Why Jamie Dimon is warning of ‘cockroaches’ in the US economy | CNN Business
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When a pair of overleveraged Bear Stearns hedge funds imploded in 2007 when American stocks were at all-time highs many shrugged the episode off. Later, it became apparent that those bankruptcies were among the first shoes to drop in an epic meltdown that would impact virtually all Americans.

Here’s what’s going on now.

Subprime auto lender goes bust

Subprime loans were at the heart of Bear Stearns’ demise. The focus today is not on toxic mortgages but on subprime auto loans.

Tricolor Holdings, a Dallas-based auto lender specializing in loans to borrowers with weak credit scores, went bankrupt in September.

[…]

The bankruptcy shines a spotlight on how millions of Americans are hurting from the high cost of living and sluggish job market. Cars are more expensive than ever, and more and more people are falling behind on their car loans.

Even JPMorgan, which prides itself on what Dimon has dubbed a “fortress balance sheet,” suffered $170 million in losses linked to the Tricolor bankruptcy, according to the company’s earnings call on Tuesday. A web of murky financing is exposed

Just a few weeks later, First Brands, a privately owned auto-parts supplier, filed for Chapter 11 bankruptcy.

  • fruitycoder@sh.itjust.worksEnglish
    2·
    3 days ago

    Different classes caught up in the bubble, and living in the socialism for the richest investors and rugged individulism for the rest of us.