Yield-crazed investors pile into US subprime car loans

[Tommy Tainant]

Subscribe to read | Financial Times


The market for securities backed by the riskiest US car loans is booming, as yield-crazed investors shrug off nagging concerns over the health of the American consumer.

Deals have been “going gangbusters” in subprime auto asset-backed securities (ABS), said Jennifer Thomas, an analyst at Loomis Sayles, a Boston-based firm managing $286bn of assets. At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn, according to data from Finsight, despite softer sales of new cars and trucks this year.

The lower-rated slices of recent deals are “five or six times oversubscribed”, said Ms Thomas. “The market is trading very well.”

What could go wrong ?

 

[Toddsterpatriot]

Subscribe to read | Financial Times


The market for securities backed by the riskiest US car loans is booming, as yield-crazed investors shrug off nagging concerns over the health of the American consumer.

Deals have been “going gangbusters” in subprime auto asset-backed securities (ABS), said Jennifer Thomas, an analyst at Loomis Sayles, a Boston-based firm managing $286bn of assets. At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn, according to data from Finsight, despite softer sales of new cars and trucks this year.

The lower-rated slices of recent deals are “five or six times oversubscribed”, said Ms Thomas. “The market is trading very well.”

What could go wrong ?

At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn,

Wow! $29 billion!!

 

[Bo Didleysquat]

Our economic system knows full well we'll/it'll crash again soon, and then the aristocracy can push another wealth redistribution to the top scam onto the public.

 

[BuckToothMoron]

When you have a central bank trying to reverse prime the economy’s pump with ridiculously low interest rates and now QE 4 this is the stuff that happens. But don’t worry, it will all eventually get unwound. When it does Trump will catch hell, and he is in fact partially to blame. He is just praying it doesn’t blow up before Election Day 2020. He knows it’s a ticking time bomb, or at least he claimed to know it in 2016.

It Turns Out That Trump Loves Low Interest Rates and Fed Stimulus After All | Ryan McMaken
Back in 2016, Donald Trump criticized the Federal Reserve for keeping interest rates too low. Trump explained that the Fed's work to keep interest rates artificially low benefits the wealthy at the expense of the poor:

And you know the people who are hurt the most are people that saved all their lives, and thought they were going to live off the interest. Those people are getting absolutely creamed.

 

[Toddsterpatriot]

When you have a central bank trying to reverse prime the economy’s pump with ridiculously low interest rates and now QE 4 this is the stuff that happens. But don’t worry, it will all eventually get unwound. When it does Trump will catch hell, and he is in fact partially to blame. He is just praying it doesn’t blow up before Election Day 2020. He knows it’s a ticking time bomb, or at least he claimed to know it in 2016.

It Turns Out That Trump Loves Low Interest Rates and Fed Stimulus After All | Ryan McMaken
Back in 2016, Donald Trump criticized the Federal Reserve for keeping interest rates too low. Trump explained that the Fed's work to keep interest rates artificially low benefits the wealthy at the expense of the poor:

And you know the people who are hurt the most are people that saved all their lives, and thought they were going to live off the interest. Those people are getting absolutely creamed.

And you know the people who are hurt the most are people that saved all their lives, and thought they were going to live off the interest.

What interest did they want to live on?
T-Bills? CDs? Corporate bonds?

 

[MisterBeale]

 

[william the wie]

When you have a central bank trying to reverse prime the economy’s pump with ridiculously low interest rates and now QE 4 this is the stuff that happens. But don’t worry, it will all eventually get unwound. When it does Trump will catch hell, and he is in fact partially to blame. He is just praying it doesn’t blow up before Election Day 2020. He knows it’s a ticking time bomb, or at least he claimed to know it in 2016.

It Turns Out That Trump Loves Low Interest Rates and Fed Stimulus After All | Ryan McMaken
Back in 2016, Donald Trump criticized the Federal Reserve for keeping interest rates too low. Trump explained that the Fed's work to keep interest rates artificially low benefits the wealthy at the expense of the poor:

And you know the people who are hurt the most are people that saved all their lives, and thought they were going to live off the interest. Those people are getting absolutely creamed.

It's the EU buying US subprime auto loans primarily because of negative interest rates. ASEAN countries plus ROK and Japan have the same problem with Chinese credit and devaluation of the Yuan. I don't see this mess as a major problem for US savers. Why would cars being sold at ten cents on the dollar here hurt American savers?

 

[okfine]

Subscribe to read | Financial Times


The market for securities backed by the riskiest US car loans is booming, as yield-crazed investors shrug off nagging concerns over the health of the American consumer.

Deals have been “going gangbusters” in subprime auto asset-backed securities (ABS), said Jennifer Thomas, an analyst at Loomis Sayles, a Boston-based firm managing $286bn of assets. At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn, according to data from Finsight, despite softer sales of new cars and trucks this year.

The lower-rated slices of recent deals are “five or six times oversubscribed”, said Ms Thomas. “The market is trading very well.”

What could go wrong ?

Maybe one of them red states in the South, like LA and MS will get above water on those loans?

 

[Fort Fun Indiana]

Haha...who is the fool who made that meme? Is that sarcasm? Good one, bro.

 

[Bob Blaylock]

Subscribe to read | Financial Times


The market for securities backed by the riskiest US car loans is booming, as yield-crazed investors shrug off nagging concerns over the health of the American consumer.

Deals have been “going gangbusters” in subprime auto asset-backed securities (ABS), said Jennifer Thomas, an analyst at Loomis Sayles, a Boston-based firm managing $286bn of assets. At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn, according to data from Finsight, despite softer sales of new cars and trucks this year.

The lower-rated slices of recent deals are “five or six times oversubscribed”, said Ms Thomas. “The market is trading very well.”

What could go wrong ?

Article is behind a paywall.

 

[CrusaderFrank]

Subscribe to read | Financial Times


The market for securities backed by the riskiest US car loans is booming, as yield-crazed investors shrug off nagging concerns over the health of the American consumer.

Deals have been “going gangbusters” in subprime auto asset-backed securities (ABS), said Jennifer Thomas, an analyst at Loomis Sayles, a Boston-based firm managing $286bn of assets. At $29bn so far this year, issuance of subprime auto ABS is on track to surpass 2018’s record haul of $32bn, according to data from Finsight, despite softer sales of new cars and trucks this year.

The lower-rated slices of recent deals are “five or six times oversubscribed”, said Ms Thomas. “The market is trading very well.”

What could go wrong ?

Wow

 

[HenryBHough]

Bulls make money.

Bears make money.

Pigs get slaughtered.

Tommy might make decent bacon if you like the gummy British style stuff.

 

[Tommy Tainant]

It looks like a bubble to me. Should we be worried ?

 

[Toddsterpatriot]

It looks like a bubble to me. Should we be worried ?

$29 billion......panic!!

 

[Toro]

What could go wrong ?

Not a lot.

Even if this market implodes, it won't have much affect on the economy. It's a small market.

 

[Toro]

It looks like a bubble to me. Should we be worried ?

No.

 

[Muhammed]

Why do millenials need a sub-prime loan to buy a car in the first place?




The Democrats fucked them hard.

 

[okfine]

Why do millenials need a sub-prime loan to buy a car in the first place?




The Democrats fucked them hard.

What are you talking about? Santander hands out loans like candy at real high rates. A lot of the cars are crap in the beginning and fall apart. They become worthless so the buyers quit making payments. Mississippi leads with this problem.

Dallas subprime auto lender’s loans souring at fastest clip since 2008

Subprime Auto Loan

 

[sparky]

Banksters soliciting risk at higher rates equates to $$$ in their coffers here

Another '08 redux looms , but only if this concept proliferates the market

~S~

 

[william the wie]

What could go wrong ?

Not a lot.

Even if this market implodes, it won't have much affect on the economy. It's a small market.

better yet investors from negative interest rate economies are the buyers of this paper.