People have been wondering about the ultimate fate of Fannie and Freddie, which were seized by the government last year. While they, no doubt, added liquidity to the system by securitizing all those mortgages, they could not escape the excesses of the industry and ended up being a huge drain on taxpayers.

We can debate the reasons for the implosions all day. But most agree that the core securitization function is a necessary one. Bloomberg reports that Moody's predicts the government will create a similar organization, that will not be shareholder owned, to play a similar role in the economy. This suggests an orderly wind down that will take many years and will not wreak havoc with bondholders. The fate of Sallie Mae is also at issue. We'll see if it is also wound down. 

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- here's the article

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