Monday, March 20, 2017

Happy Spring to All

First they came for the Socialists, and I did not speak out—
because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out— 
because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out— 
because I was not a Jew.
Then they came for me—and there was no one left to speak for me.

Martin Niemöller (1892–1984) was a prominent Protestant pastor who emerged as an outspoken public foe of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps.

Benjamin Franklin: “We must, indeed, all hang together or, most assuredly, we shall all hang separately.”

GSE News and Trump Antics

I’m back in the frigid East after a week of sunny California weather. I missed most of the constant media coverage of the very strange Administration and its leader, President Donald Trump.

Here’s a brief GSE activities review. Later, I’ll get to the national and international politics segment—but, for Fannie and Freddie, it’s all Mnuchin and the courts, still.


Hooray for the Independent Community Bankers of America (ICBA) for its 2017 legislative agenda supports a GSE capital restoration plan to free the GSEs and return them to their more traditional role of supporting lenders in a variety of ways, as well as Realtors, homebuilders, and most importantly the public with the copious amounts of mortgage liquidity they provide, albeit still operating with the equivalent of federal manacles.

The major housing trades—like the Realtors, Builders, and MBA—all have jello-like or weasel worded GSE endorsements. None are simple and say what they truly think, feel, and want, as the small bankers decidedly have.

The housing industry big guys have the caveats and “Yes, but…” explanations, which invariably mean, “It’s all about the GSEs market control and revenue, which we want to diminish going forward.”

Yet and still, the MBA is leading the other two trades by their association noses.

The GSE Court Cases

--Anyone reading the available mortgage media—which I didn’t last week—knows more than I do about what’s happening on this important front.

The Administration’s opposition last week to the Consumer Financial Protection Bureau (CFPB), claiming its structure is unconstitutional has relevance for the GSE regulator, the Federal Housing Finance Agency (FHFA), structured similarly, to face the same charge from the Trump Administration.

Selfishly, I'd hate to secure a GSE victory at the expense of the nation losing CFPB, which I think stands alone in its ability and willingness to support the many financial, credit, and product hassles the US buying public faces.

--It would be a surprise if the GSE plaintiffs in the Appeals Court decision seek and “en banc” review from the entire Court, having lost out with Judges Ginsburg and Millett, as solid as Judge Brown’s minority opinion was.

That leaves the Supreme Court, with its current 8 members who could just split, suggesting plaintiffs might want a full slate of Justices present if the highest court is willing to take up their appeal, meaning waiting for Judge Gorsuch to win his Senate approval.

--The Collins case in Texas and the Hindes-Jacobs case before Judge Sleet in Delaware are could produce some positive GSE news but my sense--absent something dramatic form Secretary Mnuchin--investors are getting tired of the wait, the constant DoJ opposition—which we all hoped the Trump Admin/DoJ would cease—and the tone of the budget discussions which suggest there will be lots of pressure to reduce some very popular federal programs (which work in Red states, too) and husband federal revenues.

The other slice of history I share this week is my belief that nothing ever happens on any schedule GSE advocates want; dates slip, court procedures--which seem sure things--aren’t; bold talk about the importance of GSEs and housing to jobs and economic recovery, disappears into the atmosphere—and GSE investors confuse their hopes and beliefs with the cold, cruel world of political and legal calculus!!

I believe that’s why GSE stocks are so soft and in fact are down in recent sessions. Some investors are war weary, losing faith, and want out at any price close to what they paid. (That also could be a wonderful buying opportunity for some but I wouldn’t treat it as such, because of the uncertainty which most of us have witnessed.)

--I loved the Gretchen Morgenson article from last week (reading it two days after it appeared!) and she’s right, those pending dates might reveal something of the Admin’s GSE plans—if they exist--but they also could quickly pass by with the last set of dividends being swept and AG Sessions’ DoJ still fiddling, if not opposing, release of some 10,000 documents, which many people think merely expose the clay feet and dodgy and possibly illegal behavior of the Obama Treasury and Justice Department. (Makes one wonder why this White House would withhold any and not drown Judge Sweeney’s Claims Court in those documents?)

(BTW. Keep reading David Fiderer’s ongoing work on these matters, available on GSE Links. It’s first rate and insightful.)

The last thing on my GSE agenda is lessening the worry that any future tax cut will narrow the value of the remaining GSE DTAs and make current matters worse. I don’t buy that and would look for this issue to be factored in—when and if—Mr. Mnuchin offers a recap plan.

With the DTA matter getting resolved in discussions with Treasury and the GSE plaintiffs. DTA tax changes won’t stop/slow/sink the GSE ship IF Secy. Mnuchin re-launches it.

President Trump; a 3 Month Perspective; Problems not Solutions, Lies not Truths

Since his inauguration, the world has seen President Trump’s office display wild insecurity and administrative disorganization, proffer several weird allegations, the POTUS’s thinner skin displayed more often, more conspiracy allegations than a year of “X-Files” broadcasts, and lots of GOP confusion and unhappiness, while just flummoxing those who didn’t vote for him.

Is this a preview of the coming Trump years? I am not a Trump fan, as noted, but hoped for far more cohesion from him and his short staffed team.

In the past two weeks, alone, DJT accused Barack Obama and others of wiretapping his Trump Towers political HQ, despite the rejection of those claims by the House and Senate GOP Intelligence Committees, the FBI, and many prominent congressional Republicans; issued his second “immigration plan” to keep “undesirables” out of the United States--which once proudly described itself as a “nation of immigrants”—and this one, like the first, shot down by federal judges; showed his rude/crude ass to Germany’s Andrea Merkel, despite her nation being a solid US ally in Central and Eastern Europe (maybe DJT's pissed because Germany kicked out his grandfather for refusing to do his military service, i.e. like grandfather like son?); embarrassed himself by accusing the British government of being party to his fantasized non-existent  wiretapping which never happened, according to all of those GOP sources (not including Sean Spicer and “Kellyanne Conwoman,” who insist it happened because “The Donald” said it); and then---there is his first Budget.

Anyone surprised that the Billionaire’s first budget  went after many programs benefiting the poor and elderly, when  he wants to boost military deficit spending, despite no true evidence that the latter needs all of that growth?

Candidate Trump railed against escalating drug costs, so where is his effort there? He campaigned for massive infrastructure spending because our community facilities are falling apart, but where is his plan for that? He talked about support for the elderly but he’s cutting “Meals on Wheels.”

I like Public Broadcasting System and National Public Radio—two major Trump budget victims—but buy two less fighter aircraft he wants and pay for a year or more of each of PBS and NPR, plus more meals delivered to the elderly.

Ditto close one of those dozens of unneeded US military facilities--which the DoD doesn’t want, but local politicians do--and we’ll save those three programs and maybe the Women’s Infant and Children healthy baby nutrition funds, also due to be slashed.

He campaigned against “Obamacare” and said his “Trump care” would be better, fairer, and less expensive, but it looks like it actually will knock millions off the medically insured lists and drive up costs for those lower income families still eligible? (But, the insurance companies should do very well, thank you.)

Interesting to note that his new OMB Director, Mick Mulvaney admitted, DJT’s campaign promise of “insurance for everyone” will not happen, since Trumpcare won’t offer universal coverage. Jot down one more prevarication.

Last week, when the “non-partisan” Congressional Budget Office—with executives all hired by the House and Senate GOP majority leaders—pointed out those Trumpcare unhappy political facts, the President,  Sean Spicer. OMB Director Mulvaney, et al, began institutionally trashing the CBO, using Chapter 1 of Trump’s playbook, “If you can’t beat them, lie about them.”

In the GOP's eyes, why was the CBO resolute and responsible in the past--when it dumped on Obama initiatives--but suddenly, incompetent now, when it points out Trumpcare flaws?

Vladimir Putin couldn’t have paid any other human being enough to do so much damage to US domestic and foreign relations, as well as slander so many of our societal institutions, as “the Donald” has… and he’s barely been in office three months.

I know a lot of people like our President and remain optimistic, but my hope is that he will level with the American people and explain—in some kind of cogent and sustained detail—his budget objectives, his foreign policy plans, his belief that his “Wall” will keep people out, and—finally--discuss what’s in it for the American people if the Russians suddenly are his and the GOP’s new “besties?”

As the US President, rather than Donny Jr's and Eric’s father, I believe DJT is better off assuming Russia's government and its leaders are pariah and have nothing the US needs or wants, even if Trump Inc. hopes to build hotels, resorts, and casinos in Putin-land.


Trump the presidential campaigner:

"I'm going to be working for you; I'm not going to have time to go play golf," Trump said during a 2016 event in Virginia.

Trump the President:

CNN reports President Trump plays at least 10 rounds of golf in his first 60 days on the job.

Sure he can golf, occasionally, but these Mar-a-Lago golf rounds are costing taxpayers millions every weekend DJT –who reportedly watches lots of television during the week--visits Florida with his family and friends.

Maloni, 3-20-2017


Anonymous said...

Do you think the same guy that has kept 11,000 documents secret, isn't capable of spying on folks from the other side? I only reference this because our our mutual interest in the GSE's. I can go on and on and on. Like the talking points about the Benghazi video from Susan Rice? Was that a lie or mistake?
How about the IRS? Any issues going on over there during the last Administration or is that Fake News? Did the BHO Administration try to tap Merkel's phones or not?
Most people can't stand NPR or PBS because they are a Liberal propaganda arm and got away from their original intent. Information coming from CNN, who knowingly gave debate questions to HRC or the NYT's that is in another stratosphere when understanding common folks, is why Trump got elected. Not that he is a great guy.
Many of us totally understand what you are going through. My advice is try to stay calm because it's going to be a long four years. Trust me, we had to endure it for eight years and if you get to caught up in it it could ruin your health. It is kind of odd though that the guy you despise so much is the only hope we have to make right what the BHO administration did to us with the NWS.

Bill Maloni said...

OK, I'll stay calm but I've never seen so much societal and governmental upheaval in my lifetime, driven by absurd extremist views and immature behavior, "wiretaps," inaugural crowd size, NATO abuse, Russo-obtuseness, immigration straw men, etc. etc.

I am waiting for some mature "Trump the sharp eyed businessman" presidential behavior, but I have yet to see it.

I see "Trump the Bully" and "Trump the Crybaby," who likes to threaten others, and dwell on "pu--- grabbing," but so far nothing else.

But, I will stay calm. Thanks for reading and sharing.

Anonymous said...

Anonymous said...


DJT will be characteristically unpredictable for people who are used to politics as usual and same political correctness.

What will be your advise for folks without jobs, without incomes, without health care, without a place to live, no where to go for help and without any hopes even after long 8 years?

Can you please list the greatest achievements by people you most admire?

Bill Maloni said...

Anon--I am no ducking your question, but not sure exactly what time frame you mean?

Are we talking about people who suffer from those things now--after eight years of BHO--or people who might suffer those things after (possibly) eight years of DJT??

Anonymous said...

Obviously after 8 years of BHO, there is no middle class left. Economy and jobs situations are no better. One can blame Bush also. But is it not the same politics as usual and same political correctness?

It is quite obvious that BHO has been master of media and optics where as DJT seems to be focused on substance and results. Did not we all see hypocrisy of BHO administration about openness, transparency and also respect for rights of FnF shareholders?

Now probably BHO will focus on book deals and speaking fees.

Bill Maloni said...

If you were Barack, wouldn't you focus on books deals etc?? (Plus, you've already read that BHO and Michelle have book deals in place. What do ex-presidents do?)

"DJT seems to be focused on substance and results"--did you really write that??

Lets' see, "the Donald as campaigner," promising "insurance coverage for everyone" and then backing the piece of crap that the House wil vote on today, leaving more uncovered, giving more to the wealthy, and cost more??

Inauguration crowd size(s), being wire tapped, blaming Germany, England, Australia, NATO, and others for things he finds irritating?Attacking public personalities, i.e. Arnold and Streep, when they disagree with him?

He's the President--and will be for the next four years--not "Homecoming King."

Golfing almost every other weekend--away from his existing taxpayer paid for home (the WH)--and chaWouldn't you focus on books deals etc?? (Plus, you've already read that he and Michelle have book deals in place.")

"DJT seems to be focused on substance and results"--did you really write that??

Inauguration crowd size(s), being wire tapped, blaming Germany, England, Australia, NATO, and others for things he finds irritating?Attacking public personalities (Arnold and Streep)
when/if they disagree with him?

He's the President--and will be for the next four years--not "Homecoming King."

Golfing almost every other weekend--away from his existing taxpayer paid for home (the WH)--and charging the US taxpayer for his "Golf Jones," when he take plane loads of staff, family, guests and friends to Mar-a-Lago? Rejecting his daily intelligence briefings, presiding over a mind boggling series of contacts with Putin and Russia?

You and I have a different definition of "substance," my friend.

Bill Maloni said...

Previous Anon--I messed up that response and there's no easy way to fix it and clean it up, but I think you get my meaning.

Anonymous said...

DJT's general appeal is not his personal morality but it
is his "Make America great again" message.
It is economy, employment, security, illegal immigration etc...

DJT will also be rated at the end of his term.

Bill Maloni said...

Anon--Frankly and unselfishly, I hope he earns all "A's." (Obama didn't and was closer to "C's.")

I just find Trump's arrogant MO dispiriting and non-conducive to representing of the diverse group of Americans (not just racially and ethnically) he is supposed to consider. The latter fact--more than political majorities--dictates moderate or more diluted approaches.

His "my way or the highway" just might encourage more opposition, from his won party, if he doesn't kiss a little more ass and--as I will note in my next blog--show some humility and less hubris.

Our government and our history scream that presidential action can't work that way. I just hope he takes away more from this past week's actions than anger and self righteousness.

We'll see.

Anonymous said...

I contribute small amount to BO campaign and voted for BO and supported ACA.
BO campaigned as a change agent but ended his term with big disappointment.
From my own personal experience, ACA is big waste of money for most people and it is in a death spiral. Without FnF NWS plunder, ACA would have been dead by now. Congress never appropriated money for ACA.

Also during Bo's term, openness, transparency and rule of law took back seat.

Well this time I voted for DJT and hope to have some good paying job for some time and do not have to worry about the useless ACA.

Most investors invested in FnF pre and post NWS betting that rule of law will prevail and these investors are entitled to win that bet. Now with DJT, these investors have some good chance that this rule of law bet will be won.

Ideologists should have no place in Public Governance and unfortunately BO turned out to be an ideologist.

Bill Maloni said...

Anon--I hope you get that job and soon.

I understand why you voted for DJT and I have been critical of BHO for more than just his position on Fannie and Freddie.

But, "ideologist" is just a fancy word for someone who has (strong) political feelings and leanings, such as Steve Bannon--Trump's apparent guru and teacher--I'm not sure DJT has those since he has been on both sides of major political issues for the past few years.

Whether we like it or not politics and ideology still run the nation's workings, i.e. elections and votes from town hall meetings to schools boards, state houses, Congress, and the presidency.

Not sure, as a nation, I want to see that disappear, but I also want better and more responsible government.

I hope you'll agree it's the GOP's chance to produce that. They have no obstacles but themselves, as last Friday's vote showed.

Anonymous said...

You certainly have valid arguments against DJT, even when one uses reasonable criteria.
You are right about ideology and politics. But when it comes to governing, stubborn ideology does not help.

If democrats wants to win back the power they need come up with plans and message to solve the problems people are facing. Acting like stubborn opposition party will also keep them as opposition party for good time.

Thanks for your openness to opposing views.