Monday, December 31, 2018

Could Steve and Louise be the next to leave DC???


Happy 2019 everyone and put on your big boy pads
Because I expect a hot time in the old town next year

Some GSE-related opinions.

As we’ve come to learn, nothing—or nobody-- is forever in Trump world.

DJT’s cat on a hot roof approach to policies and personnel, i.e. trying to jump from one hot surface to somewhere cooler is S.O.P (Standard Operating Procedure) for this President who pretends he is blameless and innocent amid all those executive transgressions where he is and deserves major blame. (Has he ever apologized for anything?)

Nobody ever has been totally sure what this White House’s Fannie and Freddie GSE policy is; everyone and their brother and sister analyst--including me--offers guesses not always guided by Admin direction, let alone insight.

But, we have known who the principal actor is on those matters, Treasury Secretary Steve Mnuchin.

Although, Mnuchin is prone to offer lots of fungible/generic “Fannie-Freddie speak” to whatever tune his institutional and orthodox audiences want to hear, i.e., “We want to free them and reduce taxpayer risk GSE; we want a fix and more private capital; regulation is easier than legislation, but we want a bipartisan agreement on Fannie and Freddie.”

Did you ever hear such confusing and shapeless bullshit? It’s kind of like Mnuchin himself?


 Time for a commercial: This past week’s American Banker asked how to diminish federal government risk in the mortgage market? How about dramatically reducing deposit insurance or making the banks which get it pay closer to what is the true value of the subsidized coverage they receive from Uncle Sugar???
Too novel, too creative??

Now, Stevie M. could be history because—when POTUS-dispatched Mnuchin to calm big bank nerves about shaky Trump policies--the Secretary managed to expound/freelance on “adequate bank liquidity” supplied by the Treasury and Fed which none of the bankers thought ever was an issue.
Oops, Steve—not the sharpest orator in town, either personally, politically or linguistically—IMO really stepped in it and "*&^%$#@ up," big time!
Asked to tranquilize the markets, specifically to convince seven big bank CEOs that all was fine with DJT’s bizarre Twitter dealing with China, tariffs, deficits, trade policies, etc., Mnuchin unknowingly “cried wolf” —with his dumb “liquidity” ad-lib and in effect said--“This Admin wants to assure you none of your girlfriends or mistresses still have STD’s.”

Except, until Mnuchin’s mention it, none of the financial behemoths worried about liquidity, usually a matter precipitated by panic and a rush by depositors and businesses to liquidate hard assets for cash, i.e. very major bad news for bankers.
Market response to Mnuchin’s embarrassing glaring flub, the Dow dropped the most in a day since the Great Depression or close to it. Trump rages at his dumb Secretary and covers it with some additional abuse thrown at the Federal Reserve’s Jay Powell.

Fed Chairman Powell has been doing what Fed Chairs do, i.e. worry about inflation and try and stop it before it starts.
Powell’s job is secure from our reality TV President, unless Powell chooses to bag it.

But when the President sends a third tier Administration economic voice out to tell the world the POTUS has faith in Mnuchin—who just threw gas on burning embers with the bankers-- I strongly would advise the Treasury Secretary to not foul up again and also to see that hollow WH endorsement as a signal not to buy any green bananas.

It could have been worse, the POTUS could have asked his hatchet woman “Scowling Biscuit” Sanders to send that message.

What could this mean for the GSE debate/discussion?

Clearly, it's not good to get on President Trump's bad side, since past obeisance is no guarantee of future Trump fealty.

And Secretary Steve still could survive his stumble

However, if Mnuchin gets dumped, someone else will be the chief GSE policy maker, who—unless that person is very F/F  verbose—hasn’t said very much about the GSEs and may not be as close to the POTUS, causing the market to revert to trying to read the entrails of goats to check what Trump wants to do with Fannie and Freddie.

Could a Mnuchin’s departure raise Craig Philips to #1 White House GSE guru or even Treasury Secretary, except that CP reportedly was a Hillary supporter in 2016? (I guess Jeb Hensarling is available, but he still pronounces the “t” in mortgage!)

Watch and see Mnuchin’s fate, when he and his Scottish actress wife, Louise Linton—also not considered a DC charm machine--return from their brief post-banker gaffe holiday break to Mexico's  Cabo St, Lucas (you know where so many other just-like-yours middle-class families go for a break from the harsh/cold Washington climate).

As Maloni opined, cheating is in the big banks’ DNA!!

Wells Fargo, again!

And Wells operatives and consultants are in the forefront of most “get rid of Fannie and Freddie” schemes. (Also, check WF’s connections to the “Gang of Six” featured in my last blog. Then connect the dots!)

Chairperson Maxine Waters, House Financial Services Committee
GSE fans should understand that the new House Banking Committee (as Wiki and I call it) Chairperson Rep. Maxine Waters (D-Cali.) will face institutional obstacles to her long-held support for the GSEs and, primarily, their low-income housing finance role.
Senate Republicans will frustrate her legislatively, as their House counterparts engage in guerrilla warfare (as Dems did for years), while the Administration will contest most things she champions or advocates.
As true as those matters are, don’t politically underestimate her and her multiyear Republican frustrations, not to mention the impact of her very personal spat with our President who insulted her deeply, every chance he got.
I would be shocked if she doesn’t involve herself and her Committee in what will be a House multi-committee campaign to make public the President’s tax records to determine if there are major conflicts with his past (overseas?) business partners, loans, and money-laundering, all of which have been hinted in reports of the Special Counsel Mueller’s inquiry.
It won’t be a dull 2019 in the House Banking Committee’s Rayburn Office Building hearing rooms.

Maloni, 1-1-2019

Political Cartoon


Anonymous said...

Great to finally see some balanced, informed opinion on the GSEs.

Bill Maloni said...

Is this a different "Anon" offering a compliment or my antagonist yanking my chain?

If it's the first, thank you.

If that's you, old buddy, just calling them the way I see them.

Anonymous said...

Was initially going to say Happy New Year, but can see that isn’t necessary as the New Year is starting out nicely for you. You sound happy.
Those Tax Returns are going to be very interesting. My guess is when the Liberals finally get their hands on them they will have maker egg on their face. Your hate and loathing can’t see that Trump is very aware of how this dirty game is played. He is leaving that bone out there for the Liberals, who he continually outfoxes, to grab it. Once they do, it’s going to be hilarious. Trump was planning his campaign during The Jesse Ventura years. He knew who he would be dealing with. A bunch of easy to beat lying, cheating, low IQ Liberals.
Really enjoy your blog fo the GSE insight and political humor. Just hope it isn’t effecting your health or mental well being. Both sides are dirty.

Bill Maloni said...

Anon-First happy/healthy new year to you and yours.

You are right about both sides, there are few Angels in DC. (And some left-wing D's can be obnoxious.)

But my PERSONAL/PROFESSIONAL--not political party--40 years experience is that the R's are more anti-GSE and more antithetical to what and how Fannie and Freddie produce.

Where I agree and disagree on DJT's taxes with you is I'll be shocked if the House gets them, since the demands will lead to the SCOTUS which is filled with Trump supporters. (Although, if the Chief Justice gets pissed enough at the Prez, that could break matters the other way.)

As wily and shady as the President and his accountants may be, I don't think he's been planning for years to defend the release of his tax records, with the names of all of those on the other side of his business deals as well as the transactional details. (Loans from Euroeopan and Russian sources?)

That approach would have been limiting in getting the maximum benefits of his tax positions.

I also think--just like his over-reliance on David Cohen--someone in the Trump empire could/will leak the tax docs to the NYT or other media.

That's why we all need to strap on our big boy pads.

Anonymous said...

Wow Bill -

This is a very disingenous comment no matter how crooked you may be...

"As wily and shady as the President and his accountants may be"

Is like asking Obama if he's done beating his wife and kids yet?

But, that's how liberals think so it understood.

Fact is as a conservative (not a republican) but someone who relates more to Republicans than Democrats, that Fannie and Freddie, not unlike social security, the FDIC and medicare actually play an important role in society and are worth protecting. Fannie and Freddie; provide access to affordable lending throughout the united states on the basis of (hopefully) credit worthiness; which if left to the banks as was pre-WW2 - was very regional and selective.

So, yes, while not a republican but a fiscal conservative, I am for Fannie and Freddie. Without wondering, if certain people have stopped taking their meds, or some other bank handed (w)itch slap.

Good day Sir!

Bill Maloni said...

Anon-I plead guilty to most of what you say.

But look at the R's who sound a similar message, Corker for months, Romney today; Bill Kristol for the past year, General Mattis, reported comments from the outgoing chief of staff Kelly, etc. etc.

Trump agreed to a bill out of the Senate last year which had the same package as Pelosi will put on the Hosue floor tomorrow, appropriations for all the agencies, except Homeland Security, which the POTUS supported and then reneged on when Ann Coulter and Limbaugh started to beat him up.

The dude is bad news on several levels.

What kind of leader or character is that display?

Besides this temporary blip in the economy which won't last, what has he done that's made you feel safer (broken treaties, broken alliances, nasty comments to historic overseas friends, cozying up to Russia, North Korea, and trying to play hardball against the Chinese and Iran)?

What is this Putin relationship all about???

Anonymous said...

Market loves those Liberals since they gained control of The House.


Besides the stagnant economy under Husain, which lasted years, what did he do to make anyone feel safer?
And our so called historic overseas friends? Letting them Rape, pillage and plunder the US while cozying up to Iran, ($150 BILLION) bowing to Syria and doing NOTHING with Chinese or North Korea?
Clearly, not a job for a Community Organizer, hence the PEOPLE elected Trump, once again “Hoping for Change”
And those Russians. “After my election I have more flexibility.”

Bill Maloni said...

OK, Obama wasn't a success.

Who has been raping, pillaging, and plundering the US??

But tell me how DJT has been successful and explain the Russian, North Korea, China strategies, all of his domestic wobbles and what he is doing to yours and my 401(K). (Have you ever seen more multi-hundred point stock market ups and downs, indicating chaos among professional traders?)

Trump has more of his top chosen officials walking out on him in his first two years than any President has had in two terms.

You keep feeling good and I'll worry for both of us, because what's happening to our nation ain't good.

Anonymous said...

Who has been raping, pillaging, and plundering the US??
NATO, China, UK, UN, Mexico-Canada

But tell me how DJT has been successful and explain the Russian, North Korea, China strategies, all of his domestic wobbles and what he is doing to yours and my 401(K). (Have you ever seen more multi-hundred point stock market ups and downs, indicating chaos among professional traders?)

Here are 289.

Trump has more of his top chosen officials walking out on him in his first two years than any President has had in two terms.
So what? Some of these folks were fired by Husain. If you aren’t on the same page or disagree, don’t let the door hit you.

Feel good? Are you kidding? With two on camera proven lying kooks and a getto thug going to run the country finance? If you don’t see the market reaction to the Liberal Lions taking The House then then maybe you are just ideologically blind.

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Bill Maloni said...

Anon--Know how to get rid of junk emails/comments??

Not yours man, but the type above.

Anyone else?

Anonymous said...

Sorry, I don’t.

Anonymous said...

Different anon,
Maloni your blog has become a Trump Derangement Syndrome weekly/bi-weekly rant. The movie you see is disconnected from reality. Quite disappointing to have pro-Fannie voices go so deep down the rabbit hole after Obama destroyed any semblance of trust we could have in the gov't and then covered it up with executive privilege. This is nuts. Give Trump time and see what he does, if he doesn't deliver on Fannie, we'll be against him in 2020. If he does, shut up and put up.

Bill Maloni said...

Different Anon--Thanks for reading and commenting.

But, as I've noted many times--after having written about it consistently--I liked BHO but didn't think much of his presidency.

With Trump, I also don't think much of his presidency, so far, but deeply dislike his actions persona, daily lying, ignorance of US history, arrogance, non-inquisitive nature, endless braggadocio, and constant attacks on anyone with whom he disagrees, not to mention American governmental institutions. He is not a force for world good--and that's where we live, not just in a small piece of the western hemisphere.

What you saw last November was the American people rejecting a bigotted, misogynist, whom I believe will leave office before the end of his term.

DJT does so much just to hold onto the 33% of Americans who buy into his antics and he ignores or belittles the growing majority who don't.

If he somehow resurrects the GSEs and keeps them operating in a largely unfettered manner, I will pay him his due on that score.

But, the Devil always will be in the details.

Anonymous said...


Why are democrats against national security?

Why do democrats hate the police?

Why do democrats "write laws to punish and take rights away from honest law abiding citizens" but coddle criminals?

Bill, why are democrats behaving childishly when it comes to the things important to society? Looks like they'd be for the 30 yr mortgage, unless Trump releases the GSE's after properly regulating them and getting them canceled? Why are democrats for the government taking the warrants and cashing them in like food stamps? Why do they want to take instead of build?

Why Bill, do democrats, bemoan trickle down economics and then the City of New York write a 3 Billion dollar give away for amazon to come to their city? Seems like this is heresy.

Bill, why to democrats hate America?

Anonymous said...

.....this is a new Anon, so don’t blame me!
I could also ask why are they for late term abortion, normalizing a penis in an anus, disregard Federal Laws against Marijuana, forfeiting our sovereignty, giving billions in cash to our enemies, shipping $800,000,000,000 to a communist country year over year in Trade, say one thing one year and another the next year (see Chuck, Nancy, Hillary and Husain), so angry, against free speech, rather save a Panda, Whale vs. a baby, always want free stuff, keep blacks suppressed, hate a Christians and more and more Jews and Israel, yikes, this could go on and on and on.

Anonymous said...

Bill never answers the tough questions.

Bill Maloni said...

Sorry various Anons,

I try and handle all questions; some people just don'y like my answers.

I've been silent for the past week and likely will stay that way for a few more, since I was hit by a car while using a crosswalk near my home: have gone from hospital to acute rehab center for treatment of injuries (broken bones).

Yes, I had the green.

One of you guys driving in DC last week?

Anonymous said...

Under no circumstances, in any way shape or form would any Conservative ever hope or wish I’ll will on you or anyone. Sorry to hear that and hope you heal up properly and soon to get back to your life.

dianne said...

I agree with you 100%. So far all we have out of the tRUMP camp, as far as the GSEs are concerned, is a lot of talk and no action...they just kick the can down the road every so often. I have little faith that tRUMP will be the savior of the GSEs.