...and the proof is Prosper.com, which offers an online market place for person-person lending (loan sharking).
This is bizarre, as a borrower, you decide how much money you want, and the max you're going to pay for it. You write a semi plausible excuse as to why you can't/won't get money from the bank and punters bid to give you money at a rate up to the maximum the borrower specified, which they promise to pay back. It works a bit like pricing a bond issue at a bank. You call up all the investors and fill the book with their bids and shift the debt to the lowest bidders.
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4 comments:
Can the lenders trade their loans? Doesn't look like it, so you'd be committed for the full duration of the loan. Cool concept though.
It's looks like you're committed for the full duration, but it is interesting. I wonder if you could make a living securitising some of these bad debts and flogging them to a fund...Or is that what caused the whole problem in the first place?
You just have to come up with a new, schnazzy name: Collateralised Risk Arbitrage Payments, CRAP. "This is triple-A rated CRAP, you want a slice or not?"
Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!
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