for businessmen only, true, strong, brave, businesmen.
The financial crisis showed that the market is pretty horrible at pricing and understanding first loss mortgage risk. It seems odd to think that the market will get it right this time. First loss bonds are, by their nature, illiquid, hard to price, volatile and extremely sensitive to small market changes. I’m fairly skeptical that we can replace Fannie and Freddie with a stable housing infrastructure that depends on liquidity in a market for first-loss mortgage risk that has repeatedly shown itself to be illiquid and volatile.