Monday, November 12, 2018

My wishes for you and some GSE grist on which to chew

Happy Birthday from me to you!!

Today is my birthday--and because I prefer giving to receiving--I have some birthday biddings for you. (I’m not going to tell you my exact age, but suffice to say, based on my personal interactions with him, Ulysses Grant was a much better president and better dressed than others suggest.)

First, I want to wish you and everyone close to you good health, because without that your happiness and joy will suffer.

Second, I urge you NOT to be passive if you are feeling disappointed with your life situation. No matter the reason, if satisfaction is not present, then work to change those circumstances.

Just trying should make you feel better and succeeding will make you feel fabulous.

Pursuing success or positive change doesn’t occur because another day passes. You need to work at it.

End of Grandpa Maloni’s happy birthday geezes for you!


Last week there were unhappy or offended readers when I wrote (before the Nov. 6 elections) that Maxine Waters (D-Cal.) would be an asset to the GSEs, if the Democrats won the House and she assumed Chairmanship of the House Financial Services Committee.

The D’s did and Waters likely will. So, deal with it folks.

Most of those who like to talk about the GSEs--but are churlish or offended when considering the implicit politics-- fail to understand that everything about the GSEs is leavened with politics. That’s been true for most of the last 35 years and certainly was accelerated in the past decade when Hank Paulson fabricated the need for “Conservatorship” in 2008.

If all it took to win inside the Beltway, was facts, logic, and success, Fannie and Freddie still would be independent, shareholder-owned corporations, serving the nation’s low, moderate, and middle-income homeownership needs in every community in the nation, not stuck in Treasury/FHFA dungeons suffering an illogical deprivation of operational freedom and hefting a “revenue sweep,” capital-starving debt millstone that never can be amortized or reduced!


Because Judge Royce Lamberth—after being lied to convincingly by a legion of Treasury officials and government lawyers—once said so!

My faultfinders can wax eloquently about the courts and the lawsuits, most of which save some recent decisions were throttled "inutero" by the original Lamberth decision, which claimed the government can do anything it wants to the GSEs, no matter how perverse and abusive to the companies and their former shareholders. (See questionable GSE debt service forced on Fannie and Freddie which NEVER can be paid back and—by design—is attached to them forever.)

Part of my view—and I guess where I diverge from my critics--is that I believe it always helps to have political friends in high places, as I hope Fannie and Freddie have in Rep. Maxine Waters. (The absence of same certainly screamed loudly from 2008 through today.)

Having not engaged directly with her since I was an active Fannie lobbyist, I can’t say that Waters always will be GSE rock solid, but that feels more accurate given her past GSE-supportive actions and because—now--she has the political station to influence and produce.

Again, last week my readers questioned how Waters could help the GSEs, if the President deeply dislikes and disrespects her—as his past comments suggest--and the Senate is even more firmly in GOP hands?

My response? If faced with disrespect, ignorance, and efforts to isolate her, I believe that Waters--as would any Committee head worth their salt--will force or extort her way into those issues and put her unique stamp on them.

The skeptics ask, “How can she do that?”

I reviewed for them (and now for you) a simple description of her Banking Committee’s core jurisdiction.

“The United States House Committee on Financial Services (also referred to as the House Banking Committee) is the committee of the United States House of Representatives that oversees the entire financial services industry, including the securities, insurance, banking, and housing industries. The Committee also oversees the work of the Federal Reserve, the United States Department of the Treasury, the U.S. Securities and Exchange Commission, and other financial services regulators.”

It would take a very deft chief executive, which Donald J. Trump is not and Treasury Secretary Steve Mnuchin, very slowly, still is learning to be--to pursue any Administration-desired policy or spending initiative, which falls under the very broad issues in the Banking Committee’s purview while simultaneously hoping to ignore or isolate Maxine Waters. 

In 2019, for the first time in 8 years, the House Banking Committee won’t be “your father’s Oldsmobile.”

Think of the Consumer Finance Protection Board and the Community Reinvestment Act (CRA) favorite whipping boys for the banks and most Republicans and how Waters’ Committee will treat those items and the financial forces which assail them. (As I wrote previously, I believe the CRA is toothless and needs major enhancement, like the big banks being given affirmative numeric housing goals not gauzy generalities.)

Plus, the House Democrats now have taken back from the R’s the basic authorization role (doling out and approving Trump agency spending), oversight authority, subpoena power, and endless opportunities to conduct hearings without any prior approval by the House Republicans or the Trump Administration, even if the Senate goes off on a pro-Admin odyssey.

Ergo, I am pretty confident--beyond the statement Waters issued the day after the elections and which I printed in my last blog’s comments section--the Committee won’t be ignored or left out of any issue in which Chairperson Waters wants to stake her efforts, including GSE legislation or White House GSE executive orders.

If you are a Fannie-fan or a Freddie-fan, none of that should worry or offend you; quite the contrary.

On the other hand, if you don’t care for assertive women or aggressive Black women wielding power—and you still are worried about caravan of rapacious invaders, infiltrated by Muslims, hurtling toward our southern borders (whatever happened to that Fox News story and its POTUS induced fear?)--strap on your seat belt because the room may start rocking.

When all the recounts finish, there will be two dozen or more new female Democrats in the House—many of color and various distinctions—joining the returning now Majority party!

Maloni, 11-13-2018


Glen said...

i think maxine is pro admin reform recap where preferred do well

Bill Maloni said...

If you are right--and I have no way of challenging that--the key is getting her invested in the behind the scenes negotiating process so she can shape what's happening not just rubber stamp it.

GSE Reform said...

What has been Maxine's history with the GSE's?

Anonymous said...

The only barrier of adm reform is Republican Senate and House. Maybe Watt too.
Not Brown, Schumer, or Maxine.

Bill Maloni said...

GSE Reform--

Thanks for reading and writing.

Again--as noted--I've not had any direct contact with her in years, but her public comments always have been positive and oriented to keeping them active and having them do more (my shorthand of that is more affordable ownership and rental activity), which you have little discretion to do if you are in Treasury/FHFA chains.

We will see.

Anonymous said...

The cartoon from the Amazon Post is hilarious. Liberal Democrats, so much concern for female voters, Blacks, Hispanics, Middle Class and even folks with no class.

Remember this?

On August 20, 2018 Bill Maloni said...‬

‪For several of the same reasons, I would support Attorney Michael Avenatti in a D presidential primary‬.

Bill Maloni said...

Hey, good to have you back--regardless of your class or lack thereof--I thought I scared you away.

If that was my quote, yep, I'd still like to see Avennatti on a state or national D ticket, maybe along with CNN's Chris Cuomo, for many of the same reasons 40% of the nation like DJT.

Trump's brazenness and cheek are surface appealing, even when he displays no understanding of our nation's history, Constitution, laws, culture or its government institutions.

But both Avennatti and Cuomo (again, not Governor Andrew but Chris) do have a non-traditional appeal. I am curious if women voters find them intellectually and physically appealing.

I certainly wouldn't want to be the rightwing troll who may have made up this assault allegation about Avennatti?? The latter already has warned that person, "I'm going to come looking for you" (legally)!!

Simran Shah said...

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Anonymous said...

Yea, anyone who challenges a Liberals hypocrisy is called no class, racist, bigot, etc., etc., etc.
Well at least your guy is innocent until proven guilty.
Why leave? Scared of what?
I am really here for the F&F info but as most papers the cartoons are on the back page.

Anonymous said...

Bill, I admire your prediction on legal battle outcome.
So far we have only half an initial victory in DC Court and half in the 5th circuit.
Others lost to my surprise. Especially 3rd Circuit. It was the worst.

Could you speculate on the administrative reform? What, when, and how?

Thank you.
Mark, Gaithersburg.

Bill Maloni said...


Thanks for asking. I can't add much more insight to what others already have speculated and what I suspect you know.

I do think the WH (Mnuchin) has control to drive this result, as soon as it gets out from under whatever hassles/pressure the Trump Admin feels.

But, bear in mind those seem to change daily, therefore tough to predict timing.

Nobody knows just what the Admin would want in a "GSE reg reform package" and there remains the unsettling (for them) matter of the government's 79.9% GSE ownership, which depending on what --if anything--Treasury does, could bring a new $100 Billion or so into Treasury (taxpayer's) coffers.
I believe the WH house would be wise, just putting together a regulatory package and moving, because once they start securing "stakeholder support," it comes close to trying to get Congress to agree on something and that been a dead horse for years...and that was before next year's House political changeover.

The Moellis mortgage reform plan has lots of pluses and has been chewed on--positively--by lots of interests, but Tim Howard continues to believe Moellis' GSE capital levels are too high--mooting the plan's effectiveness--and his opinion will have supporters, possibly among House D's when they become the Majority in January.

A successful GSE reg reform should contain:

-- honest capital requirements based on the risks Fannie and Freddie actually incur in their unique market niches (including their past 10 year loss experience); they are not like banks--which have multiple and varied financial risks--and shouldn't be capitalized as such, as so many seem to want. There is an increased cost of mortgages with excess capital.

--nothing which gives the nations' largest banks control over the US secondary mortgage market;

--GSE single family and multi-family affordable housing goals on all market participants, including the big banks, Home Loan Banks, and small lenders;

--And, given the abusive and ludicrous treatment of GSE shareholders, some regulatory mechanism--or request for collateral statute--to convince future shareholders their equity can't be ravaged on political whim. (See 2008 Conservatorship and 2012 PSP changes).

Bill Maloni said...

To all---

Have a healthy, happy, wonderful, and family-richh (as possible) Thanksgiving.

I'll blog again after the holiday.

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