delivering. I wouldn't want to trade lives with him, truly.
But, this always has been about the courts, which is why the moneyed folks put their cash into high end lawyers and lawsuits not dozens of lobbyists.
The partisan and ideological confusion over "what to do" with a F&F system that needs no near term fixes (I didn't say "at all")
will keep the Hill at bay until Sweeney or Lamberth's peers act.
Wonder if it has occurred to those who propose legislation to turn FF over to the tbtf banks that those banks still have the profit motive for which FF have been demonized. The utility model sure makes sense where execs would not need to scramble quarterly trying to figure out who they can squeeze to increase revs and earnings.
Oh, and I too reside in the Midwest Mr Stevens as does my mother. Both of us own Pre 2008 Fannie preferred. You know Mr Paulson not only knocked our heads off but also Wall Street analysts who thought there was no way FF would stop paying the pfd dividends. Hah, that rolling sound was indeed some stupid taxpayer heads mr govt official who serves and protects.....
Too--Thanks for your comments. I think the "utility model" has lots of pluses, when Congress finally decides legislation is necessary/desirable (after we get a new President in 2017), it will get lots of attention.
Because of the large hedge fund presence, the fact that there still remains some "Mom and Pop" shareholders is lost on most. In fact, a large majority in Congress has no idea--their rhetoric to the contrary--the role that stockholders play, so it is easy for the law makers to ignore to ignore them.
Stevens--I am amazed at how many interests find themselves clashing with David Stevens; most facile trade association execs would not want that rep.
Again, big picture, near term the significant action is in the courts.
The attention that raisins got in SCOTUS and Judge Wheeler's AIG comments I consider quite helpful.
Bill, are you part of the camp that believes FF will stay in conservatorship until after the next pres election? Thks
Too--I don't think Congress will make any structural changes in the GSEs and I don't believe the Obama Administration will dramatically change it's position.
What I can't predict is the impact of any court decision favoring the plaintiffs and whether--if it is appealed--whether this SCOTUS will agree to hear it.
I think the election of a new President--no matter his/her party--is a logical place to look for some resolution movement.
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