Another post from yahoo stock message board for LEND…
Why LEND will work it way up to $50
One reason–Its backdoor product–It’s loans are packaged up and sold as ABS bonds. We all knew that ! BUT did you know that once in the bond market investment banks divide up these loans even further by risk. So let’s say you have a low appetite for risk but you like the yield of 10% so you do the math and say I want only the 1st 2 years of those loans —which are the least riskiest and get a very decent yield. Then someone else comes in and says I want the middle years etc… and then the riskiest guys take the last years. Thus the risk is spread out as well as the reward and the buyer who made the correct evaluations wins. THE BIG secret by all these (vulture capitalists) is that the foreclosure rates/bankruptcy rates are in reality VERY VERY low even when houses depreciate. They laugh at “stupid consumers” who thought they could flip their way to riches. These capitalist also buy high risk auto loans, AIRplane loans (ouch), yatch loans—-all seemingly very risky—all are also known as junk bonds —but these loans make them rich and allow the consumer to spend like drunken sailors and keep our economy rolling.
