The Second Subprime Bubble Is Bursting, Gundlach Warns

Friday, January 24, 2014
By Paul Martin

by Tyler Durden
ZeroHedge.com
01/24/2014

Back in the years just before the previous housing bubble burst (not to be confused with the current, even more acute one), one person did the math on subprime, realized that the housing – and credit bubble – collapse was imminent, and warned anyone who cared to listen – almost nobody did. That man was Kyle Bass, and because he had the guts to put the money where his mouth was, he made a lot of money. Fast forward to 2014 when subprime is all the rage again and the subprime bubble is bigger than ever: it may comes as a surprise to some that in 2013, subprime debt was one of the best performing fixed income instruments, returning a whopping 17% in a year when most other debt instruments generated negative returns. And this time, while Kyle Bass is busy – collecting nickels (each costing a dime) perhaps – it is someone else who has stepped into Bass’ Cassandra shoes: that someone is Jeff Gundlach. “These properties are rotting away,”

The Rest…HERE

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