30 minute video. I try not to post a video unless it really impresses me. This one delivers.
Banks have been loaning 125% of the value of the car. People are upside down in their loans. Negative equity. The banks package the subprime loans as an asset backed security. Couple that with a big increase in the repo rate. Golly Gee folks, it seems that the average Joe cannot afford the payments on a 100,000.00 F150
The crash of 2008 was fueled by the packaging of mortgages into AAA rated securities, even though the mortgages were defaulting at a high rate. The rating agencies are supposed to be independent, but they are not. Investor Michael Burry made a billion dollars shorting the AAA mortgage backed securities. They all laughed at him when he made the bet. If you want an excellent movie on this, watch The Big Short (2015)
Sounds like they are doing it again with cars and houses, and why not? Nobody went to jail back in 2008.The U.S. govt bailed everyone out and taxpayers paid for it. So, there is no downside for the criminals to do it again.
h/t Miles2Go
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