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New crop of subprime bonds under scrutiny

Securities are backed by car loans and buyers snap them up based only on issuer's word

NEW WHEELS: The securities are fuelling much of the 72 per cent surge in annual car sales since 2008 as near-zero interest rates lure both borrowers and lenders looking for higher-yielding assets.

New York

THE US housing crisis laid bare an epidemic of fraud and sloppy paperwork on loans made to homebuyers with spotty credit. For those who bought bonds backed by the mortgages, it fuelled at least US$250 billion of losses.

Six years later, investors are snapping up a new crop...

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