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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (568)	12/23/2017 9:34:27 AM
From: John Vosilla	Read Replies (3) \| Respond to of 13801

Private-equity firms and hedge funds are getting clobbered by subprime auto loans Private-equity firms and hedge are getting clobbered on busted subprime auto-lending bets. As the US auto market has boomed in 2015 and 2016, setting new sales records, analysts have become preoccupied with so-called "subprime" lending, and especially with a subset of subprime known as "deep subprime." Because auto loans are securitized like mortgages, numerous comparisons have been made with the subprime home-lending meltdown that led to the financial crisis. The auto market is much smaller and governed by dynamics that are quite different from mortgages, but that hasn't prevented the analogy from taking hold. But defaults on most auto loans remain modest, particularly with prime loans, where borrowers have credit scores above 620. The lower reaches of subprime are a different story. And adventurous players such as Perella Weinberg Partners and the Blackstone Group are feeling some pain. According to Bloomberg's Gabrielle Coppola and Claire Boston: "In the years after the financial crisis, buyout firms poured billions into auto finance, angling for the big profits that come with offering high-interest loans to buyers with the weakest credit." businessinsider.com