Fannie Mae-No Politics (FNMA)

[navycmdr]

Bill Maloni Blog .... Friday, January 5, 2018 ....

Get ready to r-u-m-b-l-e in 2018!!

GSE Outlook: cloudy, foggy, with rain, sun, or …!!



Staring at the entrails of this old GSE carcass, I am confused/bewildered as ever.

Fannie and Freddie may record $20 Billion (speculation this week from Inside Mortgage Finance, quoting a Keefe, Bruyette, Woods report) in annual revenue in 2018, minus whatever the tax changes wreak on them, but will be hassled by the usual suspects.

I have very smart friends, better GSE connected than I, who believe there
is no way Congress--meaning Senate D’s successfully can/will move against
the GSEs legislatively.

They don’t believe the votes are there.

Indeed, with Roy Moore (D-Ala) the GOP Senate chamber margin becomes tighter and doesn’t allow them too much room to turn the real estate mortgage market upside down, with any of the several schemes to put the big banks in control of the both the primary mortgage market as well as the secondary mortgage market, where the GSEs now hold rein.

As long as the GSEs secondary market underwriting rules govern what the big guys and their mortgage banking allies might want to introduce into the market, Fannie and Freddie can continue to frustrate that bank desire to “control.” One would think those lenders just would be happy making all that money, but that’s not how banks think! More, I want more, give me more, gobble, snuff, and grunt!

As I wrote ending last year, Senators Bob Corker (R-Tenn.) and Mark Warner (D-Va.) still will push their legislation to neuter the GSEs, keeping them alive as nourishing buttresses for the blood ghoul “new mortgage Guarantors” the pair would create.

The C-W legislation would also add new federal bank guarantees for their Frankensteins, which the TBTF thriving financial services industry giants and their ilk don’t need but all want.

In spite of my friends’ assurances, I remain skeptical because the GSE opponents are working so hard and have major resources.

The bank advocates will continue to drive the false meme that the GSEs were failures, have a bad business model, can’t raise their own capital, or work successfully on behalf of the American people.

All falsehoods and dishonesty, but standard fare for this cabal.

Actually, to aid my readers--and the public--I should distill the bank fiction into the (understandable) 2018 Bank GSE Political Reality Pledge (BGPRP), i.e. pronounced BigPerp.

“Because of their history, success, positioning and consumer popularity of the %&$#@*&^ GSEs, we commercial banks cannot impose our will on the mortgage markets, plus--really--we covet the GSE revenue and their domination.

“We hope we have paid off enough of our congressional and think tank allies, finally, to blow up these public-friendly mortgage operations and get repaid for our anti-GSE campaign largesse, so help us, Wells Fargo.”

GSE investors

There appears to be some GSE investor movement away from common stock toward preferred shares. I am not smart enough to be able totally to dissect that move, but I imagine if something “good” happens for Fannie and Freddie both types of equities would benefit, albeit maybe not in the same multiples. But, up is up!


The Administration and the GSEs

Does the Trump WH/Treasury value the $100 Billion plus waiting for them on a silver platter, if they just exercise their 79.5% ownership warrants on Fannie and Freddie?

We’ll see. That’s a very attractive haul staring it in the face but as dozens have observed, it means keeping the GSEs alive and functioning as shareholder owned entities (which could mean in a “utility” mode).

If Treasury Secretary Steve Mnuchin is going to go this route, he may want to hasten his actions before the broader public sour on his massive tax effort and start turning on him.

But, 2018 is an election year for all House members and a third of the Senate, with retirements being announced weekly, it might be a politically lousy time—as I’ve written often—for the congressional GOP to try and scuttle/murder the mortgagor friendly GSEs and throw another major victory to the rapacious nation’s largest financial institutions.

Again, some in Congress will try but how hard will be dictated by what else is on their very full agenda; where the Treasury decides to land on the question; and even Donald Trump’s relationship with Senators and Congressmen.

The Courts and the GSEs

I’ll make this quick, so you all can get on to my DJT observations (sorry, Anon but I can’t pass without commenting on what he’s said/done the past few days)

The courts: Fuggedaboutit!!


Our President in this New Year…so far


Trump's bigger Nuke button??

Clearly, with the POTUS size does matter, whether it’s his inaugural crowd, his hands, or his US ”nuclear button,” which he assured the world is bigger than Kim Jong Un’s. (Maybe both just should drop trou and show us, to end this dangerous spat?)

Sigh!

BTW. Vice President Pence wants all Americans to know that he is ready—if called upon under the 25th Amendment—to lead our nation boldly into the 19th Century.

Steve Bannon

So, Steve Bannon—like the special prosecutor-cooperating Mike Flynn—was a low level staffer who had no major influence on Trump or the 2016 election, but just this week, with the released excerpt releases of Michael Wolfe’s new DJT book Bannon is a “liar who has lost his mind?”

Bannon, the once and now again Breitbart guru, former Wall Streeter, movie producer, and author of dozens of hateful statements and advocacies about minorities--who seemed to appear in every WH photo op (always scruffy)—is suddenly persona non grata, because he attacked the President, DJT's adult sons, as well as Jared and Ivanka or “Javanka.”

Maybe Bannon was right saying those DJT relatives should not be part of the White House and federal decision making?

But what about all of those other non-Trump families who Bannon figuratively poisoned or Bannon otherwise disrupted their lives with his hateful policy inclinations (and that barely includes Bannon’s campaigning for Roy Moore)??

SB doesn't deserve a pass for any of that. But Bannon and Trump soon will understand, "When you lay down with dogs, you get up with fleas."

First Amendment? Which one is that?

Now Trump wants to ban the Michael Wolfe book, “Fire and Fury,” in which Bannon gets his mad off and is so critically quoted on Trump, his campaign, staff, and family dysfunction.

How ironic and laughable that a President who spent his election campaign and his first year in office insulting, demeaning, castigating, mocking, treating viciously various men and women, as well as ethnic groups and US institutions, now should want to stop publication of a book which mirrors his actions, satirizes, and impugns his motives, his success, and his and his team’s shock at winning the 2016 presidential election.

Guffaw, guffaw, guffaw.


The reason, IMO, that the President has looked so bad is that virtually all of his constant messes are self-inflicted, he puts himself in horrible situation with his ridiculous statements and tweets.

My advice to DJT is he just should stay quiet and do his job, without daily commentary.



What’s a few hundred lies/deceptions?
But that just was last year……

http://www.cnn.com/2018/01/02/politics/donald-trump-lies-fact-checker/index.html



Maloni, 1-5-2018