Are you kidding me?

Note, some of this is not contained in the article, as I had to look through a few different sources. This article had some pretty diagrams to make the whole vomit-bucket look a little more desirable.

The investor in this new mortgage backed security faces only interest risk. The credit risk is absorbed by the MCGEs, who will replace Fannie Mae and Freddie Mac. The MCGEs can guarantee that they absorb the credit risk through—I kid you not—bond insurance and credit default swaps. They won’t get too big to fail because a competent regulator will make sure that never happens. What’s best is that somehow moral hazard will be avoided despite an explicit government guarantee. Also, despite the explicit government guarantee, this will somehow be accomplished “without putting taxpayer money at risk.”

Seriously, did someone put all of the keywords they could find on this economic crisis into a blender and then propose the result as the solution?

(I admit that I found it a little humorous that this article was written by a guy named McGee, given the proposed pronunciation of the agencies’ acronym)