Monday, March 02, 2009

Dick and Dave and Dan and Herb minus Dave (and Dick)

David Moffett, featured in these motley pages some time ago, has deleted himself from Fred: WSJ

Freddie Mac CEO Will Resign

Freddie Mac's chief executive officer, David Moffett, announced his resignation from the U.S. government-backed mortgage company just six months after being installed in that post by the company's regulator as part of a rescue operation.

The McLean, Va., company offered no immediate explanation for the resignation, effective March 13, but said that Mr. Moffett "indicated that he wants to return to a role in the financial services sector." A spokeswoman for Freddie said that the decision was Mr. Moffett's and that his resignation wasn't sought by the company's regulator, the Federal Housing Finance Agency.

Though Mr. Moffett's title is CEO, his job in many ways is more akin to that of a chief operating officer because the FHFA is running Freddie under a legal procedure known as conservatorship. As the conservator, the regulator assumes all the powers of the board and shareholders and seeks to restore the company to financial health.

A person close to Mr. Moffett said his decision partly reflected "frustration" with a job offering little freedom of maneuver. "He's a private sector guy," this person said.

Mr. Moffett is not anomalous:

In January alone, three of Fannie's most experienced investment managers -- Ramon de Castro, Paul Norris and Mike Lebowitz -- defected to other companies. Freddie recently lost Gary Kain, who was the head of its investments and capital markets operations before joining a private equity firm. Freddie has had only an acting chief financial officer since September.

Mr. Lockhart, the regulator, has argued that government ownership has gone well and that mortgage-market conditions would be much worse if it hadn't happened. Without government backing, he says, Fannie and Freddie "would have had to pull back dramatically from the market, which would have accelerated the downward spiral." When he was asked about the prospect that the federal government soon will be calling the shots at many more major financial institutions, though, Mr. Lockhart said in a recent interview: "I sure hope not."

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