The Everything Bubble, Part 1: Return Of The Subprime Mortgage

Jon Government

This cycle’s main bubble is in government bonds and fiat currencies, with a dash of large-cap tech thrown in for variety. But like a hurricane spawning tornadoes at its periphery, this Money Bubble is creating secondary bubbles like student debt and subprime auto loans that are impressively destructive in their own right.
An example of how extreme things have gotten is US housing, which – as the previous decade’s main bubble – wasn’t supposed to be a problem this time around. But apparently no sector is immune from all that excess central bank liquidity. As today’s Wall Street Journal notes, the subprime mortgage is now being resurrected:
Does Anyone Remember How to Make a Subprime Mortgage? Brokers willing to learn the lost art of making risky mortgages are in demand againBrandon Boyd was a high school junior during the financial crisis. Now, the former Calvin Klein salesman is teaching mortgage brokers how to make subprime loans.

This post was published at DollarCollapse on JUNE 12, 2017.