Sunday, July 28, 2013

Washington Post Goes "Mortgage Tea Party"

Post Still on Fannie's and Freddie's Case;
Hensarling's "Other World" Bill Gets OK


The Washington Post last week took a double barreled shot at Fannie Mae (and Freddie) cheering on the House Financial Services Committee’s narrow (30-27) passage of the bill its Chairman, Jeb Hensarling (R-Tex), drafted to dismantle Fannie Mae and Freddie Mac and turn over the nation’s mortgage finance system to the large commercial banks. The newspaper also ran an op-ed piece cheering on the Bob Corker (R-Tenn.)-Mark Warner (D-Va.) Senate bill which does the same but would add a new federal entity to play some of F&F mortgage role. 

I sent the Post the following letter on its cheers for Hensarling.

Supporting the dissolution of Fannie and Freddie is not a surprising position for the Post, which has consistently been against the two. But endorsing a Tea Party solution to mortgage finance seems to be a shocker. 

Is your institutional memory so short that you forget what occurred just a few years ago, when the large commercial banks and investment banks--went around the Fannie/Freddie systems, unimpeded by clueless and compliant Bush financial regulators--and produced and foisted on the nation almost a trillion dollars in in poorly underwritten subprime securities, which soon failed? 

The big financial institutions sold those worthless bonds throughout the world and helped make the US real estate implosion an international financial debacle. 

And please don't forget this new "private capital" which you seek mostly would come from the large banks which enjoy numerous federal subsidies for their working capital. 

Your back of the hand to the nation's preference for fixed rate loans by using the "jumbo market" (large dollar loans which Fannie and Freddie by law cannot securitize) as an example, fails, too.

"Jumbo" loans inevitably carry a higher interest rate, have far less liquidity, and tend to support far wealthier individuals than those in the middle class for whom those rates and terms would be too much for their budgets. The Post would leave them the adjustable rate (ARM) option into which banks would love to push all borrowers.

Was the writer wearing a tri cornered hat while preparing this editorial?

I know the Post won’t print my letter or most anything else which challenges their smug attitude toward the GSEs. (As I keep noting, I still am waiting for this national newspaper to print its first word—repeat—first word about last fall’s federal court decision which declared “summary judgment” in the cases of Frank Raines, Tim Howard, and Leanne Spencer, Fannie officials who were falsely accused nine years ago of engaging in securities fraud and then hounded from their corporate positions.

Last fall, Federal Judge Richard Leon, 8 years after the fact, threw out those charges based on specious but venial allegations made in a report by Fannie’s former regulator, the Office of Financial Housing Enterprise Oversight (OFHEO), which are the same folks down there, today, but using a different agency name, the Federal Housing Finance Agency (FHFA).


Hensarling Committee’s Questionnaire

The aforementioned House Financial Services Committee has sent out a survey to a variety of media sources, including the folks who run “Restore Fannie Mae,” the new website ( 

The Committee is asking responders a variation of, “What is positive about Fannie Mae and Freddie Mac?” 

In trying to answer this myself, I started with the following approach. 

I wanted to capture the trillions of dollars each has invested in the nation’s mortgage markets since the beginning of this century, the millions of families helped and to note—as Congress pretends there are plenty of other options just waiting to the F&F rubble to be cleared out so they can jump in and try and serve the American public as well—that Fannie and Freddie have done more for US housing and families than any two other US companies combined. 

I thought that was a pretty good place to focus until I talked it over with a very intelligent friend. He sent the following to me and I will defer and bow because his work is so much more specific and savages some of the illusions which most anti-Fannie folks still hold close. 

Here is my very smart friend’s (pithy) response. 



I agree with the observation that nobody else has helped provide mortgages to the extent that the GSEs have. But I don't think bludgeoning with large numbers is the way to go (apart from the fact that some people say that the large numbers show that the GSEs dominate the market too much).  

Rather than raw volumes, I would be inclined to emphasize particular benefits the GSEs bring -- and they are legion but include: adequate supply of FRMs, liquidity in the MBS market, TBA, document and other standards in the market, providing safe products to moderate income households, etc., etc.

And consider what happened when the GSEs were put in the penalty box (post 2004) on the eve of the biggest catastrophe in modern housing finance:


"Fannie and Freddie only bought mortgages of homeowners who were likely to make their monthly payment. That kept a lot of people locked out of their dream. Some couldn’t afford a down payment. Others had lousy credit."  

"But the new mortgage lenders in California wanted to change all that. They wanted a chance to offer anyone a mortgage."   

"They saw their opportunity when Fannie and Freddie became entangled in an accounting scandal and lost their dominance of the mortgage markets."   

'When you look at an industry that was driven by Fannie Mae and Freddie Mac for almost two decades, suddenly you don’t have the leaders of the industry even around. They are in the penalty box."   

'We thought that was a huge opportunity to do some of the things we wanted to do, which is change the rules." 

"All Bill Dallas needed was someone to take Fannie and Freddie’s place, someone with huge amounts of cash who would be more willing to bend the rules."

"Who took over?  Wall Street."

 (Source: CNBC, A House of Cards, 2009)


One of the biggest benefits of the GSEs was tied up with what is called, in shorthand, the taxpayer bailout (although, of course, the GSEs were not bailed out -- as I am too painfully aware as a shareholder).  

It might seem counter-intuitive to say it (particularly, to a Tea-Bagger) but believe it or not, the benefit of the GSE model may have been seen most clearly in their failure. If one thinks about it, this should not be too surprising since it shows the benefit of a catastrophic government backstop. 

The government only stepped in when the GSEs had lost their capital -- $60 to $85 or so billion in market cap for Fannie Mae, depending on where one makes the measurement. It took a market catastrophe for the government to get involved but when the catastrophe happened the GSEs were a convenient and efficient focused mechanism for the government to limit the damage of the general catastrophe. 

Consider what happened: Taxpayers put $187 billion into the companies -- admittedly a big "Ouch" figure. But by June of this year, the net cost was down to $56 billion as a result of $132 billion in dividend payments. The net taxpayer cost is likely heading to zero and maybe into positive territory -- the taxpayer could make a profit on the deal (so much for the charge on Hensarling's website that the GSEs are the biggest bailout in history particularly when one remembers the totally un-recouped $200 billion S&L disaster). 

What is never considered is what the taxpayer (and the nation and the world) got in return in addition to the money being paid back.  

By being able to support the GSEs' MBS, the Treasury was able to isolate a large part of the fallout from the mortgage finance meltdown. By its support of GSE MBS, Treasury was able to quarantine a virulent disease spread by Wall Street so that it did not infect the larger market (though it certainly crippled that which it infected). 

Thanks to the support of the taxpayer (whose support is now being paid back), not a single penny, not a red cent, was lost by investors in GSE MBS by investors in Fish Bay, Wisconsin, or in the village of Narvik, Norway.  

These were disparate (and, eventually, desperate) towns, along with thousands like them. devastated by Wall Street sharpies, as documented by the wonderful CNBC 2009 documentary, A House of Cards, which  squarely laid the blame for the mortgage meltdown where it belonged -- on Wall Street, the rating agencies and the criminal lending outfits concentrated in Orange County, CA, one of the conservative bastions of the country and adopted home to the chicken-hawk icons, John Wayne and Ronald Reagan. 

Yes, the epicenter of the subprime contagion was not the two GSEs on the banks of the Potomac but the market fundamentalists of Orange County ("This was the pulse of the subprime industry, the nerve center." -- CNBC). Needless to say, Orange County did not gain this primacy in subprime lending through some do-gooder CRA or goals mandate imposed by Barney Frank and friends.  

That this was an incubator of the subprime virus should not be a surprise since it was also a locus of the S&L crisis a generation earlier (along with, on that occasion, the great states of Texas, Florida, Oklahoma and Arizona -- surprise, surprise). 

Treasury was able to limit the contagion by supporting the GSEs' MBS. Imagine, in the alternative, trying to do this through the country's top banks -- JPM, Citi, Wells, BAC, Goldman, Morgan Stanley, etc., -- with operations spread throughout the world and God knows what sorts of investments on (or off) their books and intricate relationships with global counter-parties.  

It was bad enough that these players (throwing in, also, failed Bear Stearns, Lehman, WAMU and Countrywide) shit in the somewhat-circumscribed sandlot in which they were confined to play (by GSE prowess rather than the regulations that had been lifted in GLBA in 1999); it would have been infinitely worse if the sandlot in which they crapped had been the overall market rather than a confined space within it. If Hensarling and company had their way the whole market would become shitable. 


I hope some of the people who voted for the Hensarling bill or will be asked to support it if the House Republican leadership brings this mess to the floor remember the views of my very smart friend!


I’ll paraphrase something I said in my last blog, “Can the House be this $#*&^%$ dumb” and not recognize the asininity and thoughtless ennui represented by the Hensarling bill?

Are the nation’s largest banks and financial institutions—which can’t seem to control themselves from breaking laws and regulations--really the best stewards for the nation’s mortgage finance system?


Maloni, 7-28-2013






Thursday, July 25, 2013

Summer Musings


 Advice For Watt, If He Gets Senate Nod 

Reportedly, the nomination of Rep. Mel Watt (D-SC) to become the Director of the Federal Housing Finance Board (FHFA), the Fannie/Freddie safety and soundness regulator, may come to the Senate floor next week. I don’t know if the R’s will force a 60 vote approval or Majority Leader Harry Reid (D-Nev.) can negotiate the easier “majority”—51 votes--treatment he got for Michael Cordray to head the Consumer Financial Protection Board (CFPB). 

Watt wins the vote with the lesser standard, but likely won’t get his new SW 7th Street job, if he needs the greater total.

I’ve written this before, but let me reiterate, I liked Watt when I lobbied him and thought he was an intelligent, good Congressman (meaning responsible). None of that marks the 20 year House Financial Services Committee veteran as a mortgage finance and securities expert/manager, able to analyze policy tradeoffs and competing industry interests.

Mel Watt will have to grow into that person, but—using traditional DC standards--the deficit doesn’t disqualify him.

If he’s started to educate himself in those ways, more power to him because it will reduce his inevitable uncertainty and policy groping. 

Suggestion to Heed 

When/If he secures the position, I strongly suggest that Mr. Watt arm himself with the finest, mortgage finance and a securities deputy he can find and quickly hire that person.

(With all due respect to Cher, “It ain’t me, Babe!”)

Sure, Congressman, bring your Hill office assistant with you, but I doubt if anyone on your current staff or on the Financial Services Committee has the myriad requisite skills you will need in a specialist/deputy. Look possibly toward Wall Street.

Once at FHFA, a smart deputy can help Watt avoid “capture” by either the White House—which appointed him and to whom he is somewhat beholding—or the FHFA staff, whom he can’t trust because (I suspect) part of their agenda not only isn’t his but isn’t in “conserving the two companies,” as their agency charter reads.

Watt could assume some White House independence, as Ed DeMarco consistently proved, meaning Watt occasionally can make his own calls, if he displays a tough enough demeanor and chooses, occasionally, to bring his own mind and heart to bare on policy calls not what he hears from the Treasury or the WH.

Lastly, if the Senate smiles on Watt’s appointment, he might have to worry about Ed DeMarco possibly returning to FHFA, which DeMarco’s civil service status permits. That would create major issues and staff schisms for any new Director.

But, DeMarco, if he’s as intelligent as I think he is, should just run to the nearest conservative think tank.

Congressman Watt might well expand his educational horizons by reading my blog to alert him to historic games played by OFHEO/FHFA before he ever considered the job and how they got away with it. Some of those officials still are there, now burrowed into the very protective civil service woodwork. He should add the “Restore Fannie Mae” site to his reading list, too.

Just because the material won’t always agree with the White House and/or orthodox thinking doesn’t mean it holds no value for a new Director. Both sides might alert him to issues/ perspectives his team won’t.

This job—if the “Congressman” (they never lose the title) secures it--won’t be a sinecure and, as I’ve often counseled those heading into raging combat, Watt should strap on his “big boy pads!”

Fun and Games With Media Stalwart

A reporter whom I greatly admire has engaged in some political/industry byplay with me, on one issue, and a related one with some friends who brought me into the reporter’s “quiz.” 

Most recently the reporter suggested that F&F advocates needed to explain, “Why most countries with solid homeownership rates didn’t rely on a government related secondary mortgage market execution for most of their mortgage financing?” 

My answer was quick, “Because most countries’ commercial banks are not as larcenous as those in the United States, which have the sorry track record to prove it.” 

And I am not referring just to their PLS garbage securities escapade five years ago. 

The second part of my answer is that few of those countries have a history of long term fixed rate financing, which Fannie (and later Freddie) have provided, since the late 1930’s. 

Back to bank perfidy. Look recently at the variety of US regulatory fines the banks have paid and for what gross offenses, which violation allegations still are pending, and you tell me if you feel confident--as many on Capitol Hill do---at handing over the nation’s primary and secondary mortgage markets to the large commercial banking industry? 

Mortgage violations left and right among big banks, tilting the London Interbank Borrowing Rate (LIBOR) on which many adjustable rate mortgages were indexed, laundering drug money for Mexican gangs, and doing business with Muslim extremists are just a few government allegations against the nation’s largest financial depositories.

Is Congress %#$@&* serious?

Here is a good place to link two articles on recent bank behavior, the first from David Kocieniewski in the New York Times and the second in the Washington Post by Harold Myerson. 


Less cosmic, but quite revealing, was exclusive the exchange I had with the reporter when I expressed my concern over Senators Bob Corker(R-Tenn.)  and Mark Warner (D-Va.) and their major new mortgage finance proposal. Most observers know the Senators want to dissolve Fannie Mae and Freddie Mac and replace them with a newer federal agency the Federal Mortgage Insurance Corporation (FMIC). 

I suggested to the media person that the two Senators weren’t well enough versed in mortgage finance and securities markets to understand their own bill or the manifold impacts on related industries, mortgage prices, the TBA market, MBS history, and the general need for a strong guiding hand that F&F always presented, save their PLS acquisition mistakes (mistakes that current regulation prohibit and which cannot occur, save change to their regulator). 

His quick response, slightly paraphrased, was, “How many in Congress do you know who do?” 

He had me. I couldn’t name any, which also is a scary thought. 

Final note. I still am waiting for someone to explain why the C-W’s FMIC needs a crushed F&F to move forward, considering the two could easily repay the Treasury (as they soon will) and just become another securitizer using the FMIC. 

I wonder if the answer is that the two represent “scalps,” which C-W and others need to parade before the naïve settlers to show them Congress really does hate those “Indians?”

What Others are Saying? 

I came across this column after I finished the above blog. I am linking it for you because the author--PIMCO’s Scott Simon--agrees with many of the things I’ve written in the past, although not totally on Corker-Warner. 

Writing this week in the WSJ, Nick Timiraos produced an excellent article laying out the sides and the stakes in the current mortgage debate.


Maloni, 7-25-2013

Sunday, July 21, 2013

Odds and Ends





“Restore Fannie Mae” is A-OK;
 Hensarling’s Legislation Ain’t

Back from California and “granddad” land; brain still catching up with body from those quick round trips. Upon landing in San Diego, we had some excitement, when a flight attendant announced, “Everyone, please, remain in your seats. We have a medical emergency and the EMTs will come aboard to deal with it.”

Passengers glanced around for heart attack victims or very pregnant women and found none. The attendant then asked “passengers John Smith and Ed Jones (my made up names) to come to the front of the aircraft.” When Jones and Smith went forward the two men promptly were arrested by police, handcuffed and stuffed into two cruisers, according to my observant granddaughter sitting next to the window. 

Since we were in southern California, I looked to see if I could see CHIPS “Ponch,” Jon, or Detective Joe Friday and his partner, but no such luck with TV cop sightings. 

GSE News 

·       A blog and a half ago, I touted the “Restore Fannie Mae” website, misstating that it was the creation of the Gibson Dunn law firm, which had filed one of four prominent shareholder lawsuits against the Treasury for its 2008 Fannie/Freddie takeover. 

I corrected the record/myself/my blog, when I found out that the man behind the website is Thomas Stoddard, with whom I’ve now had a chance to speak at length. 

I feel confident enough in our discussion to highlight and support what he is doing (and also made some suggestions about how best to raise to raise site operational money without creating the impression that funds raised might go to his own pockets). 

Thomas’s heart and head are in the right place re the F&F issues and I encourage people to frequent his website and enjoy the content. (In ways, it’s superior to some old man’s blog yammering about the historical dissing of Fannie Mae.)

Here, again, is the link to Goddard’s work.

·       This past week, Secretary Jack Lew greatly disappointed in his disjointed CNBC interview, implying that F&F still are financial basket cases, waiting to come apart.

This is the email I sent CNBC host Steve Liesman after his Lew interview.

I liked it (the Lew interview) but the Secretary, neatly and by design, overlooked a few elements. 

Fannie and Freddie largely have "repaid" the Treasury for taxpayer funds invested and what little remains will be returned within a year or sooner. They both did so, paying double the interest rate on dividends (10% versus 5%) which TARP- assisted banks paid). 

For the past five years, the entities also oversaw the nation's primary and secondary mortgage markets because the only viable alternative--the nation's large banks--failed to step up and replace the two as mortgage investors (the guys at the end of the line who holds the financial liability).

The Secretary implied that F&F still were train wrecks waiting to happen, but he quietly overlooked that in the past five years, both have grown capital, raised fees, only put pristine loans on their books, and have had their "affordable housing missions," i.e., large percentage of their annual business for low, moderate and middle income families in underserved areas," take away. Many of the preceding facts are due to their current regulation. 

Nobody that I know--including myself, an active blogger on the subject--is asking for any change in F&F's regulatory regime, just that the two be allowed to compete as any other mortgage investor without any special ties to the federal government and after they have totally returned all amounts "borrowed" from Treasury.

In other words, they should treated like every other TARP-assisted financial institution. 

(I would be happy to discuss this issue further--on or off camera--with you or your producer.)


Hensarling’s GSE Bill and Other Things 

In last week’s hearing, many conservative “usual suspects” paid homage to Financial Services Committee Chairman Jeb Hensarling’s (R-Tex) newest bill to do away with Fannie and Freddie. 

Let me go way out on a limb and suggest the Chairman’s bill won’t pass the Congress in God’s lifetime! 

At a similar, same day, non-congressional dog and pony show to support the “bipartisan” Bob Corker (R-Tenn)-Mark Warner (D-Va) bill, both Senators dumped on the Hensarling approach, while tub thumping their own. It was Senator Mark Warner’s turn to claim that C-W would “end private gain and public loss” in the mortgage market. 

Warner’s naivety knows few bounds since his legislation paves the way with major new large bank federal subsidies for the behemoths to take control of the US primary and secondary mortgage markets, while he blathers that his bill will bring “private capital” back to the market. 

Read and understand your bill, Senator Warner! 

I challenge Warner and his staff, just as I have others, to show when/how—before their 2008 Bushwhacking—the federal government ever picked up Fannie & Freddie losses allowing the companies to benefit. 

The 2008 “conservatorship” debacle saw F&F stocks drop below a dollar a share and the companies expropriated by the Treasury, an action currently being challenged in court in several law suits. 

Neither of these guys has yet to show me they understand mortgage finance or that their bill is anything but one gigantic troll for campaign bucks with a proposal they describe as “subject to change and improvement!” That‘s and inside-the-Beltway green light for, “If you don’t like it, but pledge us enough campaign support, we likely can accommodate your needs.” 


I heard that Jeb Hensarling may have some opposition in his Texas Primary. The Chairman might want to make sure that all of the money he anticipates from the financial services and housing groups doesn’t leak to his opponent because of Hensarling’s extreme positioning— rhymes with “Tea Party”--on important issues.

Links to Other Fannie and Freddie Commentary


·     Nationally syndicated real estate columnist Ken Harney tells why he thinks talk of the F&F legislative demise is premature. 

·       NPR’s Rene Montagne looked at the Corker-Warner bill and examined some of its implications including the major benefits it provides to the large commercial banks.

·       NYU Law professor Richard Epstein produced a superb review of the new legislative interest in F&F as well as the shareholder lawsuits filed against the Treasury. (This article was recommended to me, on the same day, by blog reader Robert Mae and Thomas Goddard. Good choice, men!) 

·       And finally, a thoughtful piece from my friend and former colleague, Rob Zimmer, who now represents a group of community lenders, reminding Congress and others that we are facing a rising interest rate environment—a macro condition in which few of them have made policy--and what that means for all of their mortgage machinations, not just replacing Fannie Mae and Freddie Mac.


Maloni, 7-21-2013


Wednesday, July 17, 2013

Mea Culpa

My Bad!!
In the welter of good news last week, I blew it and incorrectly wrote that a new website, strongly advocating for restoring Fannie Mae and Freddie Mac, was the creation of the Gibson Dunn law firm, which had filed one of the four new lawsuits challenging the 2008 takeover of Fannie and Freddie.
I since have learned that Gibson Dunn has nothing to do with the website..
My apologies to the Gibson Dunn law firm for associating them with this endeavor--which seeks to rally F&F allies and raise money to back its efforts--and anyone who may have contacted the site offering support or, worse, a financial contribution. 
When I first became aware of my inaccurate attribution, I posted an initial concern on the blog's "Comments" section.
I've since been told by a senior lawyer (not from Gibson Dunn), managing one of the four suits, that the person behind the web site may be one Thomas Goddard (sp?), of whom I know nothing.
The site's creator may, indeed, be a major Fannie/Freddie advocate, but I personally can't attest to that because I never have encountered the gentleman and can't find any information about him. (If you  have any, please share it with me?)
So check the site if you want, but be slow to pledge anything until you become convinced of  the site's and Mr. Goddard's (sp?) bona fides.
I promise more care and caution in future blogs.
Maloni, 7-17-2013

Saturday, July 13, 2013

Is the Cavalry Coming?


“Restore Fannie Mae”



I go on vacation for one week and the GSE flood gates open up (much like the Thursday/Friday skies above Rehoboth Beach, Delaware) and out comes both heavenly manna and some “caca.”

Naturally, the first are three new shareholder lawsuits aimed at the US Treasury’s 2008 takeover of Fannie Mae and Freddie Mac. They join an original legal action, arguing the same principles, filed previously by the Seattle based Hagens Berman law firm (lead Washington partner Jennifer Connolly).

The “caca” is House Financial Services Committee Chairman Jeb Hensarling legislative effort to, yawn, do away with Fannie and Freddie, push back the nation’s clocks and history about 80 years and pretend that commercial banks still want to make mortgage loans without the federal government’s financial backing.

Jeb is heading down the wrong PATH!

The Chairman is in for a big surprise when his upcoming hearings produce little support for his efforts save from his conservative committee brethren and the usual leaning-right think tanks. 

Hensarling: “Y’all agree with me on this, don’t you boys?”

House Financial Services official Amen chorus: “Aye, aye, aye…. (Applause).”

Hensarling, channeling his best Elvis: “Thank you, thank you very much!”

New Lawsuits Reflect Fresh Interest/Action 

Gosh darn, right, these lawsuits are important and they would be even if two of the more prominent jurists in American, Ted Olsen and David Boies, weren’t steering them. 

As I commented to friends, it forces issues to get raised in a grand manner that a small typo ridden blog hitting similar themes could never hope to secure. 

It’s not easy beating Uncle Sam in court but it can’t hurt to have famous advocates and deep pockets arguing that Hank Paulson misused or abused his authority to cast Fannie and Freddie into conservatorship and played fast and loose with the companies resources in so doing. 

I have no idea to what astronomical amount the four suits accumulated damages could accrue, but—at some point—someone in power might suggest it’s easier/smarter to settle than to let that whole ball of string unravel.

Lawyers in each of those firms, as well as the litigants represented, draw media attention and know lots of people on Capitol Hill. I would be very surprised, if the merits of their case (and the merits of F&F both before the takeover and today) don’t’ get shared with Senators, House Members, and their staffs.

That also means squadrons of new, different, and important people trying to build support for anti-government case.

Since “campaign time” on Capitol Hill is all of the time, Fannie and Freddie support money should flow into some congressional campaign accounts, always an important factor. 

Ted Olsen’s Gibson Dunn law firm already has created a website to make the broader Fannie Mae (and Freddie Mac) case and raise funds to revitalize the mortgage giants. Here is an excerpt from their detailed website, which is a must read.

     “Funds will help promote the restoration of Fannie Mae and Freddie Mac through advertising campaigns, web development, legal services, and any other means necessary.” 

I support these efforts.

Sure that thinking could backfire, but the lawsuits are based on perceived sins of people no longer in DC or near office, let alone in office. For Many in Congress, there is small sympathy for those targets.

But, for reasons I often have discussed, F&F’s public understanding, support, and esteem is almost as low as Congress' own—despite lots of contrary pro GSE arguments—and, from my perspective, attention, public debate and squabbling only can help illuminate some of the GSE distortions forced on the nation and perpetuated by ideologues and business opponents.

There were lots and lots of people hurt in the conservatorship move, along with major systemic damage, these lawsuits easily could bring additional “copycat” lawsuits, some of which will be dismissible, but others won’t and that just amps up the attention and focus about how Fannie and Freddie might have been screwed over in the Bush era by a vengeful partisan GOP agenda, nicknamed “Project Noriega,” first revealed in the Bethany McLean, Joe Nocera book, “All the Devils are Here.”

Here is a link to an article on the new lawsuits.


L. Summers Instead of J. Yellen? Yak, Gag! 

Yes, that was last week’s “Who will be Ben Bernanke’s successor?” rumor, assuming President Obama gets to name BB’s heir.

London bookies have Larry Summers high on their bet list, with odds only slightly lower than Janet Yellen’s (meaning less likely to get named). 

But how many mistakes could President Obama make if he chose his old friend Larry and passed over Yellen, the extremely well respected current Fed Vice Chair? Only about a million.

Let’s see, she is super capable, with vast experience, knows the Fed system and how to make monetary policy, probably has a few enemies but not many, is a woman in an Admin still suffering from too few X chromosomes and Larry Summers is……..Larry Summers.

Egotistical and insufferable are labels which go with Larry no matter where he hangs his hat. Common enough in DC but many Hill people like their Fed Chairman to ass kiss not thumb their nose.

This Administration can’t want Summers, somebody whose ego is so big that everything about him becomes “about him” and not what’s best for the nation’s economy or international central bank goodwill.

If Bernanke chooses to leave, then I don’t think Summers even gets all of the D Senate votes let alone the handful of R’s he would need for the 60 vote approval. (Many of the female Democrat Senators will have issues with him.)

Janet Yellen should succeed Bernanke.


Maloni, 7-13-2013