Car Repos Are Exploding. That’s a Bad Omen.

[gipper]

OK Skippy, who signed the loan agreements?

Responsibility means not blaming others for a self-inflicted financial wound.

responsibility: [noun] the quality or state of being responsible: such as. moral, legal, or mental accountability. reliability, trustworthiness.

I don’t disagree. People need to take responsibility for their actions. Now if our government applied the rules to everyone equally including the oligarchy and big corporations, the little wouldn’t be so put upon.

 

[Fort Fun Indiana]

I don’t disagree. People need to take responsibility for their actions. Now if our government applied the rules to everyone equally including the oligarchy and big corporations, the little wouldn’t be so put upon.

Sounds nice on paper. But what really happens is a spike in bankruptcies that essentially spreads the costs to everyone else. And no BK lawyer worth a damn won't advise them also to include their credit card debt in the bankruptcy. And so it balloons. And that affects all of us.

 

[gipper]

Massive amounts of inventory sat due to lack of chips. Should have effected the market long before now. Thos vehicles sat in huge parking lots with out moving at all for months maybe even years. That is horrible on vehicles expect issues with them. Something strange is going on in both car and real-estate markets. Both should have crashed by now but have not. I sold all my property last summer in anticipation of a real estate crash that has not happened. I know banks have taken back mass amount of properties that are sitting on their books and have not yet reached the market. There are laws that only allow them to own a certain percentage of their portfolio in real estate many of those banks have to be over or near that threshold yet are making no moves to rid themselves of that property. Strange times the way around. The only thing I can think if is the government has told them they will not enforce the law on real estate owned percentages. Little worrisome.

I too am surprised housing prices haven’t significantly declined. If the Fed continues raising rates, housing prices should fall dramatically.

 

[miketx]

I note that our economic system is not sustainable forever.

Especially with you vermin in charge.

 

[Fort Fun Indiana]

I too am surprised housing prices haven’t significantly declined. If the Fed continues raising rates, housing prices should fall dramatically.

Somewhat, due to interconnected economic forces.

But mortgage rates are their own animal, very separate from consumer lending rates. They are tethered more to Treasury yields. Which are, admittedly, affected by the overall economy.

 

[evenflow1969]

What about lease problems?

I don't study auto like real estate. I would not want to lease a vehicle that sat for months maybe years. You are responsible for maintaining during lease. Why even rent these problems.

 

[Circe]

The jobs report and minutes from the Federal Reserve’s June meeting were the economic highlights of the week, but they are, respectively, a lagging indicator and old news. This column instead digs into the auto market, where there is an underappreciated ticking time bomb.

Lucky Lopez is a car dealer who has been in the business for about 20 years. In recent meetings with bankers, where he bids on repossessed vehicles before they go to auction, he has noticed some common characteristics of the defaulted loans. Most of the loans on recently repossessed cars originated during 2020 and 2021, whereas origination dates are normally scattered because people fall on hard times at different times; loan-to-value ratios, or the amount financed relative to the value of the vehicle, are around 140%, versus a more normal 80%; and many of the loans were extended to buyers who had temporary pops in income during the pandemic. Those monthly incomes fell—sometimes by half—as pandemic stimulus programs stopped, and now they look even worse on an inflation-adjusted basis and as the prices of basics in particular are climbing.

Car Repos Are Exploding. That’s a Bad Omen.

Weird, I was getting my 2019 KIA Soul serviced Friday morning and of course one of the salesmen tried to get me to sell it to the dealership.....The offer was 2K under what I paid for it new.

I noticed that there wasn't hardly any KIAs on the lot (no Souls) and asked why and he said they are sold when the truck arrives and that most of the used vehicles were bank repos.

LOL.....They had more used Jeeps on the lot than KIAs. I noticed that their sales staff had been pared way back too.

Tough times for stimulus/unemployment ballers and child tax credit playas that paid 140% above MSRP I guess.

Very interesting. We don't drive our Ford 150 truck much and a neighbor came over and said if we were thinking of selling it, they'd like to have the first chance to buy it!! I was a little startled -- we have a farm and so we have to have a truck, however infrequently we use it now -- but I bet it's this desperation for used vehicles that is driving that. People can't even GET new vehicles.

 

[evenflow1969]

I too am surprised housing prices haven’t significantly declined. If the Fed continues raising rates, housing prices should fall dramatically.

I was pretty much banking on it. The idea was to sell high and buy like a madman when the shit hit the fan. Now my money has sat not earning much and no property bought. I did buy a lake front condo that could have been rented out for big profit but decided to just enjoy my summer and be able to walk to work. I can see my charter boat from my bedroom window. If things remain the same I will rent this out next season and stay in my camper. Really wanna get to buying and fixing though.

 

[pknopp]

We won't. You don't sit on the Fed or any government agency. We will just do it with or without your permission. To stave off depression.

Right. You'll make bad loans, cry to the government that the taxpayers need to bail you out with all sorts of scare tactics and pretend that is capitalism.

I've not argued anything any different. Maybe this time though people will burn things down instead.

 

[pknopp]

Especially with you vermin in charge.

If I was in charge I'd have never bailed anyone out to start with.

But rant away.

 

[Fort Fun Indiana]

Right. You'll make bad loans, cry to the government that the taxpayers need to bail you out with all sorts of scare tactics and pretend that is capitalism.

Correct. When the alternative is even worse. And no pretending required. That is, in fact, capitalism.

And where you miss the mark is calling them all "bad loans". They aren't. Many are fine loans, at the time they are written.

 

[1srelluc]

If I was in charge I'd have never bailed anyone out to start with.

But rant away.

I agree wholeheartedly on that, it would have been rough for a while (for some people) but we would be in a much better position now and it's not a hindsight is 20/20 type of thing either....The numbers were there for anyone to see but, as usual, the politicians had no spine.

Those wondering about the housing market are not taking into account that any drop-off in new construction is more than made up by speculating in rentals now.....A guy in town is building a sting of new 2200 +/- sq. ft homes with the expressed intent of renting them out himself.

He already owns a baker's dozen like them that he rents out to transient .gov types and he is making bank. He turns them over every 3-5 years. The last I heard they were renting for 3K a month.

Peeps don't think population be like it is but it do. I was born in 1955 and there are around 38% more people in the US as of 2020 than when I was born.

 

[pknopp]

Correct. When the alternative is even worse. And no pretending required. That is, in fact, capitalism.

And where you miss the mark is calling them all "bad loans". They aren't. Many are fine loans, at the time they are written.

It is not capitalism. But you know that.

 

[Fort Fun Indiana]

It is not capitalism. But you know that.

It absolutely is, sorry. Competition, in a market. 100% capitalism. Any deviation from capitalism would be to regulate the loans they can write and force them to respect the prime lending rate. These controls do not exist.

 

[pknopp]

It absolutely is, sorry. Competition, in a market. 100% capitalism. Any deviation from capitalism would be to regulate the loans they can write and force them to respect the prime lending rate. These controls do not exist.

Competition is great. That is not what anyone is discussing but maybe you perhaps.

 

[miketx]

If I was in charge I'd have never bailed anyone out to start with.

But rant away.

Lol liar

 

[Fort Fun Indiana]

Competition is great. That is not what anyone is discussing but maybe you perhaps.

Then they don't know what they are talking about. So you should listen up to someone who does:

I repeat:

The banks and credit unions are competing against each other in a market. They have to write auto loans, or they will fail. I can go into the most basic ideas of how banking and lending works. Because, frankly, I don't think you understand them.

Starting with credit unions, as they do not have to pay shareholder dividends and present a simpler case:

You promise depositors a certain return on their savings. You pay this return by lending out their money to other people.

If you don't lend out the money, you cannot pay the returns that a competitor pays. So the depositors pull their money and deposit it elsewhere. Then, the credit union fails.

Now, add in shareholders whose sell-off panic is as bad as any bank run, and you can see it is even more difficult for banks.

 

[miketx]

Then they don't know what they are talking about. So you should listen up to someone who does:

I repeat:

The banks and credit unions are competing against each other in a market. They have to write auto loans, or they will fail. I can go into the most basic ideas of how banking and lending works. Because, frankly, I don't think you understand them.

Starting with credit unions, as they do not have to pay shareholder dividends and present a simpler case:

You promise depositors a certain return on their savings. You pay this return by lending out their money to other people.

If you don't lend out the money, you cannot pay the returns that a competitor pays. So the depositors pull their money and deposit it elsewhere. Then, the credit union fails.

Now, add in shareholders whose sell-off panic is as bad as any bank run, and you can see it is even more difficult for banks.

I've never heard of people like you before. You bastards pretend to know everything about every topic on here. That's amazing. Or more likely your just all liars.

 

[Fort Fun Indiana]

I've never heard of people like you before. You bastards pretend to know everything about every topic on here. That's amazing. Or more likely your just all liars.

Have you considered the idea that it just seems that way to you, because you know shit about fuck?

 

[miketx]

Have you considered the idea that it just seems that way to you, because you know shit about fuck?

I know you're a liar.