FHFA Leopards don’t change their spots

Are you satisfied, yet, GSE fans and friends?

Has Mark Calabria showed enough true colors?

Some of us have been telling you for the better part of a year that leopards don‘t change their spots and that FHFA Director Mark Calabria never has been a GSE fan, just the opposite. But more should have listened when he discussed his anti-Fannie and Freddie biases and his pro-bank tendencies.

It appears the Senate Banking Committee Republicans—with Calabria, one of their very own former staffers--installed another fox to keep track over the GSE hen house.

If Calabria was more adept, he would have hidden and delayed his political cravings, but his latest risk-based capital proposal “jumped the shark” and unmasked him for what he is and what he wants, i.e. banks in mortgage lending ascendancy (no matter what it costs the public) and the GSEs mortgage execution made too costly and in retreat, thanks to his agency.

It makes clear why in his year on the job, he never has lauded the GSEs for their mission success, low-risk operations, and revenue generation, nor congratulated them for anything else.

Knowing where he was headed he never joined the many who pointed out what valuable federal policy tools the GSE have been in assisting a COVID-19 threatened nation--and its current 100,000 medical deaths (many with DJT’s political DNA all over them)—battle the worst COVID virus housing finance manifestations.

Instead, he's pranced by himself usurping various GSE management techniques--which Fannie and Freddie in the past automatically and logically deployed when tough economic times arose--implying they were his own.

He’s become a full-time poser, pretending he has concern for housing and homeownership, while remaining quite backward-looking and very ideological.

My great joy and satisfaction will be when Calabria understands—following broad public realization, much like Lockhart, DeMarco, Bright, Parrott, Stegman, and other renowned “fellow travelers” did--that his discordant personal agenda has peter-principled.

It could be investment bankers schooling him or GOP pols alerting him to his political stupidity, i.e. signing up President Trump, who is in a major political year election shit storm, to ruin needed GSE efficiency and productivity to enhance the big banks. It is not “an achievement" the President wants, with all of the other political negatives he's hoisting.

“Yay the GOP, you made the mortgage market more bank-reliant and killed competing GSE middle and low income and affordable mortgage finance.”
That's a great TRUMP TV ad (or one from Biden)!.

I believe for one reason or another, Calabria will back off and retreat, eating crow all the way, when the Wall Street investment bankers, along with those he’s wasted GSE revenue hiring for FHFA and those separate bankers, hired by each of the GSEs, explain in small words to him why his capital numbers are vacant.
Exposing his various GSE capital bucket tricks won’t succeed, as he  struggles to keep Fannie and Freddie subservient and under his thumb.

Unless he changes those RBC numbers and his pledge to end “Conservatorship,” both will fail.

But Mr. Director, think. What are you offering those financial stakeholders for their upwards of $200 Billion down the road in the GSE investments you need?????
And where in the bank regulatory or capital statutes are all of your analogies to the GSE RBC proposal???

In several weeks or a few months, after he’s figuratively thrown up all over himself (and the public realizes it), Calabria will walk away from the FHFA to his future big bank job offer-- tail between his legs—another victim to the overwhelming truth about the immense value, efficiency, and support for Fannie Mae and Freddie Mac, because all the ersatz substitute-GSE models fail in systemic comparison.

That’s my desired expectation, despite most in Washington not knowing this fight is going on and why they should respond to the FHFA. But they will when their constituents start writing and calling them about and what the GSEs do or how they do it.

(For a far more substantive review of Calabria’s RBC proposal, read Tim Howard’s latest blog, below.0
 (https://howardonmortgagefinance.com/

Maloni, 5-27-2020