In order to fund themselves, Home Capital has to pay 22.5 percent interest on the first billion, and up to 15 percent if they use the whole credit line.
This is like Century Finance in 2007.
Sounds familiar.
2008 redux.................
It begins . . .
More like the Countrywide meltdown. What we don’t know is how many tentacles flow across the border and to the rest of world finance. Housing boom and all time stock market and zero inflation (except for medical, education and loans which aren’t counted), what could go wrong? Government intervention in currency, absolutely nothing to worry about.
More like the Countrywide meltdown. What we don’t know is how many tentacles flow across the border and to the rest of world finance. Housing boom and all time stock market and zero inflation (except for medical, education and loans which aren’t counted), what could go wrong? Government intervention in currency, absolutely nothing to worry about.
In other words, their credit is so bad they are having to turn to loan sharks and pay roughly market interest rates on a billion dollars that they don’t borrow, securing the non-loan portion with collateral.
Or else they are transferring assets in anticipation of a bust out. (It doesn’t say if they are borrowing from an arms length third party for from a front for insiders).
New Century Mortgage? Agree with others on Countrywide. You could even throw Wells Fargo in that bag as well. They were playing with the dirtbags back then.