Major Buzz Material Last Week,
Poor Sen. Corker, Speaker's Race
Last week we saw Political Alpha, kind of new-to-the-GSE scene, but a decade old DC political/financial analytical group, issue a “shake up the community” report, claiming the White House was busy behind the scenes, quietly (not anymore if they were!), considering F&F recap and release options, in anticipation of some possible needed fast footwork.
This immediately gave rise to three major entwining stories which got consumed, chewed up, and conflated in the media, Blogosphere and on Twitter.
1) The PA article, itself, discussing a GSE thinking change at the WH;
2) A talked about (likely imagined) 100 page document, spelling out those changes and containing arguments for same;
3) And a search for any proof that the WH actually is considering a tactical change from its current support for doing away with F&F.
My take, today. The first one is true, the second likely not true (although the article could have been a forward to it); and the last one cannot be said, yet, to exist or not exist.
Parsing these, I found that various parties were commenting—and confusing--one or more of these segments, only one of which unequivocally exists, and that was the article by Political Alpha’s Andrew Taylor, saying the WH is working to some degree on a possible GSE position change.
From there on it gets a little shaky.
That PA article—reflecting work done for one of its clients—somehow leaked (from PA or elsewhere?) and excited a lot of people (including me), got comingled with the claim of a “100 page report of options or advocacy sent to the Admin.”
But, “All the King’s horses and all the king’s men” this past week couldn’t locate this mystery doc, ergo…..
The secret 100 page doc probably doesn’t exist, suggsting the Obama Admin is looking at recap and release may be accurate.
But, even so, there were more DC people and others calling that Admin flip flop part of the story “BS” than those substantiating any Admin reconsideration.
My “not happening” evidence is my exchange with a an invested senior trade association exec--close to the WH-- who told me he had heard nothing of the article and the Admin was going to issue a statement shooting down the report (which has yet to happen); numerous contacts with the GSE “chattering people,” which produced no real confirmation signs; a curt rejection by the infamous blogger “Tim Howard 717” (not the real Tim Howard), who called the report “a parody”; a prominent national scribe who told me if the White House had changed its anti-GSE stance, he would have written it; and later the emphatic comments by a frustrated Sen. Bob Corker (R-Tenn.) calling the report’s existence nonsense.
People asked me, “How would Corker know?”
Simple. He’s been an Admin ally on its GSE jihad. The WH worked through him and supported the Corker-Warner bill, and anything else that would shutter the GSEs and—for a long time—he was one of the few Senate Republicans cooprating with Obama on his nuclear deal, until he didn't.
For those reasons, I believe, if President Obama went to a new GSE playbook, someone inside would clue Corker.
I contacted Andrew Taylor, the printed story’s author, but he politely told me PA doesn’t speak “with the press” about its work.
I laughed, told him that I had been insulted and called a lot of bad things in my life, but never “media.” I also pointed out to him that at least one reporter, the New York Post’s Michelle Celarier, who wrote about his article, spoke to someone at PA who told her the story was legitimate, as she later tweeted.
(I should note for purposes of my own notoriety, when I contacted Taylor, he told me he was familiar with some of my blogging. I wasn’t sure if he was “damning me with faint praise” or he fainted, damn, with no praise.)
I hope Taylor’s account is true and that the Administration really is reappraising and squirming, having realized that some of its officials may have lied or broken the law, and that one of the many pending court cases will produce a finding for plaintiffs which might blow the cover from some bad ill conceived, damaging Treasury actions.
There have been other reports—published in the past several weeks-- suggesting there’s been a mood change in DC from winding down the GSEs to looking at alternatives, that could include recap and release in a different format.
But, that isn’t new; my friend, the ubiquitous Glen Bradford, told me last week, the WH reconsideration has been going on for more than a month.
Unfortunately, Taylor didn’t respond to questions I sent him, including, “Why did your piece come out now?”
Tuesday’s BPC GSE Reform Conference
Tuesday, October 6, had to be rough day for Sen. Bob Corker (R-Tenn.), when he--along with his colleague, Sen. Mark Warner (D-Va.)--addressed the Bipartisan Policy Center (BPC) conference on GSE reform legislation, albeit separately.
In front of the BPC crowd, Corker was forced to eat crow, at least to the extent that any elected official admits his political timing was off and his legislative solution came up short (not to mention the questionable quality of his legislative solution).
Last year, Corker and Warner introduced a bill based on a BPC proposal to do away with Fannie Mae and Freddie Mac, over scary undefined time frame, and replace them with a new federal insurance agency, along with making other mortgage market changes.
Speaking last Tuesday, Corker admitted failure. The Corker-Warner bill got little traction in the Senate Banking Committee last year, and he told the BPC attendees there will no major Fannie and Freddie legislation until we have a new President in 2017.
Trey Garrison 's Housingwire conference article.
http://www.housingwire.com/articles/35271-corker-and-warner-at-bpc-gse-reform-just-isnt-going-to-happen-soonVideo of BPC conference.
Corker with Santelli on CNBC
That disquieting, embarrassing news and the mood it generated must have figured into Corker's unusual outburst on Wednesday when—being interviewed by CNBC’s on air financial talent, Rick Santelli—Corker fussed and fumed against the PA document mentioned above—which also that day had been touted by Pershing Square’s Bill Ackman in a different venue—and then Senator Corker told Santelli there was “no truth” to the report and investors should "short” GSE stocks.
Did Senator Corker violate any formal Senate ethics by advocating short-selling the stocks of two publicly traded entities he has actively opposed for years? Only the Senate Ethics Committee can say for certain. But, anger or not, his remarks didn't sound right to me.
It certainly was an un-senatorial expression of frustration from Corker, talking down a publicly traded US company.
I urged (and urge) people to contact the Senate Ethics Committee about Corker’s words.
Any Senator, certainly one on the Senate Banking Committee, should stay away from advocating any purchase or sale of US stocks, since most of the firms required in those market transactions are within the committee’s jurisdiction, including the two he suggested dumping.
Corker's action were unnecessary and unseemly..
Bethany McLean, interviewed later on CNBC, had the best comment about Corker’s stock recommendation.
Here is the comment I sent to various people, including the media, after I heard about Corker’s “short” advice.
Calling the Senate Ethics Committee;
Have a situation, here in the Corker office!
What a thoroughly stupid, unethical, and just plain dumb thing to do.
I am speaking about Sen. Bob Corker (R-Tenn.) going on national television with Rick Santelli, today, and suggesting investors “short” Fannie Mae and Freddie Mac stocks.
Why would this public official—or any public official--tout buying or selling stock in any publicly held company?
The man is a GSE critic, fine. But he has his DNA all over legislation to abolish and otherwise handcuff the companies and certainly their current public shareholders. (Can the Admin—owners of 79% of the entities--be happy with their guy Bobby?).
The Senate Ethics office immediately should be asked to look into Corker’s antics.
Plus, there are more than 20 (some consolidated) court cases pending against the US Treasury over Fannie and Freddie mistreatment.
How can Corker know what will happen with those cases, especially the Delaware case, which on the face of it, seems to suggest Treasury had no authority vis-à-vis Delaware corporations (which Fannie is) to manipulate the preferred stock Treasury created in Fannie and Freddie as a preparation for its 2008 takeover called “conservatorship.”
Someone should give Senator Corker a ride out of town on a Tennessee walking horse!
DC All Agog Over Speaker’s Election
I don’t know, really, whether it was the lack of support from a stubborn, insensitive minority bloc in the House GOP Caucus, the Congressman not feeling up the Herculean task, or dark rumors of extramarital antics, but with the departure of House Majority Leader Kevin McCarthy (R-Cal) from the Speaker’s race, the House R’s, in crisis mode, are scrambling to get some credibility traction and hope to talk Paul Ryan (R-Wisc.) into accepting the thankless post, even though Ryan has twice said “no.”
It’s legally possible for the House GOP to choose a non-member of Congress (True and Newt’s advised he’s available) for Speaker, but I doubt these wingnuts would go that far, bust tradition, and choose a non-sitting Congressman, to be the individual behind the Vice President to succeed to the presidency if both higher officials were incapacitated or deceased.
All of this high political drama and low life civic behavior screams that these GOP extremists—who turned against Boehner and curdled on McCarthy’s elevation-- can’t govern or won’t cooperate with anyone who disagrees with their “let’s roll back the clock to the 1950’s” agenda.
Ryan is a logical choice, had a run as Mitt Romney’s VP candidate, and enjoys the respect of the people who failed to support McCarthy. But Ryan may not want a job which grinds up reasonable people who must deal with so many unreasonable ones wearing the same cloth and colors.
If Ryan doesn’t pick up the Speaker’s cudgels almost anyone with a gaggle of supporters could win what until now has been a coveted position.
Does the nation have to worry about HBC Chairman Jeb Hensarling (R-Tex.) being tabbed and then being one step away from the Presidency???
No, the House GOP wouldn’t be that whacko would they, would they?
No matter how much some people enjoy seeing these Tea Party crazies in angry disarray, both Boehner and McCarthy opposed two extremes the TPers want. No increase in the federal government’s debt authority upon which thousands of mandated federal payments—for social security recipients to sovereign foreign debt holders, US companies, universities, farmers, hospitals, school teachers, other elderly and poor, police and firemen, and many more—depend and can’t easily replace or substitute that revenue.
The second one is a “hold our breath and turn blue” refusal to fund the federal government for the coming fiscal year, if Planned Parenthood isn’t defunded as part of it.
Any Braveheart seeking this job—if he or she is strategic--in return for taking the post if they win, should get in writing a pledge form every Member of the House GOP agreeing to vote for those two actions the new Speaker must pursue quickly, thereby saving the nation from more fiscal calamity and the GOP from its extremist element, which doesn’t support either of these matters.
This is a comment, from a letter in the U.S. edition of Al Jazeera, on McCarthy being forced out of the Speaker’s race.
“Another victory for the Dixie dumbass wing of the Republican Party.”
What Others Are Saying
Trump Pranks Rubio
Trump and “Carried Interest”
Barney Helping Hillary
Financial Regulation in HRC’s Administration?
Bernie is a $$ Raising Machine!
Fannie and Freddie Corner
Michelle Celarier’s NY Post article, containingthe Political Alpha initial story.
Bill Isaac in American Banker
Investors Unite’s GSE Timeline
Investors Unite has created a very helpful GSE timeline, available on its website, for those keeping track of important Fannie and Freddie events and when they occurred.
As a remainder, also very useful if the “GSE Links” website where daily you can find the latest Fannie and Freddie info, as well as court case updates.
Houston Chronicle reviews Bethany McLean’s book.
Rep. Martha Blackburn (R-N.C.)
It is worth noting that Rep. Martha Blackburn (R-N.C.), a member of the House Banking Committee, and one of the other candidates mentioned for the Speaker’s job, introduced legislation to stop the GSE sweeps, although not use the revenue for recapitalization and release,
“On March 26, Representative Marsha Blackburn (R-TN) introduced a bill that would stop profits made by Fannie Mae and Freddie Mac from being swept into the U.S. Department of the Treasury. Instead, the Enterprise Secondary Reserve Taxpayer Protection and Government Accountability Act of 2015 (H.R. 1673) would require profits to be placed in a secondary reserve fund that would cover any losses incurred by Fannie Mae and Freddie Mac due to a housing downturn.”
Tweet from Michelle Celarier and more -re-Tweets.
The next time you hear any bank spokesman lamenting about their inability to generate revenue, share these facts with them.
and from Inside Mortgage Finance
Mortgage-Banking Profits Up More Than 50 Percent in 2Q15
"Banks and thrifts boosted their mortgage-banking profits by 52.2 percent in the second quarter. Nearly everyone enjoyed the good times, with just 12 banks recording the quarter’s results in red ink. See how the quarter played out and study comprehensive charts providing numbers for all banks and thrifts for mortgage earnings, sales activity, repurchase activity and servicing rights assets in the 2Q15 edition of IMFs Mortgage Profitability Report."
General Politics Corner
Another stone aimed at the House R’s and Rep. Chaffetz over Benghazi.
“So, what you’re suggesting Mulder is that….”
Those GOP Romantics!
What Ryan Has to Weigh if he Runs for Speaker?
Foreign Policy Corner
Is this good news or bad; Do I cheer or get depressed?
and this quote from a Sunday CNN article about the Iraqi air force attack on ISIL leaders.
"An Islamic State fighter reached by telephone could not confirm whether Baghdadi had been in a convoy that was struck, but said the group would fight on whatever his fate: 'Even if he was martyred then it will not affect Islamic State. We will lose a leader but there are a thousand Baghdadis.' "
Happy Columbus Day and Watch the 10-13 Dem Debate