PolicyCast: The Election’s Impact on Housing

Kirk Willison  00:00:05  Hi. I’m Kirk Willison, host of the Arch Mortgage Insurance Policy Cast with a special post-election episode. When a financial services regulator releases a proposal or Congress passes legislation impacting mortgage lenders or mortgage insurers, the first question is often what did Jared and Isaac think? We usually don’t have to wait long to find out. Jared is Jared Seiberg at the Cowen Washington Research Group. Isaac is Isaac Boltansky of Compass Point LLC, and together they are considered the best analysts on the political scene in Washington when it comes to understanding and explaining the impacts of financial policy on a broad array of industry participants. Their analysis is valued by investors, the media, policy makers and their many clients worldwide. And like wire services of old, they frequently race each other to publish their thoughts minutes after learning of a change in policy or direction. Jared and Isaac are in high demand as speakers at industry and investor conferences as much for their ability to find humor in the complexities of high finance as their capability to interpret it. They are fierce competitors, but their best of friends and I’ve been privileged to know and work with them for well over a decade. Well, Jared, Isaac, I am really delighted to have you here on the Arch Mortgage Insurance Policy Cast as a political junkie, frankly, I don’t know whether I was more looking forward to the election or more interested in the opportunity to talk to you guys about the impact of it on finance and housing policy. So thank you very much for being here. Welcome to my virtual Policy Cast studio.

Jared Seiberg  00:01:59    Excellent. Let’s that’s some fun.

Kirk Willison  00:02:01  All right, well, listen, barring court challenges, Joe Biden appears to be taking office as the President of the United States in January, but he’s probably going to be dealing with a Republican Senate. There’s still a possibility of a 50/50 split, which would give the edge to the Democrats depending on the outcome of two races in Georgia that will be decided in January. I want to spend most of our time today talking about what a Biden administration would be like for housing and for financial policy, but beforehand, there are some decisions and such actions that might be taken in the next two months. And I wanted to see if you guys could share with me some of your thoughts on that. So, Jared, let me throw this out to you, initially, millions of homeowners and renters could really use a helping hand in the next few days to get through the crisis that’s been caused by the pandemic, in the form of a stimulus check or maybe a couple of them. Do you think that the Administration and Congress during a lame-duck session is likely to help consumers this way?

Jared Seiberg  00:03:10  Well, I think anyone who can predict what a lame-duck President Donald Trump is going to do is really, I mean, you might as well just use one of those magic eight balls and say, will sign the bill, will not sign the bill. You know, it’s really what can the Democrats in the House and the Republicans in the Senate come to terms on. And it seems like Mitch McConnell is setting those terms rather low. We are expecting a push to get a bill somewhere in the $1 trillion range, maybe a little bit higher, but we’re not really looking for direct payments to consumers. I don’t think we’ll see a second round of checks. Listen, you can’t rule anything out, but I think the focus is going to be to extend the supplemental and the enhanced unemployment benefits certainly very important to those who still have not been able to go back to work or can’t find a job. I think you’ll see the Paycheck Protection Program revived. I think you’ll see money for states for education. Just probably not checks to individuals as part of this package.

Kirk Willison 00:04:42 Isaac, you concur?

Isaac Boltansky 00:04:25 Yeah. So look, I think that my base case is that there’s just going to be this fog of disdain and distrust in D.C. during the lame-duck and I am actually pretty bearish on getting anything of substance done. I agree with Jared, the best shot that we have is a very narrow targeted package. You know, let’s use some of that PPP money and let’s get unemployment going again. And that’s our best shot. And it’s been deeply disappointing watching Washington to offer some degree of support for citizens during a national pandemic. So what my hope is that it was just the gravitational pull of the election that made it impossible for us to compromise and that there will be a window for a deal, but I’m telling my clients is that the actual meaningful, next phase of this is probably going to have to wait until next year.

Kirk Willison 00:05:20 Very good. So, Fannie and Freddie remain in conservatorship a dozen years after they were first made wards of the government, but the regulator FHFA has published a proposed capital standards and they’re in the final stages of publishing that. We have a situation where each of the three, the FHFA or Fannie and Freddie have each hired investment banks to advise them on raising capital. And then the GSEs are really very close to their current ceiling for retaining profits in order to build capital. But if nothing is done in the next quarter or so, they’re going to start giving all their profits back to the U.S. Treasury. So, Isaac, we’ll start with you this time, what actions relating to the GSEs over the next two months might happen in order to change the situation?

Isaac Boltansky 00:06:18 Yeah, I think Jared and I are actually going to agree on this one. I think that there will be an amendment to the bail out agreement between the Treasury Department and the GSEs. That’s referred to as the PSPA, the Preferred Side Purchase Agreement. And I think that will be amended and there are going to be a number of different items addressed as part of that. I think we know that they’re going to go with the heart of what’s known as the Network’s Suite. That is a construct from 2012, where every dollar that the GSEs make above a certain capital buffer is shifted to the Treasury Department in the form of a dividend. You got to get rid of that, if you actually want the GSEs to retain capital on a regular pace. The cousin, the tangential part of that is you’ve got to set a fee for what the government will get paid for its $255 billion backstop for the GSEs, something called a Periodic Commitment Fee. And then we’ll see what else they’re going to do. Are they going to layer in some of the policy prescriptions that those of us talking heads at this point and thought that they would shoot, you know, reduce the routine portfolios even further, maybe try to ban lobbying contractually in the PSPA. And then the third bucket of changes is do they go after what the government’s ownership position is? There is this senior preferred on top of the capital stack that aggregates about $222 billion and no value can fall below the capital stack while that government senior preferred position is there. So there’s a question of whether they try to address that in some form or fashion during this period.

Jared Seiberg 00:08:01 I think, you know, one critical thing that you left off that list is it does appear that they have both crossed the statutory capital requirement in the most recent quarter, that’s a little difficult because it’s not really disclosed, but if you go back to the 1992 law that basically established capital rules for Fannie and Freddie, they have to have 45 BEPS on their guarantee business and 250 basis points on the retained portfolio. They were both really close to that in the prior quarter, they both had pretty good earnings that they announced, you know, a week ago or so. And so by crossing that threshold, Director Calabria, the charge of FHFA has said several times that, you know, you can’t really do anything until they cross that statutory threshold. And so I think by getting that out of the way, it really opens the door for a lot of what Isaac just discussed layered on top of that, finalizing the capital role, putting a liquidity proposal out there and finalizing the new product rule. And, you know, I think we’re going to have a real sprint to the inauguration.

Kirk Willson 00:09:25 Do you think there’s any chance that Secretary Mnuchin might forgive the debt in order to speed exit?

Isaac Boltansky  00:09:30 I get this question all the time, and I know Jared does, in terms of is there any chance, well, look, we live in 2020, anything is possible, right? So the framing of the question I usually try to shift, but to answer your question, yes, the reality is the government has earned $110 billion more on its senior preferred than it put into the GSEs. Furthermore, and this is sort of the kicker to me and what I think those investment banks that you talked about were now advising Fannie and Freddie, and the FHFA are going to say, which is you can’t raise equity capital to put in front of uncle Sam until you address in some form or fashion that senior preferred. Furthermore, it’s unclear to me as to how you will be able to monetize the government’s 80% of the equity warrants, unless you address this year for it. So, yes, there’s a chance you could also see a conversion, there are a number of different ways of addressing it, but I just know that you have to address it if you want to get accomplished the one goal that we have heard Director Calabria say time and time and time again, which is he wants more capital in front of the taxpayer.

Jared Seiberg   00:10:43  So I think this is where Isaac and I are gonna depart a little bit. I have a hard time believing they’re gonna just simply forgive the senior preferred. I think there are legal complications to doing that. You need to get a ruling from the Justice Department most likely because this is value to the taxpayers and so, there needs to be a justification for why you’re giving that up or you probably would only do that as part of some sort of settlement with the junior preferred and probably even like common shareholders. Those suits are all pending. I have trouble believing that if those negotiations had started, that they wouldn’t be all over the newspaper. There’s just too many different parties involved and nothing in Washington stays secret for that long. And you know, they were on a crossroads, you know, not too long ago where this was an option that, you know, a senior person at Treasury was pushing and the White House wasn’t willing to go along with it. So I’m not sure, that to me seems like a little bit of a stretch. I think, you know, the conversion idea Isaac talked about is probably more likely or they’re going to come up with something creative. They have all these investment bankers there, but simply deeming it repaid I think probably a bridge too far.

Isaac Boltansky   00:12:10 Convert conversion gets a little bit sticky though, Jared, right? Cause then we go over the 80% threshold, so that’s got its own problems in terms of ownership.

Jared Seiberg 00:12:23 You know, CBS already consolidated it onto the balance sheet. So I mean, that was a really big deal, you know, back when Fannie and Freddie were first seized and was it September, August of 2008, you know, that was the big concern, we don’t want to put all this on the balance sheet, but, you know, we don’t really hear those concerns anymore. I think that ship has sailed. I’m not sure they’re worried about it.

Isaac Boltansky 00:12:49 And I think your point of compromise and claims, which is what you’re referencing is one that I think about a lot and will be a hurdle here. I think my point is whenever we reopen a document, just about anything is possible. And I think one of the governors on them not addressing the senior preferred back in September last year, which I think is what you’re referencing for the last letter agreement. One of the governors on that was there’s gotta be some political baggage to addressing that senior preferred in any way, shape or form. Right? And I think part of the predicate of it is will they take big action in the lame-duck is Mnuchin probably won’t care as much about the political baggage given that he’s going to be in a new job in a couple of months. That’s at least what I think makes it possible. Probable is a different discussion.

Kirk Willison    00:13:36    So, when the Biden Administration does take office, are they going to be as eager to have the GSEs exit from conservatorship?

Jared Seiberg    00:13:47 So great. Do you want more? So that was a yes or no question, Kirk.

Kirk Willison  00:13:53    What would their priorities be? Jared, do you want to take that first?

Jared Seiberg 00:13:57   I don’t think Fannie and Freddie is going to be even anywhere in the top 25 list of their priorities. So that means they’re going to want the status quo while, you know, they focus on other issues. I think, you know, in some ways how the Senate turns will certainly influence how they view Fannie and Freddie, if you have a Republican Senate, then you have a much greater possibility that the administration would want to try to keep them in conservatorship to try to be able to use them as policy instruments, to implement an affordable housing agenda that the left has been demanding, harder to do that if they’ve been released. And so I think that’ll be the push and pull, if you control the Senate and you can actually enact legislation then perhaps you’re a little bit less interested or have less need to be able to keep them in there and allow Director Calabria for however long he’s going to be in there, I’m sure it will turn to that question at some point, you let him keep going.

Isaac Boltansky   00:15:14 Yeah. Look, I make it a point to never disagree with Jared when he’s absolutely right. Look, the issue here is the tent pole of the Biden Administrations Housing Plan as has been publicly released, just what we know about it is affordability and letting the GSEs out of conservatorship is not consistent with affordability, at least in the way that it’s been described this far. And so I just don’t think that that’s going to be a priority when really whoever is in these positions is going to have to first and foremost deal with the response to COVID. And then we can start talking about what proactive measures after that. So I know, you know, Jared mentioned the word legislation, which I think, you know, we can spend a whole segment on talking about why that’s still unlikely in any scenario, but just from a practical operational standpoint, I think that the effort to end the conservatorships would slow if not completely stopped on their buying administration.

Kirk Willison    00:16:17    Well, one of the campaign issues pressed by President Trump to protect the suburbs from affordable housing was the repeal of the affirmatively furthering Fair Housing Act. How quickly do you think the Biden administration will reinstate that?

Jared Seiberg   00:16:35    You know, I think that’s probably low hanging fruit. It’s not really an issue that we follow that closely, but you know, it’s certainly given how Trump gave it so much attention, you know, going back to, it seems to be an easy call. Just something that I tell my clients is just look where the regulatory or administrative pendulum has swung aggressively in one direction under Trump, and it will do so in the other direction under Biden, it may take a little bit of time, but you shouldn’t have any doubt that that will be the eventual outcome.

Kirk Willison    00:17:12    Any other reactions we should expect from a new leadership team at HUD?

Jared Seiberg    00:17:15    Yeah. Look, I think there are a lot of things that they will talk about at HUD, just like this administration talked about a whole lot of big structural changes for FHFA and other places, and then none of it happened. So, yeah, we’re going to have a bunch of talk about changes at HUD and it’s difficult to envision any of it happening just because that’s really all we do about HUD, we talk about it, but at least in my time, we haven’t really taken major steps to improve or innovate there. I’m looking forward to Fannie Mae, continuing to do work on counterparty risk standards, which I think has been great work and can be bipartisan and across administrations. And then on the FHFA, let’s see what the actuarial report says in a few weeks. And then I can have a little bit more confidence in what they’re capable of.

Jared Seiberg 00:18:06 We’re hoping we’ll get that actuarial report, some years it seems to come months later, some years it seems to come months earlier. It’s a little unpredictable exactly when that news comes out. But you know, given just the amount of forbearance in the FHFA program, it’s hard to see how that actuarial report, which, you know, for those not in the know it is not a real assessment of the financial health of the fund. It is an assessment based upon strict legislative standards as to how you determine that health. And so future income from future business does not count towards the health of the fund. And that tends to increase volatility in the reports outlook. It’s going to be almost impossible for this administration to be able to cut premiums. If the actual actuarial report shows that the fund is underwater

Kirk Willison    00:19:19    Housing is rarely a campaign issue in any presidential campaign, but there was a tenant of the Biden campaign where he talked about creating a $15,000 tax credit that would have enabled lower income borrowers, potential homeowners to save for a down payment. Given the fact that we’re going to probably have a Republican Senate, is that a proposal that’s likely to get real consideration by Congress?

Isaac Boltansky     00:19:49    I can start here if you want. Kirk. Look, I think that there is going to always be conversation around affordability, around fairness, around equity, about building equity. And obviously we know that home ownership is central in that. So yes, it will be part of the conversation, but my sense is that we are instead going to have an overarching retrenchment in the Republican caucus where suddenly the budget hawks will get back on their purchases and say that the deficit is too big. And I think that we’ve seen that numerous times over recent years where, you know, I think both sides have this dynamic where deficits only matter when they’re in the minority. And so look, I don’t think that’s going to be an area of agreement. I think Jared might agree with me on this. What I’ve found fascinating over the past year or two is there’s suddenly this bipartisan support around, hey, maybe we can try to tackle the supply problem, which is something that’s really impacting affordability downstream. So I think that’s the only place where I can see maybe, hey, let’s tie some block grant funding to municipal zoning reform, things like that, where I can see some debris of agreement.

Jared Seiberg 00:21:01 Yeah, yeah. I certainly think there is a path there to try to leverage federal money or access to federal money to local zoning reform. You know, it kind of fits in with the Biden theme of expanding access to affordable housing you know, in all types of markets. On the first time home buyer credit that is, you know, playing with fire a little bit, right? You have to be really careful what you do with that. I think we learned during what I think was a fairly disastrous experiment where the first-time home buyer tax credit coming out of the financial crisis, that if it’s temporary or short term, it’s counterproductive, all you’re doing is drawing demand forward and then you’re going to see originations just fall off a cliff once it expires. So I think the critical piece, if we’re going to have a first time home buyer tax credit is for it to be permanent. And for it to be permanent, you really need to do something beyond just a tenure reconciliation bill. You know, you need to pass actual legislation that makes it permanent. And, you know, that was always going to be a struggle, even if the dems, you know, ended up taking the Senate 50/50 or if the election had turned out differently and we had a blue wave and they had 52 or 53 seats in the Senate, you know, setting up a tax credit like that and getting it through our normal order, even if we got rid of the filibuster, like even you take all these things and you say, well, this happens, this happens, everything possible, try to facilitate the vote, it’s still going to have been difficult to get the 50, because that’s going to be a huge number. And you know, the argument is going to be well, what does it do for renters? And, you know, so many of the lowest income people are renters. Why are you, you know, what are you going to do for them? Why are you trying to disproportionately help, you know, higher income, white people, you know, it would have gotten ugly. And so, you know, that was always going to be difficult to achieve, even though it was perhaps the most important plan of Joe Biden’s housing agenda.

Kirk Willison   00:23:29    Well, no matter who controls the Senate, we’re going to have a new chairman of the Senate banking, housing and urban affairs committee. It’ll either be Pat Toomey, Pennsylvania or Sherrod Brown of Ohio. So for the sake of argument, let’s assume the GOP wins at least one of the two run-off races in Georgia. How would Senator Toomey differ from his predecessor? What kind of priorities might he have and keep in mind that he’s already said that he’s only going to serve for two more years in this capacity, because he decided not to seek reelection.

Isaac Boltansky     00:24:05    I’ll start if you want. Look at the highest level I think we will see more activity than we’ve seen over the past two years. I think the Senate Banking Committee has been very quiet over the past two years and so I look forward to perhaps a new approach and a new focus on certain items. Senator Toomey aside, he wants to tackle GSE reform. That has been one of the items that he mentioned, and that is a laudable goal, but it is incredibly difficult to envision that actually happening. And I’m sure we’ll get to this, but ultimately I think GSE reform has been going on for a decade plus Fannie and Freddie of today are not Fannie Freddie of yesterday. We can point to any number of reasons why from counterparty standards to CRT, you know, we can get into all that, but you know, on the GSE legislative front look, ultimately I think it’s gotta be like interstate banking, which Jared can talk about way more than I can. Where most of the heavy lifting is done administratively, Congress comes in after it’s mostly been done, rubber stamps, it fixes some things, adds a little bit more clarity and moves on. And so for me, the next Senate Banking Committee Chair is going to talk about housing issues, whether that’s oversight of the regulators, affordability, access, fine, but they’re not going to tackle the big issue of quote unquote GSE reform just because the system right now works.

Jared Seiberg 00:25:33 When you think about Pat to me, I mean, he’s more associated with the banks. And so I think you’ll see him really push forward a bank centric agenda, you know, a FinTech Focus agenda, there’s a lot going on on those fronts. And so, to me, that’s far more likely where he was going to spend his time, as Isaac said. I mean, what’s there really big to do on housing that you could get done in two years. So it’s hard to see.

Isaac Boltansky  00:26:00 And if I can just throw in, I’m sorry. I think it’s also important to realize that, excuse me, to state the Senate banking has some oversight responsibilities when it comes to our relationship with China through Cepheus and I continue to think that’s the overarching relationship geopolitically. I think Senator Toomey can definitely move the ball forward on that issue with oversight and with hearings and with other activities that I think sort of expands the scope of the committee compared to what we’re used to

Kirk Willison    00:26:32    Are there any issues that he and a Congresswoman Maxine Waters, The Chair of the House Financial Services Committee might come to agreement on?

Isaac Boltansky     00:26:46    No. You know, we all fall into this trap every year and say, yeah, maybe they’ll agree on capital formation legislation. You know, the jobs act was such a success, maybe that’s what will bring the parties together in our world. I’m not a buyer on that. I think that that time has gone. I struggled to see anything that they’ll agree on. So we’ll have to wait just like Jared and I do every year to see what’s on page 790 of a 1400 page appropriations bill, because that’s now legislating. What can get slipped in at the last minute between leadership instead of the normal legislating that we all learned about on school house rocks.

Jared Seiberg 00:27:30 So, you know, the only issue where I think maybe you’ll see some agreement would be the SAFE Banking Act on cannabis. You know, the prior Senate Banking Chairman Mike Crapo from Idaho, a state where cannabis isn’t legal for any purpose, wasn’t really interested in moving the legislation. Pennsylvania is legal for medicinal purposes. The banks, the small banks in particular really want the legal protection. There’s a strong public safety and tax argument for why that money needs to be in the banking system and not an all cash business. And I think Senator Toomey appreciates that, you know, Maxine Waters, The Chairman of House Financial Services already moved the SAFE act. And so that might be one area where they could see eye to eye.

Kirk Willison    00:28:24    Well, we’ve talked to policy, how about moving to personnel for starters, given the likely makeup of the Senate, do you think this precludes any chance that Elizabeth Warren or Bernie Sanders would be added to the cabinet?

Isaac Boltansky     00:28:39    Yeah, sure. I don’t, but I mean, we didn’t think that was a possibility, no matter what, I mean, they both have Republican governors in those States. You’re not gonna put that seat at risk. You know, even if the Massachusetts State Legislature could try to change the law and deprive the governor of that authority in the short-term you have the real risk that Charlie Baker from my hometown of Swampscott, Massachusetts might run for Senate, you know, and the election and in this summer we’re, Warren to be added and he could win. He was very popular in the state. And so now you’ve just turned over, you know, what had been a safe seat in Democratic hands, even just handed it over to the Republican. So I don’t see why they would want to go down that path. And I think, you know, both are going to be in the Senate.

Kirk Willison  00:29:39    What other kind of alterations though would a Senate controlled by the Republicans have on who the new President might appoint. Isaac, do you want to take that one first?

Isaac Boltansky     00:29:52    Yeah, look, I think to a degree to Jared’s point, it was difficult to see exceedingly progressive candidates making their way through the Senate in general, right? Because there was going to be this contingent of red state centrist Democrats Manchin from West Virginia, Tester from Montana, Sinema, from Arizona, now, Hickenlooper from Colorado, who I think would have put some governors on how aggressive a candidate could be going through for some of these financial regulatory spots. Now, if Mitch McConnell is still leader next year, I think it’s going to be exceedingly difficult to get anyone on the Progressive scale through a nominations process. So then the question is A, can there be some grand bargain between Mitch McConnell and President Biden in that scenario where certain nominees are allowed through? And there is some burgeoning optimism that these two old guards of the Senate are able to strike an agreement I’m not sold on that yet. Instead to me, it’s going to be option B, which is, let’s see how comfortable President Biden is with using something known as The Vacancies Act, which is what we saw President Trump use to put Mick Mulvaney at the top, the CFPB when Director Cordray left. And so to me, it’s really a question of, can there be some agreement? And if so, I think that agreement will be around more moderate, pragmatic, centrist candidates. And if there can’t be that agreement, I think that the left wing of the party is going to push aggressively to use The Vacancies Act, to put people in on a temporary basis.

Jared Seiberg 00:31:42 Yeah. You know, the other thing too is, you know, Biden is not a radical   progressive, he has never been a radical progressive, he ran for reelection as a moderate Democrat, a continuation of a line of moderates going back to Bill Clinton. And, you know, so I don’t think he was inclined to begin with, to really put radicals in a lot of jobs. I mean, look at some of the, you know, the names that get talked about, you know, Roger Ferguson or Lael Brainard at Treasury, you know, I mean, you could go a lot more progressive, a lot more radical than either of them. So, you know, I think in some ways the makeup of the Senate doesn’t really impact those top level jobs where I think it has the biggest impact is the CFPB and that’s where as Isaac referenced with The Vacancy Act, I do think they’ll use The Vacancy Act. Then I think the choice will be Mitch McConnell’s either you, you know, confirm Katie Porter, you know, a Congresswoman, who’s probably a leading contender for that job, or, you know, somebody, you know, some other progressive favorite, there’s plenty of names out there or we’re just gonna fill it with The Vacancy Act and do the same thing. So if you want to send a confirmed person that you can demand comes to the Hill and testifies then confirm our person

Kirk Willison    00:33:16    Well. So let’s talk a little bit about FHFA. If the Supreme Court, in a case that they’ll hear in December should allow a president to fire the FHFA director at will, is President Biden likely to do that with Mark Calabria, and if so, what names might be considered for that job?

Isaac Boltansky    00:33:42    Look, my sense is I think that President Biden would wait until we have clarity from the Supreme Court on a case known as Pollens. This is similar in some ways to Celia, which was decided earlier this year related to the CFPB, but distinct in other ways. And so to me, look, we all look at the world through our lens, which is mortgage finance or financial policy. And we think that this is the most important thing ever, but in reality, I think the Biden administration is going to have a whole lot of jobs in other areas that are going to take time to fill. And so why would you pick a fight with the FHFA when you could just wait for the Court to make its decision and by no later than the middle of that cheer and give you the power to fire Director Calabria, which I think they would do and replace them on your own terms. So our base case is that if Biden is indeed sworn in as the next President, the Director Calabria will have until the Supreme Court makes its decision next year in that role.

Jared Seiberg 00:34:50 Yeah. I mean, I think the only thing I would add to that is everyone assumes that because the CFPB and the FHFA were created within just a few months of each other or a year or so of each other, that that means the single director of structure for each agency is the same. In fact, it’s quite different. And the authorities of the two agencies are quite different. And, you know, shooting from the hip assumption is always, well, the CFPB single director is unconstitutional so mouths FHFA. And, you know, we’d earned a lot of caution on that front. I think it’s worth reading some of the briefs filed at the Supreme Court. There’s a good chance that FHFA, is going to prevail and, you know, that would mean Mark really gets to stay for another what, three years.

Kirk Willison    00:35:45    All right. Last question. What are the most important words of advice you’ll be giving to your clients as they prepare their own Public Policy Agendas for 2021 and 2022? Isaac, why don’t you start the last question and then we’ll finish with Jared.

Isaac Boltansky    00:36:04    Look, I think a truism is that in D.C. stories are better than spreadsheets. And so in general, when you’re trying to explain a story, making it more relatable is always good, which is why when Jared and I talk about things like perhaps the financial transaction tax, something very complicated and very nuance, but if you can then bring that story down and say, well, this is going to be, for example, attacks on retirees, then suddenly the likelihood of that going through changes. Now our job is to advise institutional investors. So we don’t really care what the outcome is. Our job is to try to forecast and so I think my 2 cents in that world is it’s going to be volatile, it’s going to be bumpy, but ultimately we have a more moderate and checks and balance system, at least it looks like, and we had over the past four years, which should be a net positive for the business investment landscape.

Jared Seiberg    00:37:02    Yeah. I mean, I think the only thing I would add to that would be that, you know, if you were to look back to 2008, 2009 during the financial crisis, when, you know, the investment community suddenly remembered there was a wash into, and, you know, I often wished I had that old school health rock cartoon on how a bill becomes a law. You know, I think the market is a lot more sophisticated on that front now, they’ve been dealing with risk out of Washington for 12 years. I think there’s a better understanding of Government, but you know, the advice that I always tell clients is like, don’t overreact to a bill being introduced, don’t overreact to a congressional hearing. They’re real impediments to getting things done. And, you know, Washington always moves, you know, one 10^th the speed that you think it’s gonna move. And so, you know, we urge, you know, people to be a little calm and not to overreact to the headlines.

Kirk Willison    00:38:05    Great, great comments. Hey, thanks both of you guys as a faithful reader of both of you on a regular basis, it’s been fun to just sit together and get you together at the same time and talk about policies and people that will be shaping housing for years to come. So thanks very much.

Jared Seiberg  00:38:22    Excellent. Lots of fun with you.