GSEs and that damn hotel in California

Welcome to the Hotel California……..

Stacked in my car CD player, right now (even after—parked in my driveway--the vehicle was rifled by a thief who got my roll of quarters because I don’t know how to use my cell phone for parking meters) is “The Eagle Greatest Hits,” along with my CDs featuring the most famous R&B groups of the 60’s and 70’s, Drifters, Temptations, Four Tops, etc.

The Eagles monumental hit “Hotel California” is the GH’s album’s first cut.

It’s a song that has as many “I swear to God” interpretative connotations as there are suggesters, all musing about the meanings in this anthem to the Left Coast, drugs, Hollywood and the entertainment industry. (Editorial Confession: my youngest son is employed in LA as an animator on “Cosmos,” a network science show aimed at the entire family.)

The most accurate explanation I find comes from a long-lost interview with original Eagles founders Glenn Fry and Don Henley who said the “California” story is about the wild and hyperactive, swashbuckling and uncontrolled LA music scene/industry, which gobbled up and signed new acts right and left used/abused and then kicked them to the curb with barely a thank you or compensation for their original and occasionally successful efforts.

The most haunting line about Hotel California is, “You can enter anytime but you can never leave.”

That line was used last week, again, this time in court, by an appeals Judge hearing the Collins GSE case to analogize the federal government conservatorship requirements and Fannie’s and Freddie’s inability to escape them, no matter how good the plaintiffs’ legal arguments or how successful is the GSE operations.

The irony here—given my belief that no federal judge will rule for the GSE plaintiffs unless and until the Trump Administration (Mnuchin and the POTUS) indicates its desire that the GSEs remain functioning and in control of entrepreneurial managers as well as their private shareholders (even in “utility mode”).

The judge who made the seer like observation about the trapped mortgage providers/guarantors is one of a troika of jurists who could bust the GSEs out of that evil hotel, but I doubt ill it will occur, until something like the triggering mortgage market signal is indicated by those who control our government.

Regarding the latter possibilities, as I’ve stated so often, it falls on Mnuchin and FHFA Director Watt—more the former and less the latter—to drive an executive/regulatory action to free the GSEs and return then to real functionality, keeping their earnings and building capital.

Mnuchin’s Future? No worse than other cabinet officials, but….

But, just this week a slight shadow crept over that wished for but not quickly realized hope—as Secretary of State Rex Tillerson just found out today and Gary Cohn learned a week ago.

Cabinet status in the Trump Administration is not a long term sinecure (are you listening Betsy DeVos, Ben Carson, Steve Pruitt, Kellyanne, et al).

Mnuchin by all reports is OK with DJT, says the right things about the GSEs, but he is not a favorite on Capitol Hill (see his outrageous exchange with Rep, Maxine Waters (D-Cal.) where he clearly tried to fill his non responses with not-on-point formal oration intended to run through the allotted five minutes each Member gets to ask questions. The 300 seconds also includes a witness's answers. If you prattle, intentionally, as SM did, you choose “run the procedural clock” disrespecting your questioner.

Added to his dournessindividual lack of appeal/winning personality, the Treasury Secretary’s Scottish actress/model wife, Louise Linton--has displayed qualities which are the equivalent of “nails scratching on a DC blackboard,” with her bragging mention of the couple’s financial success, major tax requirements, her designer clothing, and  Marie Antoinette approach to DC life.

Unfortunately, those things matters for cabinet, if your goal is to keep your job and not to wind up on Trump’s bad guy list (Tillerson, Cohn, AG Sessions?).

Bottom line, will Secretary Mnuchin be around/last long enough to rescue the GSEs? Hoping so.

Speaking of Gary Cohn….

When Gary Cohn walked out of the White House’s top economic job over his dispute with the POTUS over Trump’s demand to impose steel and aluminum tariffs, and Cohn’s concerns over starting a trade war, the name of Larry Kudlow, TV talent and former Bush Treasury officials was named as a possible replacement. That noise has increased in DC.

Initially, I took to my small group of GSE friends and mentioned my opinion why I thought Kudlow would not be good for Fannie and Freddie, remembering his comments and op-eds over the years, suggesting he was not a GSE fan.

However, I was corrected by some GSE graybeards, whom I respect, pointing out Kudlow has strongly suggested that GSE shareholders have been treated unfairly/poorly, as well as Kudlow being a major fan of Josh Rosner, a pro-GSE stalwart for the past several years.

If Kudlow gets Cohn’s job, I am rooting for the graybeards!!

Pennsylvania’s 18^th Congressional District

By the time most of you read this, we’ll know if Conor Lamb—33 year old ex-Marine and former assistant US Attorney, plus Democrat candidate for Congress in today’s March Special Election—has prevailed against his GOP opponent and pulled off a stunning political upset.

Republicans have thrown $10 million into this race for a House seat President Trump won by 20 points in 2016. If Lamb, whom I’ve met and support, can triumph, it will add to the recent election rejections of Trump and the Republicans, happening so far only at the state level. Now it’s a House of Representatives seat.

Conor Lamb is sharp witted, very bright, articulate and more conservative than most House D’s.

This is a white collar congressional seat, south and east of Pittsburgh, where Trump, twice, VP Pence, the notorious Kellyanne Conway, and other GOP bigwigs have crisscrossed to try and boost their lackluster candidate. The POTUS’s embarrassing 65 minute speech in suburban Pittsburgh last weekend, was filled with spurious comments, putdowns, and the usual Trump untruths about his performance as President.

As POLITICO observed, “If Lamb wins, or even comes close, it will be a signal that Republicans are in danger even in districts where Trump was won handily in 2016, and raise Democratic hopes of capturing the House and Senate this fall. The race would also serve as a model for Democrats running in deep-red districts across the country.”

Maloni, 3-13-2018