Shocking, I know. Tricolor Auto’s Failure Has It All - ESG, Woke Capital, Illegal Immigration, Securities Fraud, Government Diversity Programs, BlackRock, etc.
Tricolor Auto Group, the nation’s seventh largest used car dealer (and 3rd biggest in Texas and California), just filed for Chapter 7 bankruptcy – e.g. liquidation. Its target customer had been illegal aliens, and with President Trump deciding to start enforcing the nation’s immigration laws, there has suddenly been a major “market correction” in that market segment.
There is a lot going on here, best read the whole thing. Here are a few highlights.
- Fifth Third Bank is booking a $200 million loss related to fraud at one of its customers
- Tricolor’s bonds have collapsed to a value of 12 cents on the dollar
- JP Morgan Chase has about $200 million in loans outstanding to Tricolor, most of which they will lose
This is the 2008 crash all over again, only with car loans.
You may recall that a major contributor to the financial crash of 2008 was Wall Street wizards packaging up a bunch of sub-prime mortgages, securitizing them, and then selling those “mortgage backed securities” to investors as something other than perfumed garbage. That is effectively what Tricolor has been doing with its auto loans, with the help of Wall Street.
Click thru and read the whole thing.
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