Are there positive GSE times afoot??
Not sure, I’ll believe that when I see it
Mel Watt, Director of the Federal Housing Finance Agency (FHFA), the GSEs titular regulator (although most of the real power/direction/clout comes from the US Treasury) sent a dramatic letter to the Senate Banking Committee last Wednesday, endorsing a set of GSE reforms that sound very close to the Moellis (pronounced “MOLE-us”) plan and which—as the GSE scuttlebutt goes—will be reflected in the February debut of Corker-Warner 2.0 GSE legislation.
(Admin Bullshit alert!)
But, in the stop, go, red light, green light, confusing DC GSE world—when investors were hoping to hear a stunning full throated endorsement of Watt’s letter suggesting some collaboration--Treasury’s Craig Phillips spoke to Thursday to DC’s ‘Women in Housing Finance, generally endorsed some of Watt’s (surprising) recommendations, then added the standard gag producing convention, “But we want the Congress to pass meaningful reform, blah, blah, blah.”
For GSE supporters, Phillips really didn’t walk the walk and may not have even talked the talk.
Phillips absence of certainty, F&F praise, and other caveats were music to DC’s anti-GSE ears.
Those folks have no appreciation for Fannie and Freddie operations, their history, their post-Conservatorship success and current productivity (the two of them, handcuffed by the federal overseers, still are holding up the US mortgage market, which relies on the GSE underwriting standards to fend off big bank mortgage aberrance).
Few, if any, Fannie/Freddie positives come from the Hill R’s, just the pols unexplained lust to screw over the GSEs and give the nation’s big banks even more power over mortgage markets and consumers.
Shortly after Phillips spoke, “Hill sources” (read behemoth banks and their sycophants) began dampening any hope over Watt’s letter and spinning “future Senate bills will put Fannie and Freddie in “receivership” and went medieval on the GSEs in a dozen different ways (but did not spank them with a “Forbes Magazine”).
It’s times like this when I wish I could ask each Senate Banking Committee member exactly what it is about the GSEs they dislike (knowing that most of their concerns are folly and easily rebutted) and why they think anything they can conjure legislatively—once they put Uncle Sam on the hook for financial losses, as most of the new proposals do—is a dramatic, watershed improvement over exactly what Fannie and Freddie provide the nation now cheaper and more efficiently than the big banks??
(No fair using logic and rationality, Maloni!)
When you consider any federal legislation—especially one with lots of moving parts that massively uproots US mortgage markets--you have to crank in the inevitable drafting and implementation screw ups; the predictable greed as the financial buzzards seek parts of the GSE carcasses; the new rules, new players, chaos and uncertainty with anything Washington touches; plus giving the big banks even more market control—which they don’t merit or deserve—you wonder how thoughtful people can do that to a $10 Trillion market tranche of our economy?
The answer is most are not thoughtful or knowledgeable.
(In case anyone missed it the Fed has named a new financial regulatory czar to do away with all of those banks and regulations governing the banking world that it believes produce too much caution and consumer concerns.)
I also have to remind those who believe that thrusting the GSEs into “receivership” is the answer, ignore the fact that Administrations and Treasury Secretaries change, along with their policies.
If this GOP crew in both congressional chambers and the White House believe investors will flock to whatever their new mortgage guarantors are that replace Fannie and Freddie, the precedent of Trump stealing the capital and assets of the GSEs will dampen that enthusiasm if not scare the money guys far away.
I continue to believe this mid-term election year, when with all of the other craziness which can be put at the feet of President Trump and his Administration, is not the ideal time to try and euthanize the GSEs—especially when there is a $100 Billion in GSE warrant monetization or more there for Treasury’s taking if it chooses to keep the GSEs alive, even as privately owned utilities.
One last comment is that I don’t think Secretary Mnuchin knows what GSE things he wants to do or endorse, beyond the “happy talk” about working with the Hill.
If the Hill fails to enact legislation—as I suspect it will—then it’s up to him to do something or just further kick this mortgage can down the road.
Trump the SPP?
Even before the Stormy Daniels affair broke into the news, big time, at midweek, I was thinking how much Donald Trump’s presidential actions remind me of the celebrated “Swedish Penis Pump” (SPP).
Let’s see how far I can take my analogy?
Like the SPP, when confronted with opportunity, the agitated POTUS demands attention, gets red-faced, inflates himself above normal size, girds for a vigorous assault on whatever is in front of him, and then retires only to repeat the same operation the next time he is challenged.
(Note, none of this is a comment on DJT’s virility, hand size, or use of an SPP, just comparison of the SPP’s operational activation and Trump’s dealing with personal criticisms or perceived ego threats.)
I am sure you’ll tell me how close my comparison is or where I am off?
The Maloni Idea
Thanks to several of you who reached out to laud my suggestion of –someone—reviving the old report which Fannie Mae used to publish quarterly showing all of the mortgage finance activity (since and multifamily) in every congressional district and state in the nation.
I argued it would help Congress understand better what the GSEs do and see firsthand how much mortgage finance business they do “back home,” which is the piece of the nation all Senators and Member of Congress care about first.
The good news is that efforts have been made to find and implement the information—which can’t be done as easily or frequently as Fannie once did—but it can be done.
OK, I know few of "the Donald's" tweet buddies will believe the a story, which first broke big in the Wall Street Journal, that 10 years ago, “Stormy Daniels”—an adult film star-- had a brief affair with Donald Trump (am I the only one who thinks Stormy looks “mannish”?) just months after Melania Trump, his third wife, gave birth to their son Barron?
Or maybe, they just won't care, remembering Candidate's Trump boast that he could shoot someone in the middle of New York City and not be blamed.
The WSJ story continues that one of Trump’s regular fix-it lawyers made a $130,000 payment to Ms. Daniels just a month before the 2016 presidential election to keep Stormy from going public with the sordid matter and possibly costing DJT the election.
Trump's self-admitted horniness and wanton pursuit of women—which he displayed during his adult life and which he bragged about before he decided to seek office-- is so Donald, including using his personal lawyer to hush the embarrassment (an MO he’s used all of his professional career) and then to deny everything that the Journal and now other media are writing (don’t miss the Forbes magazine spanking session).
(Publish the Steele dossier, publish the Stele dossier.)
I wonder what Melania thinks of her husband’s proclivities, but of course Sarah “Biscuit” Sanders told us that DJT never said, “Grab them by the P----!”
Oh, "Biscuit" also said Trump didn’t say “Shit Hole countries.” And, if you don’t believe her, ask Senators Tom Cotton (R-Ark.) and David Perdue (R-Ga.).
The GOP—hoping to ignore that it controls all three government units (not to mention the courts)--can try to call this weekend’s federal government shutdown whatever it wants, but the “Spanking Stormy Shutdown” has a nice ring to me because of the timing coincidence.
Our POTUS; the man who would be King
Lots of one year reviews of President Trump first 12 months in office. I won’t try to do that, but I will ask—for the doubters out there—can you remember any 12 month period in our history—save when we were involved in world wars--when living in the United States has featured more hostile, chaotic, unnerving, wracked by more presidential attacks on US institutions (FBI, CIA, science, race relations, immigration, his own political party etc. etc.) as well overseas friends and allies?
It seems clear to me—from his autocratic complaints—about our legal system, Congress, cultural and civic history, DJT would like to change so very much and laments his criticism doesn’t make it so. He seeks the power of kings or emperors and can't understand why its not his.
He generates quarrels and rows, perpetuates them, and then walks away looking for others to blame. I am sure he will be a Tweet-machine during the “shutdown,” scapegoating, and raising specious issues to hide his own "negotiating with jello" responsibility.
You cannot separate President Donald Trump from any malaise associated with these matters, plus dozens of others. Did I mention Healthcare, Russia, North Korea, genial comments about Neo-Nazis, racial/ethnic putdowns, and policy by tweets??
No, Trump is not a good politician, not well read, with little understanding of our country’s Constitution, history, and—apparently—not an effective political deal maker, no matter how much he praises himself.
He has fostered an unhealthy situation and as a nation we will suffer from his obstreperous nature and efforts to tear away any vestige of his immediate predecessor...
I believe our best hope is to vote out as many of Trump’s congressional acolytes as we can and hope we can halt some of the more destructive actions when he and his congressional pose soon try and destroy our Social Security, Medicare and other people programs—in the name of federal savings--to pay for his tax giveaways and infrastructure and military deficit spending.