On paper, America's bailed-out banks learned their lessons from the crash of 2008 and got rid of their exposure to subprime debt, especially "deep subprime" loans to people who are so broke that it's basically impossible that they'll ever pay their loans back.
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The subprime car-lending industry -- charging exorbitant rates for car-loans to people least suited to afford them, enforced through orwellian technologies, obscuring the risk by spinning the debt into high-risk/high-yield bonds -- is collapsing.
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After the subprime crisis, vulture funds swept into the hardest-hit areas and bought thousands of foreclosed-upon homes at firesale prices and floated bonds based on the expected returns from the rents they'd be able to charge in an America with the lowest levels of home-ownership in modern history.
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A lawsuit against JP Morgan-Chase -- the nation's largest bank -- asserts that the institution paid off the $4,200,000,000 in mortgage forgiveness that it agreed to as a settlement for widescale mortgage and foreclosure fraud by committing a lot more mortgage fraud, in which homeowners, ethical lenders, and American cities were stuck with the bill. Read the rest
Massive infusions of cash by way of the central bank, combined with runaway mass panic-buying has stampeded Chinese people into buying into the property markets in boomtowns like Shenzhen, despite the insane prices that almost guarantee that they will default on their mortgages -- because they fear that rising property prices will shut them out forever if they don't buy now, and the new rentiers who've speculated on all that property are cranking up rents so fast that renting is worse than buying. Read the rest
The "Camperforce" is a 2000+ strong army of retirees in RVs, a choice most were forced into when the value of their homes and pensions was wiped out in the 2008 crisis -- as many of them neared literal starvation and destitution, they began to travel from Amazon warehouse to Amazon warehouse, serving as a seasonal workforce of elderly, frail but diligent workers who put their bodies in harm's way to pack our Christmas supplies. Read the rest
If you buy a house in Australia -- where housing prices are out of control, even by global standards -- you can wait a couple months for the house's book value to go up, and then borrow against that "unrealised capital gain" to buy another house...and then you can do it again. Read the rest
In 2013, DOJ lawyers showed JP Morgan Chase CEO Jamie Dimon a draft of a 92-page complaint against his bank. Dimon coughed up $13B to settle the case, and the complaint was sealed, leaving us all to wonder exactly what kind of red-handed fraud convinced Dimon to part with what was then the largest financial misconduct settlement in US history. Read the rest
Tim Harford points out that Dieselgate -- when VW designed cars that tried to guess when they were undergoing emissions test and dial back their pollution -- wasn't the first time an industry designed its products to cheat when regulators were looking; the big banks did the same thing to beat the "stress tests" that finance regulators used to check whether they would collapse during economic downturns (the banks "made very specific, narrow bets designed to pay off gloriously in specific stress-test scenarios" so that they looked like they'd do better than they actually would). Read the rest
Black American wage disparity can be offset by education; but even though black American families -- one parent, two parent, educated, uneducated, employed, unemployed -- save more and spend less than their white counterparts, white families have substantially more wealth than black families -- college-educated white adults have 7.2 times the wealth of their black counterparts. Read the rest
Kamala Harris was just sworn in as a senator from California, but her last gig was as California's Attorney General, and in that role, she decided not to prosecute Trump Treasury Secretary pick Steve Mnuchin, whom her office had identified as presiding over "widespread misconduct" in foreclosing on Californians -- that is, stealing their houses. Read the rest
China has adopted stringent new anti-money-laundering rules that will make it nearly impossible for small investors -- for example, middle-class families who pool their savings -- to get their money out of the country in order to buy condos in Canada's superheated property market (not just Canada, of course!). Read the rest
Steve Mnuchin, Trump's pick for Secretary of Treasury, has a checkered past (he once foreclosed on a 90 year old customer who was $0.27 short on her mortgage payment) but a leaked memo from the California attorney general's Consumer Law Section reports that Mnuchin's leadership of Onewest Bank involved "widespread misconduct" in foreclosing on Californians, through which the bank was able to fraudulently confiscate their customers' homes. Read the rest
Vancouver has been wracked by a white-hot property bubble driven primarily by offshore speculators, mostly Chinese, who have driven up the price of housing beyond the means of working Vancouverites, crippling the city's daily life as workers, students and families struggle to find somewhere -- anywhere -- to live. Read the rest
Sales of Manhattan co-ops and condos have plunged 20% in Q316, relative to the same quarter last year -- sales in excess of asking price dropped from 35% to 17%; days on market before sale increased from 67 to 72; median growth in sale price fell to 2.6% from 18%. Read the rest
Last month, Senator Elizabeth Warren published an open letter to FBI director James Comey observing that, in revealing details of its investigation into the Clinton email scandal, the Bureau had seemingly abandoned its longstanding policy of not sharing its deliberations, meaning that there was no longer any reason to keep secret its reasoning for not bringing criminal charges against the bankers who did trillions of dollars' worth of damage to the world economy, sparking wars, starvation, and personal ruin for millions of people. Read the rest
Beth Jacobson was a Wells Fargo loan officer who blew the whistle on the bank's predatory, racist loan-fraud in the runup to the 2008 financial crisis, which tanked the world's economy and nearly wiped out Wells Fargo (they were rescued with a $36B taxpayer-funded bailout). Read the rest