Peak Bond Markets: Crowdfunding Investment Website Offers 40% Returns
Daniel Drew, 7/1/2015
The Bank for International Settlements recently reported that low interest rates have contributed to financial booms and busts, and "short-term gain risks being bought at the cost of long-term pain." Nonetheless, the Federal Reserve continues its obsession with stimulating the 1% while ignoring severe liquidity problems in the bond market. With government bond yields near historic lows, investors have piled into the stock market and other alternatives. Perhaps no other company epitomizes the speculative frenzy as much as Yield Street, a crowdfunding investment website which currently offers 40% returns.
Yield Street is only available to accredited investors, but they hope to offer their services to anyone in the near future because of recent changes to the JOBS act. For just $5,000, you can have access to specialty finance investments such as litigation financing, livery leasing, and real estate lending. With a 40% yield in one offering, one can only imagine the kind of risk that involves.
The possibilities don't end there. Yield Street also offers professional athlete loans. What better way to reflect the boom and bust pattern of the capital markets than to invest in athletes who rise to the top only to crash and burn in a series of injuries and bankruptcies? Mike Tyson, Johnny Unitas, and Scottie Pippen have all blown millions of dollars. Despite this, Yield Street insists their investments are not correlated with the broader market. To top it off, they also offer divorce financing. With divorce settlements running into the billion dollar range nowadays, this doesn't seem like a low-risk strategy.
Perhaps none of this is surprising when you look at who is behind the firm. The backers include alumni from SAC Capital and Goldman Sachs. These are shrewd individuals who will sell you junk at the top of the market.
So if you want to finance lawsuits, divorces, and LeBron James' vacations, head over to Yield Street, the Wall Street of tomorrow.