FedFin on: A Half-Empty Privatization Glass
Markets are getting very excited by ongoing Trump transition rhetoric about GSE privatization and a Friday CBO study refining its 2020 scenarios to conclude that release-and-recapitalization could proceed more quickly and prove less costly than four years ago suggested. That said, CBO remains cautious about what would happen if recap/release actually began, standing by its earlier, conservative view of budgetary implications and systemic impact. One little-noticed conclusion of note for those favoring privatization for free-market reasons: if privatized GSEs can’t sustain GSE volume, CBO concludes (we think rightly) that …
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