In the stock market brokerage business there's what's known as sell side analysts. They're mostly the ones who produced the garbage to entice you to buy the crap their firm wants to unload.
It ranges from subprime mortgages to anything they think they can book a spread on. You'll usually find the word bundled in there if you search hard enough. Now two big Wall Street hitters, Blackstone and Deutsche Bank, are toying with bundling monthly rental payments into some type of bond.
Blackstone, a private equity group LP, sucked up tons of foreclosed properties, spending billions of dollars, a move that buoyed demand and essentially is designed to put a floor under the once sickly RE market. Now it payday time.
Blackstone intends to bundle an estimated 1,500 to 1,700 homes into a bond, in this case a new type of security backed by rental payments. If it sounds a bit risky, head to the front of the class. Renters traditionally have less reason not to walk then even zero-down folks did in the last real estate miasma.
To hawk the deal Blackstone needed an enabler. Enter open-palms stage left Deutsche Bank. If the deal goes down, Deutsche will hawk the stuff to investors. Blackstone will recoup its investment plus a profit and the rest of us will wait to see if the deal is the beginning of the other shoe or, as the late radio commentator Paul Harvey used to say, "the rest of the story."
Blackstone, according to one report, spent more than $5 billion since the start of last year acquiring around 32 million homes in a dozen US markets.
Now that's some engineering.
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