Bill Maloni's GSE Blog

Wishes and Hopes for 2009



It’s the time of the year to bestow gifts and wishes on rich and poor, friend and foe, family and others. So here’s my list.

--For the American people—and therefore the world—I wish for a strong Obama presidency, a thoughtful and hardworking Congress, a revived and vibrant national economy providing many new jobs, accompanied by a rip roaring wild bull stock market, and serious work begun on a national health care system and major renewable energy sources.

--For Fannie Mae and Freddie Mac, I wish them powerful friends in high places, ideally a guy soon moving into 1600 Pennsylvania Avenue and others now sitting on Capitol Hill.

--For the nation's large commercial banks, which have received billions of taxpayers’ dollars from their “Uncle” Henry Paulson, I wish them some integrity, corporate conscience, and recognition that they now have a major obligation to their customers and the nation to start lending money, quickly.

--For the Detroit automakers, see previous Christmas wish and the need for car buyers to have access to financing.

--To Governor Rod Blagojevich, I hope he can secure a defense team with the combined skills of Abraham Lincoln, Perry Mason, Alan Dershowitz, F. Lee Bailey, and Johnnie Cochran, because G-Rod’s going to need them all and then some!

--To President Obama and his Cabinet, I wish that they enjoy the sustained and deep support from the American public and that their efforts produce peace and international prosperity which can come from bold United States leadership.

--For Angelina Jolie, I wish that she finally realizes her life long dream to go out with me.

--For the Pittsburgh Steelers, I wish for them the Super Bowl XLIII Championship, to go with the five others they’ve already won.

--I wish in 2009 that the McCarran-Ferguson Act, which cedes to the states regulatory control over the insurance industry, dies and is replaced by a national insurance regulatory regime. Consumers then can look forward to efficiency and lower product prices, which is not the case now. This development could also end the title insurance rip-off which costs new homebuyers $1500 to $2000 for the insurance with almost the lowest claim rate in the industry. (Digitize those local title and sales records and watch how quickly you lose the need for “title search” and even appraisal fees. The savings to homebuyers would be large!)

--In 2009, I hope former President George W. Bush remembers never to accept a hunting invitation from Dick Cheney.

--To the Pittsburgh Penguins, I wish them a Stanley Cup Championship to go with the two that the Marion Lemieux-led Pens won for the city and their fans in the early 90’s.

--For the AEI, Mike House, Peter Wallison, Charles Calomiris, Tom Stanton, and Bert Ely, and the other professional GSE irritants, I hope they can find another target for their rancorous energy, like global warming or world hunger, since Fannie Mae and Freddie Mac can’t carry them anymore.

--I hope the nation’s mortgage insurance companies—which owed their modern existence to the GSEs, but were so rabid with their overheated support of the campaign to kill off Fannie and Freddie—didn’t sow their own industrial demise with the effort. Too much of a good thing is bad! (See title insurance above!)

--For the editorial boards/writers of the Wall Street Journal and the Washington Post, I wish for a lifetime supply of kaopectate and lots reasons to use it!

--To Senator Dick Shelby (R-Ala.), I wish for the United Auto Workers to buy the house next door to his and then entertain the Senator, nightly, with continuous polka and yodeling contests. To aid that move into his neighborhood, the UAW should use the Shelby family title company to do their mortgage search. (To the UAW. I agree that yaks are totally acceptable neighborhood pets. Dick will love them!)

--To the senior Democrats of the House Financial Services and Senate Banking Committees, I wish for less acquiescence to Treasury officials, even in 2009 when they will represent the same party as the committee majorities. Lead don’t follow!

--To the Republican management of the Federal Housing Finance Agency, I wish you good luck in securing employment in 2009 in the fast food industry or at your friendly Wal-Mart store.

--To those investors who keep going “long” Fannie and Freddie, because they are so cheap, I wish and hope that you see and know more than I do about the two companies!


--For the Pittsburgh Pirates, I wish an end to their 15 consecutive losing seasons. Come on guys, it’s called “Major” League Baseball. Try playing some!!

--To Mr. Z, I wish that you stay a curmudgeon in 2009!

--To the Mortgage Bankers Association, I wish that you would drop the pretense and just merge with the American Bankers Association. It just a matter of time before it happens, anyway.

--To the National Association of Realtors (NAR) and the National Huilders Association (NAHB), I hope you never forget that you are the last commercial voices for homeownership and possibly the most powerful. Wear that mantle well and responsibly. Once again, don’t follow, lead!

--To the media chroniclers of Fannie Mae and Freddie Mac, several of which are writing books on the two companions and the economic meltdown. I wish that you successfully separate the truth from the lies and remember that the GSEs didn’t invent/design themselves, with their three-cornered statutory requirement to satisfy housing mission (55% of all of their business going to low-mod homeowners), shareholders, and safety and soundness regulators. That was Congress, reiterated again and again, from 1970 through last year.

--To all of those phony-baloney members of the House and Senate—who uttered those “Casablanca, gambling at Rick’s “ hypocritically hilarious comments about Fannie and Freddie making profits or helping too many poor people--I wish you’ll receive a prompt education and understand about the reality of the GSEs, so you will make some more thoughtful decisions in 2009.

(I hope your holiday gift of wisdom allows to realize that until Fannie and Freddie managers (not the long gone “scorned and evil Democrats”) in 2006 and 2007 succumbed to the need—wrongly—to buy toxic subprime and Alt A product, the companies did a fabulous job, i.e., just what Congress wanted them to do, carrying out their federal mission, supplying trillions of trillions of dollars in liquidity to America’s low, moderate and middle income homeowners. The two birthed and successfully managed a national secondary mortgage market, which now is missing from the mortgage finance system, and is part of the reason why housing still is suffering.)

--I wish that all of the GSEs critics come to realize that the GSE function is desperately needed and that the commercial banks, alone, can’t/won’t serve that “dedicated investor” role.

--I wish Shawn Donovan, the HUD Secretary-designate, a huge shovel and a sharp fat cutting knife, as he takes on the modern Aegean stables which are HUD.

--For Selma Hayak, I hope that she gives me at least a week to recover from my previously noted celebrity date, so that Ms. Hayak can have her much sought after evening with me.

--To my family and family’s family and to all of my friends, thanks for being there. I wish you all good health (which is most crucial), personal and professional success, and a ton of good wishes in 2009. Oh, and for myself, I wish for a typo-free 2009 blogging experience and some more grandchildren to go with our wonderful three we now have!


Maloni 12-22-2008