From the industry that brought you CMOs where mortgage payments of …ahem… various kinds of quality were bundled up and by the power of greyskull math deemed to be as good as the best of the elements therein comes…So, here we have CRAPS. As murky as the output and as risky as the game, this combines both in one hypertoxic proof that YEAH BABY WALL STREET IS BACK IN THE GAME!
A bond backed by rental payments. Yes…. Its true
Two major Wall Street firms are in detailed discussions to create and sell the world’s first bond backed by home-rental payments, people familiar with the matter say.
Source : Wall Street Journal
why? WHY !!!!
Investors still are hungry for the high returns that are likely to accompany a first-of-its-kind deal, which would be viewed as more risky than well-known securities.
duh… so these risky things, because people welch on rent a bit dont they… they will be junk rated yes?
The top-rated slice could receive a rating as high as single-A or triple-B from some of the credit-rating firms, some of the people familiar with the deal add
Sweet holy…..
But at least we have learned from the CMO debacles yes? yes..?
The structure of the deal would be similar to better-known securities, such as those backed by home or commercial mortgages.
Run , dont walk…
Brian M. Lucey 
Pingback: Profitable Banking Blunders | Enhance The Human Experience
Reblogged this on Machholz's Blog and commented:
In other words another kind of Derivative and just as worthless as all the other 640 trillion worth out in the market .Get ready for the mother of all crashes ,there will be no bailing out ,no bailing in when this one implodes !
I imagine that at least one renter will pay, so I suppose that the first $1 or so could be quite safe and deserve an A rating. Beyond that, though, I’d be inclined to leave these to someone else.