This is really very good, very good indeed.
You\’ll recall that Northern Rock and various subsequent problems in the mortgage market were driven by first the expansion, then contraction, of securitisation of mortgages?
The bank issues the loan, bundles a number of together as a pool and flogs off the pool as a bond issue, thus getting the money back to start all over again?
So Our Wee Wully has a bright idea about how to deal with the subsequent problems. Let\’s get the securitisation machine running again!
Yes, like the US has Freddie Mac and Fannie Mae, we should have a Gordon Mac. A private sector company (for both FMs are such) with no direct government guarantee (which neither FM has) should be set up to buy all those pesky mortgages and securitise them and syndicate them.
Then everything will be lovely and there\’ll be a pony in every pot!
Can\’t help thinking that there might be something a little wrong with this plan you know.