The Sweet Smell of Privatization
We have analyzed what’s known to date on the preferred-stock conversion privatization plan released yesterday by Fairholme to convert the GSEs into totally private MBS guarantors with state bond insurance charters.  We think the proposal is DOA, but it nevertheless could be used not only as a legal ploy in preferred-stock litigation, but also as a way to speed development of the common securitization platform (CSP).

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