President Donald Trump has ordered the purchase of $200 billion in mortgage bonds using funds from Fannie Mae and Freddie Mac, claiming: “We are bringing back the AMERICAN DREAM that was destroyed by the last Administration.”
In a long post on Truth Social, Trump said Biden ignored housing while being “immersed” in crime, inflation, and military disasters. Trump praised himself for keeping the two mortgage giants under government control in his first term, “against the advice of the experts,” and said that decision left them sitting on “an absolute fortune.”
He wrote, “Because of this, I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS. This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable.”
Bill Pulte, Director of the Federal Housing Finance Agency, confirmed on X that Fannie and Freddie will carry out the order. But there’s a catch: the actual cash reported on their Q3 balance sheets totaled less than $17 billion as of September 30.
Pulte said the $200B figure is based on accounting of liquidity beyond just what’s labeled “cash.” He pointed to Fannie’s $12.2B in cash, $27.2B in restricted cash, and $61.5B in securities under resale agreements, which totals $100.9B. Freddie has $4.6B in cash and $86.3B in similar securities, giving it $90.9B in total.
That adds up to around $191.8 billion, still short of the $200B figure, but Pulte says it’s “ample liquidity.”
Markets immediately flashed back to the 2008 housing crash, which was also triggered by mass mortgage bond exposure. That collapse made Michael Burry a household name and took down half the U.S. financial system. This time, it’s the White House trying to make the bet.
Meanwhile, Bitcoin is clinging to $90,000, still in the red, with its open interest at $139.87B (+0.34%), while liquidations are down over 50% at $237.22M and the RSI is a flat 48.9.
Source: https://www.cryptopolitan.com/bitcoin-90k-on-trump-200b-mortgage-bond-buys/