Channel theory and the Freddy-Fannie debate

The mortgage system is modeled as a production system. It is going to have a most common set of -iLog(i), where i is a finite set of probabilities that sum to almost 1.0. Each of the probable events is a transaction somewhere in the production chain.

The chain, let's call it the network distribution, has rank equal to the number os elements in the set i. There is some real network of that rank within the economy.

The only solutions for this network to add growth in mortgages past a limit, is to expand the distribution rank. So we would model the thing as two networks, the expanded and contracted network. The private securitization firms do this. But the minimum redundancy norm says the private market will attempt to insert itself into the chain, rather than parallel it. Hence the bundle and sell, they want to minimize service interval.

So who caused the house price mismatch? Energy shortages, it had nothing to do with the mechanics of housing. There was neither oversupply nor under supply, but volatility changes between the two network states, the more complex network is more accurate but carries higher inventory risk. The other short network has less risk but posts less accurate measurement.