Some people might think my gaff isn’t very salubrious. Well, it’s on the riverbank.

We get flooded a lot when it rains - and it rains regularly. It’s smelly at times. We’ve got Ratty and his increasingly large family as our next-door neighbours and there’s always some lout in a boat making a racket. And, boy, did I find it hard to get a mortgage for this place. Tried all the normal channels before meeting this spiv with a great line in patter. It was a bit pricey but he signed me up though, and we’re here. This is what the expert class as ‘sub-prime lending’.

And this has been causing a lot of concerns to our American cousins. It’s having a huge effect on the cost of living with some of the lenders collapsing into bankruptcy. So could it happen to a riverbank near us? I certainly hope not.

But some institutions have been so desperate to hand out mortgages they’ve taken a big risk. Unnecessary, in my ’umble view. They’ve been able to offer mortgages to people on low income or with doubtful credit histories and they’ve charged them over the odds interest fees. Now, I ain’t an economist, but this always struck me as a real risky business. People on the breadline - or the riverbank - with little disposable income hit with fat charges! Come on. How come all these highly paid risk managers didn’t spot the problem in this one?

The truth is they probably did but then the market is so short-sighted it’s driven by short-term termism. Now thousands of people can’t afford the repayments and are having their homes repossessed. This is a social tragedy on a large scale.

One point is clear, that lots of happy-clappy investors haven’t a scooby-do that they are bound up in this potential lending timebomb. The sub-prime debts are sold on to other specialist companies, then sold on to an investor wrapped in another company which raises bonds with the term ‘collateralised debt obligations’. But there’s not much information about these CDOs, their housing market expsoure and they don’t get traded a lot. And, according to the experts, many buyers of CDOs didn’t fully appreciate there were hold large tranches of sub-prime lending which was dropping in value. When they tried to sell their investment, they’ve been losing millions.

But the worst thing for all of us, even in the UK, is that this kind of investment collapse could usher in some kind of recession. In America, the housing market is in a severe downturn and the economy is bracing itself for trouble. There’s a lot of messy litigation in the pipeline too.

So, there’s a warning for all of us over here. Certainly, I’m taking it seriously on the riverbank. Indeed, it was the sub-prime lending and collateralised debt obligation was the sole topic down at the tavern last night. Far more interesting than the football.