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Old 03-31-2018, 09:16 AM
 
2,240 posts, read 1,385,700 times
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Quote:
Originally Posted by Yuptag View Post
Read Zerohedge, they have been claiming that the autobubble will implode any day now . . . for the last several years. The logic makes sense, market ignores it. Maybe the market ignores logic, maybe the market is rigged, maybe . . .
Iíd rather not.

Theyíve predicted 1,457 of the last 2 world wars preceded by world wide collapse of the economic system.
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Old 03-31-2018, 09:43 AM
 
Location: Brawndo-Thirst-Mutilator-Nation
15,140 posts, read 15,198,298 times
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120 month auto-loans are not uncommon when you are talking about 50K and up vehicles. I imagine the larger the loan, the longer the terms, the bigger the chance of defaults.
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Old 03-31-2018, 09:56 AM
 
608 posts, read 280,904 times
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Originally Posted by tickyul View Post
120 month auto-loans are not uncommon when you are talking about 50K and up vehicles. I imagine the larger the loan, the longer the terms, the bigger the chance of defaults.
Most sub-prime auto loans include a rollover on the unpaid balance of a previous loan, so that "$50K" vehicle is likely two $30K cars mashed into one 120-month loan.

Almost as shameless as what goes on routinely in the commercial real estate market.
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Old 03-31-2018, 10:14 AM
 
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Yeah but what could go wrong by rolling rapidly declining asset values into larger and longer loans...?

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Old 03-31-2018, 01:42 PM
 
Location: Norfolk
1,574 posts, read 1,977,317 times
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Originally Posted by skeddy View Post
Don't see forgiving student loans in our future. US Govt reduces SS payments by 15% if you owe student loan money you didn't pay back, it 's happening to a 66 year old friend

Is that for real?

Because that sounds awful.

As to the OP, I just bought a new Camry and financed it at ZERO percent. That's an incredible value for anyone.

I needed a new car and I am tickled pink.
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Old 03-31-2018, 02:44 PM
 
11,299 posts, read 5,834,479 times
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Quote:
Originally Posted by Thatsright19 View Post
Iíd rather not.

Theyíve predicted 1,457 of the last 2 world wars preceded by world wide collapse of the economic system.


Any ZeroHedge reference immediately destroys the credibility of a post. "Tyler Durden says..." indeed.

The subprime auto loan business is enormously profitable. People with lousy credit need a car to drive to work. The car is collateral. Even with a high default rate, the interest rates are so outrageous that banks are making good money. That default rate is priced into the loan.

Most subprime loans aren't for luxury SUVs. They're for fairly modest cars.
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Old 03-31-2018, 03:47 PM
 
3,994 posts, read 8,724,794 times
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Quote:
Originally Posted by GeoffD View Post


Any ZeroHedge reference immediately destroys the credibility of a post. "Tyler Durden says..." indeed.

The subprime auto loan business is enormously profitable. People with lousy credit need a car to drive to work. The car is collateral. Even with a high default rate, the interest rates are so outrageous that banks are making good money. That default rate is priced into the loan.

Most subprime loans aren't for luxury SUVs. They're for fairly modest cars.
Yes, the interest is outrageous and if things go south, they just repossess the car. Subprime auto loans are more commonplace right now, but nothing is going to come of it since itís easy enough for cars to be repossessed.

Student loans will never be forgiven imo since the government is on the hook and you canít repossess a college education. Any political party that does will have massive opposition from those who took out loans and struggled to pay them off. No one likes playing a game where the rules are changed in the middle of it.
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Old 03-31-2018, 04:54 PM
 
608 posts, read 280,904 times
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Quote:
Originally Posted by GiantRutgersfan View Post
Yes, the interest is outrageous and if things go south, they just repossess the car. Subprime auto loans are more commonplace right now, but nothing is going to come of it since itís easy enough for cars to be repossessed.
And what is a typical repo car worth to the lender? Certainly not the loan value in most instances, and often it's a total write off.
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Old 03-31-2018, 05:48 PM
 
2,484 posts, read 1,725,769 times
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Remember ACORN? That got po' people into houses they could never afford. Problem was those variable rate mortgages and dopes that didn't "get it." Banks can and do whatever they want with variable rate mortgages. Well...you know the rest of the story.


Cathedral City CA is home to mostly working class, non-skilled types, many Hispanics. Wanna see $35,000 brand spanking new pickup trucks by the dozens? Driven by 20 year old Hispanics? They're everywhere in Cat City.


Interestingly, dealerships over the past 10 years, moved from Palm Springs to Cathedral City. I don't think it's so much coincidence. The buyers of new vehicles with an "affordable" note and probably "percs" moved those dealerships there. Cathedral City lacks some tax dollar-generating venues as well. Its "downtown" is vacant. So...it's vehicle sale driven. (Who needs tourist dollars?)


You're seeing "ACORN II" Not houses this time - but cars, pickups, etc. And, oh...I see the same thing in other parts of the country - people who couldn't click two nickels together driving $40.000 brand new pickups. The north woods are full of them!


2 things: GM would certainly be out of business years ago (personal info); and, if you intend to buy a new vehicle like a pickup, have a high FICO score or you'll pay $7,000 more for that vehicle. Cash customers pay full price.
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Old 03-31-2018, 05:59 PM
 
2,135 posts, read 1,149,266 times
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We are still a good bit away from the default stage. Defaults are the end game, kind of the last kick in the nuts "hey this is a really bad" type indicator. By the time the defaults start to really spike, the economy is already on the ground puking its guts out.

Currently we are in the, "everything is ok, don't worry!" stage but it probably isn't. Nothing bad is outright happening but the warning signs are there. Longer termed loans, lower demand for vehicles, more household (non mortgage) debt increasing. Most importantly, interest rates are rising and the yield curve is getting wonky again.

As interest rates rise, credit card debt really starts to become a drag on the economy.

https://www.marketwatch.com/story/us...008-2017-04-03

You'll notice that credit card debt is at an all time high. This is obviously bad.

Why? Well obviously credit cards are bad when people carry debt on them. Everyone here should know that. Well fact is, debt being at an all time high and rising pretty rapidly indicates that people have been over spending to maintain lifestyles. This can not continue forever. Especially with rates rising.

Either way, even if nothing happens, we have a year or two before we start to see demand become an issue where it is obvious something is very wrong.

Once that happens, recession is right on the doorstep.

Now if the idiot in the White House does invoke a trade war, all bets are off. Any rapid inflation is going to be a death sentence to our economy for a good decade. It will be bad. Hopefully cooler heads prevail.

Otherwise you can expect the same trading rang we've seen for stocks. Volatility will be high and likely increase the closer we get to a demand issue. We'll see the long term rates continue to mostly hold fast and short term rates will rise. I shouldn't have to tell you that this is abnormal and bad.

The fed will over tighten and then end up having to knee jerk back down. The next recession will be longer lasting than what we saw from the housing crisis. We just dead cat bounced into a double peak and are likely starting a lost decade soon given the options for federal stimulus have all been exhausted for no economic benefit.

Last edited by aridon; 03-31-2018 at 06:12 PM..
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