Replies to post #484592 on Fannie Mae-No Politics (FNMA)

[RockRoll]

Agreed. We know about Calabria's negative views on the GSEs, but I'm inclined to agree with the following:

"Analysts at Keefe, Bruyette, & Woods, writing about Calabria as potential FHFA director, say that Calabria has a “libertarian bent” and call Calabria an “outspoken critic” of Fannie and Freddie, but they caution that Calabria’s personal views on the government-sponsored enterprises may end up being subservient to the Trump administration’s views."

[KenKong]

Yelp!

[Patswil]

Sounds good

[kthomp19]

2. He can no longer put the GSEs in receivership because they are making so much money.

I have already shown that receivership has NOTHING to do with company profitability. The pervasiveness of this misconception boggles my mind.

Calabria could easily and legally put FnF into receivership on day 1 in office, invoking HERA section 1367(a)(3), either (J)(i) or (K). All he would have to do is set binding capital standards first, a power he would have by statute.

‘(a) Appointment of the Agency as Conservator or Receiver-

‘(3) GROUNDS FOR DISCRETIONARY APPOINTMENT OF CONSERVATOR OR RECEIVER- The grounds for appointing conservator or receiver for any regulated entity under paragraph (2) are as follows:

‘(J) UNDERCAPITALIZATION- The regulated entity is undercapitalized or significantly undercapitalized (as defined in section 1364(a)(3)), and--

‘(i) has no reasonable prospect of becoming adequately capitalized;

‘(K) CRITICAL UNDERCAPITALIZATION- The regulated entity is critically undercapitalized, as defined in section 1364(a)(4).

This can only conclude him supporting a recap/release scenerio along with the Admin.

From the top of page 3 of the Krimminger-Calabria report:

continuing the conservatorships for more than 6 years without any effort to comply with HERA's requirements to "preserve and conserve" the assets and property of the Companies and return the m to a "sound and solvent" condition or place them into receiverships

Calabria supports either recapping and releasing the companies or placing them into receivership. What he is against is the status quo.

[Release us]

Mark Calabria to be FHFA director!!!

It's official now and I agree with your comment. The markets should like this move, but who knows.

https://www.whitehouse.gov/presidential-actions/president-donald-j-trump-announces-intent-nominate-appoint-individuals-key-administration-posts-3/

Thanks! I was gonna post my opinion on Calabria. But this article summed it up well:

“We think it is possible the administration does not wait for Congress to act (on ending the GSE conservatorship) and instead decides to act on its own to end the conservatorship by recapitalizing and releasing the GSEs,” the KBW analysts write. “The fact that Dr. Calabria has said that amending the conservatorship was illegal suggests that he would end the profit sweep and allow the GSEs to start rebuilding capital. We think this view has support within the administration.”

What we know:
#1 Calabria supported to end the GSEs back in 2009/2010 when the GSEs were bleeding. Everyone wanted the GSEs to end and everyone blamed the GSEs for the crash. So that's understandable.

#2 Fast forward 2015 - Calabria outspoken and criticized FHFA of NOT preserving the GSEs and illegally taking money in the NWS.

What this is telling me is 1. He supports the end of NWS and Recap. 2. He can no longer put the GSEs in receivership because they are making so much money. 3. He nodded and agreed that the GSEs paid back the Treasury. This can only conclude him supporting a recap/release scenerio along with the Admin.

THERE YOU GO PEOPLE!!