• 09/21/2014 - 14:52
    Dear Janet; If I may be so forward, as a concerned citizen of the Constitutional Republic of the United States, it is with great consternation that I feel compelled to write you this distressing...

Edward DeMarco

Tyler Durden's picture

Moody's Mark Zandi Set To Head Fannie, Freddie





Ever since Moody's head economist Mark Zandi, together with Princeton's Alan Blinder, authored a paper in July 2010 titled "How We Ended The Great Recession" (which incidentally is wrong on two key counts: i) it is a great depression not recession, and ii) it has not ended) it became clear that the Keynesian sycophant would not rest until he somehow found a way to penetrate deep inside one or more of the darkest administrative orifices of the Obama regime. Surely, Zandi must have been heartbroken when it was not him but Jack Lew picked to replace Tim Geithner - a post the Keynesian had a desperate craving for. Yet his recent appointment to head up the ADP "payroll" joint venture, which was nothing more than a test of his propaganda skills, should have given us advance notice something was cooking. Further notice should have emerged when the US Department of Injustice launched its rating agency witch-hunt campaign only against S&P, not Moody's, where the abovementioned Zandi still officially works. Last night all of this finally fell into place, when the WSJ reported that Zandi has emerged as the leading candidate to head the FHFA - the regulator in charge of the two zombiest of zombie US institutions: the still insolvent Fannie and Freddie, in the process kicking out current FHFA head Ed DeMarco who recently emerged as Obama's persona non grata number 1 for his stern refusal to espouse socialist practices and wholesale debt forgiveness and principal reduction.

 
Tyler Durden's picture

Obama Prepares To Kick Out Fannie's Ed DeMarco





The man who singlehandedly fought the administration over the idea of converting Fannie and Freddie into the latest taxpayer-funded handout machine, FHFA head Ed DeMarco, and refused to write down Fannie and Freddie home loans in yet another Geithner-conceived debt forgiveness scheme, whose cost like any other non-free lunch will simply end being footed again by yet more taxpayers (what little is left of them), appears to have lost the war, and with the second coming of Obama appears set to be replaced as head of the FHFA. The WSJ reports that "The White House has begun preparations to nominate a new director to lead the agency that oversees Fannie Mae and Freddie Mac as soon as early next year, according to people familiar with the discussions. This would pave the way for President Barack Obama to fill what has become one of the most important economic policy positions in Washington." And so the impetus for as many as possible to default on their mortgage in a wholesale scramble to obtain debt forgiveness, will soon take the nation by storm, while the contingent liability will be transferred to those who still believe that taking out debt should be a prudent activity and one that takes into account future cash flows. In other words, the solvent middle class - those who were prudent stupid enough to save when they should have simply be doing what the government does and spend like a drunken sailor, preferably on credit, will soon be punished once more. And like it. Because according to the new broke normal "it's only fair."

 
Tyler Durden's picture

Frontrunning: April 11





  • Subprime bubble is back: Lenders Again Dealing Credit to Risky Clients (NYT)
  • Housing bubble is also back: AIG Is Planning a Return to U.S. Property Investing (WSJ)
  • Spain and EU Reject Talk of Bailout (FT)
  • Coeure Suggests ECB Could Restart Bond Purchases for Spain (Bloomberg)
  • IMF Set to Recognise Shrinking Chinese Surplus (FT)
  • Government to Propose New Mortgage Servicing Rules (AP)
  • Japan Currency Chief Warns Against Delay Over Finances (Bloomberg)
  • The 'Michael Corleone' of Libya (Reuters)
  • North Korea Says Fuel Being Injected Into Rocket (Reuters)
  • SNB Reaffirms Vow to Cap Swiss Franc (FT)
 
Tyler Durden's picture

FHFA To Treasury: Forget Principal Forgiveness





FHFA Acting Director Edward DeMarco offered some prepared remarks today making it abundantly clear that his preference is for forbearance over forgiveness in the great mortgage hole in the US balance sheet's dam. As Bank of America's Chris Flanagan noted this evening "[DeMarco] effectively nixed the idea of broad-based principal forgiveness by Fannie Mae and Freddie Mac" in his comments on the Treasury's incentives to forgive principal on underwater borrowers. Citing three factors - NPV Impact to taxpayer, moral hazard, and operational costs - the FHFA Director indicated that forbearance (simply put - delaying foreclosure) is effectively a shared appreciation mortgage (SAM) without the operational complexities of a more formal SAM. BofA concludes: "his preliminary remarks on the incentive approach to principal forgiveness of GSE loans [mean] that there will be zero to minimal scale of such an approach." Back to the drawing board for the Treasury (or more forced-through unintended consequences?).

 
Bruce Krasting's picture

On FX and Notes from D.C.





...know when to walk away, know when to run.

 
Tyler Durden's picture

Fannie CEO Michael Williams To Quit After 2 Years, Pockets Millions After Receiving $60 Billion In Bail Out Cash





A few months ago we learned that outgoing Freddie CEO Ed Haldeman quit Freddie after just two years of work, pocketing over $4 million primarily to collect over $21 billion in bailout funds from the US government. Now, it is the turn of the other broke GSE: according to a just filed 8K, Fannie Mae CEO Michael Williams is also stepping down without a replacement, so obviously the decision was made in haste and is an indication that nobody at the helm of the two largest mortgageholders want to do anything with what Obama and the Chairsatan have in store for the two behemoths holdings over $6 trillion in mortgages in their books. Incidentally, according to Forbes, Williams made $4.84 million in comp last year. His claim to fame: receiving a total of $60 billion in Treasury bailout cash (net of $17.2 billion in dividend payments) - hard job that one.

 
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