Selling GSEs, Keeping Taxpayer Backstop

The administration reportedly plans to sell a 5–15% stake in Fannie Mae and Freddie Mac, with Reuters valuing the companies around $500 billion. Critics say this hands underwriting fees to banks and jackpots hedge funds who bet on restored privatization while the government still implicitly guarantees losses. It reprises the pre‑2008 model where GSEs behaved like leveraged hedge funds under a public backstop. — It reframes GSE 'privatization' as a moral‑hazard reset and wealth transfer, raising governance and systemic‑risk questions for U.S. housing finance.