New York Times has an article about Americans getting into debt.
What is smelly is this:
But behind the big increase in consumer debt is a major shift in the way lenders approach their business. In earlier years, actually being repaid by borrowers was crucial to lenders. Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made.
Guess who are buying those bad consumer debt in the form of securities?
Retail investors and indirectly, the people who save.
When the securities go bad, those who sell it owe you nothing. But they can come after you for your loans and interests.
Hmmm…
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