Replies to post #331776 on Fannie Mae-No Politics (FNMA)

[Bostonsesco]

Yea we are??

[Patswil]

Deloitte & Touche As Part Of A Conspiracy To Destroy Fannie Mae

http://www.fidererongses.com/

Deloitte & Touche As Part Of A Conspiracy To Destroy Fannie Mae
7 Mar, 2016, 1 comment
Fannie Mae shareholders filed a lawsuit in Florida District Court that alleges that Deloitte & Touche's public stance, that it acted with professional independence in its capacity as the company's outside auditor, is a joke. Rather, plaintiffs allege, the accounting firm took illegal actions, at the behest of the Federal Housing Finance Agency and the Department of Treasury, to present a false and misleading picture of the company's financial health to investors and to the public.
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White House Role In 3rd Amendment Net Worth Sweep
12 Feb, 2016, 2 comments
Cooper & Kirk, plaintiffs' counsel in the Fairholme case in the Court of Claims, summed up its objection to the government's assertion of the Qualified Presidential Communications privilege as follows:
But White House officials played a unique role in the decision to impose the Net Worth Sweep, and this fact cannot be seriously disputed in light of the materials attached to the plaintiffs' motion...As this Court has already observed, "[h]igh-ranking officials within an agency, corporation, or other institution are not fungible," [.] and the communications of such officials are not fungible either.
Otherwise, the law firm made a very compelling case against the government's assertion of the Deliberative Process Privilege and the Bank Examination Privilege. One sure bet, the government won't accede to the requests for additional information without a fight.

Hank Paulson Launched The Big Lie Campaign On September 15, 2008
9 Feb, 2016, 4 comments
It wasn't apparent at the time. But today we can look back and observe how The Big Lie campaign-- promoting the meme that Fannie Mae, Freddie Mac and U.S housing policy caused the financial crisis--was launched just after 1:42 p.m. on September 15, 2008, exactly twelve hours after Lehman Brothers filed for bankruptcy. At the White House, Treasury Secretary Henry Paulson came forward to address an anxious nation and financial leaders.
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My Take On The Third Amendment Sweep Litigation
6 Feb, 2016, 11 comments
My take on the lawsuits challenging the Third Amendment sweep has never changed. Right away, I thought of one of those lawyer-Latin phrases, res ipsa loquitur, which means the thing speaks for itself. The phrase is sometimes invoked in negligence lawsuits, when the plaintiffs' lawyer alleges that the nature of the injury could not have occurred but for some illegal act, therefore the elements of a tort--a legal duty, a breach of duty, and causation of harm--may be presumed.
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Who Pressured KPMG To Defame The CFTC And Start A Fact-Free Media Narrative?
1 Feb, 2016, 1 comment
UPDATE: Feb.5, 2016: I'm still reviewing the GAO Report, and will have an update some time next week. The report refers to a long paper trail and statutes I have yet to review. But the report is silent on certain matters, in that:
There is no reference to GAAP or accounting principles;
There is no reference to footnote disclosure versus balance sheet treatment;
In other words, the report is never explicit about how and where the debits and the credits were misplaced. And without such information, it's very hard to figure out what the GAO is talking about without further fact checking;
There is no mention that KPMG and the CFTC OIG are the gatekeepers, the parties primarily responsible for assuring OMB and the GAO that the CFTC presents its numbers properly; and
Since the report never references the footnotes, it's still virtually impossible to figure out who, if anyone, could possibly be misled.
So far, my assessment, below, stands.

Last month KPMG made three serious, and patently false, charges against its client, the Commodity Futures Trading Commission. It wasn’t happenstance. Employees at Big Four accounting firms like KPMG do not suddenly go rogue. So you have to wonder, who pressured KPMG to invent these defamatory smears? It sure looks, sounds and smells like if was the CFTC’s Office of Inspector General, working in tandem with some Republican Senators.

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The Bubble and the Crisis: A Picture Book
1 Feb, 2016, 1 comment
Pictures Of The Crisis: Timing Is Everything

In the spirit of show, don't tell, this week is about visual enhancement, using charts to place familiar concepts into a broader context. For many this is old and familiar news; for others the info might be fresh.

Right away the charts tell you what every real estate lender knows: (a) Location, location location; and (b) Timing is everything. The point in the housing cycle when you booked the loan drives your recovery. Or more specifically, home price appreciation, positive or negative, post-closing drives loan recovery more than any other factor. This has been especially true for subprime loans.

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He helped Geithner write his memoir, but The Big Short went over his head
28 Jan, 2016, No comments
[Previously posed on 1/17/16 but lost in the shuffle to a new website host.]

Michael Grunwald neatly summed up his takedown of The Big Short in Politico with this observation: "[Y]ou can’t blame the Dutch tulip craze on synthetic CDOs." By invoking the Dutch tulip craze and other empty platitudes, Grunwald presents an analysis that fits squarely into the Stuff Happens school of economic thought. "As with the tulips and most financial crises, the basic cause was a highly leveraged investment mania," he says. Everybody, "took advantage of easy credit—fueled by low interest rates and what Ben Bernanke has described as a 'global savings glut.'" This stuff just happens, right?

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Jim Parrott's Deposition May Be Less Than Meets The Eye
24 Jan, 2016, 14 comments
An update from the Department of Never Mind: A statement by the Department of Justice on January 28, 2016, immediately below, states that Mr. James Parrott did not invoke the Fifth Amendment.


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Is AEI Laying Groundwork For A Gov't 3rd Amendment Exit Strategy?
18 Jan, 2016, 2 comments
January 18, 2016
"We don’t think Fannie and Freddie are a live issue in Washington," said Peter Wallison. He spoke at an NYU panel discussion, "The Reorganization of Fannie and Freddie," held in the Spring of 2014. "Fannie and Freddie are doomed according to the Washington way of thinking about it. We’re going to get rid of them somehow, so why even bother thinking about things like this."

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Ripple Effects Of Falling Oil Prices
17 Jan, 2016, No comments
January 17, 2016

To me the best executive summary anywhere, of the collapse of the Soviet Union and the subsequent rise of Putin, is this graphic prepared by Brookings Institute for its Energy Security series.


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Whitewashing Corporate Fraud: Boston Fed Edition
13 Jan, 2016, No comments
January 13, 2016

Part 1: It’s the fraud stupid

In The Big Short the character played by Rafe Spall is on a due diligence trip to Florida. He knocks on the door of what he thinks is the home of a borrower who is late on his mortgage payments. But he discovers that the occupant is a renting tenant, and the name on the mortgage is the name of the borrower's dog.


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Seminal Story on Subprime Fraud Ignored 11 Years Ago
6 Jan, 2016, 1 comment
January 6, 2016
The Stuff Happens school of economic thought likes to whitewash the magnitude of fraud by invoking the standard cliches--excess liquidity, tail risk, Black Swan scenario, irrational exuberance, we all drank the Kool Aid, remember the tulip craze--to dismiss an empirical review of culpability.

The antidote to this doublespeak remains the seminal reporting done by Mike Hudson and Scott Rekard in The Los Angeles Times on the boiler rooms at Ameriquest Mortgage Company.

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False Equivalency of the Week: GSE Risk Sharing Like Synthetic CDOs
5 Jan, 2016, No comments
January 5, 2016
"Taxpayers have borne the bulk of mortgage credit risk ever since Fannie Mae and Freddie Mac were put into conservatorship more than seven years ago,” writes John Carney in The Wall Street Journal's Heard On The Street column. "In an ironic twist, a plan to ease this burden relies on a version of one of the instruments most demonized in the financial crisis—the synthetic collateralized debt obligation."

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Maloni and Wallison Debate The GSEs
28 Dec, 2015, No comments
December 28, 2015

From the Department of Inside Baseball...

Being a kind hearted soul who seeks common ground with everyone, my friend Bill Maloni reached out to to somebody on the other side of the ideological chasm. He wrote a brief email to Peter Wallison of the American Enterprise Institute, and suggested that Peter modify his vitriol against the GSEs by also including Wall Street players as some of the blameworthy culprits.



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Martin Fridson Embraces The Big Lie To Challenge The Big Short
28 Dec, 2015, No comments
December 28, 2015

Near the end of The Big Short, the Steve Carell character prophesizes that, "the banks will blame poor people and immigrants." More specifically, they will pander to class bigotry in order to reassign the failures of private label securitizations on to affordable housing goals and the GSEs. Which is exactly what Marty Fridson did in Barron’s a week ago. He writes:

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Congressional Record: On January 2, 2018, FHFA Director Mel Watt may release GSEs from conservatorship
23 Dec, 2015, No comments
December 23, 2015

(Clarification: The headline is based on my construction of the conservator's powers under HERA. The dialogue below simply quashes the notion that release from conservatorship would be at odds with Congressional intent.)



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Ya think Mark Zandi knows better? Translating his NYT op-ed into plain English
21 Dec, 2015, No comments
December 21, 2015

Based on his articles and books that I've read over the years, I believe Mark Zandi, head of Moody's Analytics, is a really smart guy. So I presume he is fully aware that the op-ed he wrote with Jim Parrott in The New York Times is filled with doublespeak.

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Who cares if Treasury expected a GSE downward spiral? + The Bob Corker Story Has Legs
20 Dec, 2015, No comments
December 20, 2015
What did they know when they enacted the 3rd Amendment Sweep?

What did they know and when did they know it? That seems to be the big question hovering over the litigation in the Judge Sweeney’s Court. The government says that in mid-2012—after turnarounds in the Los Angeles, Phoenix, Miami and Las Vegas housing markets were apparent?—?Treasury and FHFA suddenly feared that the GSEs might fall into a death spiral. So, to protect the Fannie and Freddie, they executed the Third Amendment to the Senior Preferred Stock Purchase Agreement.



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[Patswil]

White House Role In 3rd Amendment Net Worth Sweep
12 Feb, 2016, 2 comments
Cooper & Kirk, plaintiffs' counsel in the Fairholme case in the Court of Claims, summed up its objection to the government's assertion of the Qualified Presidential Communications privilege as follows:
But White House officials played a unique role in the decision to impose the Net Worth Sweep, and this fact cannot be seriously disputed in light of the materials attached to the plaintiffs' motion...As this Court has already observed, "[h]igh-ranking officials within an agency, corporation, or other institution are not fungible," [.] and the communications of such officials are not fungible either.
Otherwise, the law firm made a very compelling case against the government's assertion of the Deliberative Process Privilege and the Bank Examination Privilege. One sure bet, the government won't accede to the requests for additional information without a fight.