GAO Finds U.S. Government Likely Stuck Holding GSEs Forever
"It may be very difficult to credibly privatize [the GSEs] as largely intact entities. The financial markets likely would continue to perceive that the federal government would provide substantial financial support to the enterprises, if privatized as largely intact entities, in a financial emergency."
Which basically means that as more and more foreclosures keep hitting (see RealtyTrac report this morning) and as agency and MBS borrowing standards are loosened ever more (see Credit Bubble formation ref: Alan Greenspan), US taxpayers (and China) will be forever on the hook for the next credit-housing-liquidity bubble.
Chairman Ben, by creating the largest Mutually Assured Destruction scenario ever, has effectively put a gun to everyone's head and proclaimed the Fed's balance sheet TBTF. If only Bernie "Scam of the Century" Madoff had access to the same (Made In Heidelberg) gun...