A top U.S. Department of Treasury official effectively ended any speculation that the government’s 7-year-old conservatorship of Fannie Mae and Freddie Mac would end before the 2016 presidential election. Antonio Weiss, Counselor to the Treasury Secretary, called the push to recapitalize the GSEs and release them from the FHFA’s conservatorship, quote, misguided. Weiss claims that such a recap and release proposal, if executed, could raise the cost of mortgages and potentially expose American taxpayers to another bailout.
With the conservatorship passing its 7-year anniversary in September, much talk among lawmakers has centered on GSE reform and on privatizing Fannie Mae and Freddie Mac. But Weiss contends that the recap and release proposal that is being bantered around is not an effective way to do it. Weiss contends that a recap and release would not work because it would not expand mortgage credit access, because taxpayers have not been fully repaid for the bailout, and because the GSEs would require a high level of capital to cover the 5 trillion dollars worth of risk on their books.
Morgan Stanley’s net revenues for the third quarter of 2015 were down by more than 1 billion dollars from Q3 2014, according to the firm’s Q3 2015 earnings statement released Monday. Morgan Stanley reported net revenues of 7 point 8 billion dollars for the quarter ending September 30, 2015, compared to net revenues of 8 point 9 billion dollars from the same reporting period a year earlier. Morgan Stanley Chairman and CEO James Gorman said, quote, The volatility in global markets in the third quarter led to a difficult environment, impacting in particular our Fixed Income business, close quote.