Wednesday, March 2, 2016

And This Bubble Keeps Growing

Right now dealerships, both new and used, are setting on top of the world. There just seems to be no end to the buying spree of automobiles right now. Since I am in a way right on the front line of this bubble I can attest that people will agree to anything and buy something no matter what. If McMansions are not available then by golly they will take the next best thing and get a new car for little to nothing down and a payment plan that will make any sane person balk when looking at the costs.

Dealerships simply cannot get cars on to the lots fast enough right now. They are buying them from every available source possible. Trade ins, auctions, re-built, new, each dealership is having dozens of them delivered each and every day.

I read today that car sales for the month of February appear to have eclipsed even the impressive sales of February 2015 at this point.

I also see the buyers and how most of these people can afford these payments is totally beyond me. I can only assume that by and large the general public is as much in debt as our government at this point. Any person who crawls in off the street can get a car loan these days. I honestly think we have sold a few to homeless people as a matter of fact.

Often times I deliver the loan applications and I have witnessed at least half a dozen new offices dealing with auto loans open up in the last few months. Sun Loan this, Reliable Finance that. Bob's burger and car loan company. You get the idea. Someone is cashing in big on this but I can't help but wonder, like with the housing market of  08, just who is going to be left holding the bad debt when this bubble pops.

Actually the answer is easy it will be the tax payers somehow. I guarantee it.

At this point I am unsure who is actually exposed to these toxic loans. If they are bundling them up like they did with the housing market and reselling them to investors I am unaware of who or even if they are doing it at all. It might warrant some looking into though if you are still in the market or reliant on the market in some way.

Keep Prepping Everyone!!!!!


  1. I think this time there won't be a bailout but instead the banks will have a big emergency and will get approval to just take money from the depositors to save the country and world from the emergency since they are too important to fail. That is why it is good not to keep a lot in savings now as it will be stolen by the banks and whoever lays claim to it to save the world.

  2. It'll be a bail in, not a bail out. Cash on hand, and outta the bank is the best practice for people like us.

  3. A hear a pop sound.


  4. Has to be a short term thing. After all, there are only so many new cars one can buy and then the market is full.

  5. The ABS market is alive and well. What I don't know is what percentage of the market is financed this way. With interest rates so low, and (one would hope) without the synthetic financial inputs into the investment vehicles, returns might be a little tight to do quite as much flipping as with the home mortgage market. But because subprime has higher margins, it is also can be the easiest to flip. At least until the market turns sour.


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