| A GREY SWAN PUBLICATION | Tuesday April 1, 2025 | Ripple Effect — April 1, 2025
Ah, Freddie Mac.
In 2008, Freddie was sitting on $2 trillion in mortgage exposure, much of it radioactive. As housing prices crumbled and borrowers defaulted en masse, delinquency rates surged. Investors panicked.
Uncle Sam, ever the enabler, stepped in with a $200 billion backstop to keep the thing from imploding altogether. And voilà — Freddie Mac was nationalized along with its misfit twin, Fannie Mae.
That's when the term "moral hazard" became more than a footnote in an Econ 101 syllabus. It was policy.
This week, Freddie Mac's single-family delinquency rate quietly crept past its 2008 peak. Not in headlines. Not in primetime. But in the data. Mortgages that were humming along just months ago are now going sour like milk left out in a nation that forgot how interest rates work: 
Freddie Mac, 2025: The Sequel Nobody Wanted Now, here we are again. Déjà vu all over again, as Yogi Berra — or anyone with a memory longer than a TikTok loop — might say.
The excuses are familiar: "temporary economic dislocation," "transitory inflation," "weather events," and "unicorn shortages." But the reality is far simpler — the system is breaking under the weight of its own self-delusion.
Why does this matter? In the 2008 collapse, the fuse was subprime. In 2025, it's the Everything Bubble: student loans, auto loans, credit cards, commercial real estate... all teetering like the last Jenga block in a structurally unsound game of empire finance.
And at the heart of it? Freddie Mac. Once again, playing repo man for the debt-fueled fantasy that everyone can — and should — own a home, regardless of what their balance sheet says.
So, if you're watching this unfold and thinking, "Haven't we seen this movie before?" You're right. We have. The plot hasn't changed, and the cast is eerily familiar. The only question now is whether the audience is gullible enough (again) to buy the popcorn.
Stay tuned.
Addison
As always, your cheerful reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. 
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites: Bookshop.org, Books-A-Million or Target.)
Please send your comments, reactions, opprobrium, vitriol and praise to: feedback@greyswanfraternity.com |
Post a Comment
Post a Comment