First blood: Tricolor Holdings files for bankruptcy in Texas, sends AAA bonds crashing, JPM, BCS, and FITB face billions in exposure from subprime auto fraud.

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AAA bonds rated just two months ago are crashing, with lower tranches nearly worthless. Subprime auto debt tied to fraud is imploding while rating agencies keep pretending nothing is wrong.

Subprime Auto Lender Collapse Delivers Blow to Risky Debt Market (it begins)

Debt-fueled “growth” based on lending to the manifestly non-creditworthy was never a sustainable business model.

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