In come the waves: The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops.
— Economist, June 16, 2005
As of December 2007, five months after the financial crisis started but nine months before the financial system collapsed, the two largest government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, looked quite different from how they did a decade earlier in 1997.
For example, in 1997, with $21 billion of shareholder equity, and a $481 billion portfolio of mortgages and $1.06 trillion of mortgage-backed security (MBS) guarantees, supported by $256 billion of notional ...