Michael Burry is warning everyone that President Trump's decision could set off the next housing crisis
Burry just published his most detailed note yet on Fannie Mae $Federal National Mortgage Association(FNMA.US) and Freddie Mac $Freddie Mac(FMCC.US)These are the two government-backed companies that back most American mortgagesThe whole trade comes down to one decision the U.S. Treasury hasn't made yetIf the government writes off a $193,000,000,000 debt the companies technically still owe:• Shares could rise 3-4x immediately• And up to 6-7x over timeIf they don't: both stocks drop to the low single digitsBurry also dug through their SEC filings and found:• Fannie's bad loan write-offs jumped from $61M to $243M in a single year• Their biggest mortgage partner had to buy back $221,600,000 in fraudulent loans
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