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I have a question for you. With auto sales so strong, they bundle the auto loans, right? How are they rated? A? B? C? Junk? What do they pay and what is the risk? Any ideas....? Just thinking..... the Pudd
Ted, Thanks, Linkster, for scaring the pants off me (LOL). Looks like 2007 all over again. The highest yielding/lowest rated slice sold out first --- losses as high as 27%. Why would you ever?? And the deal sold out in hours.....are you serious?? the Pudd
Puddnhead, Ted's link says it all. This is a totally different market than the corporate or muni junk arena where I tread. As an aside, the corporate junk market has been strong in 2015 outperforming many equity indexes ala the Dow, S&P, NYSE Comp, and Russell 2000. Last year the star outperformer was the junk muni market - not so much this year as it is barely hanging on.
junkster said: "It was no contest with PHYTX the clear winner. But then I am biased! Junk bond funds are notable for their trend persistency and low volatility making them amenable to various trading methodologies using tight stops. Yes, I know 2008 was a disaster but the tight stop methodology would have kept you out of harm's way."
I ask: have you opened up about your methodology anywhere here? If so, could you provide a link? If not, are you adverse to doing so?
@Puddnhead Yeah, last year was really bad with this; I think it was something like over 50% of all auto loans were subprime, to people with FICOs in the 400-500 range. Guess they had to move those cars off the dealer lots one way or another, so the large automakers would have the space to keep churning out new cars, and keep those new car "sales" figures up. But this year the auto subprime still stinks, too. If you want a "vintage" loan, fresh out of the shoot, go with Skopos Financial; they really know how to plum to FICO depths of Hell (may want to check over the quality of the collateral on these, yuck, yuck): http://www.zerohedge.com/news/2015-04-27/meet-skopos-financial-new-king-deep-subprime But if nothing interests you there for yield, then consider the new new thing that Wall Street's securitization machine is putting together: CDOs composed of peer-to-peer (P2P) loans. Of course, after selling them, they will then short them, so prepare to "be nimble" after your purchase. http://www.bloomberg.com/news/articles/2015-04-30/wall-street-s-latest-craze-meets-small-short-in-new-derivatives
Comments
Regards,
Ted
http://www.nytimes.com/2015/03/16/business/dealbook/many-buyers-for-santanders-subprime-loan-bundle.html
Thanks, Linkster, for scaring the pants off me (LOL). Looks like 2007 all over again. The highest yielding/lowest rated slice sold out first --- losses as high as 27%. Why would you ever?? And the deal sold out in hours.....are you serious??
the Pudd
Derf
I ask: have you opened up about your methodology anywhere here? If so, could you provide a link? If not, are you adverse to doing so?
Yeah, last year was really bad with this; I think it was something like over 50% of all auto loans were subprime, to people with FICOs in the 400-500 range. Guess they had to move those cars off the dealer lots one way or another, so the large automakers would have the space to keep churning out new cars, and keep those new car "sales" figures up. But this year the auto subprime still stinks, too. If you want a "vintage" loan, fresh out of the shoot, go with Skopos Financial; they really know how to plum to FICO depths of Hell (may want to check over the quality of the collateral on these, yuck, yuck):
http://www.zerohedge.com/news/2015-04-27/meet-skopos-financial-new-king-deep-subprime
But if nothing interests you there for yield, then consider the new new thing that Wall Street's securitization machine is putting together: CDOs composed of peer-to-peer (P2P) loans. Of course, after selling them, they will then short them, so prepare to "be nimble" after your purchase.
http://www.bloomberg.com/news/articles/2015-04-30/wall-street-s-latest-craze-meets-small-short-in-new-derivatives
@Junkster Hey, if you're still looking for something novel for your HY pile, check this out. You know what they say? Diversify, diversify, diversify:
http://www.bondbuyer.com/issues/122_86/yields-outweigh-the-risks-of-investors-of-iowa-fertilizer-junk-bond-paper-1051322-1.html
Yes, members of the criminal banking syndicate have figured out how to turn even a physical pile of sh*t (literally) into money... as a municipal bond, no less. What will they think of next? USA! USA!