Republicans gutting Dodd-Frank as Wall St. goes subprime again

[applegrove]

Republicans gutting Dodd-Frank as Wall St. goes subprime again

By Neil Macdonald, CBC News

http://www.cbc.ca/news/world/republicans-gutting-dodd-frank-as-wall-st-goes-subprime-again-1.2938552

"SNIP..................


Think they won't? Well, Wall Street has already dived back into the stinking ooze of subprime lending, the financial weapon of mass destruction that blew up in 2008.

This time, it's car loans.

First, auto lenders, including some of the big car companies, seek out consumers with poor credit ratings who need transportation.

Then they offer them car loans with interest rates of 25 or even 35 per cent. Loan sharks call that "the vig." Banks call it "high return."

Then, up the food chain, lending institutions package up a few million of these sketchy loans, forming them into securitized debt while "slicing and dicing" them, which theoretically spreads the risk thinner, earning a good safety rating from the big ratings agencies.

They then offer this securitized debt to big investors worldwide who are hungry for high return.



....................SNIP"

[Atman]

1. Cool!

I need a new BMW!