What We're Hearing

One GSE watcher tells us that the White House is taking a keen interest in the depleted reserve fund that covers losses at the Federal Housing Administration. (The thought here is that FHA may need taxpayer money, TARP, or otherwise.) And (of course) the Obama Administration is still trying to figure out what to do with Fannie Mae and Freddie Mac -- and how much more money these two mortgage giants ($1.6 trillion in on-balance sheet assets) will need. A major concern for the White House is how much a new FASB accounting rule that goes into effect January 1 will cost the GSEs in terms of new capital. Meanwhile, it appears that our elected leaders have finally come to their senses on Glass-Steagall -- a law that a Republican Congress and the Clinton White House shredded late last decade. Senators John McCain and Maria Cantwell on Wednesday unveiled legislation to reinstate the Depression-era Glass-Steagall Act -- a law that once separated commercial banks and investment banking firms. "Under our proposal, too big to fail banks would be forced to return to the business of conventional banking, leaving the task of risk-taking or management to others," said Sen. McCain...