Trump's Freddie And Fannie Plan 'One of The Worst Economic Decisions Ever,' Says Peter Schiff — '2008 Will Pale In Comparison'

Economist Peter Schiff is warning that President Donald Trump’s plans for a unified listing of the Federal National Mortgage Association (OTC:FNMA) or Fannie Mae and Federal Home Loan Mortgage Corp. (OTC:FMCC) or Freddie Mac could create economic risks far greater than those that led to the 2008 Financial Crisis.

Schiff Warns Investors Assume ‘Implicit Guarantee’

On Tuesday, in a post on X, Schiff shared the history of the two mortgage giants, starting with President Franklin D. Roosevelt, who created Fannie Mae in 1933, followed by President Lyndon Johnson, who turned it into a government-sponsored entity in 1968, but “without a government guarantee,” he notes.

“Then Richard Nixon created Freddie Mac in 1970 to compete with Fannie Mae, allowing both to buy non-FHA insured mortgages for the first time,” Schiff says, adding once again that this was “without any government guarantee.”

See Also: Mortgage Rates Hit Lowest Since Last October, Homebuilder Stocks Breaking Out

According to Schiff, investors wrongly assumed the government would always stand behind the firms, despite repeated warnings to the contrary. ...