I think everyone assumes that the GSEs really are “too big to fail”. The public discussion of the silent but assumed federal government guarantee of their debts (and support for their role in propping up home prices) is widespread and never denied by Congress. What are the odds that a majority in Congress will vote to pull the plug on the GSEs? A majority of voters want home prices to stay as high as possible, so I’d say it’s as close to zilch as you can get in politics.
