Sunday, May 5, 2019

Will one of you #$@&^%*, please, just act??




“You first Mr. Secretary; no, You go first your honors,”


GSEs, GSEs, GSEs, blah, blah, blah. Steve Mnuchin, for two years now, has been saying "free the GSEs!"
When is it going to happen, man?
Only the very politically naïve believe every single individual at the reputed “independent institutions” in the nation’s capital, like the Fed, the Supreme Court justices, or other judicial officials don’t read the newspapers or follow political events and developments.
Not in this town, because where you sit is where you stand.
In my last blog, commenting on when we might get a GSE decision from the en banc Fifth Circuit judges--which could turn upside down the 2012 Treasury cash sweep of all future Fannie and Freddie profits--I admitted that nobody knows the court’s schedule, let alone inclinations.
Also pending is a GSE case before US Judge Margaret Sweeney, which reportedly now has her court assistants putting tiny mirrors under the judge’s nose—just check if she is breathing--since this case has been pending for as long as GOT’s “Night King” has been threatening Westeros.
(Apparently, just last week there were reports of DC area 7-11 stores selling cartons of milk with Judge Sweeney’s picture on them!)
OK, those were(bad) jokes!
However, the delays the two legal actions are experiencing caused me to wonder if the judges in both cases are waiting for the Administration to move with its “GSE regulatory fix,” which reportedly has been in percolating stage for a dozen or more weeks and now is bouncing around between FHFA’s Mark Calabria, Treasury Secretary Steve Mnuchin, and Larry Kudlow, the latter writing the memo inserting himself in the review of the proposal? (I am sure that fact just made Mnuchin’s day.)
I’ll bet every big trade association has seen/heard some of the WH plan, which is probably why they are so twitchy!
BTW, the longer these non-judicial delays, including whatever is holding up the WH, only plays up their embedded  conflicts with  traditional GOP and Right Wing themes and what the latter hope to get out of a future mortgage finance system. Not that anyone seems to care what is best for the American consumers! (Shhh, it rhymes with "GSE.")
Then there’s this reality, the federal government must settle with GSE shareholders since the public’s junior preferred stock represents a “contract” with federal government.
 Any Treasury Department hope to create new “mortgage guarantors” to compete with the GSEs—however Treasury would do that—begs the questions of why would any sane investor put her or his money up when Treasury in 2012 aggrandized all future GSE earnings from Fannie and Freddie shareholders, without any forewarning or compensation?
That’s a lousy precedent to draw fresh money into the mortgage market through some banker’s and mortgage banker’s wet dream to abolish the GSEs.
Flash to the future from Secretary Mnuchin: Please Ms. And Mr. Investor, forget all about Hank Paulson, put your cash in these new whiz-bang thingy do’s and, trust me, I never will take your money from you, honest!
Keep that in mind when the anti-GSE TBTF bank crowd clamors for more private capital but also wants new federal guarantees for their own (which are not truly private) mortgage securities, because it’s a (not!) commercial bank standing behind that bank PLS. (A little more on that point, later.)
Riddle me this, guys, how would elements of this new bank legislative demand reduce the government’s “at risk” profile in the mortgage market?
Oh, I get it, those new Uncle Sam bank benefits (see the latest “Crapo principles”)—just like the bargain basement FDIC insurance it gives the depositories—can’t be considered a federal benefit, especially when the banks say, lamely, but “we pay for it?!!” (The last time I checked, about $7.5 Trillion in bank deposits was being protected by a $100 Billion FDIC fund!! Talk about leverage.)
Where I am headed with all of this is to suggest maybe this WH loves the GSE current status quo, feels no need to change anything, because its total focus is on the 2020 election.
Hurry up Fifth Circuit and/or Judge Sweeney, nothing but a positive plaintiffs’ decision could be big enough to move these Admin guys from their GSE reform odyssey taking real action.
But then—think about it--maybe the courts are waiting for the White House and the Trump Administration is waiting for the Courts, to provide cover with the Right, which may not like Treasury’s plan to privatize or recap and release Fannie Mae and Freddie Mac, about which I’ve often written, since nothing done in DC would surprise me.
Christopher Whalen, GSE Critic
I don’t often agree with Christopher Whalen, a dedicated “only in God’s lifetime” GSE critic. In fact I sharply disagreed with his ignorance/feigned avoidance of how deeply the nation’s banking system is riddled with federal bank subsidies.
But his article did contain this prose with which not only do I concur but I offer because it makes extremely difficult the task of those who would replace Fannie and Freddie with one of their “reform solutions.”
“The fact is that the GSEs are creatures of Congress and are de facto backed by the full faith and credit of the U.S., regardless of what the law may say. Welcome to Washington. Mess with this convenient fiction and liquidity in the secondary mortgage markets will be vastly reduced. Without the subsidy provided by the federal government, the revered 30-year mortgage will likely disappear as the market for secured mortgage finance evaporates. As the old saying goes, be careful what you wish for Secretary Mnuchin — you may get it.”
Thank Chris for an effective warning and reminder—from a GSE opponent--you offer the pols and DC stakeholders of what screwing with the current system could produce.
And—having little to do with Whalen—the political reality for the GOP and its allies to remember is that you can’t legislate or regulate memories away.
Until Treasury Secretary Hank Paulson, seeking to implement his ideological scheme to neuter Fannie and Freddie--and serve the TBTF institutions, while claiming he was protecting and preserving the GSEs—harassed and blackmailed their boards to accept his $189 Billion ersatz solution 11 years ago--neither Fannie or Freddie ever required emergency federal financial support (and, as the courts now are haggling over, maybe didn’t need it in 2008!!).
The GSEs—which printed the factual law at the time “not the full faith and credit of the federal government” on every debt instrument or security-- covered all of their own losses from earnings before the infamous Paulson Shanghai.
I may be repeating stuff said before but it never hurts to separate the honest facts from the storm of distortions from the big bank, anti-GSE crowd since they keep spreading all town, along with a lot of campaign cash.
For the Record:
In a previous blog, which I think I nailed, I suggested if Donald Trump’s two Federal Reserve Board candidates—Herman Cain and Stephen Moore-- not make it, Sarah Palin, with her rifle rack in hand, still is available for Fed service. Especially, if DJT just wants someone to follow his lead and screw up the Fed’s culture and works.
Well, with Trump’s recent “let me attack the Fed through idiot appointments” now behind him, several new names have cropped up who would support the President on anything he wants and are deserving, since he self-proclaims that he  nominates “only the very best.”
Highlighting my list of colorful potential Fed Board candidates are: losing Alabama Senatorial candidate Judge Roy Moore; former Arizona Sheriff Joe Arpaio; current Alt-Right fuhrer Richard Spencer; front line white supremacist, anti-Semite, and ex-KKK Wizard, David Duke; for balance there’s Louis Farrakhan, not a white supremacist but certainly an anti-Semite, ready for a Faustian DJT appointment deal; and there’s both Marcus Bachman, former Rep. Michelle Bachman’s husband (if he will give up his lucrative practice urging his clients to “pray away homosexuality” or as they call it “Pray out the Gay”--and former Congresswoman Bachman herself, would be good, since she served on House Banking and once visited a bank. Plus, if the Prez chooses Palin, Ms. Bachman  could team with the former Alaska Governor as a cabaret pair, “Fed ditzies for Trump;” last, there’s Ronald McDonald, but he has a good paying day job and gets to wear a neat outfit!
Since all Fed Board nominees require Senate approval, it shouldn’t be difficult to prep any of those “best” folks on the nation’s financial services system, US monetary policy, and the role of the Federal Reserve and related issues, since all would represent blank slates.


Maloni, 5-6-2019


29 comments:

Anonymous said...

Where I am headed with all of this is to suggest maybe this WH loves the GSE current status quo, feels no need to change anything, because its total focus is on the 2020 election.
Did you read the memo from the Administration? The one from two months ago, not the one from eight years under Husain.

Maybe nominate some of your favorites like the creepy porn lawyer to the Fed since he won’t be running for President?
Your hate is not healthy for anyone. Just try to breathe, relax and enjoy the Winning!

Bill Maloni said...

Anon--Good to see you survived the Derby and all the rain, if you live in the east!!!

You forget, possibly, that before my 21 years at Fannie, I worked at the Fed, when Paul Volcker was Chairman. It was an is pro-bank--which was possibly one of the reasons I was hired (coming from the Home Loan Bank Board) because I spoke "houser"----but it's independence is
should be sacrosanct and not cheapened by this President.

Tell me my friend, who is going to listen when you remind the world that DJT's Admin ignored Kudlow's memo?

Read this blog, deeply and carefully.

Who--besides the low-mod advocates--on the Hill, downtown, in the media is going to lament, "Oh Mr. President, you asked for a plan to pull the GSEs from the government but didn't follow through or have time, or it wasn't a priority??"

Wake me up when that cacophony begins, so I can applaud the principals?

Will you be among them or will you still be giving them credit just for sending a memo?

Who on my Fed Board candidate list do you like the most? Remember you have two choices.

Anonymous said...

Enjoyed reading Good points about GSEs but not about Trump and GOP.
You should stop mixing up things that do not mix well.

You criticize banks but you are defending unelected and unaccountable Fed, a repugnant institution controlled by private bankers. Fed may be an independent institution but it can not be a adversary of the administration. Fed can not pursue policies that contradict administration policies.

The main reason why your favorite party/candidates lost elections is they lost trust with people. Right messaging helps but when one uses right messaging to fool the people, they lose the trust.




Anonymous said...

"but it's independence is should be sacrosanct and not cheapened by this President."

Bill,

LOL, Fed's independence is not sancrosanct. It is another Gov institution that should be working along with administration to serve the people. As hinted by you in the article nobody in the swamp is independent, so nobody or anything is sancrosanct. All Gov agencies and institutions should be subject to checks and balances.

Fed is a legacy deep state institution created by the private bankers to control the economy without the checks and balances. Why in the world, unelected and unaccountable Fed be independent to make decisions that affect the economy and that too against elected executive policies.

If there is a merit to having such independent institutions and agencies in Gov then Constitution should be changed to include them along with three independent branches of Gov. These extra constitutional independent institutions are creations of judiciary another subtle or implicit political branch of Gov. BTW judiciary is the biggest flaw of the constitution and it is showing up every day with inconsistent and paradoxical case laws and interpretations.

Case in point is unaccountable FHFA conservatorship and its use of 4617(f), is direct result of such inconsistent and paradoxical case laws and interpretations by the flawed judiciary. You should ask Mark Calabria who co-authored the HERA does not agree with judiciary.

Bill Maloni said...

Anon 1 and 2 (if you are different folks)--Where should I begin???

Mark Calabria, who is he and what has he done?

"Stop mixing things that don't mix, well."

"All government agencies should be subject to checks and balances!"

We have seen very little checks and balances in the past few years, except when the heat builds on DJT's excesses and they blow up in his face. (I'll save you the entire list, except to ask, how are those Wall-China-North Korea-Middle East- Saudi-Russia deals going
The concept of 10 year Fed terms PRECISELY is to make the Chairman's term longer than any President's, since all presidents try and lean on the Fed, some smoothly and some crudely.

I've laid off this President because so many others are on him, as his behavior warrants.

Finally, please don't tell me what to put in MY blog.

That's my call, your is to not read. But, please continue to comment all you wish and I'll try to respond.

Anonymous said...

Thank you for blogging! As a long time investor in Fannie and Freddie, if recap and release happen by way of ending the NWS via the courts or admin action, what do you think Common (FNMA) will be within 1-3 years from the NWS ending? Do you think it's smart or foolish to invest in Common shares? Or do you think one should be all in on Jr. Preferred or none at all?

Thanks!! Keep up the great work!

Anonymous said...

"That's my call, your is to not read."

Bill,
Thanks this is a obvious reality that all know. The question was not about what you want to write but about how you justify what you write to be relevant.

People read blogs for new information, analysis, insights etc...

Then it becomes question of maintaining the creditibilty of ones thoughts, analysis and insights.

If you do not care about what your blog readers think, then good luck to you, people will just ignore and move on.

Anyway I may still visit your blog if you write about interesting topics.



Camaloni said...
This comment has been removed by the author.
Bill Maloni said...

First Anon--

I can't and won't go there, simply because I cannot predict the future.

But, I own both P&C GSE shares and haven't changed that profile.

Second Anon--

Of course, I care about what my readers think.

I don't justify what "I think is relevant," but just to give my perspective about whatever GSE is happening, just did happen, or could happen, i.e. like the court cases.

IMO, a blog if both information and an opinion piece; I also strive for humor, too. If I want just "facts," I'll reproduce the Wash Post, NYT or the WSJ.

In this instance, the Fed is crucial to the nation's financial and banking operations. I had written previously about Moore, Cain and the President's efforts in this unsavory attempt which--it seems--they fell flat on their faces.

My humor, which seems to have stirred some readers, was my speculation about who on the Right the Prez could turn to next to fill his Fed embarrassment Jones. ("Jones" is street talk about a desperate need!)

There are better candidates out there.

I'll keep your views in mind and thanks for reading.

Anonymous said...

"My humor, which seems to have stirred some readers, was my speculation about who on the Right the Prez could turn to next to fill his Fed embarrassment Jones. ("Jones" is street talk about a desperate need!)"

Thanks, I like your style of writing and also humor, i have no problem with that.

Bill Maloni said...

Anon-I appreciate your good taste, sense of fun, and willingness to state it.

The irony of my critics being upset because I give back a little of what a seriously flawed DJT does to all of his opponents, making up demeaning nicknames, eviscerating them over their heritages, religion, political history, financial status, ethnicity, etc. etc., also suggests to me a lot of people who like to give it but can't take it!!

Anonymous said...

Bill,

Many of your blog readers are FnF shareholders who expected fairness and justice from previous Obama administration and Dems during long 8 years. But Obama administration and Dems disappointed these shareholders with decisions to wind down FnF with continued conservatorship and NWS. Shrareholders feels Obama administration and Dems favored wall street bankers at the cost shareholders and other stake holders.

On the other hand Trump administration is taking steps to end conservatorship that will benefit all the stake holders. All of the Trump appointees favor ending conservatorship where as most of the Obama appointees favored wind down of FnF with continued conservatorship and NWS.

There are many more reasons why people favor Trump despite some of the negative things you mention. Obama administration and Dems had golden opportunity to end conservatorship but they wasted the golden opportunity.

These are the some reasons for which these people like what you write about GSEs but not about Trump.

Dan said...

Bill, you've got a point. Judge Margaret Sweeney should have come up with a decision on whether or not to act on the government's motion to dismiss by now and the fifth circuit is up to or close to a time limit on on when it usually comes out with an enbank decision. With some of the illogical and irrational decisions that have been made by the courts so far in the GSE cases I often wonder if the executive or legislative branches of our government have some kind of hold on our supposedly independent judicial branch of Government.

Bill Maloni said...

Anon--You make solid and valid points.

I feel as thoughI dumped both on BHO for his presidential shortcomings and his Administration for what it did to the GSEs.

I think/thought Obama is a good and decent man. I don't think the same way about Donald Trump and I've written that, too, often.

I've also written that if President Trump succeeds in revitalizing the GSEs, where others have failed or didn't try, I send him my kudos and acknowledge his leadership, if it happens and he's just not forced into by a favorable GSE court decision.

But, until that happens, seeing all of his lies (up to 10,000 ?)and promises that have been broken or just ignored, I keep those kudos to myself.


*******************************************************************************************

Dan--Go back to my near opening blog line about " everyone in DC reads the newspapers....!"


If the courts didn't' feel some trepidation, the appropriate ones should have reached pro GSE conclusions and announced them.

Sweeney and the Fifth Circuit are the two I mentioned.

Based on a campaign which still is being carried out for the benefit of the big banks, which spend millions in congressional campaign contributions, Fannie and Freddie are considered such "pariah in this town--except possibly by the affordable housing allies-- that no matter how solid the two are and how effective and efficient at doing their job, few policymakers want to stick out their necks and support them.

You've seen most of the material presented to the courts showing lies and duplicity by various federal government employees and the absolute disconnect between "HERA's "preserve and protect GSE assets" and the 2012 "sweep?"

How can you reach any other conclusion that those decks have been stacked???

Which is why I believe that it will take an Admin regulatory effort driven by the WH/Treasury's own self-interest, for this matter to turn out well for the mortgage finance system, it players, and the families seeking fair support by the secondary mortgage market players, the rules for which drive primary market lenders.

Anonymous said...

Great points. Evidently I am not alone.
Husain a good man? Absolutely, to the Iranians fir the cash, Russians for Crimea, Syria for ignoring the Red Line, for $10 Trillion of new shovel ready debt, for those great GDP numbers, for bowing to China, for promising to move the Embassy in Israel (not), if you like your Doctor you can keep your Doctor, definitely for the new hoops behind the WH, and definitely getting Mel Watt elected while establishing the NWS. This list can go on and on and on.
The day I realized you were wrong more then right is when you suggested the creepy porn lawyer would make a good president. Was that humor?

Bill Maloni said...

Anon--

Which particular D porn lawyer are you angsting over, they are many? (And we know that no Republicans look at porn or have meetings with women, absent their wife's presence?)

You sound very unhappy, did you bet on Maximum Security in the Derby?

Also, what's wrong with porn and lawyer who defend the porn industry? Aren't those people entitled to First Amendment rights, just like you?

And look at what you are trying to jam me on, with your primary lament that I should stick to GSE matters.

How do you like the "Dealmakers" China engagement?

Anonymous said...

Bill, please don’t spin. You know you thought Avenatti would make a good candidate for President. Nothing about anyone’s right to a legal defense.
Happy? More then you could imagine just doing my small part to put Liberal talking points in check where possible.
Not a betting man.
Should China be left unchecked or attempt some kind of deal? Fair question?
BTW, that was not me jamming you on GSE matters. Some other Anon.

Bill Maloni said...

Be nice if you "Anons" would use numbers or, heavens forbid, use your real names.

Aha, you got me. Yes, I did admire Avenatti and Chris Cuomo, saying their skills/personalities would be good for the nation.

Still like them both, a lot, but they are busy on other matters to run for office. (Notice Cuomo's hour on CNN now is its top-rated segment??) Nope, I guess you wouldn't.

Can we get off (pun intended) pornography and back to what you say you want to discuss, the GSEs.

Or are you obsessed with the porn subject, which is more about you than me liking Avenatti?

Anon, for real, nex time consider using your real name (or any name).

If it is worth writing about publicly, it's worth you employing your true identity. Just sayin'.

*******************************************************************************************

What do you think about the latest NYT's expose of DJT's wealth? Is he still the $10 Billionaire he bragged about and campaigned on or is that another of his duplicitous headfakes?

Blind Sheep Investor is never 'anonymous" said...

Having read through all the above comments, I'll only add that the GSE Wail is 'keening', and quite loud, at least it is in My echo chamber:

The Long GSE Wail

https://youtu.be/xfsQkUQouCI

Ten years ago, on a dreadful day
GSE profits were stripped away
There were few at the scene, but they all agreed
The scam was ran by US Treasury

No judge says “so what’s your alibi?”
“If you had conserved, Capital would not have died.”
And Trump tweets not a word about #Fanniegate
Billions to Treasury sounds just great

And from the Hill comes a long GSE wail
Treasury robs their graves every ninety days
No network shows, no reporters see
Theft of the GSEs

Oh, the payback’s so high that eternity's closer
For it MAY be HERA was written by a poser
But late at night, when the cool DC breeze blows
With a long GSE wail, shareholders cry over home loans

And from the Hill comes a long GSE wail
Treasury robs their graves every ninety days
No network shows, no reporters see
Theft of the GSEs

No network shows, no reporters see
Theft of the GSEs

Bill Maloni said...

Blind Sheep, I love optimists!!

We need more.

*************************************************************************************

Lots of rumors--running around in GSEs circle today--re a Fifth Circuit Court en banc decision, which is why the GSE stocks are rising.

I merely would add, "watch, don't bet!"

Anonymous said...

Conservatives are very aware of how they are abused by the loony liberal left. More and more violently for wearing a red hat, standing up for the unborn, etc. What value is there in using anyone’s real name in a Blog? Why would you want it? To Dox someone? Nah, we will just write as Anon and use our one vote to do all we can to fight evil.

Bill Maloni said...

I was yanking your chain because I get several critics who sign "Anon." However, f you are moved enough to write to me, I'll respond to you as best I can.

But--and I am sure I'm on some list somewhere--I do more than writing a blog. I frequently comment on articles--political, GSEs, sports and, other social commentaries--and it never occurs to me to do anything but sign my real name. Because they are my opinions and I want people to associate what I say with me.

You do what your heart tells you and I'll follow suit.

(What does "dox" mean?)

If he has nothing to hide and he is innocent, why does DJT want to bury what's in the Mueller Report? His stooge AG already has taken a lot of incoming over just the redacted version???

If it clears him of any wrongdoing, what's his motive??
Let me know what you think.

Anonymous said...

Dox
Publish private or identifying information about (a particular individual) on the Internet, typically with malicious intent.

If it clears him of any wrongdoing, what's his motive??
Not sure. Maybe the 33,000 emails he deleted or the Uranium deal he had with Russia or the speaking fees he received in Russia or to better understand a Socialist Health Care System?
This is nothing more then Lawyer bantering and gamesmanship to keep the people watching.

You won’t see it on CNN or MSNBS but Conservatives are verbally and sometimes physical targets in public. Very sad.

Your GSE commentary is very enjoyable and why I come to look.

Bill Maloni said...



Anon--

Thanks for explaining "dox,:" truly a new term for this old man.

If you'll take me up on it, you can be "Anon#1" and have a special place in this blog'
s history.

Re the President--as I said very early after his election--my expectations are low, I'll be happy if he just keeps us out of a nuclear war.

Bill Maloni said...

Readers: New Blog out tomorrow night, dated Monday

(Anon check it out, you have a mini--and benign--feature.)

Bill Maloni said...

Anon--I should have added "nice."

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