posted on Oct, 11 2010 @ 05:34 AM
Interesting theory! And possible... here's my suspicions...
Ever known anyone who dealt with a "buy here - pay here" car lot? Well their predatory business model works like this...
The car lot buys a car at auction and then puts it on the lot with their actual total purchase price as the "down payment". They then sell the car to
any credit unworthy person who comes along and shows interest. The car lot makes their investment back instantly.
The purchaser might not make a single payment, and lose possession of the vehicle after just one week. Or they might actually pay off the terms of the
loan (Which is by far and away more than the car is actually worth by any stretch of the imagination.), or, and this is the good one, they make a
number of payments before defaulting.
Now when this happens the car lot repossesses the vehicle, and puts it right back for sale for the exact amount of money that they bought it for to
begin with. Now, bear in mind, they've already recouped their investment, and received a number of payments towards "interest" or to their profit.
And, now, they are reselling the car for another 100% profit, plus more weekly profit.
Many cars go through this cycle several times over before they are out of the system.
I think that
this is the most likely model for what is to come in real estate. And I think that the banks are wetting their underoos with
excitement over it.
Just my thoughts...
~Heff
edit on 10/11/10 by Hefficide because: typo conspiracy... ATS hires monkeys to mess up my text!