Headlines

Vaccine makers’ ‘no profit’ pledge stirs doubts in Congress

U.S. carries out 1st execution in 17 years after Supreme Court clears the way

California governor orders widespread closures of indoor activities

Poll: 35% of Americans ‘comfortable’ returning to normal

Biden signals openness to eliminating Senate filibuster

Schools have low coronavirus infection rate, German study finds

NYC sees 17 shootings Monday — ‘astronomical’ for a weekday

Cuomo: Trump ‘COVID scandal’ makes ‘Watergate look innocent’

Iran executes Defense Ministry staffer as alleged CIA spy

Coronavirus updates: Pandemic roils corporate earnings, 3M developing rapid antigen test

Britain bans China’s Huawei from 5G network

Fauci downplays lower coronavirus death rate as ‘false narrative’

Here We Go Again

The sub-prime mortgage fiasco of 2008 should have taught us a lesson. With the encouragement of Barney Frank and other political cockroaches, the banking industry and mortgage brokers gave mortgages to hundreds of thousands of people who didn’t have the wherewithal or the intention to pay them off. They used these houses like an ATM machine … pulling out cash whenever crooked appraisers or cozy transactions made it look like these houses were worth more … which most often they weren’t.

And the mortgage originators went along with this fraud because they could offload these mortgages onto Fannie Mae as fast as the documents could be created … collecting large origination fees in the process. This mortgage bubble was also compounded by another grifting scheme … the packaging of bunches of mortgages into “securities” which were sold like bonds and given premium ratings when they were clearly undeserving. It got even more complicated and dangerous with the insuring of these mortgage securities … which I won’t go into here.

But the lesson has, unfortunately not seem to have been learned. What should every deserving con-artist get for free next? Why a car of course. So now car dealers (mostly used-car dealers) are giving car loans to buyers who do not really qualify for such credit … sub-prime borrowers if you will. And these car loans are then being packaged up and sold to lenders seeking higher yields than can be had most other places … see: CNBC Story for the gory details. And as long as hanky-panky in the rating of these auto-loan securities does not occur ... like it did with mortgage-backed securities, things should be OK. But I’m not sure that I would have as much faith in this process as Apple, Google and 3M apparently have.