Firstly Ben proposed that lenders allow borrowers off some of the principal

http://www.federalreserve.gov/newsevents/speech/bernanke20080304a.htm

as this will be cheaper than allow the borrower to foreclose

Then we have Darling saying that we should have a gold standard of mortgage to get the MBS market moving again

http://www.ft.com/cms/s/0/cfb0b2ca-ea2f-11dc-b3c9-0000779fd2ac.html

No doubt this will make the same flawed assumptions that the other rating agencies made - using historically low levels of defaults and not taking into account fat tails in their calculations.

I think these two should stop trying to influence the market and let it run its course - even if there is some pain along the way

On a related note, Darling is planning to exclude Northern Rock from the budget

http://business.timesonline.co.uk/tol/business/economics/article3486125.ece

thereby keeping the net debt below the 40% GDP rule (something that Gordon has manipulated in the past). I wonder if PFI will make an appearance

http://www.guardian.co.uk/business/2008/feb/19/northernrock.banking3