In remarks yesterday Director Calabria reiterated his suggestion that he could single-handedly quash the conservatorships without recreating under-capitalized goliaths by way of an IPO. Here, we consider the regulatory and policy construct of any such IPO. In short, its prospects depend on critical decisions that start with whether or not the new GSEs will still have the same implicit USG guarantee on which investors will count still more as shareholders if current common stockholders profit thereby.

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