Monday, August 15, 2016

Cats and Dogs
(Summer is s-l-o-w, but I still have GSE opinions)

August barely has two weeks left and I guess there is time for court decisions from Judge Sweeney, the Lamberth appeal, or the Delaware case, but summer blahs seem to deaden all developments. And yes, it’s because most of the working world is on vacation, as well as the attendant people the principals need to issue their findings.

For you pessimists, I’ll remind that in August 2012, federal Judge Richard Leon did issue his opinion—after eight years of legal slogging--that there was nothing to the “securities fraud” allegations brought by investors against Fannie CEO Frank Raines, CFO, Tim Howard, and Treasurer, LeAnne Garmon Spencer.

One last note on the courts cases.

As my mind roams around all the GSE pieces, still believing the courts offer the best short term relief for GSE supporters, I wonder if President Obama’s parting gift to the nation, the middle income and minority voters who twice elected him, and to his own legacy—if the courts return a pro-plaintiffs decision—to instruct his Justice Department not to appeal the decision???

One can dream and hope.

Tim Howard

I hope everyone closely is reading Tim Howard’s blog and his extremely informative answers to readers’ questions.

Tim doesn’t just rant (like some bloggers we know, harrumph, cough, cough), but provides “proofs” to support his statements.

In his recent work, he is crushing advocates (think Treasury and FHFA), who contend that the forced GSE sales of underwater loans is a smart business move. Ironically, Howard argues it is causing the Treasury/taxpayers likely future income, but when has Treasury ever worried about that?

Howard writes the “risk sharing” deals are badly designed, poorly priced, and that’s before you look at the justifying Treasury policy logic.

As I’ve written, given the same circumstance, I doubt any private financial services company would be selling those loans at those giveaway prices, unless their regulator was forcing them to reduce their portfolio for political PR and not business reasons.

If you haven’t become a Tim regular, read his recent articles and decide for yourself.

Howard has his own priorities, but I suggested he turn his attention to the phony  FHFA “stress test,” which produced some BS headlines recently that Fannie and Freddie could need huge taxpayers’ dollars in a prolonged economic downturn. 

Predictably, in designing its stressors, FHFA freelanced some poisonous elements in their exercise. (I am sure FHFA official thought, “How can we can make this really look bad, which will get our guesses a GSE-ugly headline, especially from Bloomberg!!)

To a certain Bloomberg reporter, FHFA played you like a violin.

Gene Sperling

I am supporting Hillary for President, but I long have viewed Gene Sperling, her primary GSE advisor, as biased and not a critical thinker.

That feeling grew geometrically with news that Sperling—while in the Obama White house--borrowed several hundred thousand dollars (no exact figure because various federal reports don’t require them), at below market rates, from a prominent Washington lawyer who Sperling described as an “old friend.”

It was just bad judgment, Gene, as you probably know by now from the blowback.

But, before Sperling’s credit difficulties hit the news, there were rumors the Bernie Sanders insiders—at that time, still bidding with Hillary for the nomination—had Sperling on a short list of “bad guys.”

I don’t know what their issues were/are, but maybe his inside the campaign judgment was questioned? His current appearance in the headlines can’t help.

David Stevens is a “Hillblazer”

Media reports last week identified the Mortgage Banker Association chief David Stevens as one of several hundred people who have raised, i.e.” bundled,” since it wasn’t his personal contributions, over $100,000 or more for Hillary Clinton’s primary and general; election races. Good for him, since we support the same candidate.

But DS has—or seeks--a pretty high profile in the in ongoing GSE discussions and has steered his trade group to joining with the big banks and Republicans trying to stop this White House from the GSE recapitalization and  Conservatorship release that many small lenders, the civil rights and social action groups are pushing.

How wise is it for a trade association heavy who needs bipartisan goodwill to get so  profiled? Just sayin’.

One Man’s Opinion: Tim Mayopoulos and Heather Russell

I don’t know either of these individuals personally, but my initial instinct was “bank foul,” after reading that Heather Russell last month was fired as General Counsel at the Fifth Third bank HQ’d in Cincinnati, Ohio, because she was dating the Fannie CEO Tim Mayopoulus.

The pair are consenting adults, separated from their spouses, and once worked together at the same firm in the past. Fifth Third uses rival Freddie Mac for most of its securitization of conforming loans.

Both employers were informed by the principals of the dating arrangement, but only the bank felt it was a “legal matter” requiring sacking Russell despite the fact that Ms. Russell conducted no Fifth Third business with Fannie or its CEO.

Not my personal concern, I hope she sues the bank’s ass off and collects millions for wrongful dismissal.

Donald Trump and his presidential campaign 

Surprise, I am not a Trump fan.

There is nothing I can add to all of the critical media commentary that describes his immature, thoughtless, selfish, and frontal lobe behavior as he seeks the highest job in the land, to be the leader of the free world, and to control the “nuclear football.”

But, what really hit me at the end of this tumultuous week was his Pennsylvania allegation, “The only way Hillary can beat me is if she cheats.”

Donald Trump is setting up a horrible self-fulfilling prophecy backlash which could become politically and racially ugly--including with some form of armed insurrection--given the ugly arms mindset his "posse/supporters" likely possess.

The outrageous Trump assault, delegitimizing the political process which produced his very candidate status, will need a massive bipartisan scrubbing of the mess Trump has made of our election process and his vile views about its winners and loser.

Trump’s tactics insure this election will not end on Nov. 9, no matter how many electoral votes the winner secures.

Maloni, 8-15-2016


Anonymous said...

// if the courts return a pro-plaintiffs decision—to instruct his Justice Department not to appeal the decision???

He will do the Alinsky irrational pursuit till the end. So no, he won't instruct the DOJ to do what is logic.

Bill Maloni said...

Anon--I noted it was a "wish and hope;" no evidence for it.

Anonymous said...

"voting for hillary" omg... how she has accomplished exactly nothing and has been proven incapable of leading. her only claim to fame is marrying bill and living in the white house as a guest. her election to the senate was a joke; what populist democrat couldn't win in new york or california for that matter and while in the senate did zip. she quit to take sect of state job and mucked it up. Then as sect of state was fubar. sadly she has even less qualifications as the current less than qualified occupier. being a lawyer and a bad one does not qualify one for president. and for those sexists (akin to racists) voting for her just because she is a women; think about it.

voting for her is proof the redundant stupidity of american voters (having followed) the same path to near 20Trillion in debt. at 5% the debt service is about 1/3 the total annual federal tax takings.

it sure sucks to be fiscally responsible and not very popular. but participation awards and popularity contests don't create good leaders or successful businesses.

Bill Maloni said...

I have some/many issues with HRC. But, as a practical matter, the two major parties left me with a choice between Donald Trump and Hillary Clinton.

I would never vote for the irresponsible, undisciplined, thin skinned, say the first thing that comes into his 12 year old mind, lying, Mr. Trump.

Because Mr. Trump thinks he can play handsies with Vlad Putin, and Putin is fearful of HRC, she gets my vote. Plus she is smarter than he is, as the "debates" will show and he doesn't have an inquiring or fertile mind.

He has an adolescent mind.

Anonymous said...

It continually puzzles me beyond logical thinking why so many pro F&F supporters and investors are voting for Democrats. This is the party that created the NWS, steals your money, and will continue to steal it going forward perpetually.

JF said...

Anon - couldn't agree more.
Syria: saying Assad was a reformer, puts Libya into chaos, Benghazi the real 3am call that was unanswered resulting in Americans dying, withdrawing from Iraq, supporting the idiotic Iran deal, putting the nations most top secret info. on an unprotected home server in your basement, lying about a video leading to Benghazi, lying about the entire email situation, the ties and pay to play with the Clinton foundation and btw, Putin fears HRC!? Remember the Russian reset! She is an absolute joke to Putin as is Obama. But the super successful businessman, who doesn't speak like a robot using a teleprompter is so dangerous. I'd trust my family's safety to Trump any day over a self enriching, crooked, and deceitful career politician like HRC.
It is amazing that you blame Republicans for the GSE situation, when it is 100% the Obama administration that has virtually nationalized the GSE's and stolen shareholder's money. Who is it using executive and presidential privilege to hide the real truth?

Bill Maloni said...

Anon and JF--

I may be wrong--it's happened--but I suspect both of you may be new readers. I say that because in the almost 8 years of writing this blog (and my near 50 years in DC, 40 of them directly or now retired, indirectly, involved with GSE issues), the GOP has been the one constant in opposing Fannie Mae (and to a lesser extent Freddie Mac).

It started, formally, with the Reagan Budget in 1983 (user fees on the debt and securities of the F&F, only) with Hank Paulson's lies to Congress producing the "Conservatorship. The GOP antipathy starts with Fannie being a "creature of Roosevelt" and then continues onto it's housing role which supported low/mod families including many minorities. When too many D's wound up in senior Fannie positions and made impacts in other areas of DC, i.e. Kennedy Center, Brookings, brought back to OMB, it picked up strength, as the big banks coveted GSE revenue and did all they could to trump (verb choice intentional) their success. (You never heard a massive consumers complaint, just the monied interests, as in "follow the money.")

Yes, the D Wall Street guys, think Tim Geithner and other Democrat GSE opponents did their share under Obama (who continues to mystify me with his GSE opposition), but the amalgam of think tanks, Senators and Congressmen, business enemies, media, have GOP stamped all over them, ergo my position.

The hope for the GSEs, now, is in the courts (I've noted some of my issue with HRC and certainly some of her campaign staff), but Trump so violates my sense of opprobrium on so many levels, I wouldn't trust him to make policy, appoint judges, fill the SCOTUS, negotiate with Putin, and the many other duties the next President must assume.

JF said...

I don't disagree that the GOP has had a negative view of the GSE's, but that's far different than an administration that steps in and illegally effectively nationalizes two of the largest companies in the U.S. only to steal all shareholder money. In addition, that same administration then uses exec. and pres. privilege to hide what they have done.

So Obama/HRC policies are literally a sea scroll of absolute failure both in domestic and foreign policy, completely lie and follow the Alinsky model, and Putin has zero respect for either (emphasis added), yet you don't trust Trump. The problem with progressives is that you all think that you are the smartest people, but in fact you have no common sense at all. Against all fact and reason, you'll still make excuses and vote for a mendacious criminal.

Anonymous said...

Yes, I am new to "writing" in your Blog but not new to reading it. I look around everywhere for News & views. I respect and appreciate your inside view of DC. I write as a Shareholder. A considerable Shareholder. I need to repeat the ones who wrote, enacted and continue to steal your money in the most lawless, callous and premeditated way, controlling the DOJ & Treasury is who you and many others support. That is soooooooooo bizarre to me. TH717 thinking is the same but if you write the truth in his Blog you get X'd out. It's like a Sencored State controlled Blog where you either agree or your eliminated. No freedom of speech there. As for Trump, I like every policy he has spoken about. Every one. He knows how to negotiate. He knows he won't get everything in anything but he takes an offensive position vs. a typical defensive position position at all. We just lived thru almost 8 years of a man that was a street corner trouble maker who is controlled like a puppet. I can't imagine, although very possible, that we get 4-8 more years of worse leadership. Imagine, we are going to have competition in the White House of who is more perverted between Bill and Weiner. Imagine that.

Bill Maloni said...


Well, you and I share being dumped by TH717," who has yet to reveal his true name after hijacking my former colleague and good friend Tim Howard's.

BTW, "717's" name is Pat Malloy.

Nobody knows the future and therefore arguing about what Trump or Hillary might/could do is an exercise in futility. But, most of us do it to make up our minds for whom to vote.

IMO, Trump purports to be a master manager (hugely wonderful!), used to a system when he is the top guy and makes the calls and people jump to implement his demands and, pretty soon those things happen or you are out/replaced.

Government doesn't work that way. If he's elected, he'll need to bring in--through surrogates--4000 appointees to manage the agencies and carry out WH orders.

He'll need a CoS who can communicate back and forth between him and the agencies and trust me, there are a lot of GOP interests (as you saw under Bush) who want those agencies alive, full of people, and doling out taxpayers money to their businesses.

Name one past President--either party--who hasn't demanded making the government smaller, keeping down spending and hiring. Has any R or D you can name succeeded??

Just like lawyers, suppliers of everything the federal government buys, like delays because they charge for it. All regulations must go through comment periods, which the agencies can extend and then the comments have to be considered. Frustrating as it may be, it's called "democracy."

And then there is Congress which likes to move at its own speed and consider issues it wants when it wants, no matter what the guy/woman in the White House seeks. Being in the same party doesn't change that. There are House and Senate egos, too.

Most recent example, the GOP screwed Obama for most of eight years, turning him into an executive action machine.

I don't think Trump has the temperament or judgment to deal with the Civil Service and how Washington truly works.

Having been there and done it, I think HRC can succeed at her agenda better.

I may not change your thinking but I hope I gave you something about which to think.

Anonymous said...

Thank you. Your comments are interesting. Especially thank you for exposing TH717. It all is clearly adding up now. Makes you wonder who is behind the massive naked shorts. What are TH717's real motives? Look forward to enjoying tour Blog going forward.

Bill Maloni said...

I know very little about "717," having exchanged emails but never met him. At some point, in his world, I went from being part of the solution to being part of the problem--an intrusive competitor-- and got zapped from his site and my comments banned.

I think he means well and hopes the companies survive, but I think he got carried away with the mystique and crazy power with which the Net anoints some people and, possibly, it got overwhelming for him. There also was an early suggestion of his effort generating revenue or having access to some, when, initially, he mentioned possible cash offers to people who could supply the kind of "smoking gun" docs which came out in "discovery."

Initially, he very much was into the investor issues--on both sides--and others of us were into the policy and political machinations. The two obviously converge but the GSEs long have stopped being driven by their actual business performances but by the politicians, the courts, and headlines.

Anonymous said...

Bill...long time reader, occasional poster. I'm thrilled that you're back at it, btw. I also frequently traffic '717', along with the real TH's site (which is great). So, who exactly is Pat Malloy?? Is there some significance to who he is?

Bill Maloni said...

Anon--As I wrote, I've never met him and have no idea how he got into this issue or chose the approach he did. I think he lives somewhere in the Northeast but don't really know. (A few people I know have lunched and/or spoken to him.)

Until he stopped accepting my comments, I read his blog--to see what he and others were saying--found it interesting and shared my opinions on stuff being written by him and others,

I received some early congratulatory email messages from him (and comments on my blog comments), but when I wrote that I didn't see this WH doing a 180 turn and throwing its support behind recapping and releasing the GSEs--a point he made strongly and frequently, implying he had inside knowledge that turnabout was coming--he shut me out.

Some of his Maloni comments were ugly which prompted similar ones from his acolytes.

Then, suddenly, his blog went for days/weeks without his personal comments or answers to questions and seemed to reflect some behind the scenes problems. People were worried if he had health problems or other setbacks. (The speculation, when the "black helicopter" guys--with their tin foil hats--started theorizing about government retaliation, it got very entertaining.)

I don't know if his inactive presence still is a situation.

If you have access, you might ask him his true name and background. Maybe he's beyond his insecurity issues and will share that info.

Anonymous said...

Bill...thanks for the reply. I have no notable access, so can't add value there. Appreciate the input, however.

Bill Maloni said...

By "access," I meant if you can read the blog--since I think he limits readership, or "access," and ask questions?

Anonymous said...

Should be open as far as I know. For a time, it was restricted, but seems to be 'back to normal' for the past several weeks now. In regard to posting comments, no idea on that front. I will agree though, 717 has been notably absent for quite some time now - likely months really. Very sporadic posts, and incredibly light on new info/details, etc. Like you already highlighted, something clearly feels different over there now. And for what it's worth, I recall the anti-Maloni commentary you reference. Unjustified for sure.

Bill Maloni said...

Who knows, where you sit is where you stand.

He may think he was perfectly justified, if you are thin-skinned, since I did dramatically disagree with his view that BHO was going to come to the GSEs' rescue.

I never made it personal and I haven't lost any sleep, either.

Michael Gatti said...

Have you seen the release on the Piszel Case, US Dist Court of Appeals. If you send me tour email I'll send you the link. Would like to know your thoughts.

Bill Maloni said...

Michael--Thank you.

I've seen it and Hamish Hume's letter; frankly, since I am a cynic with court cases and how their findings are view by other judges, I am not sure how to read this decision.

The point I've stated, often, until the public gets an explicit win for the plaintiffs, I am not sure how anything else matters, especially reading "wins" in suits, like Piszel, who didn't win.

I remember someone describing "difficult" as trying to balance a tennis ball at the top of eight shoe boxes held vertically in your hands. The court cases, i.e. suing the federal government, all seem very difficult.

The court's belief that Piszel was the victim of a "taking," but didn't file quickly enough and in the right venue, is of little value unless other judges agree.

Except with material for another appeal I am not sure where it leaves us.

Again, please remember because of the almost across the board opposition to the GSEs, I am cynical when it comes the companies/shareholders rights being violated.

I hope that's the sustainable finding, but.....We all should get a chance to see in the next several weeks.

Michael Gatti said...

Thanks for your response and for bringing me back to earth, any ray of light ya know.
The legal stuff reminds me of walking to school as a kid, up hill both ways. Anyway thanks for what you do.

Bill Maloni said...

Funny, I used to walk to school and home twice a day, coming home for lunch made by my stay-at-home Mom. That's what a lot of us did.

Remember the year you had no shoes--when it snowed so heavily--and the next one, when they took away your legs. ;-)

Just root for one court case to go the plaintiffs way and then sit back and watch the reactions, both the market and political.

Michael Gatti said...

Our childhoods seem to be very similar. I often long for those simpler times, not for youth
(although that would be nice) but for the gentler side of society. People helping each other and being involved in community.

Sorry, greatly off topic.

Take good care.