Moody's Mark Zandi Set To Head Fannie, Freddie

Tyler Durden's picture

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.

From the WSJ:

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?

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prains's picture

 why does anyone still pay their mortgage in the US?


because; "what will the neighbors say?"

Abraxas's picture


I think what Mr. weasel wanted to say with the title is “How we ended the great recession and created a super hyper-inflationary depression”. Sorry, I didn't want to spoil the ending for you.


flacon's picture

No new blood? Just recycle the same players around and around? Incest never felt so good - government/bankers/rating agencies. When are we going to start seeing genetic defects emerging from their primordial soup? It's King Henry the VIII all over again - can't even give birth to a normal human being. 

redpill's picture

Does this mean forecasts from Moody's Analytics will become less ridiculous?

toys for tits's picture

Weekend Tyler is on Fire!!!

Mae Kadoodie's picture

What next, Steve Liesman replaces Ben Bernanke to run the Fed?

Arius's picture

you know better be careful what you wish for ... you might be into something.  After all, Bernanke was not what he is today when he started.

DoChenRollingBearing's picture

suck, nibble, dribble

suck, nibble, dribble

suck, nibble, dribble

suck, nibble, dribble

suck, nibble, dribble


Or is that just being mean?

butchee's picture

What do you mean, mean?  Hardly.....

jekyll island's picture

Yeah, I kinda surprised Jimmy Johnson didn't want come out of retirement for a second tour as CEO. Maybe he'd get another book out of the deal.

YHC-FTSE's picture

Incest often reinforces recessive characteristics. What we call recessives: Greed, delusion, megalomania, and compulsive lying have become the dominant characteristics of those who keep swapping chairs in government/banks/rating agencies. 

The really sad thing is people who try to copy these defects to be more like their overlords. Spouting crap about the virtues of selfish behaviour, and alpha male theory. Reminds me of peasants cutting their own lips open to look more like their hair-lipped, chinless landlords. 

Edit: Just noticed. Should be Harelipped, not hair-lipped. :)

prains's picture



the american gov't is applying "reverse Darwinism" to its people and #winning, unfortunately, but time is running out 

Temporalist's picture


"what will the neighbors say?"

The neighbors will say "Why are we still paying our mortgage when our neighbor hasn't paid in 3 years and has been living there for free?"

prains's picture

that's a team concept, I thought we were trying to perfect individualism, LoL

Jayda1850's picture

Atleast I wont have to see his bitch ass on CNBS on jobs friday anymore, making BS prediction about BS numbers. Wonder who they will fill in with on their circle jerk.

Abraxas's picture

Why do you have a criminal whose ideology made all of this possible as your avatar?

Jayda1850's picture

I don't agree with alot of Friedman's views. However, I was born in the early 80's and his TV appearances, especially his special with Phil Donahue, opened my eyes to an alternative view of economics than I was hearing on the news nd at school. So I will always be grateful to Friedman for informing me of a different view.

Clayton Bigsby's picture

This fucking buttclown has been auditioning for the job for at least a couple of years now. He's perfect - full of shit enough to say whatever the administration wants him to say...

Pool Shark's picture



Yep. It's a small, elite club.

And, you're not a member...


TheFourthStooge-ing's picture


Yep. It's a small, elite club.

And, you're not a member...

...or an elite club with big heads and small members.

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.

When Eric Holder is holding your balls, you are exempt from the inconvenience of legalities.

chunga's picture

A brief history on FNMA...


FRANKLIN RAINES [D] – FNMA CEO (1999 – 2004) Raines accepted “early retirement” from his CEO position while the SEC pretended to investigate accounting irregularities. Fannie’s own OHFHEO also accused him of abetting widespread accounting errors, including the shifting of losses, so he and his fellow execs could “earn” large bonuses. The WSJ reported back in 2008 that Raines was one of several cronies that received below market rates for mortgages from Countrywide. Raines alone received loans for over $3 million while CEO of FNMA. Raines’ compensation for his “work” at FNMA - $90 million.


DANIEL MUDD [R] – FNMA CEO (2005 – 2008) Before becoming CEO of FNMA, Mudd worked at the Office of the Secretary of Defense, was an advisor to Asia-Pacific Economic Corp., “served” on the board of the Council of Foreign Relations, “consulted” at the World Bank, and held many positions at GE Capital including president and CEO. Mudd was dismissed as CEO of FNMA when FHFA became conservator in 2008. In 2011 Mudd and other GSE execs were charged by SEC with securities fraud. After his career at FNMA Mudd became CEO of a NYC hedge fund named “Fortress”. Fortress invested in purchasing tax liens on delinquent property taxes from local governments under many benign corporate names such as “Pleasant Valley Capital” and “Travis Farm Investments”. Cozy. Mudd’s compensation for his “work” at FNMA - $80 million.


 NEEL KASHKARI [R] – FNMA CEO (Tenure is murky) Kashkari was a former investment banker for Goldman Sachs, was tapped by Hank “The Shank” Paulson to lend his skills over at TARP HQ, and now rather ironically, continues God’s work as a Managing Director at PIMCO. Kashkari’s compensation for his “work” at FNMA is also murky; I’ll just assume it was too much.


HERB ALLISON [D] – FNMA CEO (2008 – 2009) The esteemed Mr. Allison was quickly whisked off to oversee the wildly successful TARP program. I didn’t find much on his compensation during his brief stint as FNMA CEO. Allison served in various positions at Merrill Lynch and became a member of the board in 1997. He was a director of the NYSE from 2003 – 2005.


MICHAEL WILLIAMS [?] – FNMA CEO (2009 – Jan 1, 2012) Mr. Williams is a 20 year veteran at FNMA. While “serving” as FNMA CEO, Williams managed to scrape by on less than $6 million in 2011 alone. This could and should be considered a hardship, given the complexities involved in purloining ~ $60 billion of Fed bailout money.



Charles (my friends call me “Ed”) Haldeman has announced his retirement plans but intends to be a good sport and stay on with insolvent FHLMC until another crony can be found to fill his wing-tips.

That might take a while. “Serving” as CEO of the ultimate backstops for the lion’s share of the MBS Ponzi is very stressful.

We’ll have to accept former Freddie exec David Kellermann’s testimony posthumously. Mr. Kellermann was found hanging by the neck in the basement of his posh Vienna, VA home in the affluent suburb of Washington. D.C. way back in April of 2009. It is presumed he had no help and local police have stated there was no evidence of foul play.


toys for tits's picture


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.

What is the point of having entities that are guaranteeing half of the mortgages when the Fed is buying more than half every month anyway? If someone defaults the government pays itself? Is this more of the same retarded redundant expensive bullshit?



chunga's picture

Given the history of these incestuous cronies; I'd say yes. Just more retarded bullshit.

(As always, no offense intended for normal, regular retards)

Kaiser Sousa's picture

Mark Fucking Panzi....

i hate the lying ass mother fucking wall street fucking bank worshipin mother fucker.....

Motorhead's picture

Douchebaggus maximus.

Lucius Cornelius Sulla's picture

Class warfare?  Give me a break!  We all know that Obama reports to Jamie and Lloyd.  Don't fool yourself, they will protect the MBS securities to the end because that is what TBTF needs and that is what the 1%ers want.  The deadbeads squatting in foreclosed homes are just an inconvenient result of unintended consequences who I consider rather clever.  After all, they are really no different than the banksters who rape savers and taxpayers on a daily basis.  It's a match made in heaven!

Abraxas's picture

Hail Lucius! You hit the nail on the head with this comment. Class warfare is just another distraction by the criminals and their associates in the MSM.

Lucius Cornelius Sulla's picture

Lehman was part of the plan just as placing Hank Paulson where he was in order to consolidate Jamie and Lloyds power in the banking cartel.  Never let a "crisis" go to waste!  Don't fool yourself; this was scripted, rehearsed and executed brilliantly.  These guys make the Mafia look like amateur hour.  Anybody who does not realize that a criminal gang runs Wall Street and the USG is totally delusional, brainwashed, ignorant, stupid or all of the above.

ebworthen's picture

What?  The government is putting one of their "top men" in the job before he has found The Ark Of The Covenant?

Kaiser Sousa's picture

"In fact, while we are here, why pay taxes? "

i aint paying the fucking bankers Jack Mother Fucking SHIT!!!!

taxation + illegitimate representation = FUCK YOU BERNANKE!

rlouis's picture

So, the only FNMA/FHLMC officer that served with distinction was the one who offed-himself.  Or maybe he was offed for threatening to spill beans.   Regardless, that's still a pretty low level to set the bar.

Never One Roach's picture

mortgage?....what's that?


That's filed in the, "Ok Not To Pay" file.


I forgot I had one.

LoneStarHog's picture

When Obozo needs another WHORE and the entire alphabet has been used, there is the biggest one at the end.

Brokenarrow's picture

I looked at Fri's close and thought:"one good thing is that it can't get anymore crooked than this...."

It can and it will.

I'm closing out all brokerage accounts. I'm done. I'm not an elite. I'd done gambling at the crooked casino.

Abraxas's picture

I wish I could do the same (close the accounts) without admitting that I've lost a small fortune on the PM miners. My Ego does not bear it well (even though it's Him who made me invest so foolishly).

jekyll island's picture

I'm with you my brother. Don't even want to look at my returns on Jr. Miners but I consider them another layer of insurance that just might pay off if Owebama would just get around to cratering the economy.

The Abstraction of Justice's picture

Zandi and Gandhi, both puppet whores.

world_debt_slave's picture

Whatever happened to ex-fannie ceo franklin raines? Oh, that's right, he was exonerated for his crimes.

Jim B's picture

He is probably hanging out with the Jon Corzine.....  Has Corzine been exonerated yet?

Abraxas's picture

He is probably the one in charge of the exoneration process.

Downtoolong's picture

Someone has to make sure all those MBS the Fed is paying top dollar for get properly rated AAA+++. Who better than someone with ties to Moody's?

"The inner circle must remain intact, and the boundaries must be fortified. We’ll add another three feet and row of razor wire to the fence if we have to. We can’t risk involving anyone who might challenge our plan." 

FieldingMellish's picture

Putting the fox in charge of the disease-ridden henhouse?

The Dancer's picture

Class warfare is just another way of saying "divide & conquer", triangulation = Let the Mexicans/Latinos in and "voila"....pit the blacks, whites, browns against each other to cause chaos and "voila"....distractions galore while they rape and pillage the good working people....

I struck the word "fair" from my dictionary long ago....these same kind of bastards put both my mother and father in their graves way too early...they worked themselves to death trying to raise up the kids the right and honest is not what ya want it ti be; it is what it more or less....the SOBs have no "human-heartedness", the word that Confucius used to describe that special quality that some have that make them truly beneficial to us all... 

earleflorida's picture



Bravo :-))

*burned into the grey matter the second it pierced my ears...

dataanalytics's picture

Dandy-Zandi Globalist extraordinaire... SCUMBAG.

yogibear's picture

A true Bernanke and the Fed bootlicker.

Goes along with Wall Street flow. Another Jeremy Segal.

A male version of Abby Joseph Cohen.

No critical thinking or original though with Zandi.

The Dancer's picture

Yes, I do love that word...human-heartedness...I lived with a Chinese woman for 2 years in Thailand...they are pretty sharp cookies...but all too often they too closely resemble their Occidental other half(for the edification of some, the Chinese are sometimes called the Jew of the Orient...I won't repeat this anymore as I'm sure it bores some folks...btw, I was told this by a Jewish guy from Pennsylvania who lived in bangkok)lol lol...I have Confucius's full definition of the term in one of my manilla folders, if you can't fin it through search engines...holler at me sometimes to remind me...I really respect his approach to life

JR's picture

The revolving door that leads deeper into economic Armageddon continues.

It was in late 2010 that “Zandi declared that thanks to the fiscal stimulus, ‘The economy has made enormous progress since early 2009.’"

And it’s been downhill from there, and, now, Zandi, with his Keynesian philosophy is the likely candidate to team up with Fannie and Freddie.

Neither side of this no-think economics establishment has “a policy response for economic Armageddon, assuming they are even capable of recognizing it” – neither the Keynesian government-deficit-spending-is-needed-to-lift-the-economy-out-of-recession view nor the 'fiscal consolidation' (the new term for austerity) “let-them-eat-cake school view.

And who should know better than he who said it, Economist Paul Craig Roberts in DEATH BY GLOBALISM.

Economists who have spent their professional lives rationalizing “globalism” as good for America have no idea of the disaster that they have wrought, says Roberts.

But in the comfort of their cushioned Keynesian ivory towers, both Zandi and Princeton Keynesian economics professor Paul Krugman miss the evidence shielded from their eyes down on Main.

“Neither side in ‘The Great Stimulus Debate’ has a clue that the problem for the U.S. is that a large chunk of U.S. GDP and the jobs, incomes, and careers associated with it, have been moved offshore and given to Chinese, Indians, and others with low wage rates. Profits have soared on Wall Street, while job prospects for the middle class have been eliminated.”

None of these irrelevant dinosaurs recognize that the stock market is built primarily upon psychology and the economy is built primarily upon production growth.

Thus, they missed the truth, that “when the jobs have been shipped overseas, fiscal stimulus does not call workers back to work in order to meet the rising consumer demand. If fiscal stimulus has any effect, it stimulates employment in China and India.”

The truth behind offshore production, as Roberts has often said, is there’s no free trade, there’s no any kind of trade; it’s just labor arbitrage.

 “[T]he offshoring of American jobs resulted from (1) Wall Street pressures for ‘higher shareholder returns,’ that is, for more profits, and from (2) no-think economists, such as the ones engaged in the debate over fiscal stimulus, who mistakenly associated globalism with free trade instead of with its antithesis--the pursuit of lowest factor cost abroad or absolute advantage, the opposite of comparative advantage, which is the basis for free trade theory. Even Krugman, who has some credentials as a trade theorist has fallen for the equation of globalism with free trade.” …

The reason fiscal stimulus cannot rescue the U.S. economy has nothing to do with the difference between Harvard economics professor Robert Barro’s let-the-eat-cake austerity and Zandi’s fiscal stimulus spending. “It has to do with the fact that a large percentage of high-productivity, high-value-added jobs and the middle class incomes and careers associated with them have been given to foreigners.

“What used to be U.S. GDP is now Chinese, Indian, and other country GDP.”

Note: “Zandi's analysis of the impact of an economic stimulus package on the United States economy was cited by Christina Romer and Jared Bernstein in their report on President Barack Obama's proposed American Recovery and Reinvestment Plan, which became the American Recovery and Reinvestment Act of 2009. (Wikipedia)