Morning Brew - ☕ Fannie and Freddie

Can the NHL pull off outdoor games in Florida?
A person walks with his bicycle on a snow-covered bridge in Heerlen, southern Netherlands on January 9, 2025.

Walking a bike on a snow-covered bridge in Amsterdam. Marcel Van Hoorn/ANP/AFP via Getty Images.

 

BROWSING

 

The wackiest headlines from the week as they would appear in a Classifieds section.

Careers

SHY GUY SITTER: At CES, Yukai Engineering revealed a furry robot that will latch onto your purse and act curious. If someone approaches it too quickly, it will act shy. The companion is essentially a $70 baby—pretty cheap as far as babies go.

JUKEBOX FIXER: Taylor Swift can control every aspect of her career, unless it’s in Philadelphia. Touchtunes revealed that Philly’s dive bar patrons played more Creed than Swift last year.

PANOPTICON SECURITY: Three Netherlands prisons famous for their domed designs will transform into hip art hubs. One former prison with a central watchtower that tricked inmates into thinking they were always being watched will now house podcast studios.

Personal

REVISITING THE NUMERALS: OK—maybe we should take everything Marcus Aurelius said with a grain of salt. Scientists found that lead pollution from silver mining during the Roman Empire was so high that it potentially lowered IQs.

FEAR THE SQUIRRELS: A new study found some squirrels act way too carnivorously for most people’s liking by hunting and eating voles.

For sale

ROOMBA REPLACEMENT: This robovacuum doesn’t just suck up dog hair until it gets trapped in the corner—it can pick up your dirty socks until it gets trapped in the corner.

SUPERCENTER DUPE: Walmart is selling a knockoff of the $10,000+ Hermès Birkin bag. But good luck getting your hands on the Wirkin (as it has been nicknamed), because the dupe is about as exclusive as the real thing.

STADIUM PRICED BOWL: The Washington Wizards NBA team hosted a “Hoops and Hounds” night that had 140 dogs watch the game at Capital One Arena. The halftime show was eight hours of ducks strolling around a babbling brook.—MM

 

SCIENCE

 
Spaghetti

Tbralnina/Getty Images

Here are some illuminating scientific discoveries from the week to help you live better and maybe even grow big and strong.

Nanospaghetti could one day treat your boo-boo. Fun to dress with, bland to eat: English scientists say they’ve spun up the thinnest noodle in the world—measuring 1/200th of the width of a strand of hair—designed for ultrafine bandages that would be porous enough for water but tightly woven enough to keep out bacteria. The ultra angel hair pasta is created using all-purpose flour, potentially making it a cheap, plastic-free, and widely reproducible alternative to conventional bandage materials. The research team spun the superfine spaghetti by breaking down the flour in an acid that naturally occurs in ant venom and then shooting the liquid through a needle and collecting the strands with a sheet of paper. It’s edible, but “needs seasoning,” the study’s author said.

A milk a day might keep bowel cancer away. Babygirl was just a PSA for Big Calcium. Pulling a Nicole Kidman and drinking a half-pint of milk every day could cut risks of bowel cancer, aka colorectal cancer, by nearly 20%, according to a study of more than 500,000 postmenopausal women’s diets over almost two decades. Every 300mg daily serving of calcium consumed (daily recommendation is ~1,000mg), whether in dairy or nondairy form, was linked with a 17% lower risk of bowel cancer, which is the third-most prevalent cancer in the world. Diagnoses among 25- to 49-year-olds jumped 22% from the 1990s to 2018, and the reason isn’t clear. More than half of bowel cancer cases are preventable, though. For example, 1 in 5 are linked to diets heavy with red or processed meats.

We pulled ancient ice out of Antarctica’s depths. Megatron should be awakening any time now. A group of heavily bundled scientists from around the world drilled 1.7 miles down into Antarctica to extract a hunk of ice thought to be at least 1.2 million years old, they announced this week. The team of 16 researchers, funded by the EU, reached bedrock in January after working in –25-degree Fahrenheit weather for four summers. They’re optimistic that analyzing the new sample will shed light on how the Earth’s atmosphere and climate have changed since the Ice Age, especially regarding greenhouse gas concentrations.—ML

 

SNAPSHOTS

 
Super Scooper plane drops water on the Palisades fire

Brian van der Brug / Los Angeles Times via Getty Images

A CL-415 Super Scooper can dump 1,600 gallons of water onto fires and complete the refilling process in about five minutes. It’s one of the more crucial tools for containing the fires in Los Angeles, but authorities have found themselves without one of the two at their disposal due to a collision with a civilian drone that required repairs.

The drone, which was taking video of the blaze, was violating the FAA’s temporary flight restriction in the area, which runs through Jan. 23. The incident is under investigation.—DL

 
 

NEWS ANALYSIS

 
Fannie Mae

J. David Ake/Getty Images

One asset that has skyrocketed since the election has nothing to do with bitcoin or Polymarket bets on Greenland becoming the 51st state. That would be the stock of what Bloomberg calls a “stodgy 87-year-old company,” aka Fannie Mae, which, along with its corporate cousin, Freddie Mac, guarantees 70% of US home mortgages.

The financial behemoths have been locked in government conservatorship since getting bailed out with taxpayer cash during the Great Recession. But hedge fund billionaire and longtime Fannie Mae shareholder Bill Ackman recently predicted President-elect Donald Trump would take them private as soon as next year—a process Trump started but did not complete during his first term.

Ackman believes the privatization of Fannie and Freddie could herald a massive payday for those who own a piece of the pie:

  • Shareholders currently don’t get any dividend payments since the government owns 80% of the companies and claims virtually all of their profits, making it the stock equivalent of a random baseball card your dad assures will one day be worth a fortune.
  • But the government reducing its stake in the companies and relinquishing its right to its earnings could make it much more valuable.

While not traded on major exchanges, Fannie Mae shares shot up almost 173% since Trump won the election, as investors bet that his desire to reduce the role of the government in the economy could lead him to privatize the company. The stock is currently priced at over $5, but Ackman recently projected it would zoom to $34 if the government allowed it to go public.

That would be a jackpot for investors like Ackman, but the move would be a major shakeup of the mortgage market that could make home loans more expensive for ordinary Americans.

How we got here

If Fannie Mae sounds like someone who was born during the Great Depression, that’s because it’s the nickname of a company the government established in 1938—called the Federal National Mortgage Association—to make affordable mortgages available to middle- and low-income Americans. Freddie Mac, whose full name is the Federal Home Loan Mortgage Corporation, was founded in 1970 with a similar mission.

The private but tightly regulated Fannie Mae bought mortgages from banks and started packaging them into mortgage-backed securities in 1981, which it sold back to the banks or other financial institutions. In exchange for a fee, it guaranteed the assets were fail-proof, allowing investors to recoup their money even if homebuyers defaulted on their loans.

When Fannie and Freddie found themselves on the verge of bankruptcy in 2007, in part due to risky investments they made in the years leading up to the mortgage crisis, the government injected them with billions in loans. In exchange for its largesse, Uncle Sam put them in a federal conservatorship.

  • Now, all of their profits, which are derived from the loan-guaranteeing fees they charge banks, are remitted to the Treasury.
  • Meanwhile, private shareholders own the other 20% of Fannie and Freddie, holding their diminished stocks mostly in hopes of eventual privatization.

Both companies became profitable after the housing market stabilized in the early 2010s and have since built up about $147 billion in equity. While that piggy bank technically belongs to the government, Ackman argues that Uncle Sam has already recouped all the cash it loaned Fannie Mae and Freddie Mac while making a $25 billion profit.

He claims another $300 billion could flow into federal coffers if the government sells part of its stake via an IPO, allowing the US Treasury to drop risky assets from its ledger. If that IPO happens, it would be the largest in US history.

But Bloomberg Columnist Matt Levine notes that Ackman’s claims hinge on just one interpretation of the conservatorship’s terms and accounting, and that the government might not want to relinquish its control of the companies since they already support a relatively well-functioning mortgage market and are profitable.

What this means for homebuying

Experts are worried that privatizing the two companies could push up mortgage rates since the government wouldn’t guarantee mortgages. That would make homeownership more expensive.

How? Fannie and Freddie operating without an explicit assurance that the government will pay off their debts in case of default could make its mortgage-backed securities riskier, forcing it to charge banks more for its services. Lenders could pass on these costs to homebuyers, potentially driving up yearly interest payments on an average mortgage by as much as $2,800, according to estimates by Moody’s Chief Economist Mark Zandi.

Looking ahead…while the initial law taking the two companies under the government’s wing assumed that the measure would be temporary, and even though Ackman is looking confident, analysts say there’s no guarantee that Trump will make the issue a priority or that he could do it without congressional approval—especially with mortgage rates already hovering around a two-decade high of 7%.—SK

 

DESTINATIONS

 
An aerial view of Raymond James Stadium ahead of Super Bowl LV on January 31, 2021 in Tampa, Florida

Mike Ehrmann/Getty Images

It’s a big world out there. In this section, we’ll teleport you to an interesting location—and hopefully give you travel ideas in the process.

When you think about sports in Florida, you might imagine spring training baseball, Miami Hurricanes football, and chasing down costumed characters at Disney World. But now, the NHL wants you to get excited about a concept more foreign to the people of Florida than wearing a shirt while being arrested: outdoor hockey.

The sports league you always forget exists until the playoffs announced this week that it will hold its first outdoor games in Florida next year. The Rangers and Panthers will meet at Miami’s loanDepot Park on Jan. 2, 2026, while the Bruins and Lightning will meet at Raymond James Stadium in Tampa on Feb. 1.

The NHL is looking to capitalize on the growth of youth hockey in the state, where the Lightning and Panthers began to play more than 30 years ago.

Warming up to the idea

An outdoor preseason game in 1991 between the Rangers and Kings in Las Vegas roasted under temperatures between 85 and 95 degrees. The warmest outdoor regular season game occurred in 2016, when the Red Wings and Avalanche dropped the puck at Denver’s Coors Field with a temperature of 65 degrees Fahrenheit. The average high temperature in Miami in January is 76 degrees; Tampa has similar average temperatures in February.

It will require a special setup. The NHL will use loanDepot Park’s roof to shield the ice surface from the sun until the game starts. Raymond James Stadium is an open-air facility, so the league will build a structure to cover the surface.

How will the ice stay frozen? For its outdoor games, the NHL deploys a 300-ton refrigeration unit and an intricate system of aluminum trays below the playing surface that keeps the ice at the ideal temperature of 22 degrees.—DL

 
 

BREW'S BEST

 
To-do list banner

Cook: Freezing temps means it’s time for gooey French onion soup.

Make: Mechanical keyboards are in this year. Learn how to make your own.

Connect: Friendship lamps exist for when you’re missing your long-distance bestie.

Learn: A professional cook teaches you how to grocery shop like a pro.

Watch: A star-studded Jane Austen adaptation that lifts the spirits.

Read: Get out of your head with a thrilling sci-fi novel about the end of humanity.

 

COMMUNITY

 

Last week, we asked, “Who is your most impressive friend and why?” Here are our favorite responses:

  • “My friend Bianca, who has caught about 15 mice living in her apartment in the last few weeks. She then walks them down to a nearby park and uses chopsticks and oil to set them free.”—Fernanda from Tiverton, RI
  • “Doyle, guitarist extraordinaire. Doyle has been on the Grand Ole Opry countless times. He’s played with all the greats, from Chet Atkins to Merle Travis, Duane Eddy to Grandpa Jones. He’s a true master, and even knowing that, he blows me away whenever I see him play.”—Pat from Prescott, AZ
  • “My best friend Talia has a stomach of steel. She can put down three White Claws and four hot dogs for dinner, no questions asked.”—Emily from San Francisco, CA
  • “My friend Oriana. My family plays a game that includes a charades portion, but you can only act using your fingers (you sit under a table with just your hands above it). She ‘acted’ out ‘Hillary Clinton Dabbing’ with just her fingers so well we all guessed it immediately.”—Allison from Denver, CO

This week’s question

What’s the wildest bit of mischief your pet has gotten into?

Matty’s response to get the juices flowing: “I had a yellow lab named Cheddar growing up, and he would constantly steal things from our neighbors—mostly trash and fish from their pond. One time, though, he came home with a full pizza box and $3.”

Share your response here.

 

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Written by Dave Lozo, Matty Merritt, Cassandra Cassidy, Molly Liebergall, and Sam Klebanov

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