This time, it wasn’t even creative. It was a rehash of the junk bond schemes of the 80’s. Package bad debt into bonds and sell them.
Then, the debt was corporate. Now the debt is mortgage.
I’ll bet a cruller some idiot tries to package retail debt, credit cards and such, and try to sell that.
Might take five years to come around, but we’ll see it.
It’s already done - credit-card debt packages in much the same way. Even CC and other debts discharged through bankruptcy are packaged and sold for fractions of a cent-on-the-dollar, and then firms attempt to collect. It is probably illegal to collect on bankruptcy-debt but that doesn’t stop anybody these days.
The credit-card implosion is probably next on the horizon because a lot of folks are trying to buy a bit more time on their soon to be foreclosed home by transferring mortgage payments to their credit cards.