President Trump and his advisers are looking at a pseudo-privatization of Fannie Mae and Freddie Mac, the ailing wards of the Federal government, according to a Wall Street Journal article by reporter Gina Heeb.
It hasn’t been a great market for IPOs given the broad market jitters. The Fed clearly again is all at sea, now uttering the word “stagflation.” If tariffs are sticking, then surely lumber prices for new construction will raise the price of new homes further from their inflated levels.
The IPO investor is looking for a good long-term story, with growth coming out of the chutes in an IPO. The only growth for the twin subprime issuers will come from issuing high volumes of securitized mortgages. Well, we just saw how this worked before. Surely there is a limit to investor stupidity, given the recency of the outbreak of that condition. There’s a government guarantee, which is just more lipstick.
With all of the market and sentiment conditions described above, mortgage rates surely would be higher with this pig coming to market than they would be otherwise.