Lots of follow-up in the other papers today after the FT’s story on Thursday about the House of Lords being replaced by a “senate” with half the number of occupants. Here is the background article.

Not sure about the idea of “senators”, which is either very old-fashioned (think ancient Rome) or a bit futuristic (think Star Wars, below).

The transfer from the current system to the new one will be intensely complicated.

One of the big unresolved issues  is what to do with the 26 bishops. They sit in the Lords because the Church is/was a major landowner in the UK rather than because of their spiritual influence over Parliament.

But to remove them all would provoke accusations from some quarters - not necessarily from the bishops themselves - that some kind of “disestablishment” is taking place.

Cutting their numbers to a small rump is the current plan. Even that would spark further questions though, such as: why is only the Church of England represented in cosmopolitan UK?

I suspect this one won’t go away for a while.

Jimmy Cayne, the cigar-chomping, bridge & golf loving boss of Bear Sterns, had a pay packet of $34m last year.

The US bank, which was worth $140bn last summer, has just been bought by JP Morgan for $236m in a desperate rescue mission.

British MPs are getting a lot of stick right now for their remuneration. By my rough calculation you could employ 300 of them for the price of one Mr Cayne (pictured below).

That isn’t going to avert the mother of all rows, however, when MPs’ pay comes to a head in July.

We revealed in Saturday’s paper that members may be asked to vote on a 50 per cent pay rise which would take their salaries to £94,000 in return for foresaking their expenses.

In case you missed the story, here it is.

If initial reaction is any guide, Nick Clegg has just blundered by storming out of the House of Commons with his troops in tow. Ben Brogan brands it a “hissy” while Peter Hoskin at the Spectator Coffee House thinks it is “bizarre behaviour”. They think it is a stunt publicising a “red herring” policy backing a referendum on EU membership that is sure to backfire. I disagree, for three main reasons:

1. It will be covered. Some MPs have been getting a little worried about Mr Clegg’s inability to win media attention. This should do the trick.

2. People may remember it. Unlike a vote on a motion that was always doomed, a defiant protest does stand out. It may be seen as a gimmick in the Westminster village, but it is a guerilla tactic that could play well in the world beyond.

3. The position has legs. Whenever the election comes, most people will have forgotten about minutiae of the parliamentary debate on the Lisbon treaty. The Tories will probably be spending lots of time batting off questions over how they will handle a ratified treaty. The Lib Dem position, for all its gimmickry, does have a life beyond Lisbon: you can always call for a referendum on EU membership.

For those who are unconvinced, there is a fourth point in defence of the Clegg caper. We should never underestimate just how little people know about Lib Dem politics. It is a struggle to get the average Joe to even recognise Mr Clegg. Mercifully few people know there are Lib Dem splits over the referendum on the treaty. Even fewer care.

This means that most people learning of the Lib Dem referendum policy for the first time may judge it on its own merits, rather than seeing it as a tawdry cover for party splits. Hell, if they found out about the walk-out, they may even think the Lib Dems truly believe it.

UPDATE: OK. I give in. My first point proved to be absolutely wrong: the Lib Dems didn’t get much coverage for the parliamentary tantrum. And the coverage they did receive was awful….

One of the most curious aspects of the Northern Rock debacle is the government’s insistence that the bank’s loan book is fundamentally solid and that market conditions will soon improve. How can they be so very sure?

Yesterday, Alistair Darling continued to say that: “The Financial Services Authority continue to assure me the bank is solvent. It believes that Northern Rock’s mortgage book is of good quality.” Just now, at the monthly 10 Downing Street press conference, Darling repeated his claim that “these are good assets”.

There is an old cliche in financial markets that you only find out who is wearing no swimming costume when the tide goes out. In the case of Northern Rock, that is the housing market, where prices have teetered slightly in the last few months. If they fall further and faster - as likely a scenario as any other given that banks are now reining in their lending - we may find out whether the assumptions about the Rock mortgage book are realistic or not.

Bear in mind that the group was seizing unprecedented market share just as house prices rushed towards their peak. Furthermore, it specialised in “generous” products including a 130 per cent loan-to-value mortgage which is apparently still on offer.

In the coming months, the nationalised Rock will be expected to run down its mortgage book, probably by upping its interest rates; a move which will encourage customers to shop around for different loans when their current ones expire. Other lenders may be happy to take on some of the Rock’s customers. ie, the more credit-worthy ones. With banks increasingly risk-averse - for obvious reasons - they may not, however, want to take on the Rock’s more questionable borrowers. In other words, the rump of the mortgage book, retained by the government, is likely to contain the more problematic loans.

At today’s presser (it’s still going on as I write) Mr Darling insisted that the Rock’s position would look better “when the housing market comes back”. Most commentators thought that house prices would be on the rise pretty soon, he suggested.

“Every penny is secured against Northern Rock’s assets…We are acquiring its liabilities and also its assets.”

Asked by the FT whether the government still expected to make a “profit” from the deal, Gordon Brown said it was “entirely possible” as the value of the Rock’s mortgage book improved.

Unfortunately for the pair, it’s also easy to envisage a scenario where the housing market does not - as the chancellor puts it - “come back” for several years. If prices fall further, the mortgages in question may look increasingly less attractive.

Last time I spoke to Matthew Oakeshott, the Lib Dem Treasury spokesman, he said he was writing to the Financial Services Authority. (The FSA had just warned that there could be up to 2m high-risk mortgages written in the last year or two).

Lord Oakeshott wanted to know how many of these risky mortgages were provided by Northern Rock. I’d be surprised if the FSA comes back with an answer. But it’s safe to say: a large proportion.

The odds on Chris Huhne winning the Liberal Democrat leadership race never seem to make sense.

Last time round, when he lost to Sir Menzies Campbell, the odds on his victory shortened dramatically for no apparent reason. This gave his "dark horse" campaign some much needed attention. Many suspected that Mr Huhne’s wealthier supporters manipulated the betting market to give him a boost. Whatever the truth of it, the bookies were delighted.

No-one can accuse Mr Huhne of playing the market this time. Take a look at this chart form Betfair, the online betting exchange, showing how Mr Huhne’s odds have moved in this race.

The gap between the two candidates — Nick Clegg has been odds on favourite throughout — narrowed a couple of weeks ago, around the time of a Guardian survey favourable to Mr Huhne.

But since then Mr Huhne’s odds have spiked to now stand at about 5/1.

This is puzzling. For the past week, Mr Huhne has almost been a permanent fixture in television studios talking about dodgy donations to the Labour party.

Yet the betting suggests he has less chance of winning now than at almost any other point in the campaign. Can this be true?

The reason for the spike is a YouGov poll of party members commissioned by Sky News. About half of the respondents said they had already voted, and about 54 per cent of those said they had backed Mr Clegg. 

It is the first piece of reasonably reliable data we have had in this race, so to that extent it is important. But is it as conclusive as the movement in the betting market suggests?

Does anyone really think that Mr Clegg is five times more likely to win?

The briefing session started with a chirpy "Hi I’m Vince Cable" and ended with me walking out of the room fumbling around for my phone to withdraw an offer I’ve just made on a house. "After a week of jokes" the acting Liberal Democrat leader, part time comedian and Brown baiter thought he "should get down to something more serious". It is hard to know what Gordon Brown will be more scared of.

Mr Cable returned to his favourite riff: Britain’s housing market is in the midst of a "grossly inflated bubble" that is about to burst. This time he came armed with slides - terrifyingly pointy slides. "The logic of the position is painfully clear," he told us. "It is going to crash."

It certainly grabbed the attention of most of my erstwhile colleagues in the room. When he said "something very big is now happening", you could sense the journalists scribbling down his words believed it was more than just a Lib Dem presser. It was almost as if "Professor" Cable, doomsayer and former Shell economist, had hijacked a room in parliament to give a university seminar.

Put simply, he believes economy has been awash with credit and the reckoning is nigh. Those, like Mr Brown, putting their hopes on Britain being a special case are sorely wrong. Lack of supply, rising demand, bureaucratic planning, and rich Russian oligarchs do not explain the extraordinary boom in house prices. Just like America, this little island is due for a correction. Ominous signs emerging: Mr Cable said he recently met his first constituent in Twickenham with negative equity. "The house of Gordon has been built on a flood plain and the waters are now seeping in," he bleakly said.

Whilst it is always refreshing, if a little perturbing, to hear politicians talk down the value of most voters’ most cherished asset, we have heard this from Mr Cable before. What made today different was his call for a "safety net". Peter Lilley removed state support for arrears during the last Tory government, Mr Cable said, leaving borrowers with no protection. The government must step in and and bang heads together with the mortgage lenders to set up a bank repossession operation that aims to keep most families in their homes.  That made me a bit happier about the prospect of becoming a homeowner. But not much.

Liberal Democrat activists obsessed with civil rights may well be taken aback by our report revealing Chris Huhne’s involvement in a company that pioneered mobile CCTV use in Britain (he certainly seemed to be when I put it to him).

But Nick Clegg, Mr Huhne’s rival for the Liberal Democrat crown, also has a surprising business past. For almost a year, Mr Clegg worked as a partner at GPlus, one of the most influential lobbying groups in Brussels.

This brief lobbying liaison is not something Mr Clegg is keen to highlight on the stump. He prefers to talk up his time as a trade negotiator, journalist and ski-instructor. One can understand why: since he left company, GPlus have taken on clients such as Vladimir Putin and Gazprom, the Russian energy giant. These are hardly popular causes among the LibDem faithful. 

In a press release announcing his appointment, Mr Clegg said it was ”especially exciting” to be joining GPlus at ”a time when Brussels is moving more and more to the centre of business concerns”. But, for all his initial excitement, this was a short career bridging the gap between him stepping down as an MEP in 2004 and becoming an MP in 2005. He lectured at Sheffield University during the same period.

Mr Clegg’s lobbying colleagues tell me he actively worked with them for just six months, largely part-time. As one of five partners, Mr Clegg drew on his inside knowledge of the European parliament to give several lectures to staff and clients such as Centrica, the energy group. He spent very little time on lobbying work for existing UK clients such as Asda, the supermarket chain, or Aviva, the insurer. But he did join GPlus teams pitching for new business.

Friends of Mr Clegg told me that the work helped him to support a family while he was waiting for a seat in parliament. But Mr Clegg does not seem to have made the most of the opportunities from his new job. When he joined the company, Mr Clegg  was awarded equity rights, which he never chose to exercise. He thus missed out on a big windfall: GPlus was bought by Omnicom for about £8m, soon after Mr Clegg’s departure.