Sunday, February 24, 2019

Look elsewhere Mr. Gasparino, Mark Calabria won't be your foil

What will Mark Calabria do as head of the FHFA?
He will be a good and loyal Administration soldier

The Senate Banking Committee (SBC) has scheduled a committee vote this week on Mark Calabria’s nomination to be the new Director of the Federal Housing Finance Agency (FHFA), the GSE regulator. The vote easily should go Calabria’s way, making his full Senate approval just as smooth. No schedule for the latter, but no real reason to hold it up.
MC and I may have crossed DC paths at some point in the past dozen years or more, but I don’t remember meeting him. I have read Calabria’s written material and reviewed other positions he’s taken. My views are based more on certain existing political hierarchies and tradition than Calabria’s conservative product on the SBC or his Cato Institute work.
Calabria has indicated in the past that he wishes the 30-year fixed rate mortgage (FRM), probably 15-year, too, would go away, so do most bank lenders; MC also has indicated he thought the unprecedented all profits 2012 GSE "sweep" is bad policy (since it denies the GSEs a ton of capital which their @$290 Billion of earnings should have generated). He also isn’t a fan of the GSE’s affordable lending obligations and by extension similar rules for primary market participants. And he also hopes Congress will approve legislation to revamp the nation’s mortgage market, so he doesn’t only possess the chore.
Strong personal views, but hardly political winners in the year before the major 2020 elections.
Will President Trump campaign on ending fixed rate mortgages or affordable mortgage lending for moderate and low-income families who qualify??
And I can't see any of the Dems doing so, when all their internecine bloodletting concludes.
I may be wrong, but I don’t think questioning Calabria’s GOP loyalty quotient rises to the bizarre scare level of Fox Business News, Charlie Gasperino and his colleague Lydia Moynahan are floating, predicting a fractious dispute between Calabria and the current acting FHFA Director, Joseph Otting, Treasury’s Crag Phillips, and Treasury Secretary Steve Mnuchin.
I believe this is a case of a very worried anti-GSE crowd whistling past the policy graveyard knowing this WH (and by extension Steve Mnuchin) is capable of following its own GSE drummer, quietly mouthing “bipartisan cooperation” to the Hill, while simultaneously gesturing it thinks the “Congress is #1”—at least I believe that’s what that one finger salute means—but then going its own way.
So we hear from worried Gasparino, Alex Pollock, and various other Rightwing solons—not accustomed to being on the defensive--ramping up their fears this Administration might move on its own, realizing that Congress—even when it was run by the GOP—couldn’t produce GSE restructuring or reform legislation.
The Righties are trying to sow doubt and foster "black flag" fantasies
to slow what might be an effort to resolve administratively these contentious matters flowing from the GOP's 2008 Fannie and Freddie "conservatorship" declaration.
But, as one Admin GSE principal was quoted at the Pepperdine GSE conference, “If we don’t do it, who will?”
Poor Charlie—who has been savaged in various blogs, especially where GSE investors hang out—has been called a ton of angry names, with “GasBag” and related memes the most printable in a community blog.
In this piece, Gasparino was reduced to quoting ”unnamed” WH sources worrying about Calabria going off track. C’mon Charlie, name a few names?
Calabria—until he demonstrates otherwise—I think is a team player, a staffer to the SBC and former chairman Dick Shelby (R-Ala.), CATO fellow, and VP Pence’s chief economist. That’s a lot of GOP heritage against which to rebel and still hold onto his new job.
I think it would be most unlikely, and indeed uncomfortable, if Calabria leads a revolt against the WH—as Gasparino would like you to believe—given MC’s lineage.
IMO, when/if a Trump executive or regulatory action comes, it will be a Treasury-blessed event, with Calabria on board. He may even be given a starring role in a few weeks, if the White House agrees to let Fannie and Freddie keep their last quarter’s earnings to build some capital base and for Calabria to announce that fact.
I keep returning to a major reality. The reason it has been so difficult--for the past 10 years to blow up the GSEs and start over, whatever the scheme-- is they work and have worked in the past. Plus, the nation’s largest financial institutions--which for years have begged Congress to do away with Fannie and Freddie--are not reliable stewards of both the nation’s primary, which they run now, and also the secondary mortgage markets for which they yearn.
The banks just can’t be trusted.
Fannie and Freddie succeed too much—even with their FHFA shackles--first and foremost for consumers who aspire to own a home of their own. The two also produce for system professionals, i.e. Realtors, builders, lenders of various types and sizes, who populate the mortgage finance system and rely on those GSE  borrowers.

And, while I am on it, no Democrat in the Congress will oppose making mortgage finance more available to qualifying lower-income families.

Charlie and friends, don’t go back to your erroneous pre-2008 GSE beliefs since you really don't understand what Hank Paulson did to the GSEs and why? It wasn’t about Fannie and Freddie having losses and not being able to access the domestic and foreign debt markets.
It was ideological, not structural! The facts are there for all of you to read.

Maloni, 2-25-2019


Unknown said...

Thanks again Bill for putting the current situation in its properly unbiased perspective. Truth and real understanding is so rare in current discourse about anything these days and more so regarding the gses. Their very nature makes them esoteric to most and the disinformation campaign waged against them make you, David Fiderer, and Tim Howard the only voices I trust in my longsuffering hope that my IRA gamble and "principled position" bears fruit before I get much older. The current state of other things may turn out to be even more problematic however.

Reformed Apologist said...

Nice job. Gasman is a fraud.

Sagasea said...


Bill Maloni said...

Ron--Thank you, but add Tim Pagliara (Investors Unite) to your list of GSE advocates and a few other somewhat reticent folks who only use nicknames on public sites.

Reformed Apologist--thanks for reading.


Sagasea--I agree with you, but Gasparino's prior positions make it easy to spot his agenda.

G. Buckman said...

Bill, perfectly stated as always.

The real truth, as it pertains to Charlie, is one of an insecure, two-bit TV News personality attempting to use his pulpit to bully individual shareholders whom he spars with in the Twitter ring. Unfortunately for good ol' "GasBags", he has a GLASS JAW and is about to hit the mat after Calabria's (WH/Admin) right cross connects to his - made for radio - face. Don't fret, he'll eventually stammer to his feet and proclaim - with the same arrogance and ineptitude that put him down - VICTORY, only to find the crowd having crowned his opponents winners long ago. Let's face it, Charlie desires the fame of the Octagon, but unfortunately lacks the skills and scruples to last very long.

Let's Get Ready To Rumble....

P.S. Hey, I'm having a little soiree in my mom's basement; she's making Hot-Pockets, so come on over! (for those who follow "GasBags'" childish, slow-motion Twitter "jabs")

Fercris Hart said...
This comment has been removed by the author.
Fercris Hart said...

Let the GSEs Rock

With lyrics by "the Sainted One", it's time to Let the GSEs Rock!

Now out of New Orleans comes a new judicial chance
Eighteen federal judges, some riding a-scance,
En Banc to take a new Lamberth stance
As they consult deep in their law books
Nooch, Otting and Phillips run to GSE Treasury nooks


There’s gotta be a real fix acceptable to all
We tell each other, ‘cause this system has the balls
See it workin’ these past ten years, spite-a bank bullshit n’ anti-GSE fears
And there's a hundred billion for Uncle Sam
If we don't foul up the executive plan


So now at last between the Courts and the Admin
There finally could come a GSE win    
N’ the best part is Fan and Fred can finally serve the public again!
And there's a hundred billion for Uncle Sam
If we don't foul up the executive plan

Bill Maloni said...

Mr. Buckman--tell us what you really think about Gasparino, don't hold back??

I'm in for the party. Can I bring my Score Four or Scrabble games?


Fecris Hart--I love Zydeco and Polka music, just can't figure out which goes best with those lyrics???

G. Buckman said...

Bill, just in case good ol' Charlie GlassJaw shows up to the party, we probably want to keep it simple. Might I suggest something like Musical Chairs or Duck, Duck, Goose - so he doesn't feel left out.

Bill Maloni said...

I understand--

Maybe Rock, Paper, and Scissors?


A small note of deep appreciation. This has been the highest hit day (375 so far) in my blog's 10-year history.

Thanks all of you and especially the guy who gave it exposure on Twitter.

Anonymous said...

And all this time I was concerned you were converting millions over to the Liberal Left and now find out there are only 374 of us? LoL
Case in point, great blog for GSE related information and not so much for Political Prpoaganda. It’s ok to throw a dart at our great President once and a while, after all it’s your blog.

Bill Maloni said...

Thanks Anon--

I am happy I am making you happy. I'm not teasing, if laying off him represents my share of lowering the rhetorical political/ideological hostility, I'm in.

As I said the other day, as long as I have decent GSE stuff to share, I don't have to go after DJT, since so many others are doing it.


I believe some of the Cohen congressional dialogue yesterday regarding Trump Towers Moscow explains the reasons ($$$) the POTUS has been friendly with and soft on Putin.

Russia long has been a pariah and most US Presidents--both parties--have recognized that and treated Russian officials as dangerous, devious, trouble making, thieves and villains.

Except for its nuclear weapons, the country long has been a place of shortages and needs of all types, which adds to its international; insecurity and neurotic profile. And that won't change.