Matt Levine, Columnist

The Fannie and Freddie Trade Is Back

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

January 8, 2025 at 7:12 PM UTC

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.”