From Maloni to the Big Guy at 1600 Pennsylvania Ave

Thank you for acting presidential, Mr. President

GSEs, the POTUS, and some Iran stuff……..

If you’ve seen my last few blogs, read my answers to questions in my blog "comment section,” you’ll understand why I think the wheels have come off from Treasury’s plan to end the GSE “conservatorship” and return Fannie and Freddie to some form of private ownership, through a recapitalization plan. 

In hoping to raise the tens of millions needed to achieve what government officials have proclaimed, Treasury and the GSEs regulator--the Federal Housing Finance Agency (FHFA) and its new Director Mark Calabria--still have to publish a new capital plan for the two enterprises and, likely, settle with shareholders of the original companies currently suing the government in a variety of cases. 

BUT, I think something has happened in the past few weeks to take the momentum from that promised action and created what appears to be discord between Treasury Secretary Mnuchin and others from the Administration. 

A constant among GSE opponents has been the nation’s largest banks, the various right-wing think tanks, media, Senators and Congresspeople who oppose the Mnuchin idea (which reportedly largely was shaped by his former deputy Craig Phillips, who seemed to have been forced from the “DC in crowd” or just got fed up and left the Admin). 

So in this blog, which starts with my serious “thanks” to the President, I thought I would share what I am seeing on the GSE scene and hope word gets to the POTUS that someone on his team isn’t doing their part. 

Your guess on who that may be is as good as mine, but I’ll accept your guesses in my comment section.

Back to my Trump thank you and connected matters.  

I sit here writing, on Saturday evening, June 22, one day after my wife and I celebrated our 50^th wedding anniversary, just nine days after our 7^th grandchild was born to Dr. Kryssy Cates Maloni and our third son Bill Maloni, Jr.

We’re traveling to Philadelphia tomorrow to meet/see Molly Kathleen Maloni, her parents, and Baker, the family Rottweiler (our own “Good Dog Carl”).

It occurred to me as a parent, grandparent and active citizen concerned about the future my sons and their progeny will encounter, I want to thank President Donald Trump for making a decision not to retaliate against Iran’s destruction of one of our drone airplanes and risk  escalating a fight he started and then rhetorically ratcheted up. I hope he doesn't deviate.

War should be unthinkable, a last resort, Mr. President, absent a huge and extreme provocation.

President Trump, your early moves involving Iran were questionable, as they baited the Iranians. But, your second moves last week were prudent, better, and more surefooted.

Don’t renege on your latest more statesmanlike position Mr. President.
From what I’ve read your instinct about opposing wars is right, unless faced with an incident in which there was serious deadly damage to the United States, its citizens, or our national interests.

A lone drone being shot down ain’t one of those. (BTW. Someone might want to handcuff or arrest John Bolton, until you can develop your secondary and tertiary Iranian planning. Talk more, threaten less.)

You are surrounded by some whacky staff people and I worry the foreign policy stability and breadth of experience you need in these times may not be present in your one-dimensional war council or inside your own family. 

Widen that circle of advisors. There are plenty of thoughtful Conservatives with whom you can counsel without appearing like you’re knuckling under. Talk to your presidential predecessors. Include a few Democrats—inside the Beltway and a few more outside-- and earn credit for bipartisan discussions. Show patience.

I’ll stop with the praise and kudos and just hope your angry side doesn’t overwhelm your thinking side and we find ourselves in a war that quickly escalates and could turn nuclear. 

Iran isn't Grenada! 

A GSE winner for President Trump... 

A matter far less cosmic but just waiting for you to intervene and indicate your wishes, Mr. President, is what appears to be an internecine battle within your Administration--between Secretary Mnuchin and “others”--who are grappling with Treasury’s decision to free Fannie Mae and Freddie Mac (the GSEs or government-sponsored enterprises) from their 11-year-old federal conservatorship,” a Treasury promise which has been sitting out there for most of the past two years.

But that "stopped financial traffic light" still exists, sir, unfixed.

An executive action plan, designed by Treasury--with ample input from most stakeholders--is ready to operationalize.

But your team has some foot-draggers.

Conservatorship is a pretty word describing that Fannie and Freddie were nationalized by Treasury over a decade ago, with their financial assets expropriated, boards neutered, and management marginalized. Operationally, however, they still support—quite successfully--the nation’s homebuyers, providing billions in liquidity.

The GSEs structurally exist, but in that operational purgatory where all key decisions are conveyed to them by government bureaucrats and regulators.

The nation’s secondary mortgage market sets the rules for the nation’s primary mortgage market, controlled mostly but not exclusively by our country’s large commercial banks, which for years have tried to displace Fannie and Freddie but have failed. 

Banks can’t match the GSE efficiency, desired consumer access, and pricing.

Given your real estate development history, the importance of people owning the roof over their head, and your chagrin for turfy federal bureaucrats, a bold domestic action ending the GSE conservatorship, Mr. President would be overwhelmingly well received by those whose votes you hope to get next year.

Also, that one step alone could be a huge economic stimulus, with a flood of new good paying jobs, when homes are constructed, sold, furnished, and older homes are prepared for sale to the millions of low, moderate, and middle income families still aspiring for their share of the “American Dream.”

You could do that with one meeting when you slap down those slow-walking the Mnuchin plan, and who seem to worry more about their personal political agendas than yours.  

Freeing the GSEs is a political and domestic policy winner for the nation and for you. But, know the nation’s largest banks may not agree. 

The wrong people in town seem to have gotten their hands on this proposal’s procedural throat and are looking to throw sand in the gears of this overdue “fix,” not carry through with Secretary Mnuchin’s sound idea and instincts to fix what, a few weeks ago, you told the Realtors is a “pretty urgent problem.”

The Wall Street investment “experts”--who you told the world are being consulted--appear to support the Mnuchin plan. But, some ideologues within your Administration don’t.

I think those interests need to see what an angry President Trump does when his will is being ignored or worse being buried by excuse-making incompetents.

Maloni, 6-24-2019