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29 December 2014 @ 03:48 pm
From the ridiculous to the subprime  
A scary word has returned: There are reports of a big market in subprime car loans. We are told not to worry, because it's not like subprime housing loans. Cars are easier to repossess (there's a movie about that), and there's not going to be the wave of "flipping" and reselling that we had with housing loans. I hope they're right. I also hope that if anyone tries to build complex financial structures on these bad loans, the similarity to the previous disaster will be noticed, and people will not fall for it. But I am cynical enough to imagine new set of complex financial instruments that will get AAA+ ratings because no one looks deeply enough to see what they are based on, and we will once again elect representatives of the primitive Republican tribe, with their quaint animistic belief that the Market can regulate itself, and eventually the mighty and elegant structure built on a foundation of soft shit will fall down, and the experts and the Very Serious People will have no idea how it could have happened.
don_fitch on December 29th, 2014 09:40 pm (UTC)
Humm... yes, thanks for this. I've recently had a collision (for which I was accurately ajudged at least 51% at at fault), and am dithering about buying a new Toyota Corolla or a several-years-old one, but in either case I'd be paying cash. Still, the information you provide is interesting & useful, especially because most people in the U.S. are more likely to be buying new cars than  new homes.

David WilfordDavid Wilford on December 29th, 2014 09:53 pm (UTC)
Bud: Credit is a sacred trust, it's what our free society is founded on. Do you think they give a damn about their bills in Russia? I said, do you think they give a damn about their bills in Russia?

Otto: They don't pay bills in Russia, it's all free.

Bud: All free? Free my ass. What are you, a fuckin' commie? Huh?

Otto: No, I ain't no commie.

Bud: Well, you better not be. I don't want no commies in my car. No Christians either.
Avram Grumer: Post-It Portraitagrumer on December 30th, 2014 12:07 am (UTC)
When I was a kid, they told me that rich people could help the economy grow by investing in new businesses that hire workers who use the money they earn to buy stuff that makes those new business prosper which makes the rich people richer. What ever happened to that?
she just wants to be kissed all the timeanne_jumps on December 30th, 2014 01:49 am (UTC)
Exciting news: Subprime lenders can remotely turn off and disable your car at any time! http://dealbook.nytimes.com/2014/09/24/miss-a-payment-good-luck-moving-that-car/?_r=0
nancylebov: green leavesnancylebov on December 30th, 2014 05:16 am (UTC)
At a minimum, this is bad because there are incentives to push people into buying cars they can't afford. This is bad for their access to transportation and their credit records.

With a little luck, there's less potential for huge disaster than there was for doing the same with houses.
The Hebrew Hammercockhammercock on December 30th, 2014 05:17 am (UTC)
Fucking leeches.