You are welcome Sogo it is my pleasure.
I do not actually know how long it will take since I cannot precisely predict the time it will take for DeMarco to prepare the GSEs (i.e. common securitization platform, operational efficiencies, credit losses, credit risk sharing products, etc.). Also, I do not know how long it will take the lawmakers in the House and Senate and the Obama Administration to move towards intelligent dialog and understanding of the financial and operational embeddedness of the GSE in the current housing finance system that represents approximately 20% of the US economy. This is not a matter that can be handled by lawmakers alone, and whatever gets done, it has to be done right or risk serious disruption or catastrophic failure in the housing economy.
Considering the enormity of the tasks ahead and examining the Corker-Warner and Hensarling bills, it is easily seen that they are without the substance or merit needed or the detail required for the handling of the reform of the housing finance system let alone reforming the 5 trillion dollar operations of the GSEs that interacts with a myriad of industry participants and citizens both nationally and globally.
The sudden rush to reform by lawmakers after nearly five years of dormancy is being promoted by them as being important when in fact it is only a poor, one-sided beginning. With every House and Senate hearing there will be more details revealed on what is in involved with the GSEs and it is not simply mortgage paper of various kinds and payments that can be moved around using legislation printed on paper.
The current intellects expounding on what to do will be replaced with people different voices and who actually know what they are talking about. I fear that if the current lot of talkers continue to hold sway in the media, the nation will be at risk with their wrongheaded and uninformed views. They really have no idea what they are doing or saying though they present a convincing front. If they do know what they are doing, then they are involved in purveying a great deception and lie to the American people.
The people at Fannie Mae and Freddie Mac do understand since they are doing it, but have we heard more than two peeps from them? When will they have a say in public? The FHFA muzzles them without mercy. We need to tell their story, the story of 12,000 people serving millions.
After the House and Senate recess, we will see what new things will arise, if any. With full House elections for all seats and battles for 33 senate seats around the corner, the Congress may be busy with getting relected.
While they are busy, the FHFA lawsuits vs. the remaining banks out of the 18 sued will continue. With each FHFA victory, the saga of Fannie and Freddie will be altered in the public mind. It will become clear as a bell ringing in the morning that the banks played a major role in the housing crisis and that the banks have been treated well compared to Fannie and Freddie. And as net zero comes closer with sustained GSE profitability, the language and reporting on Fannie and Freddie will change. It will be more and more difficult to disparage the GSEs or to speak about eliminating them.
The shareholder lawsuits will also begin to have effects. Hopefully, both Perry Capital's lawsuit aiming at the vacating of the Third Amendment and the remaining six invoking the takings clause of the Fifth Amendment push the US Treasury and the FHFA to make the appropriate adjustment in the agreements and policies under the conservatorships.
The outcome of Watt's confirmation vote will also signal change for Fannie and Freddie.
Earnings reports will soon appear in August.
All of these events and processes will occur in an ongoing manner during the next five months and the convergence of these events will impact the market and pps in different ways.
The result we can see everyday.
AI
