Sunday, May 12, 2019

They'll get us, but your choice is to go as a lamb or a predator; I'll go as a dire wolf



GSE Cats and Dogs, GOT, and the Dire Wolf

 “Game of Thrones,” the 8 year old, coarse, raw, dramatic, erotic, wonderful action show, roars to its still uncertain royal climax.  (Penultimate Episode #7 is up tonight, with Episode #8 being the final, but don’t worry, I am sure we’ll see,  future “prequels” or movies likely with the same characters being performed by mostly different players.)
If you haven't realized, yet, this fantasy series has real parallels to our contemporary culture, as one CRITICAL observer suggested last week.
“Westeros politics (where GOT action occurs) and DC politics are similar in that some people treat chaos as a ladder, to use ‘Littlefinger’s*’ phrase."  
“The most honorable people aren’t always the ones who thrive politically. Power is frequently dynastic and often correlates to those with the most wealth. And big, existential threats to life are ignored until they’re on the doorstep.
(*Littlefinger--for those who don’t know—was GOT’s resident weasel, glad-hander, and frequent turncoat, until he turned once too often and NADA Littlefinger!”) 

I know I want a dire wolf (Canis dirus, "fearsome dog"), male or female, any color you can get. But, if all my readers got together and gifted me with a dire wolf for my birthday later this year, you would make me the happiest man in the DC area.
Reward me with an oversized, alert, fearlessly brave giant wolf to walk by my side--without a leash/harness--protecting me and mine from all threats (including spam phone calls, because he or she—my planned name is for the wolf is “GSE”-- would eat the phones and do away with the spammers), making the world safe again for Fannie and Freddie allowing their mortgage entities to go back to some acceptable semblance of full historic operation.
A question for my loyal reader “Anon,” is that too much to want? (Query your “fellow Anons,” whom I’ve asked to attach a number to their “anonymous” NAME choice, so I can at least sort them out?)
Hope my small fan club can get my dire wolf request right. That will permit me to stop walking my wife’s “must have it now,” six months old, 70 pound Bouvier des Flanders “puppy” (“Look Mommy it’s a bear, a bear”), who is stronger than a horse and now wears a giant cone because of his recent neutering. “Toby Junior” or “TJ,” currently crashes into door frames and cabinets and rambunctiously pulls away from all those who walk him. (Except for the very smart 11-year-old girl, my wife hired to exercise TJ after school.)
Yes, I need a dire wolf or two if you can find them for me. They only obey and instantly do whatever their owner/masters tell them!! 
Some real GSE stuff
I sit here on 5/9, Thursday afternoon, sorting through the latest Fannie-Freddie buzz, like the entrails of a barbecued goat. Drogon (?) , a fire-breathing GOT dragon or I should say “the last surviving GOT dragon?
Following Mark Calabria’s tease, saying the GSEs could be freed without Hill action (who didn’t know that!!??) and, separately, they could IPO by early next year. I am stoked. But, face it we all have been excited before and charged up with F&F optimism, only to be sent home having wet our pants and crying when nothing good followed???
Last week, too—mostly unfounded--rumors circulated of a possible Fifth Circuit decision, "any moment now," adding more GSE momentary luster and rising stock prices.** (“Navy,” please back up those posts with some facts we all can see and enjoy!!)
Calabria’s comments about not needing Congress struck me as an “I accept fate” realization about his situation, as most see it. The IPO—which the Wall Street guys will tell him ain’t that easy—would be a logical follow to his inclinations.
If the Fifth Circuit bails on the GSEs plaintiffs, that makes Calabria’s comment more compelling (since he made them a few days before any rumored court nod.) 
But, a plaintiffs win in the Fifth also could produce immensely positive results).
(**Riddle me this Senator Crapo (R-Idaho). If Fannie and Freddie are not real companies, why did both--as has happened frequently in the past--wind up in the Saturday Washington Post's list of "local gainers and losers," area corporations with the highest weekly stock gains??)
Mark Calabria and Bethany McLean
Bethany McLean, Vanity Fair author with two GSE books to her credit, and FHFA Director Mark Calabria will appear next Tuesday, May 14, at a National Association of Realtors (NAR) event in DC.
https://www.amazon.com/Bethany-McLean/e/B001K8AGQE  (Buy her books!)
The NAR wanted me to appear with Bethany, but unfortunately, I told them I would be busy in Westeros with dire wolf training class, so I suggested, instead, the new GSE kid in town.
Here’s hoping he says something particularly newsy, beyond announcing I have been named FHFA’s new “Director of Culture and Sports Training!”
It was that post or FHFA’s General Counsel--both jobs had been promised to me--but, as everyone now knows, I’m ain’t a %$#@*& lawyer or “AAFL,” so the new Director will have to be content with FHFA’s old GC Alfred Pollard...for a while. (That reminds me, I have to check the dictionary for the word “sinecure,” again.)
I’ll bet Mark Calabria knows some real sharp legal mind --not just yes men/yes women--who have a solid history in securities and financial market operations, not just as posers.
In my new FHFA position,  I will content myself with buying new agency unis and getting rid of the old ones showing bureaucrats strangling what appears to be a Williamsburg-style building!
Don’t know if this is GSE related, but when Mnuchin testifies sparks can fly
Treasury Secretary Steve Mnuchin is slated to appear (again) before Rep. Maxine Waters (D-Cal.) and her House Banking Committee, on May 22. It wasn’t an edifying or pleasant visit the last time he showed, more like a cat fight.
Maybe somebody should ask him if he thinks big banks should have statutory low-income housing goals or if the Volcker Rule should be strengthened not diluted? Nah, ain’t going to happen, but I always can hope.
What if I lend the HBC Chair my dire wolf--order “GSE” to obey her--and see if the pair working on the Secretary can produce some true policy answers or even secure a SM promise to fess up the Prez’s tax returns (“um, they’re being audited”), which shouldn’t bother the President because as we know he has nothing to hide and the Mueller report said “no collusion?”

My Calabria management hope

My premise is that FHA Director Mark Calabria is a smart guy; he has some traditional conservative views which resemble what big banks and the Right Wing have said in the past about the GSEs; and he espoused some of it, given his variety of past jobs. But he's already stated (paraphrasing) "the 2012 sweep wrong and a mistake" and I suspect he is learning not everything he thought coming is accurate or plausible from a policy perspective.
He's learning or soon will appreciate the GSEs do a hell of an operational job, a major complicated one (made worse by regulatory interference from intrusive political nerds with agendas who never worked in a major financial services business) as they manage their legacy portfolios and newly acquired securities. And he knows that—without the GSEs—there really is no long term fixed rate mortgage financing which the US consumer celebrates and wants. I suspect, too, he is awakening to the realization that he doesn’t want his DNA among the detritus of those "just kill the GSEs efforts," since those won't succeed.
I don’t see Calabria becoming a flaming GSE housing advocate but realizing they are more desirable achievements in the mortgage finance world than being defined by all of the “get rid of the GSE schemes” because Fannie and Freddie do a great systemic job and provide something no amalgam of other financial institutions can, because the banks are reluctant to take it on without Uncle Sam writing them a large cashable financial diaper. 
Again, I hope Calabria surprises and becomes an honest broker and doesn’t engage in ideological fantasies or caprice with our nation’s $10 Trillion system mortgage finance system, a potentially monstrous middle-income jobs/wealth generator and purveyor of the “American Dream,” which has been put in his care.

Maloni, 5-12-2019



Happy Mothers' Day ladies and thank you for all you do for the many people in your lives. We--and the nation--need and rely on you!!



















9 comments:

Bill Maloni said...

Sorry folks, I missed this, but...call your Realtor friends and urge them to weigh in with the POTUS, if given an opportunity?

Thursday: THE PRESIDENT TRUMP will speak at the National Association of Realtors Legislative Meetings & Trade Expo in D.C.

Anonymous said...

Bill,
With all the lawless history of conservatorship, will the investor ever invest new money in FnF. If there are no investors to invest fresh capital in FnF what will happen.

Bill Maloni said...

Anon--

I'll give you two answers, one a variation of the first and also employ a higher source, Tim Howard.

I've tried to address your point before but Tim does it better--and often in his blog--but, if the Treasury doesn't settle with shareholders and the courts provide no relief, why would any investor--WITH THE SWEEP AS PRECEDENT--put any money in any Treasury mortgage scheme (F&F or otherwise) where it can be expropriated by some future Administration, no matter the political party?

Responsible boards of directors--when presented tot hem--should balk at those super risky investments, subject to future ideological whim.

Your point has less to do with the interstices of the GSE debate and more about the INTEGRITY of the US Treasury.

That's where Mnuchin and his team should rule over any other political intrusion and where the Wall Street guys who advise Treasury and FHFA on capital raising should prevail. (I hope!!)

As I have suggested about Calabria--not in any mean spirited way--but it's important to understand the role of capital, but that's not the same as "knowing how to raise capital."

Anonymous said...

Good piece. Might want to change the date from 10-12-19 to 5-12, but good piece

JosephS

Bill Maloni said...

Thanks and I will make the correction, Joey!!

Anonymous said...

Bill,

Thanks for your response.
As for as "INTEGRITY of the US Treasury" is concerned, it is more about INTEGRITY of the Bush-Hank and Obama-Tim administrations rather the US Treasury. The problem is Wall Street investment bankers who want to promote interest of wall street at the cost of all others.




Bill Maloni said...

In your mind, between those two, who do you want to display some/more integrity??

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