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Opinion
Matt Levine, Columnist

The Fannie and Freddie Trade Is Back

Also the EIB's GAR and coughing up your Bitcoins.

January 8, 2025 at 2:12 PM EST
[160x160]
By Matt Levine
Matt Levine is a Bloomberg Opinion columnist. A former investment
banker at Goldman Sachs, he was a mergers and acquisitions lawyer at
Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals
for the 3rd Circuit; and an editor of Dealbreaker.
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The Fannie Mae and Freddie Mac saga has been going on for, depending
how you count, 16 years, or perhaps many decades. There are strong
feelings and a lot of lore. It's back in the news now, and I thought
it might be nice to start with the basics.

In the US, as a matter of policy for many decades now, the federal
government wants it to be relatively easy to buy a house. Most people
do not have enough money to buy a house, so this policy mostly means
that the government wants someone to lend buyers the money on
generous terms.1 In practice, "generous terms" means something like
"a 30-year fixed-rate mortgage with an interest rate not that much
higher than Treasury bond rates."

 
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