The return of subprime loans

What could possibly go wrong?

Proving that no-one ever really learns anything, the New York Times is reporting on the rebirth of subprime loans in the US:

Credit card lenders gave out 1.1 million new cards to borrowers with damaged credit in December, up 12.3 percent from the same month a year earlier, according to Equifax’s credit trends report released in March. These borrowers accounted for 23 percent of new auto loans in the fourth quarter of 2011, up from 17 percent in the same period of 2009, Experian, a credit scoring firm, said.

The situation isn't quite as bad as it was last time, however:

The push for subprime borrowers has not extended to the mortgage market, which remains closed to all but the most creditworthy.

The financial crash wasn't strictly caused by subprime mortgages, however. Instead, the blame usually falls at the feet of the "collateralised debt obligations", or CDOs, which were financial instruments created by bundling together these mortgages and selling them in tranches. The CDOs were then rated higher than they ever should (or would) have been if their provenance had been clearer. All of this was helped by a lax regulatory authority which only caught up with some of the outright deception involved long after the fact. (I should note that to call this a simplified version of the crisis would an understatement).

So at least this time none of that is happening. No, hang on, it is:

Auto loans are particularly attractive for lenders since they were largely untouched by many of the new regulations. The new Consumer Financial Protection Bureau said it had not yet decided whether it would oversee the largest nonbank auto lenders.

At the same time, the market for securities made up of bundles of auto loans is heating up. Last year, investors scooped up $11.7 billion in auto loan securities, up from $2.17 billion in 2008. The pace of securitization in credit cards is slower, with lenders selling roughly 30 percent of their card portfolios to investors, down from 60 percent before the financial crisis, according to S&P.

Worst of all, though, is the industry's terminology for their customers:

The lenders argue that they have learned their lesson and are distinguishing between chronic deadbeats and what some in the industry call “fallen angels,” those who had good payment histories before falling behind as the economy foundered.

If you aren't a fallen angel, you may be a rising star instead. Gag-inducing.

Counterfeit credit cards on display in France. Credit: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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A general election means Jeremy Corbyn's euroscepticism is finally an asset

The Labour leader's track record means he can connect with Remain and Leave voters alike. 

The first anti-establishment party leader to offer true ideological opposition and alternative to the Thatcher consensus in a generation is staring down the barrel of a 20 point polling deficit at the start of this snap election race. This leader has filled halls; galvanised hundreds of thousands and consistently voted on the side of freedom, progress and justice. So just why has he been abandoned by those who should support him?

While Jeremy Corbyn’s leadership has rightly been held to account, the criticisms have been, at times, unfairly amplified both by hostile MPs and a condescending press. With the election just over 40 days away, the left must now realise the severity of the task at hand, and question whether its constant attacks are helping to create the monstrous Tory landslide we all so fear. In the run-in, Corbyn will need unified backing by all those who oppose austerity, inequality and injustice, in a way he’s so far failed to receive.

The votes for Brexit and Donald Trump show the sheer disillusionment with the extreme centre governments of the last decades, that have given rise to mass inequality, caused global instability and brought terrorism to our doors. While Corbyn’s policies – on nationalising railways, foreign intervention, supporting the NHS, tuition fees, and more – are overwhelmingly supported by the public, he has so far lacked the communicative edge to ride the wave of this new age of populism. Whereas policy-lite Trump romped home with the mere repetition of eight syllables, Corbyn often misses opportunities to sell the bright, inclusive future needed to inspire the British public. He needs to create the punchy soundbite that sells his vision, in one, short sentence what a future Britain can look like, and how it stands in stark contrast to that of the Tories.

Throughout his spell at the helm of the Labour Party, Corbyn’s style has constantly been ridiculed; from his dress sense to tone of voice. So what do we really value in a leader and how should they act?

As PM, David Cameron regularly hit home in Parliament, brashly mocking opponents with quips and digs. He stood smug and unrepentant as deeply damaging cuts were enforced. But while he was once considered a strong and stately leader, history now judges him quite differently. For inflicting austerity, and leaving behind a heavily divided Britain, he’s now recognised as one of the worst. Theresa May’s brief stint at leadership has already seen a humiliating u-turn, dodged live debate and false election date promises, all while cruelly playing with the lives of millions of EU nationals.

Meanwhile, Corbyn, who at times has been unfairly lambasted for his approach has consistently displayed personal and professional dedication to championing pro-people politics for over 30 years, undeterred by spin and political games. Compassion, equality, fairness - surely these leadership traits hold equal worth.

In an election based primarily on Brexit, Corbyn can take real and emboldened ownership. A lifelong eurosceptic, Corbyn has the chance to offer a people-led Brexit that works for the majority, reaching out to Leave and Remain voters alike.

Much of the Remain protest movement and post-referendum activism revolves around fears of Britain becoming racist, hostile and isolationist in its approach to would-be migrants, and EU nationals. In negotiations, if a deal on immigration is to be struck, Corbyn’s historically compassionate views on migrants and refugees could create the most fair, humane solution possible. In his move today, he’s sought to reassure EU nationals of a future far removed from May’s brutal nationalistic games. And in Corbyn’s lifelong championing of workers’ rights, and redistribution of wealth, he can at last speak to the working-class heartlands freely of an inclusive and beneficial post-Brexit future.

While there can be shortcomings in Corbyn’s communication, and occasionally muted approach; criticisms can frequently seem unbalanced. His inability to shout about recent budgetary u-turns, for instance, made headlines over the actual climbdown itself. The time has surely come to focus on the severity of the alternative.

Throughout his leadership, Corbyn has been targeted by all corners of the press, with focus poured on his character over providing a real and important platform to explore his policies. When he refused mass media engagement he was dubbed cranky and weak, yet we’ve largely let May off the hook for dodging much-needed live debate. Written off by Westminster, mocked and condemned by the media. A principled voice fighting for equality, inclusion and fairness. Not much has changed in 30 years.

While we must hold his leadership to account, there is a sense that we, on the left are at times helping to fuel the massive Tory victory we apparently dread. So now is the time to remind ourselves, and others, who and what we’re up against. The "go-home illegal immigrants" vans circulated, and then pulled by May; her election u-turn, reinvention and uncompromising hard-Brexit approach. A party of callous, brutal decisions that have caused despair and plunged many into poverty. A snapshot of their comparative voting records alone should be enough to put the choice ahead of us into stark perspective.

And just to reiterate Corbyn’s largely swallowed, forgotten record during his rebranding as meaningless, lost and ineffectual. He was right on sad, regrettable wars; he passionately protested apartheid, championed workers rights and equal pay, and has consistently stood up for the NHS – against party line.

That’s a name, record and leader many will be proud to put an inked endorsement by on 8 June 2017. 

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