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In response to
"It is not mortgages but subprime car loans that U.S. banks are repackaging now for foreign investors -- (link)"
by
Beaker
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This is a terrible "analysis." Before 2005, home prices were widely assumed to rise. Car prices famously fall as soon as you drive it off the lot
Posted by
con_carne
Feb 2 '15, 05:56
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One of the big problems with the mortgage meltdown was that traders were assuming home prices would rise indefinitely. When they plateaued, people couldn't use their homes as an ATM anymore, refinancing indefinitely to make up for the fact that they had lower paying jobs.
Betting on car loans is just not the same thing. There's no incentive to refinance, so it doesn't have the "bubble" that homes did in 2005.
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