Monday, November 14, 2016

He Won, She Lost, It's Our Turn Now

Cats & Dogs; the Election, Trump, and the GSEs


While most of my year’s worth of non-GSE political blogging wasn’t wasted, it was way off the mark. Hillary Clinton—whom I was supporting and touted—didn’t win.

Donald Trump--who I didn’t think had an August snowball’s chance and who I excoriated--came through, lost the popular vote but beat her in the Electoral College, which the GOP would be foolish to drop, since they secured two their last three elections wins (Bush in 2000 and Trump in 2016) through that artifice. 

 Trump is our next President….Gag, haff-kaff, harrumph!!

OK, I was wrong, wrong, wrong, and if you missed it, I was dead wrong. A lot of others were wrong, too, but that doesn’t make my massive miss feel any better.

I still think Trump was helped by the Russian hackers, but what I think doesn’t matter. My choice and predictions were the wrong ones I underestimated the anger and dislocation his supporters felt. I underestimated the depths to which he and his campaign would stoop. I underestimated “rogue” FBI agents and their equally rogue agency head Jim Comey. I overestimated HRC’s ground game and its ability to snap back. I overestimated how certain demographic groups would vote. Did I mention the Russians?

In a nutshell, I still worry that Donald Trump’s thin-skin will cause him to move against North Korea (or fill in the blank_______) and start a nuclear holocaust, if he feels insulted. I see only “yes men” surrounding him.

I despair that the new/old R political appointees he’s rushing pell mell to bring in –reportedly because his initial transition team didn’t think he would prevail and didn’t do much early work--will have their own agendas and “President Trump” will be too overwhelmed by his broad new responsibilities to slow them down or stop them, i.e. the Trump pledge to help the little guy and who has been shut out of jobs and prosperity will be quickly ignored.

I think DT won on policy promises that are too tough to pull off, even with a GOP Congress which also won and doesn’t feel it needs to sit back while Trump shapes America’s future and gets credit.

I believe Mr. trump has miscalculated the challenge of governing in a pluralistic democracy, working with his opponents (who could include Republicans), in a system which works on compromise but can be slowed immeasurably by foot dragging foes and critics, people not unknown inside the Beltway. I hope he learns fast.

But, we are facing Donald Trump’s inauguration and four years of his presidency. Since I can’t/won’t wish ill fortune on him, what do I do and what do I say/write?

Using how I blogged and treated President Obama will be my template. I will criticize Trump when I think he’s wrong and praise him when I think he makes the right decision, in the same manner I criticized Obama’s foreign policy and his tentative steps domestically.

That will take a lot for me, since I am heavily inclined not to trust the ‘Donald Trump type” and I certainly don’t trust the people the President-elect has around him. 

But, I have to give him a chance to rise above them and rise above some of his campaign arguments.

So, my mind is open, but leaning skeptically.

One note that’s disconcerting, already, and that is the GOP lobbying and money world voracious efforts to integrate itself and run Trump’s transition and personnel team. That crowd has been shutout of political jobs in DC for eight years, but still managed to achieve a lot by grindingly lobbying the BHO administration and working with the Republican Congress to secure other victories.

Now, they’re just trying to find federal jobs for themselves and/or their friends where, inevitably and invariably, they will try to influence future decisions about their previous/current employers and/or their own ongoing issue responsibilities, if they, personally, don’t join the Trump Admin.

See seamy story below from the Washington Post.

As I have written before Leftists are lazy and wobbly; this crew of Conservatives is very much into breaking glass, taking prisoners, destruction of Obama legacies, and busting other policies they find abhorrent, women’s health rights, climate control, environmental regulation, fossil fuel development limitations, etc.

Let’s see how much President Trump wants to or can control his new executive shock troops and, hopefully, rise above them.

What “Trump transition progress”  I’ve seen so far—especially the people handling major areas and issues---looks very “old hands and  same-o, same-o,” an approach that doesn’t augur well for Donald Trump’s promise “to clean out the DC Swamp.” 

Instead it appears Trump's employing the very Washington swamp denizens and residents—replacing Republican hacks for Democrat hacks--which he asserted not do.

So, I am not sure what his current implementation portends?

It’s one of those consequential details I pointed out early that a new President can’t just fob off, as Trump now has done twice first with Chris Christie (who, finally, will lose weight if he serves NJ jail time) and now his VP-elect Mike Pence.

The Democrats—under Minority Leader Chuck Schumer (D-NY) with their 48 seats—still can clog the Senate process, much as Mitch McConnell (R-Ky.) vowed in 2009, when he announced that his GOP Senators would “oppose anything Obama is for” and try and make BHO a one term President.

For Minority Leader Schumer, that’s one fresh and ugly precedent for you to consider.

I just hope Democrats won’t be too quick to sing "Kumbaya" with the GOP, since the other side seldom if ever did.

Some post-election black humor

 Alexandra Petri in the Washington Post, is fast becoming my favorite contemporary acerbic writer.

The Donald, Fannie Mae & Freddie Mac 

The GSE community was much in a happy twitter last week as the stock market, surprisingly, reacted favorably to the Trump election and Fannie and Freddie stock, specifically, jumped on thin reports of favorable treatment by the new President.

Hold on folks, let’s try walking before we run…too far.

As you know on the GSEs, I’ve written that I think Trump would side with the big money interests and support doing away with Fannie and Freddie in some new arrangement. 

Nothing Mr. Trump has said or done since winning on Nov. 8 has altered my opinion.

The near term F&F fate still is with the courts, as Judge Sweeney and the appeals judges in the Lamberth case, as well as the Delaware court likely will voice major GSE opinions before the new President or his spokesmen/women.

(Maybe with the election past us, we’ll get a decision one of these Tuesdays or Fridays from the appeals court?)

The GSE good news story last week was all about Donald Trump’s personal relationship with Fairholme's Bruce Berkowitz, investor Carl Icahn, and Wall Street investment guru John Paulson, throwing in some late week positive comments from Bill Ackman to the effect that the Trump team will fix the F&F issue and return them to operational function as private companies within a year.

That would be wonderful news---if it happens.

Remember, President Obama had lots of friends (who were consistent voters), indeed a nation of African American and Hispanic citizens--who relied on the GSEs to support their homeownership aspirations--and then BHO did nothing but stymy those hopes with his “kill the GSE” efforts. Worse he agreed to hijack their resources under Treasury’s “2012 sweep.”

The GSEs are nowhere near the “Top 20” matters facing the new Trump White House. He has lots of other worries/priorities.

That is not to say that he won’t, ultimately, help F&F, but—IMO-- it ain’t happening quickly or based alone on searching through last week’s relationship goat entrails we perused.

The Washington DC political reality is that the GSEs always have been and will be about partisan politics. Resisting the GSEs resurrection, to something akin to what they were, is formidable array of opponents.

President-elect Trump might have to choose between these roster sides.

Likely future good GSE guys:

--John Paulson
--Carl Icahn
--Bruce Berkowitz
--Bill Ackman (?)
--the Community Mortgage Lenders, Independent Bankers, a variety of civil   rights and social action groups
--scattered GSE investors, bloggers/communicators ("the real" Tim Howard)

Definite bad GSE Guys:

-- GOP’s anti-GSE presidential platform language
--Nation’s largest and most powerful financial institutions
--The entire GOP leadership in both houses, with Senator Bob Corker (R-Tenn.) and HBC Chairman Jeb Hensarling (R-Tex), leading the anti-GSE crusade
--Think tanks on the Right, AEI, Heritage, Cato, etc.
--The Wall Street Journal and other media
--Corker’s good friends/allies at the Realtors, Homebuilders, Mortgage Bankers, Financial Services Roundtable, American Bankers Association, etc. etc.

(Speaking of anti’s, while they’ll still be skulking around, I won’t miss the likes of Gene Sperling, Gary Gensler, Jim Parrott, Mike Stegman, Antonio Weiss, and a few other anti-GSE Obama/HRC supporters.)

For Trump to remove GSE constraints, the new President would have to oppose that hulking GSE opposing array, a task for which he might not be tough enough, especially because he’ll need those same folks' congressional support on so many other issues from healthcare, immigration, jobs, the Wall,  and dealing with Iran, Syria, China and the Middle East, etc. etc.

Prudence suggests pro-GSE types could be happy under the new President, but I think we need to wait until we see more, i.e. the actual fire in Trump’s cave, not the shadows of same (as I tried patiently to explain that Plato  allegory to one of my blog critics last week).

Maloni, 11-14-2016

Happy birthday to me, yesterday; not saying I am old, 
but--having now seen both in action--I can tell you that Donald Trump is no Abraham Lincoln. ;-)


Mr Fid L Sticks said...

Ford's called in your rush to leave the theatre you left your Hardee Hat behind ...
Don't forget to mention the Investors Unite Call on Tue Nov 15 @ 10:30 am

Bill Maloni said...

Yes, tomorrow at 10:30 AM, (the real) Tim Howard, Tim Pagliara, and CMLA's Rob Zimmer talk about the GSEs' credit risk transfer securities, which transfer no risk but provide investors with "YUGE" buy-in profits.

That "call in" info is on the IU site; I will be there.

(Do you still claim Lincoln wore a toupee when you saw him in Gettysburg?)

G. Buckman said...

Bill - good stuff as usual and even more impressive given the defeat.

Happy belated birthday!

As Lincoln said..."Nearly all men can stand adversity, but if you want to test a man's character, give him power."

We can only hope Trump has the wherewithal to channel some inner Abraham Lincoln as apposed to what, so far, appears to be just a giant pile of Lincoln Logs.

OT - sorry the Steelers fell short on what could've been a great birthday present.

Bill Maloni said...

Thanks G--

Silverlining to Steelers, it might be the game which forces the Rooneys to "drain the Pittsburgh Steelers football swamp!"

Time to replace Tomlin and Colbert.


Yes, I am willing to give Trump the chance to make good.

Washington is a cesspool and, if Trump means it, he likely could improve it faster/better than HRC, but I think the swamp stench and depth might be too much and he won't get a lot of help from the congressional GOP, whcih likes it that way, as long as nobody threatens their respective little pieces of the swamp.

As Russell Long once said, "Don't tax you, don't tax me, tax the guy behind the tree."

Mr Fid L Sticks said...
This comment has been removed by the author.
Mr Fid L Sticks said...

Oh I forgot .... Happy belated Birthday !!
G. Buckman and I were gonna chip in and get you a "Fake" Bill Maloni 717 for your birthday
but all we could find were nice grandfatherly types and we didn't want to ruin your well earned and much deserved crotchety old geezer image

Donald Trump said...

Happy Birthday Bill! I look forward to being your President for the next 8 years. Mike sends his best and looks forward to being your President for the next 8 years after I leave.

What do you make of Steve Mnuchin as Treasury sec.? Seems very positive given he is a dem likely to side with minority housing groups, etc. and he sits on the board with Berkowitz. Thoughts?

G. Buckman said...

Though Mr. fid-l-sticks did agree that it's quite possible a "Fake 717" crapper makeover is still on the table for next year's birthday....said he knows a guy! ;-)

Option two is a years supply of diapers....he said it depends, he also might know a guy. I told him good, cause I don't know $hit from Shinola!

Bill Maloni said...

I'd love Steve Mnuchin, but I need to learn how to pronounce his name, correctly, since I still pronounce the "t" in "mortgage" and the "g" in foreigner."

But Mnuchin has to be a much better candidate than Jeb Hensarling (R-Tex.) or Bob Corker (R-Tenn.).

(Speaking of whom, make sure you read the Rocky Mountain News coming stories on the Senator which the paper feels will be as painful for him as a cactus suppository. The paper--in a great metaphor--alleges that Corker has more baggage than an airplane luggage carousel.)

Anonymous said...

BIll, releasing GSEs does not require congressional approval. Treasury can talk with FHFA to discuss ending of C-ship and 3rd amendment. Congress Republican know Trump does not love them for whatever reasons.

Bill Maloni said...

Anon--Thanks, I know that, but an angry GOP Congress--if it is pissed enough--could undo what Trump might do with his executive authority (and then he would have to veto and then they could.......).

My point was that he is going to need that Congress to make all of the policy changes he's discussing and there are some heavy political and interest group hitters on the other side of the GSE question.

How about if he just gets word to DoJ to stop fighting the courts, allow plaintiffs lawyers to see the contested documents and then let matters evolve before the judges?

Then when his appointees are in Treasury and Justice, work out a settlement?

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