Monday, May 8, 2017

This and That!

First they came for the Socialists, and I did not speak out—
because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
because I was not a Jew.
Then they came for me—and there was no one left to speak for me.

Martin Niemöller (1892–1984) was a prominent Protestant pastor who emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps.

GSEs and Healthcare; the latter not a POTUS Win

Every week, I talk or otherwise interact (lots of emails and texts) with dozens of people focused on the GSE issues.

But while some homogenization exists, most of those with whom I deal seem to care more about the GSE preferred or common stock price and don’t, surprisingly, focus on the nation’s mortgage finance delivery system, and who/what would control it if dramatically altered, i.e. as most of the Hill proposals would.

To me more than any stock price bump--more likely drop, given the financial and social peril if it is delivered into the wrong hands—governing control is the crucial part of the lengthy and intractable imbroglio. 

Personally, I don’t know any of the mega hedge fund GSE mavens, but do know several people who years ago—way before 2008—invested in the GSEs and have watched their hopes crumble of catching financial lightning in a bottle with their early Fannie and Freddie investments. I feel for them.

Their increasingly rueful stories appears on many of the GSE blogs where they can offer up their frustration and unhappiness.

I welcome and enjoy discourse with both groups. Indeed the major investors need to be acknowledged because they have driven—and paid for--all of the primary lawsuits which keep the future of the GSEs alive, operationally. My thanks to them for those actions.

I worry less about the GSE stock trading multiples and more about the nature of the future mortgage system model which survives the producing end of the public policy meat grinder, because I think one begets the other.

If policy makers ever agree on the one, then you realize the second.

Secure the GSE System, Price Comes Later

Fannie and Freddie stock prices, despite their $20 billion per annum product—never trade on economic returns, market share, etc. the stuff that moves other publicly traded stock, but whims and whiffs of GSE political or legal developments (not many of the latter, lately).

IMO because of the legal/political uncertainty, GSE preferred and common shares are bouncing political footballs (sorry my legalistic friends) as we’ve seen in so many cases decided in the “Lamberth” vein.

Yes, the GSE preferred stock is a “contract,” which bears distinction from the common shares and the common—depending on a positive resolution of the GSEs current value—could have value of several times current prices.

Yes, the courts still may offer a better hope than any congressional exercise, since this Congress is not made up of honest brokers nor people who have displayed deep understanding of how mortgages are originated, financed, or the best way to deliver those to their constituents, most of whom want ease, access, and fairness when they shop for a mortgage loan.

I contend, if policy makers just focused only on--“What is the best, fairest, most easily employed, transparent, mortgage finance delivery system for all Americans,who qualify for mortgage loans?"--the Fannie Mae/Freddie Mac model and experience, hands down, is superior to all conventional loan competitors.

Especially so, if those congressional policymakers realized that the “all Americans” are their constituents or better yet, their constituents will know if their Senator or Member of Congress whiffs on their interests but embraces the promises of the big bank crowd.

Look to Tim Howard's Proposal

More aggressively, I would argue, that all of the “Inside the Beltway” think tank, aerie faeirie replacement schemes, being touted by the industry groups and special financial interests, pall when compared to the Tim Howard “remake them as utilities” idea which he has logically constructed and capitalized, which appears on his blog.

The latter idea preserves the best of the GSEs but adds proscribed limits on what critics claim are Fannie and Freddie shortcomings, i.e. profits and scope of business activity.
Washington skeptics, please re-read that last sentence and think about it.

And the Howard proposal would not disrupt the current regulatory regime, which already has sanitized the GSE operational mode and did away with the single biggest element of the pre-2008 financial debacle, i.e., authority to buy/securitize subprime mortgage products.

(Please note that the bank financial regulators have not banned their regulated institutions—the likely beneficiaries if the GSEs were disassembled--from selling those products.)

Bad Guys Secretly Creeping into Fed Posts

In past blogs, I’ve mentioned the dozens of anti-GSE types lurking in the DC policy area still with their long knives out and still desirous of damaging the two.

The Washington Post’s Sunday editorial (excerpt below) suggests why my concerns have foundation.

“WHAT DID President Trump really mean when he vowed to “drain the swamp” in Washington? Did he mean to break up the endemic conflicts of interest among lobbyists, industry and public servants? Certainly Mr. Trump’s campaign rhetoric implied that he would discourage the mingling of political power and influence. On taking office, Mr. Trump’s executive order on ethics toughened the rules on government officials when they leave, barring them for five years from lobbying on topics they worked on in government.

In the same executive order, Mr. Trump also attempted to prevent conflicts of interest when officials join the government. Specifically, under Mr.Trumps order, officials must pledge that, for two years from taking office, they will not participate in any particular matter involving specific parties that is directly and substantially related to former employers or clients. Also, if they were lobbyists in two years before taking office, they must promise to stay away from any specific issue they lobbied on, a ban that should also last for the first two years in government.

Now come reports the Trump White House is issuing secret waivers to the president’s own ethics rules, allowing incoming officials to work on issues they handled before becoming public servants. The New York Times reports that in the Obama years, there were waivers issued under narrow circumstances, but the waivers and explanations were made public. The Trump administration is no longer disclosing and no longer explaining.

How many waivers have been issued? No one seems to know, but the president is appointing former lobbyists, lawyers and consultants who are in many cases working on policies affecting the same industries they served before, according to a survey conducted by the Times in collaboration with ProPublica. For example, they reported, a top White House energy adviser is handling the same issues that were of concern as a lobbyist for major energy-industry clients.

Last Week’s House Healthcare Vote 

I don’t care what anyone thinks about the current Obamacare health system, which hardly was coming apart as critics suggested, but how could anyone find anything ennobling about how the House--on a pure party line vote, with some in the GOP voting “no”--passed a bill on which they had few details, no objective cost estimates, no measurement of Americans served or exposed to losing their insurgence,  far more expensive coverage,  no easily understood protection for those citizens with pre-existing conditions, sketchy policy tax breaks for the wealthy, and a bill that most American major medical groups opposed?

(List of opponents.*)

·         American Medical Association
·         American Hospital Association & Federation of American Hospitals
·         American Cancer Society Cancer Action Network
·         American Health Care Association (AHCA)
·         America’s Essential Hospitals
·         America’s Hospitals and Health Systems
·         American Public Health Association
·         National Disability Rights Network
·         National Partnership Women and Families
·         National Physicians Alliance
·         American Federation of State, County, and Municipal Employees
·         National Council of La Raza (NCLR)
·         Asian & Pacific Islander American Health Forum
·         National Committee to Preserve Social Security & Medicare
·         National Center for Transgender Equality
·         Catholic Health Association of the United States
·         American Federation of Teachers (AFT)
·         National Education Association
·         American Federation for Suicide Prevention
·         Cystic Fibrosis Foundation
·         HIV Medicine Association
·         Leadership Conference on Civil and Human Rights
·         MomsRising
·         Children’s Defense Fund
·         Families USA
·         Consumers Union
·         Sister Simone Campbell
·         NETWORK Advocates for Catholic Social Justice
·         Young Invincibles
·         Planned Parenthood

*List from the office of Senator Chris Van Hollen (D-Md).

IMO, that vote all was about a rightwing House voting against the former Black President’s signature legislative achievement to the detriment of millions of lower income, elderly and poor Americans who need that system, with its working state exchanges????

Wait until those people wake up and find out what the POTUS and GOP did to them.

That tortured legislative exercise was produced so our intellectually uninquisitive, non-reading, incapable of identifying with family hardship President--who didn’t know what was in the healthcare bill  voted down before and didn’t know the details of what passed last week—could chortle over a pyric/ersatz victory that it and he are “great!”

His “win” which likely came at the expense of millions of the least able and the oldest of us all, whom he promised to help prosper.

I expect his insurance industry allies are happy but many of the American people can’t be.

Maybe DJT can go, again, to Pennsylvania or West Virginia and brag how he helped all of those residents with this slash and burn healthcare legislation.

Sorry DJT, not leadership. 

Best line, I read, describing the Trump/Ryan healthcare bill--crucial details of which were not available to the undemanding House R’s when they voted overwhelmingly for it last Thursday—was penned by Ross Douthat in New York Times:

Thursday’s House vote for the American Health Care Act, a misbegotten Obamacare quasi-replacement with the favorable ratings of diphtheria and the strong support of almost nobody on the right who cares about health policy, will necessarily be the undoing of the congressional G.O.P.”

Yay Douthat: the ‘”favorable ratings of diphtheria,” what super descriptive prose!

I wouldn’t be shocked if diphtheria’s favorability ratings are close to those of the current Congress.

Maloni, 5-8-2017


Anonymous said...

Your GSE comments and viewpoint is very interesting and appreciated. Once you leave that arena, you sound like a Loony Left Wing Liberal who is having a temper tantrum. Sorry you feel that way but totally understand after living through eight years of BHO.

Anonymous said...

Your comments are always appreciated. I am constantly amazed by activist gse supporters who rightly argue for property rights and against expropriation but don't believe, as the rest of the civilized wold does, that there's any right to healthcare. They think it's a product, like a car or a toaster. Many of these same conservatives even have the stones to call themselves Christians.
Conservatives have been trying to kill the gses for decades but wait, if there's money to be made....
I'm heavily invested in f&f to hopefully make a few bucks, but also based on principals. I also support single payer healthcare because paying twice as much as the rest of the world is just stupid. But with who we have running things it's clear that we love in the age of stupid. God help us all.

Bill Maloni said...

Anon 1--

I admit to being a left leaning progressive and yes, what I am seeing disturbs me, for my children, grandchildren, and nation less so myself.


Anon 2--

Thanks for your comment; nothing wrong with earning money on investments. In this GSE instance, I just am suggesting prioritizing because the right perpetuation of the GSE system will bring the reward investors seek.

Bill Maloni said...

Today's original Anon 1--

I owe you a better answer.

I assume your comments were in regard to my "healthcare" rant.

Is anyone you know--who relies on Obamacare--better off under the legislative proposal.

What fairness was there in promising coverage for pre-existing conditions, which some R's and Trump voters have--and then giving that decision to the states, with no guarantee that all or any will provide the equivalent of the Obama effort? They could but they also could not, so you go from a certainty to a crapshoot.

The whole House exercise was a PR show, not substantive legislating which the party promised to deliver when it gained control of all three units of government. (Read what exists of the bill and tell em if you think all of those detailed and NON-DETAILED features
make sense to you as a citizen?

Plus it provides air cover for dozens of ongoing indiscretions involving Russia, retrenchment on environmental matters, business deals--which only benefit the Trump family, ongoing immigration matters in a country which relies on smart/capable workers born overseas, BS about building a "Wall," and planned huge deficit spending once his tax "reforms," i.e. cuts for the wealthy kick in. That feeding the cows to feed the crows approach hasn't worked, on a sustained basis in our past, why would it work now? It just make the Treasury a piggy bank for the 1%.

Yes, it pisses me off, but Trump is the President for the next four years, but--mostly, so far--I disagree with him.

BTW, were you heartened by the signing ceremony with Trump and @30 White guys surrounding him? Do you think that group reflects America's current or future demography?

All of that and the constant cheerleading because the POTUS is so insecure just violate my sense of what the country is all about and what it needs.

Anonymous said...


It is simple reality that any Gov program with no cap on spending will bankrupt the nation.

As one reaches end of their life cycle, the costs of prolonging the life increase exponentially. In addition there are many health condition where a small percentage of population can overburden or bankrupt the entire nation.

As a policy Gov should have full responsibility only for general public health and education. Gov should also make sure that health care is affordable with or without health insurance. The current health care system based on health insurance is not viable unless health care costs are below certain levels.

So Gov should focus on bringing health care costs down starting with health care education. Lowering health insurance costs with taxpayer subsidy is temporary fix for only few years.

Current health care system based health insurance is a 100% Ponzi scheme. It will work as long as there are more payers and less users.

Bill Maloni said...


I agree with you on health care costs (and I am part of a family with two surgeons and two other advanced degree nurse practitioners among us).

But, it's a daisy chain with nobody willing to break that linkage and curtail the costs which infect all of the medical elements, hospitals, docs, pharmaceutical companies, insurers, med schools, etc.

I just don't see DJT doing this or being upfront about what he is doing.

I would respect him and support him if he announced that was his #1 doemstic priority.

Anonymous said...

People all over the world love other people's money especially easy unlimited taxpayer's money. Politicians, insurance and drug companies surely love the current system because there is lots of easy money in it ($3T every year). Providers used to love the system but not so much now. In the current system patients even do not know how much health services cost before hand. Patient may come know about costs, may be after few months.

There is no system more efficient and more effective than communities, families and individuals managing their own health and health care costs. Gov mandated and Gov managed health care systems are most inefficient and most ineffective.

With every Gov regulation, every Gov mandate and every supply side barrier to competition, the costs go up and service levels come down. What we need is less Gov regulations, less Gov mandates, less barriers, more flexibility, more options, more supply side competition...

In the current system it starts with most expensive, highly throttled and most elite health education system that takes unnecessarily punishing long years before one becomes health care provider. Gov has to undo all of these things and make it easy for every aspiring student to pursue education in medicine and health care. In addition to most expensive western medicine, Gov should also promote other holistic and natural healing medicine.

If one looks around the world, there are solutions visible in plain sight. Only blind people can not see it.

Anonymous said...

It only takes "human ingenuity" to make health care system so complicated, expensive and unsolvable problem. So take out "human ingenuity" from it, people will find simple solutions.

Same thing can also be said about "Fake Conservatorship".

Bill Maloni said...


Can you think of anyone better than the President of the United States to lead the effort you describe?

Who has a better bully pulpit, who has a more far flung communications apparatus, who has more Tweet followers?

As I noted, if DJT took on those tasks, he could have two terms and whatever else he wanted domestically.

If successful, highways, buildings, children, mountains, and lakes would be named for him.

Anonymous said...

Success requires right team, right time and right place.
Hope DJT has the right team.
GOP is in majority in all the branches of US Gov and majority of State Gov.

Bill Maloni said...

I've tried to make clear in most of my blogs--because he is the President who we have for the next four years--that I want him to succeed on objectives that are good for the nation...all of our citizens..

But, I can't stay quiet at some of his antics, priorities, personal style, and priorities.

I'll repeat, when he does well, I'll cheer him, but will point out when/where I disagree.

I hope more Americans would do that.

Anonymous said...

Expressing views with good intentions is good for all.
You speak with with good intentions.

But "Don't let perfect be the enemy of good".
People mainly elected DJT because he does not have politically correct
"antics or priorities or personal style or priorities".
Media likes all these things and also drama
but not the public who have gone through the worst situaions in previous administrations.

Bill Maloni said...

Fair enough, but at what point--since DJT has blazed his own somewhat unprecedented path--are those aberrations (from tradition) damaging to the greater good?

What gives you confidence that he would be steady in a true national security situation or domestic Armageddon?

Anonymous said...

Name some one who could have done what DJT has done so far against all the odds.

DJT, an outsiders and a political novice becomes POTUS after eliminating 17 established GOP contestants who had support from GOP establishment. More than a billion was spent against DJT. Most of the Main stream Media wrote off DJT many times up to election day and after election day and continues to write off DJT every day.

DJT won despite strong opposition from Dems, Reps, MSM establishment, DC establishment, University establishment, financial establishment, judicial establishment and many more.

American People trusted one person and elected him ignoring all other distractions

What more is needed to have confidence in such person?

Anonymous said...

American People seem to doubt anyone who belongs to Dems, Reps, MSM establishment, DC establishment, University establishment, financial establishment, judicial establishment and many more.