Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on larger issues.
Friday saw lots of White House drama surrounding the exit of press secretary Sean Spicer and the announcement that Wall Street hedge fund manager Anthony Scaramucci would assume the role of White House communications director.
The appointment of Scaramucci adds another Goldman Sachs alum to the Trump team. Steven Mnuchin, Treasury Secretary, Gary Cohn, head of the National Economic Council, and Dina Powell, deputy national security advisor, are all former Goldman partners, while Steve Bannon, the president's top strategist, was a vice president at Goldman Sachs in the 1980s.
President Trump's reliance on Goldman talent is ironic given his comments during the campaign, when he accused the firm of having "total control" over rivals Hillary Clinton and Sen. Ted Cruz, whose wife Heid Cruz is a Goldman Sachs investment manager.
For its part, Goldman seems to be reveling in the warm Trump welcome. An article in the August issue of Vanity Fair titled "A very Goldman White House," quotes Goldman CEO Lloyd Blanfein saying, "I find it validating that as he was looking for good people it happens that a lot of them had Goldman Sachs affiliations."
Many press outlets report the concentration of Wall Street execs in Trump's cabinet with a conspiratorial tone, but the firm has been well represented in key administration roles for decades. A recent article in The Hill pulled a quote from an interview with author Michael Lewis back in 2009 that sounds very familiar:
There is a great tradition on Wall Street of making a fortune, creating a mess, and then making a fortune cleaning it up. But to do it on this scale is breathtaking to me.
And it is amazing to me the degree to which, say, Goldman Sachs is intertwined with the Treasury, and how they’re — there don’t seem to be any independent voices in the thick of the decision-making. The decision-making is all being done by people who one way or another might expect to make a lot of money from Goldman Sachs in the future…
As for Spicer, his resignation triggered a surprising wave of sympathy on social media, despite his many flaws. This article from The New Statesman sums up Spicer's everyman appeal.
Despite working for a dishonest and dissembling White House, Spicer never felt like the actual bully. He was the bullied. The kid who wanted in with the big boys and did their bidding but actually wasn't that bad inside so never did it with much effect. Indeed, he was all of us when we have a sociopath for a boss, a recent promotion, and a mortgage.
The New Republic recalled Spicer's greatest hits, while others lamented the loss of future SNL skits.
The CFPB's complaint database, a thorn in the side of financial institutions for the unverified claims made by consumers, is again in the news. The Wall Street Journal reported Sunday that several firms are now offering analysis of the complaints to help companies understand their performance, and critically, avoid regulatory action that could follow a high volume or complaints. From the article:
According to PerformLine Inc., which analyzes regulatory data, companies that have received more than 10,000 complaints through the CFPB face a 64% chance of being fined by the regulator, compared with 7% for those with fewer than 2,000 complaints. Wells Fargo & Co., for instance, had received 45,710 complaints ahead of a $185 million government fine in 2016 for engaging in illegal sales practices.
This confirms what the CFPB told servicers in February at the Mortgage Bankers Association’s National Mortgage Servicing Conference. CFPB Senior Analyst Ann Thompson said, “We review the number and content of consumer complaints, and we weight the complaints based on potential violations of law."
Canadian lumber prices continue to rise, this time because of forest fires. The U.S. Commerce department proposed a tariff on Canadian softwood lumber this spring to right what it said was a trade imbalance. An additional tariff proposed in June could mean up to 30% in duties on lumber, affecting the ability of U.S. homebuilders to increse their inventory in this tight housing market.
Now, prices are set to rise again after devastating forest fires forced three large lumber producers in British Columbia to shut down in July. From a Wall Street Journal article on Sunday:
Lumber futures at the Chicago Mercantile Exchange, an indicator of price expectations for the months ahead, rose above $400 per 1,000 board feet in mid-July. That was near a 12-year high reached in April before the Trump administration accused Canada of unfairly subsidizing its forestry industry and started slapping tariffs as high as 30% on some timber imports to the U.S. Canadian officials deny the allegations
The lumber shortage has already affected U.S. hombuilders, with a fifth reporting a shortage of framing lumber in May, the article said. And confidence among homebuilders fell to an eight-month low in July amid concerns over rising lumber costs.
