RIP Fannie and Freddie: 1968-2017?

  • The Treasury Secretary nominee, Stephen Mnuchin, asserted that the GSEs have been "displacing private lending in the mortgage market" and said they'd be removed from government control.
  • The risk to the economy -- and in this case specifically to housing -- will be the nature of the lurch out of gridlock.
  • Once in a while, government can do things better than markets, which can result in anti-competition.

The new Treasury Secretary nominee, Stephen Mnuchin (who has no doubt suffered since his crib as “Munchkin”) wasted no time at all to announce the end of Fannie Mae and Freddie MAC (government-sponsored enterprises, the “GSEs”).