Sunday, February 25, 2018

GSE Stuff, Mueller, Russia, the NRA, and President Donald J. Trump

Some GSE Notes, plus my observations about our President!

I keep looking for some commonality among the sparse GSE-related doings, as I try to analyze what's going on in Washington both to explain them from my historic perspective and even to hazard a guess to future developments. 
But it is tough finding positive Fannie/Freddie things, let alone loads of cohorts in DC. 
Investors Unite does an excellent job, the small lenders (CMLA) and the Independent Bankers are stalwarts, plus the low-income housing community we have helps, but we have few foot soldiers, let alone corps leaders. 
With almost no GSE advocates beyond those mentioned, ones who read and exalt Tim Howard’s superb blog, and a few folks who say nice things in response to my posts, Fannie and Freddie allies are not numerous. 
We’re a small group.
Doing my best Johnny Carson, “How small is it you ask?” 
Well, Tim Howard and I planned to host a joint meeting of all of our GSE fans. We figured two discarded, but contiguous public telephone booths near Capitol Hill would suffice for the meeting, plus permit sufficient space for vendors. 
We decided one Dunkin' donut and two cups of coffee should cover all our guests’ food needs, and the public restroom in nearby Union Station could handle the toilet needs of all of our participant. 
Our group is so small, if he drops in, we expect Sen. Bob Corker (R-Tenn.) might be the tallest attendee. 
(Lame humor attempt. No, Howard and I are not doing such an event.)  
Seriously, I see little near term positive for Fannie and Freddie, except the continuing obtuse nature of our opponents for which we all must be thankful because therein is where we have hope. 
Last week 127 mortgage bankers, from across the country, wrote to congressional leaders, rhetorically wringing their hands exhorting lawmakers to write powerful “kill the GSEs legislation” (my terminology not theirs) before either Federal Housing Finance Agency Director Mel Watt or Treasury Secretary Steve Mnuchin acts through executive fiat on their own version of “GSE reform,” which scares them” 
Legislation ain’t happening—with uninformed Senators and Members Congress tripping over their ancient/dogged biases--nor will GSE fans get much help from the courts, including the SCOTUS, which all can hide behind the “Lamberth opinion.” 
It appears Judge Royce Lamberth decision's delivered without having all of the relevant facts--denied him by our very own Justice Department--gave subsequent federal judges all the cover and justification they needed not dig into the GSE issues and accept the DoJ falsehoods. 
Also, from Mt. Olympus or wherever the Wall Street Journal‘s editorial board hangs outs—we heard thunder, lightning, and anguish as the heavens opened up—and the fearsome (and now maybe fearful?) WSJ opined in its predictable anti-GSE way—sounding like those MBA members, the trade association, and its President and CEO David Stevens--worrying that the Trump Administration (really Secretary Mnuchin) might act unilaterally and support the GSEs. 
All that did was make me root for the WSJ’s and the MBA’s, fears since it would cause the WSJ editorial staff gastric distress  (keeping in mind my late mother’s curse on all who crossed her or her children, “May they need kaopectate for the rest of their lives!”).  
After reading that MBA letter and the WSJ’s editorial lament, I screamed, “Yes mortgage bankers. From your fears to God’s ears, let’s all root for Mnuchin and/or Watt rising to the GSE rescue!” 
I think that either of those two officials--Watt acting on his belief in “access and fairness” and Mnuchin on his knowledge of how securities markets work (not to mention the $100 Billion plus he could recoup for the federal government)--would do a better, more efficient, less disruptive, less biased, open minded, and constructive job for the nation’s mortgage markets and homebuyers, than anything this Congress could design on their best day. 
I sure hope the MBA and the WSJ are onto something with their anxieties and horrible dreams of Treasury or FHFA action, because--as I’ve written before--I think that’s the best near term hope for Fannie and Freddie, not some GOP blessed Fannie/Freddie literal statutory execution. 

A Bit More Fannie and Freddie 

--Adding to possible FHFA mystery steps--an agency which can’t do much without blessings from Treasury—is the agency mandate to the GSEs to increase their respective Returns on Equity (ROE). That regulatory ask often—but not always—is a call for more revenue. 
That should cleanse anything lingering in the MBA’s bowels, since—simply—if FHFA wants the GSEs to generate greater income/revenue by raising their respective prices, it also suggests someone wants the GSEs to maintain their operations. That prospect flies in the face of the MBA’s destroy the GSEs position and should make those 127 mortgage banking letter signers consider kaopectate, too. (See above). 
--Does anyone think that well-known former Obama anti-GSE source, recently seen visiting several Senate offices—who is not registered as a lobbyist—is working on the very positive  “Moellis Plan,” which would free Fannie and Freddie and let them bloom once again?? 
I doubt it. Chances are that Jim Parrott’s Senate hob knobbing again with the Corker-guys with whom he worked on the earlier “give the big banks what they want, but kill Fannie and Freddie proposal.” If that is what unregistered lobbyist Parrott is doing, is he going to come clean with the Secretary of the Senate, report himself to the Ethics Committee, or will any of those GOP offices and staff blow the whistle on him??? (Don’t hold your breath.) 

Mueller, Russia, Putin, and President Trump????????? 

Special Counsel Robert Mueller and his staff last week filed 13 indictments against Russian individuals and institutions for interference in the 2016 US presidential election, backing his charges with very precise, detailed, and copious evidence showing exactly what the Russian perps did, starting two years earlier in 2014. 
Those details describe an astounding invasion and threat. The President’s indifference confuses and astounds me. 
I’m not talking about possible collusion with the President’s campaign--that issues hasn't been addressed by Mueller, yet--but just the Russian boldness and audacity (which DJT should combat, not accommodate). 
The President, who has been squirming, deriding, and stiff-arming the Mueller work as “fake news and a hoax,” first reacted to Mueller’s latest indictments with a very predictable Trump position (paraphrasing), “Yes, but there was nothing saying my campaign colluded with the Russians,” as if as elected leader of the United Sattes he had no stake in honest American elections not poisoned by foreign meddling. 
Really, really?? 
Mr. President where was/is your concern that an overseas adversary government--historically and unchangingly antithetical to US interests and institutions--sought successfully to infiltrate our electoral process, undermine its validity, and insure Russian political and societal objectives, including elect you President?? 
Where is your personal and national anger, your patriotic outrage and fury, Mr. President?? 
Except for some angry tweets accusing everyone but the guy looking back from his mirror (which is Trump S.O.P.), the President of the United States said very little, beyond trying to blame it all on Barack Obama. 
Mr. Trump, do you think your bro Putin had anything to do with this matter or any of our international headaches? 
This week, lamely and late, the President finally asked AG Jeff Sessions to look into future implications of this type of invasive election skullduggery. 
Prior to that Sessions request—despite the world knowing Russia was guilty of a variety of mischief and dishonesty--Trump did nothing pre-emptive, asked nobody at the FBI or any of our national security agencies to protect the integrity of this nation’s future elections, with an important one coming up in 10 months. In fact, he claimed he believed Putin when the Russian thug said his country and its spy services did none of these things. 
How do we know DJT did "nada" to head off future election tampering? The heads of each of our national security agencies, publicly, testified to that sorry fact just days ago in the Senate. 
Why does Trump “turtle” for Russia and its political hooliganism? 
In addition to the Trump family’s wet dream of doing massive hotel building and development in the former Soviet Union (whose leaders still act just as their Tsarist and Communist predecessors did), it’s likely the Russians must have something on DJT which explains his dramatic reticence. 
Trump the businessman--who still refuses to share with the nation all of his tax returns and their details--may have started borrowing money from Russian banks and oligarchs, when his financial fortunes ebbed in the past. He may even have engaged in the massive money laundering those Russian sources, banks, and officials required and still need as they sought to launder and hide literally billions of dollars. (Big US real estate purchases via Trump Inc. could hide that, too.) 
Remember Eric Trump telling Fox News, “My dad’s favorite color is green.” (Yes “green,” more than red, white, and blue.”) 
What else—besides the reported “Steele dossier pictures”—can cause our current President to be the only US President since the end of World War II to so compliant/soft on Russia and its leaders? 
He still won’t mention Putin/Russia etc. or their election interference. Before the Mueller 13 indictments, he refused to extend stronger sanctions on these same Russian officials after the Senate and House—with record bipartisan votes—directed him to do so. But, now he has evidence, confirmed by his Justice Department appointments. 
As you think about the Mueller 13 indictments look back at all of the Trump statements and accusation trying to steer the nation away from that finding and the extending possibilities. 
Trump: “It’s not me. It’s the guy behind the tree” (with all due respect to former Senator Russell Long (D-La.).

Washington Post editorial on preventing Russian or other foreign election interference.

Marjory Stoneman Douglas High School, Parkland Florida

There is very little I can or will add to lament the horrible massacre of those 17 students and teachers and the wounding of others. 
As with most of these ordeals, it brought out the best and worst of us. 
After offering his "thoughts and prayers," I am glad someone suggested the President meet with the kids and their parents, as well as those from other school murder tragedies, even if DJT had to rely on WH-provided notes to help him remember to convey compassion. 
But the time for words will shortly pass and the craven NRA-butt kisser ("the NRA leaders all are patriots," DJT said this week) will be confronted with congressional demands for action to make these war weapons more difficult to acquire for anybody, but certainly youthful buyers. 
Well see if our President walks the walk then, or lets the NRA and its allies back him down? 
In the meantime, Trump can show leadership and maturity in telling the world (and his Trump tweet mob) that the Parkland kids are not paid actors or traveling agitators for hire, currently a favorite GOP meme. 
The President should mirror the grace of Senator John McCain, who--when running against Barack Obama in 2008--was asked by a follower "if Obama was an Arab?” 
A resolute McCain, on national TV, said, "No, ma'am. He's a decent family man [and] citizen that I just happen to have disagreements with on fundamental issues and that's what this campaign's all about. He's not [an Arab]."

That’s the character a leader shows.

Steve Sack - Minneapolis Star-Tribune

Maloni, 2-25-2018


Anonymous said...

Bill, would you think the best time for Mnuchin and Watt to do admin reform is between election and new congress starts n Jan 2019?

Bill Maloni said...


If you mean "best" as in most optimal, I would say sooner rather than later and take the wind from the sails of opponents and let public, stakeholders, media and others discuss the benefits.

However, by waiting until later in the year, they also reduce the time for someone in Congress to try and attach a "stop exec/reg GSE relief" amendment to a "must do" bill.

The predicate--because both have said it--must be Congress tried--and failed--which may mean they would need some losing effort in one or both of the Banking committees to have come and gone before they (again, either Watt or Mnuchin) acted.

If I knew for a fact "it" was going to happen, tactically, I would say...wait.

Anonymous said...

Pinto and Walliston have some new idea for admin reform to gradually kill GSEs: gradually shrink their business by reducing cap. This approach takes a long time. It would hurt housing market and economy. The two dudes don't care.

They don't realize their real opponents are millions of home loan borrowers satisfied with low rates (enabled by GSEs). Stupid? They have to work to earn their paychecks.

Bill Maloni said...

I know both guys and disagree with them.

They're doing the opposite of what I try to do--without their soap box--which is to argue why the GSEs and how they operate are a huge asset to the nation and superior for all players in the mortgage finance chain, builders, Realtors, lenders, and especially, the American consumer.