I’m Back!!
After spending 11 days in California with two of my (four)
sons, my three grand kids, wonderful daughter-in-law, and my youngest boy’s
super girlfriend, I have returned, revived, and ready to do battle.
I got to meet for the first time my grand dog “Angus” and
help build the doggy gate to keep him from the new carpeting in the second
floor; see my 10 year granddaughter graduate to middle school (she delivered
the opening prayer); play in her select soccer team game; watch my 12 year old grandson play four ice
hockey games, i.e. “skate Rex, skate”; and see my five year old granddaughter
at her ice hockey practice where she was the swiftest skater on the ice and a clearly
budding athlete as she grows up. (She has an array of backyard athletic
equipment to delight an Olympian and can use all of it, with agility. Remember
the name, Seaver Star Maloni, in a few years, she going to be playing
hockey, soccer, or softball at some California university.)
Did I mention my three visits to the beloved Barona
Casino and the wonderful treatment I received there, although it didn’t
match my delightful family experience (I love SD’s fish tacos!)? If you a casino enthusiast and traveling to
San Diego, try and visit Barona. It’s a treat, both in service and amenities
(be sure and hit the Buffet)!
*****************************************************************
As usual, not much new has happened on the GSE front while I
was in Cali, which mostly is good news. We’re headed for summer doldrums.
Before I left, there were rumors that this Administration
might replace Mel Watt when his term is up next January with someone currently
in place at another Executive spot, ala Mick Mulvaney, doubling up at Director
of the Office of Management and Budget and head of the Consumer Finance
Protection Board, which has been a fizzle for every US consumer but a boon for
the banks, as Mick tries to scuttle as many of the internal pro-buyer/shopper
CFPB operation he can.
I don’t believe that will be the situation, but if that
becomes the call, IMO, the three guys who could get anointed to do double duty
overseeing the GSEs and their day jobs are: Treasury’s Craig Phillips,
currently Secy. Mnuchin’s chief assistant; Brian Montgomery, who now runs the
Federal Housing Administration (FHA); or the mostly undesirable choice (for my money) Michael Bright, who heads
Ginnie Mae and worked for Sen. Bob Corker (R-Tenn.) and various other interests
lusting to do away with the GSEs.
The Mortgage Bankers
Association were still looking for someone to succeed their retiring
President/CEO David Stevens, for whose long term good health we all root. House
Banking Committee Chairman Jeb Hensarling (R-Tex), whom I thought would be a certain
pick, claims he’s not interested and rumors are that the MBA wants a manager, not a pol for the job.
We’ll see.
(As I was writing this segment on June 7, the MBA announced that it had
hired Robert “Bob” Broeksmit to follow David Stevens. Bob is a neighbor and an
industry vet, comes from his own mortgage management firm, but as early rumors
suggested he is far more an industry insider than politician. Good luck,
neighbor.)
The National
Association of Realtors also is seeking a new Exec to follow Jerry
Giovanello, who will retire this year. Joe Ventrone, long time DC housing maven
(former GOP Hill housing subcommittee staffer, HUD official, and NAR veteran)
has taken on more of the Realtors’ GSE portfolio.
Speaking of the MBA, it this week sent an eight page tome to
the GSE regulator asking to be let in on the decision making process far sooner
than has been the case.
Why? Did they send similar letters to the Fed, OCC, FDIC and
bank regulators asking for more /more early communications and involvement in
bank activities regulated by those agencies?
The trade association so worried about the GSEs—because of
this big bank members—might want to pay closer attention to what the Justice
Department, Treasury, and SEC are investigating related to possible “trader
manipulation” (read bank trading desks and Wall Street firms) of GSE debt and
MBS securities sales.
Maybe Broeksmit can/will exercise superior judgment and turn
the MBA from its constant belittling and harassment of the GSEs, which I long
have suggested only benefits their big bank members as the expense of
their small members whose operations rely on the GSEs.
GSE BS
Below is the kind of rightwing GSE hyperbole which regularly
gets peddled in this town, in this case by the staff blog of Citizens Against
Government Waste (CAGW) and the Council for Citizens Against Government Waste
(CCAGW). blog@cagw.org.
Very few recipients challenge
these scurrilous reports and their memes fester, so I encourage any reader who
wishes to, send your (critical?) comments to the two organization sponsoring
this Fannie and Freddie crap. (copy
your Congressperson and Senators on it, too.)
“On
September 6, 2008, mortgage giants and government-sponsored enterprises (GSEs)
Fannie Mae and Freddie Mac were placed into
federal conservatorship in the wake of the housing market crash and global
financial crisis.
“More
than a decade later, neither the GSEs, the Federal Housing Finance
Administration (FHFA), nor Congress have offered any viable plans to unwind
these entities and release them from taxpayer-backed financial foster
care.
“More
alarmingly, there are no indications that, should Congress manage to create a
path to release them from conservatorship, Fannie and Freddie will be
constrained to their original mission of secondary mortgage market
securitization. In fact, their activities over the past decade indicate
that they will continue to overspend, overreach, and overlap into the private
sector, as they did before the 2008 meltdown.
“FHFA
is the GSEs’ regulator, but it has failed to act as the taxpayer watchdog
Congress intended. FHFA Inspector General (IG) Laura Wertheimer testified at an April 12, 2018 House Financial
Services Committee hearing that nearly $193.5 billion has been invested into
Fannie and Freddie from the pockets of taxpayers. Rather than ensuring that the GSEs' “reduce taxpayer
risk,”
“Fannie
and Freddie required another $4
billion infusion of taxpayer money in February 2018, and could need a
bailout of up to $100 billion in the future.
“Despite
prior and potential future bailouts, Fannie and Freddie continue to spend
recklessly. For example, the build-out costs for Fannie Mae’s new
headquarters, according to a September 28, 2017 FHFA Office of the Inspector
General (OIG) report,
rose by 49 percent, from $115 million in January 2015 to $171 million in March
2016. Fannie Mae’s excessive purchases included a $250,000 chandelier,
$1.2 million for decorative wood ceilings, $2 million for a third glass bridge
spanning between the organizations two towers, and a $4.1 million cafeteria,
lavish appointments for an entity that is currently under federal control;
i.e., the American taxpayers.
“Beyond
the GSEs’ wasteful spending, they continue to blur the lines as to whether they
are government entities or private sector operations. On May 7, 2018,
Bloomberg reported that Freddie Mac has been extending
lines of credit to nonbank mortgage servicers. Very few details have been
provided on exactly what Freddie Mac is planning to do, and whether it will use
its privileged status to create an uneven playing field with private
businesses.
Fannie
Mae is also under increased scrutiny for edging past FHFA’s lobbying ban, according to Bloomberg, which reported that
Fannie has been “quietly meeting with people inside and outside President
Donald Trump’s administration.”
“Fannie
denies that its executives are actively lobbying, claiming that they are only
presenting “factual information on policy proposals” in meetings with
government officials. Pouring money into lobbying was a hallmark of
the GSEs’ business model before 2008.
It
should come as no surprise that there are indications that they may be
following that freewheeling model again, even under conservatorship…”
Let see who among my blog readers can identify and communicate with the CAGW all of the exaggerations, magnification, embellishments, and
falsehoods in this column/blog which Hill staffers and elected officials read/swallow
with few challenges.
Here’s a brief Maloni starter list of
CAGW blog errors/shortcomings.
-- Since 2008 and far more recently,
there have about a dozen serious legislative plans to alter, reform, or
restructure, as well as erase the GSEs, coming from the Hill (See products
Senators Corker, Warner, Crapo, et al), not to mention House Banking Committee
Chairman Jeb Hensarling. In addition the Urban Institute and AEI have authored
other plans, as has the Milken Institute, with the most thoughtful bunch being
the “Moellis plan.”
-- Treasury may have “given” the GSEs
$193.5 Billion (whether it was needed or not, a fact currently being challenged
in federal court), but the authors forgot to note F&F repaid the original 2008
$187.5 Billion given them. And have shipped an additional @$275 Billion—and
still growing each business quarter—to Treasury, because their debt, in
Treasury’s 2012 reshaping of GSE debt service, never gets extinguished. (To
anyone who can do math, that means Fannie and Freddie have sent @$460 Billion
or so to the Treasury, since about 2012, after receiving about 40% of that
number in 2008 aid.)
-- The CAGW bloggers fail to explain
thoughtfully that the February, 2018 “$4 Billion” was a temporary, onetime
event, the result not of a GSE business failure or slow down, but of
temporary tax changes made in the Trump tax reform bill—which affected
Deferred Tax Accounts (DTAs, previously applied GSE tax deductions) but now are
self-correcting, since the GSEs corporate tax rate will be much lower going
forward with those needs extinguished.
-- Tax payer risk” has significantly
been reduced for the GSEs since—at the request of banks and others--Treasury
forced F&F out of the once profitable portfolio business, where they faced
interest rate risk on $1.65 Trillion of mortgage loans portfolio. Mandatory
reductions, still ongoing, have shrunk those portfolio numbers down
dramatically to $452 Billion.
--The GSEs are prohibited by law
from lobbying or advocating for their mission or business activities, which is
why nobody is responding to this phony CAGW “dog whistle.”
But, this lobbying prohibition rule might be a
good proposal and the CAGW and CCAGW should advocate its application to the
nation’s largest banks and financial institutions, where some real waste could
be saved.
Once again, until he sticks his tiny hands in the GSE business,
I am avoiding commentary about our egomaniacal and destruction, history-fogged
President, who is rumored to be considering pardoning Sirhan Sirhan, Lee Harvey
Oswald, the Lindbergh baby killers, Charles Manson, John Wilkes Booth, and any
Neo-Nazis charged at Charlottesville.
President Trump observations from
others
I thought Jake Tapper’s discussion of the POTUS decision to disinvite
the Philadelphia Eagles form the traditional NFL-WH visit—when no members of the Eagles in their championship year, last season
ever knelt when our national anthem was played (read that line again!!)—deserves
sharing.
As was this New York Times story of the
President’s lawyers admitting the POTUS did draft part of the infamous DTJ Jr.
statement--discussing his son’s June 2016 Trump Tower meeting with Russian
representatives--after his personal lawyers and Sarah Sanders vehemently denied
same.
*****************************************************************
Topping my list of Trump commentaries is Alexandra Petri’s hilarious column—Saturday, 6-9 Washington Post--about
President Trump’s week.
*****************************************************************
G-7
After thoroughly reading through the flotsam and jetsam reporting of the
G-7 meeting and the US President’s disrespect (not to mention his “Putin
embrace,” again), I only can encourage everyone who has a grievance with Trump’s
actions, ethics, attitude, persona, behavior personnel choices, and policies, to vote against every congressional
candidate in November who claims to support DJT or who claims he/she is
“more Trump than Trump.”
It’s one way to end this nightmare!
(I hope the Canadian-born Washington Caps hockey players boycott the WH
Stanley Cup celebration as their one Canadian born Black teammate, Devante
Smith-Pelly, already announced.)
Congratulations to Doug Bibby and my
other long suffering Caps-fan friends. As a Penguins fan, having been to that NHL
pinnacle five times, I know how good you feel. Enjoy it all! You and your team
earned it!
Maloni, 6-10-2018
