The Fannie and Freddie Stakes Are High
Also stacking Bitcoin using home equity, private credit continuation funds and Cobol vibecoding.
The capital structures of Fannie Mae and Freddie Mac are a little complicated, but here’s roughly the situation1:
The essential thing to notice there is that the US government’s $348.4 billion senior preferred claim is quite a bit larger than the total shareholders’ equity of $160.7 billion. If Fannie and Freddie liquidated today and returned all their money to shareholders, the US government would get all of it. If Fannie and Freddie’s shareholders’ equity doubled, the US government would still get all of it. The common stockholders, and the holders of regular preferred stock, are underwater by many tens of billions of dollars.