Shaky Ground

Shaky Ground
The Strange Saga of the U.S. Mortgage Giants

Fannie Mae and Freddie Mac were created by Congress to serve the American Dream of homeownership. By the end of the century, they had become extremely profitable and powerful companies, instrumental in putting millions of Americans in their homes.

So why does the government now want them dead?

In 2008, the U.S. Treasury put Fannie and Freddie into a life-support state known as “conservatorship” to prevent their failure—and worldwide economic chaos. The two companies, which were always controversial, have become a battleground. Today, Fannie and Freddie are profitable again but still in conservatorship. Their profits are being redirected toward reducing the federal deficit, which leaves them with no buffer should they suffer losses again. China and Japan are big owners of Fannie and Freddie securities, and they want to ensure the safety of their investments—which helps explain why the government is at an impasse about what to do. But the current state of limbo is unsustainable.

Based on comprehensive reporting and dozens of interviews, Shaky Ground chronicles the story of Fannie and Freddie seven years after the meltdown, and tells us why homeownership finance is now one of the biggest unsolved issues in today's global economy—and why it must be placed on firmer ground.

Shaky Ground
  • ISBN: 9780990976301
  • Price: $12.99
  • E-book ISBN: 9780990976318
  • On Sale: September 14, 2015
  • Pages: 160


A Washington Post Notable Nonfiction of 2015
Washington Post Bestseller
Porchlight Business Book Award Longlist, 2015

“Bethany McLean has written an insightful guide to one of the fascinating true-financial-crime cases of our time.” —Simon Johnson, Washington Post

“Seven years after the housing crisis, a look at what happened, how well the government fix worked, and where are we now.” PBS Newshour

“In a short, lucid paperback (or e-book) from a new publishing arm of Columbia University, McLean explains how the topsy-turvy world of Fannie and Freddie came to be and why government control of them likely will limp along indefinitely as the major unresolved issue of the financial crisis.” USA Today

“An excellent new book that attempts to make sense of the senseless history of Fannie and Freddie.” Fortune

“Bethany McLean romps through the well-intentioned founding of Fannie and Freddie, via their gradual corruption to the current unhappy limbo, with the government and hedge funds fighting over the scraps in the courts.... McLean deftly steers a sensible course through the competing claims.” —Tom Braithwaite, Financial Times

“McLean ably describes a situation where, seven years past the brink of economic collapse, Fannie and Freddie are severely undercapitalized, faced with investor lawsuits, and caught up in political infighting that prevents either comprehensive reform or their ultimate abolition.” Publishers Weekly

“Readers of this maddening, sharp report will rightly wonder why Fannie Mae and Freddie Mac have been allowed to survive and why we can’t do better.” Kirkus Reviews

“Based on in-depth reporting and dozens of interviews with key players in Washington and Wall Street, Shaky Ground vividly describes how we got into this unsustainable situation—and why everyone should care. This is business journalism at its best and a must-read for anyone concerned about a full recovery from the financial crisis.” Porchlight

“The latest very smart finance book by McLean ... [who] found a very good [topic] in our deeply flawed home mortgage system.” The National Book Review


Fannie and Freddie are Back, Bigger and Badder Than Ever — New York Times

Government-backed mortgage lenders are awful—and essential — Washington Post

The biggest remaining risk in today's financial system, hiding in plain sight — Yahoo Finance

Why mortgage giants Fannie Mae and Freddie Mac pose a huge threat to the market — CNBC

The depressing reason Obama and Congress have failed to fix Fannie Mae and Freddie Mac — Quartz

Bethany McLean weaves a tale of Fannie Mae and Freddie Mac that enlightens, enrages, and educates — Porchlight

I’ve written books about Enron and the financial crisis. But Fannie Mae is the scariest of them all — LinkedIn

The Shaky Ground Edition — Slate Money podcast

Business Gone Bad and the Art of Persistence — Invest Like the Best podcast

🎧 Listen to our Underreported with Nicholas Lemann podcast episode with Bethany McLean

Also by Bethany McLean

Shaky Ground

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Bethany McLean digs deep into the cycles of boom and bust that have plagued the American oil industry, and reveals the true story of fracking's impact—on Wall Street, the economy and geopolitics.

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Bethany McLean on "Shaky Ground"

About the author

Bethany McLean
© Steven Laxton

Bethany McLean is the co-author of the bestseller The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron with her Fortune colleague Peter Elkind. Her second book, which she co-authored with New York Times columnist Joe Nocera, is All the Devils are Here: The Hidden History of the Financial Crisis. She is a contributing editor at Vanity Fair, a columnist for and a contributor at CNBC. She lives in Chicago.  @bethanymac12