Fake and gay indeed. Part of the Conclusion: “This architecture delivers powerful short-term stability. Mortgage rates remain lower than they otherwise would be. Investors treat agency MBS as near-sovereign assets. During downturns, scheduled principal and interest payments continue flowing to investors even when borrowers default, reducing forced selling and systemic panic. But stability is achieved through structural leverage. Mortgage lending creates bank deposits — expanding the money supply at origination. Federal guarantees reduce funding costs and suppress risk premiums, encouraging greater credit expansion than a fully private market would likely sustain. Over time, this contributes to higher home prices, higher household leverage, and greater sensitivity to rate cycles. The system reduces the frequency of collapse while increasing the scale of public exposure. It converts episodic private losses into managed public absorption. That tradeoff may be rational, but it is not neutral. The system does not eliminate risk, it reallocates it through layered public backstops.”