The scariest bubble I see right now

[Mac1958]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

 

[beagle9]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

 

[william the wie]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

The exact opposite of predatory lending creates bubbles. Bubbles come about this way: buy a loan, sell it to some yield whore, then rinse and repeat. As long as the payments are made for a sufficiently long period to prevent you from having to pony up money the good times roll.

 

[Mac1958]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

Predatory lending was a part of the 2008 Meltdown, for sure, when these steaming piles of crap subprime mortgages were pushed, written, sold within 24 hours into CMOs and CDOs, somehow given COMPLETELY invalid AAA ratings by the paid-off agencies, and then sold all over the world under purely false pretenses. Oh, and then sometimes shorted by the same fucking people who created them. Oh, and then, hundreds of billions in insurance was sold against them to anyone who wanted it without ANY fucking reserve requirements needed to back up that insurance. There's your Meltdown.

That's where the complete & comical lack of regulation was so screamingly evident. And destructive.

This is different because there's just so much damn liquidity chasing a smaller market. A small business is a riskier loan proposition than a mortgage by a factor of about a zillion. So you have that, PLUS the lenders are willing to take poor credit ON TOP of it? And then, as we see above, many of the SAME BANKS are pouring money into it?

So I wouldn't call this "predatory" lending so much. It's just breathtakingly risky, to people who should KNOW better, BY people who should KNOW better.
.

 

[Two Thumbs]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

millions of home owners fell for clintons idea of a person in every house, they over paid and failed to get returns.

if a biz owner goes under, it's just another failed biz. there would have to be a very large amount of at risk shops for this to have much impact.

and clintons bubble was an attempt to keep a failing economy going, right now the economy is improving, so as long as banks/gov don't get to damn dumb....


well, I was going with this is no big deal, but the line above just proved that the sky could actually fall.

 

[Mac1958]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

millions of home owners fell for clintons idea of a person in every house, they over paid and failed to get returns.

if a biz owner goes under, it's just another failed biz. there would have to be a very large amount of at risk shops for this to have much impact.

and clintons bubble was an attempt to keep a failing economy going, right now the economy is improving, so as long as banks/gov don't get to damn dumb....


well, I was going with this is no big deal, but the line above just proved that the sky could actually fall.

Clinton played a role in this, primarily by signing the repeal of Glass Steagall and kissing the feet of Greenspan, Rubin and Summers. But that deregulatory, hands-off philosophy was carried on quite willingly by Bush, who repeatedly bragged about deregulation and the phony real estate market.

If one business fails, yes, that's just one. If thousands or millions fail, with large loans outstanding, that's potentially a different thing when ripple effects are included. And if those loans have been packaged into CDOs, even worse.

A smaller bubble, yes. But not insignificant.
.

 

[Mac1958]

Hey! Look at what I found! A new financial chew toy! The CLO - Collateralized LOAN Obligation! That's new!

What Are Collateralized Loan Obligations? (CLO/CLOs)(OXLC/ECC) - Eagle Point Credit Company Inc. (NYSE:ECC) | Seeking Alpha

These are business loans packaged into larger securities, just like those cool CMOs and CDOs from the Meltdown. We're promised these loans are to large and mid-sized companies only, and can include equity.

Many of these loans are good, normal, senior floating rate corporate loans. But would anyone like to pretend these types of securities aren't spreading down from saturated large and mid markets to small businesses? And small businesses with poor credit? Leading to "CLOs" that are nothing but shit small business loan securities?

How fun! What could go wrong!


.

 

[Two Thumbs]

Hey! Look at what I found! A new financial chew toy! The CLO - Collateralized LOAN Obligation! That's new!

What Are Collateralized Loan Obligations? (CLO/CLOs)(OXLC/ECC) - Eagle Point Credit Company Inc. (NYSE:ECC) | Seeking Alpha

These are business loans packaged into larger securities, just like those cool CMOs and CDOs from the Meltdown. We're promised these loans are to large and mid-sized companies only, and can include equity.

Many of these loans are good, normal floating rate corporate loans. But would anyone like to pretend these types of securities aren't spreading down from saturated large and mid markets to small businesses? And small businesses with poor credit?

How fun! What could go wrong!


.

depends.

I'd like to say the adults are in charge, but CLEARLY isn't the case.

but if the economy keeps improving, these 'risks' could turn into big profits.

 

[Mac1958]

Hey! Look at what I found! A new financial chew toy! The CLO - Collateralized LOAN Obligation! That's new!

What Are Collateralized Loan Obligations? (CLO/CLOs)(OXLC/ECC) - Eagle Point Credit Company Inc. (NYSE:ECC) | Seeking Alpha

These are business loans packaged into larger securities, just like those cool CMOs and CDOs from the Meltdown. We're promised these loans are to large and mid-sized companies only, and can include equity.

Many of these loans are good, normal floating rate corporate loans. But would anyone like to pretend these types of securities aren't spreading down from saturated large and mid markets to small businesses? And small businesses with poor credit?

How fun! What could go wrong!


.

depends.

I'd like to say the adults are in charge, but CLEARLY isn't the case.

but if the economy keeps improving, these 'risks' could turn into big profits.

Yep, true, but I think we've seen (both financially and culturally) what happens when we continually lower standards. And the fact that we have appeared to learn NOTHING just amazes me.
.

 

[Two Thumbs]

Hey! Look at what I found! A new financial chew toy! The CLO - Collateralized LOAN Obligation! That's new!

What Are Collateralized Loan Obligations? (CLO/CLOs)(OXLC/ECC) - Eagle Point Credit Company Inc. (NYSE:ECC) | Seeking Alpha

These are business loans packaged into larger securities, just like those cool CMOs and CDOs from the Meltdown. We're promised these loans are to large and mid-sized companies only, and can include equity.

Many of these loans are good, normal floating rate corporate loans. But would anyone like to pretend these types of securities aren't spreading down from saturated large and mid markets to small businesses? And small businesses with poor credit?

How fun! What could go wrong!


.

depends.

I'd like to say the adults are in charge, but CLEARLY isn't the case.

but if the economy keeps improving, these 'risks' could turn into big profits.

Yep, true, but I think we've seen (both financially and culturally) what happens when we continually lower standards. And the fact that we have appeared to learn NOTHING just amazes me.
.

Are you kidding me?

The movers and shakers that want us under their thumb learned we will gleefully repeat that idiocy.

free shit yo!

 

[william the wie]

Not being a lawyer and especially an immigration lawyer I don't know but I would suspect that a lot of this mess began outside the US proper but may include some of our commonwealths. Like with the housing bubble the buyers of this crap are shooting for dirt cheap ocean/sea front retirement with hot and cold running servants like Eastern hemisphere Georgia or Bulgaria, not to mention Timor-Leste and similar dangerous places.

 

[Toddsterpatriot]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

Predatory lending was a part of the 2008 Meltdown, for sure, when these steaming piles of crap subprime mortgages were pushed, written, sold within 24 hours into CMOs and CDOs, somehow given COMPLETELY invalid AAA ratings by the paid-off agencies, and then sold all over the world under purely false pretenses. Oh, and then sometimes shorted by the same fucking people who created them. Oh, and then, hundreds of billions in insurance was sold against them to anyone who wanted it without ANY fucking reserve requirements needed to back up that insurance. There's your Meltdown.

That's where the complete & comical lack of regulation was so screamingly evident. And destructive.

This is different because there's just so much damn liquidity chasing a smaller market. A small business is a riskier loan proposition than a mortgage by a factor of about a zillion. So you have that, PLUS the lenders are willing to take poor credit ON TOP of it? And then, as we see above, many of the SAME BANKS are pouring money into it?

So I wouldn't call this "predatory" lending so much. It's just breathtakingly risky, to people who should KNOW better, BY people who should KNOW better.
.

Oh, and then sometimes shorted by the same fucking people who created them.

What's the mechanism to borrow non-standardized CMOs or CDOs?

 

[Mac1958]

I won't go so far as to call this a prediction, but there's a massive bubble brewing right now and I haven't seen anyone talking about it.

Remember those radio and teevee commercials in the 2004-2008 years that advertised low-document and no-document home loans, 125% LTV loans, bad credit mortgages, all the horrific SHIT that would get layered into CDOs and CMOs, avoid regulation, get phony AAA ratings by the paid-off ratings companies, turn to shit and ultimately damn near bring down the entire global economy?

Well, imagine those same types of loans for small to mid-sized business owners instead of home buyers.

It's damn near deja vu. Lenders are both proliferating everywhere, and dropping lending standards to a point at which they could barely be considered "standards". Because it's not a front-page thing like mortgages, this massive stew of bad credit is flying totally under the radar - YET, a business is FAR more likely to fail than is a home owner likely to pay their mortgage. They're everywhere now, the loans are going into larger securities, and here we are again.

Just saying.
.

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

Predatory lending was a part of the 2008 Meltdown, for sure, when these steaming piles of crap subprime mortgages were pushed, written, sold within 24 hours into CMOs and CDOs, somehow given COMPLETELY invalid AAA ratings by the paid-off agencies, and then sold all over the world under purely false pretenses. Oh, and then sometimes shorted by the same fucking people who created them. Oh, and then, hundreds of billions in insurance was sold against them to anyone who wanted it without ANY fucking reserve requirements needed to back up that insurance. There's your Meltdown.

That's where the complete & comical lack of regulation was so screamingly evident. And destructive.

This is different because there's just so much damn liquidity chasing a smaller market. A small business is a riskier loan proposition than a mortgage by a factor of about a zillion. So you have that, PLUS the lenders are willing to take poor credit ON TOP of it? And then, as we see above, many of the SAME BANKS are pouring money into it?

So I wouldn't call this "predatory" lending so much. It's just breathtakingly risky, to people who should KNOW better, BY people who should KNOW better.
.

Oh, and then sometimes shorted by the same fucking people who created them.

What's the mechanism to borrow non-standardized CMOs or CDOs?

They didn't short them in the traditional sense of borrowing securities. They sold them and then immediately bought default swaps, knowing they were pure shit.

The joke was on the banks, of course, since AIG didn't have reserve requirements on those swaps in the first place.


.

 

[Toddsterpatriot]

you're the ones who want the banks deregulated. *shrug*

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

Predatory lending was a part of the 2008 Meltdown, for sure, when these steaming piles of crap subprime mortgages were pushed, written, sold within 24 hours into CMOs and CDOs, somehow given COMPLETELY invalid AAA ratings by the paid-off agencies, and then sold all over the world under purely false pretenses. Oh, and then sometimes shorted by the same fucking people who created them. Oh, and then, hundreds of billions in insurance was sold against them to anyone who wanted it without ANY fucking reserve requirements needed to back up that insurance. There's your Meltdown.

That's where the complete & comical lack of regulation was so screamingly evident. And destructive.

This is different because there's just so much damn liquidity chasing a smaller market. A small business is a riskier loan proposition than a mortgage by a factor of about a zillion. So you have that, PLUS the lenders are willing to take poor credit ON TOP of it? And then, as we see above, many of the SAME BANKS are pouring money into it?

So I wouldn't call this "predatory" lending so much. It's just breathtakingly risky, to people who should KNOW better, BY people who should KNOW better.
.

Oh, and then sometimes shorted by the same fucking people who created them.

What's the mechanism to borrow non-standardized CMOs or CDOs?

They didn't short them in the traditional sense of borrowing securities. They sold them and then immediately bought default swaps, knowing they were pure shit.

The joke was on the banks, of course, since AIG didn't have reserve requirements on those swaps in the first place.


.

They sold them and then immediately bought default swaps, knowing they were pure shit.

Who were the morons selling them default swaps on shit?
Why would they even need to securitize shit, if they could just buy default swaps on shit already out there?

 

[Mac1958]

Um, no I'm not. You STILL haven't figured that out.

*shrug*

Bizarre.
.

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

Predatory lending was a part of the 2008 Meltdown, for sure, when these steaming piles of crap subprime mortgages were pushed, written, sold within 24 hours into CMOs and CDOs, somehow given COMPLETELY invalid AAA ratings by the paid-off agencies, and then sold all over the world under purely false pretenses. Oh, and then sometimes shorted by the same fucking people who created them. Oh, and then, hundreds of billions in insurance was sold against them to anyone who wanted it without ANY fucking reserve requirements needed to back up that insurance. There's your Meltdown.

That's where the complete & comical lack of regulation was so screamingly evident. And destructive.

This is different because there's just so much damn liquidity chasing a smaller market. A small business is a riskier loan proposition than a mortgage by a factor of about a zillion. So you have that, PLUS the lenders are willing to take poor credit ON TOP of it? And then, as we see above, many of the SAME BANKS are pouring money into it?

So I wouldn't call this "predatory" lending so much. It's just breathtakingly risky, to people who should KNOW better, BY people who should KNOW better.
.

Oh, and then sometimes shorted by the same fucking people who created them.

What's the mechanism to borrow non-standardized CMOs or CDOs?

They didn't short them in the traditional sense of borrowing securities. They sold them and then immediately bought default swaps, knowing they were pure shit.

The joke was on the banks, of course, since AIG didn't have reserve requirements on those swaps in the first place.


.

They sold them and then immediately bought default swaps, knowing they were pure shit.

Who were the morons selling them default swaps on shit?
Why would they even need to securitize shit, if they could just buy default swaps on shit already out there?

Well, AIG was the King of the swap. Others will selling them too, but the others didn't have an $85B hole full of 'em.

Madness.
.

 

[Toddsterpatriot]

Is predatory lending the biggest part of creating bubbles, and then out of control speculation etc. ?

Predatory lending was a part of the 2008 Meltdown, for sure, when these steaming piles of crap subprime mortgages were pushed, written, sold within 24 hours into CMOs and CDOs, somehow given COMPLETELY invalid AAA ratings by the paid-off agencies, and then sold all over the world under purely false pretenses. Oh, and then sometimes shorted by the same fucking people who created them. Oh, and then, hundreds of billions in insurance was sold against them to anyone who wanted it without ANY fucking reserve requirements needed to back up that insurance. There's your Meltdown.

That's where the complete & comical lack of regulation was so screamingly evident. And destructive.

This is different because there's just so much damn liquidity chasing a smaller market. A small business is a riskier loan proposition than a mortgage by a factor of about a zillion. So you have that, PLUS the lenders are willing to take poor credit ON TOP of it? And then, as we see above, many of the SAME BANKS are pouring money into it?

So I wouldn't call this "predatory" lending so much. It's just breathtakingly risky, to people who should KNOW better, BY people who should KNOW better.
.

Oh, and then sometimes shorted by the same fucking people who created them.

What's the mechanism to borrow non-standardized CMOs or CDOs?

They didn't short them in the traditional sense of borrowing securities. They sold them and then immediately bought default swaps, knowing they were pure shit.

The joke was on the banks, of course, since AIG didn't have reserve requirements on those swaps in the first place.


.

They sold them and then immediately bought default swaps, knowing they were pure shit.

Who were the morons selling them default swaps on shit?
Why would they even need to securitize shit, if they could just buy default swaps on shit already out there?

Well, AIG was the King of the swap. Others will selling them too, but the others didn't have an $85B hole full of 'em.

Madness.
.

Sounds like your original comment, "to people who should KNOW better, BY people who should KNOW better"

 

[Mac1958]

What to Do About the New Subprime Boom

Looks like I may have been right... They were talking about this on Bloomberg this morning.
.