Killer Credit
Attack of the $915 billion consumer debt monster
Like mortgages, credit card debt is often carved up and sold on global debt markets as securities. Since borrowers generally pay back what they owe, that debt has been profitable and safe for traders, which explains the $40 billion increase in securitized credit card debt from September 2005 to 2006.
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These developments are problematic because credit card debt is unsecured, meaning no portion of defaults can be salvaged. Yet broader dangers ...
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