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 as three years later and $5 trillion in extra central bank liquidity the economy is in worse shape now than it was then), 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.
Mark Zandi, a prominent economist, has emerged as a leading candidate to head the regulator of mortgage-finance companies Fannie Mae and Freddie Mac amid signs that he would likely attract support from Senate Republicans, according to people familiar with the matter.
The FHFA director has become an increasingly important economic-policy position in Washington, because the agency serves as the warden of Fannie and Freddie, which own or guarantee half of all the nation's mortgages.
Mr. Zandi, co-founder of an economic-forecasting firm that was purchased by Moody's Corp. in 2005, serves as chief economist of Moody's Analytics. A registered Democrat, he was an economic adviser to the 2008 presidential campaign of Sen. John McCain (R., Ariz.). He speaks frequently on the economy, fiscal issues and housing—testifying before Congress at least nine times in the last two years—and played a key role advising congressional Democrats on the 2009 economic-stimulus bill.
The FHFA's current director, Edward DeMarco, took the job four years ago in an acting capacity after his predecessor left for the private sector. Mr. DeMarco has at times clashed with the Obama administration over homeowner aid, and left-leaning groups have campaigned to replace him. The agency, created five years ago, has never had its own director confirmed by the Senate because of Republican opposition to an earlier nomination.
Why is Zandi acceptable to both the left and the right? Because the Wall Street puppetmasters behind America's politicians love him for his policies which will merely perpetuate the interests of Wall Street by not even remotely daring to rock the boat.
Mr. Zandi has attracted attention, in part, because he may have a good chance at winning Senate confirmation. Senate Republicans have largely supported Mr. DeMarco and are expected to scrutinize his successor closely. But Mr. Zandi may placate these critics.
Sen. Bob Corker (R., Tenn.), who serves on the Senate Banking Committee, said in a written statement Friday: "If Mark Zandi and the administration have an acceptable plan to transition us away from our dependence on [Fannie and Freddie], I'm optimistic that he could do a good job helping our country effectively execute that plan while also protecting the taxpayer."
What happens when Zandi takes over Fannie and Freddie? Nothing but 4 more years of living mortgage free for all those who bought homes at the peak of the housing market and are still tens of thousands of dollars underwater on their mortgages.
Replacing Mr. DeMarco could give the administration greater latitude to expand initiatives to help homeowners facing foreclosure and to mediate disputes over when banks should be forced to "buy back" defaulted mortgages, which some policy makers fret has kept credit standards too tight. But people familiar with the process have said that the Obama administration's push to fill the FHFA position has less to do with specific policy flare-ups and more to do with its desire to have a permanent director oversee the process of overhauling Fannie and Freddie.
Which begs the question: why does anyone still pay their mortgage in the US? It's not like the US banks need the money - after all they are drowning in fungible liquidity courtesy of the Fed and its nearly $2 trillion in excess reserves, they mark any and all non-performing mortgages on their balance sheets to whatever mythical price they want, and nobody dares to ask any questions because it would collapse the entire house of cards for everyone involved. As for the US consumers still paying mortgages, this is hundreds of billions in dollars that could be redirected away from paying banks into much more important purchases: like iGizmos, or whatever the next iteration of "cool" purchases is now that Apple is so 2012, or in other words, helping funds the Chinese trade balance and boosting China's GDP.
In fact, while we are here, why pay taxes? With the Fed funding about half of the annual US deficit and rising, is there any other point to pretending the country even needs taxes to operate aside from fanning the flames of class warfare and scapegoating those who are evil enough to be rich based on whatever Obama's daily definition of "rich" and "fair" may be?