May 7 2017

Debt Apocalypse: US Student and Auto Loans Hit New Record of $2.6 Trillion.

American consumers are once again spending beyond their means.  Just a few months ago there was a startling headline reporting that US consumers now had over $1 trillion in credit card debt outstanding.  That seemed astonishing in itself but now looking at debt levels in other sectors we find that auto loans outstanding are also […]

Mar 26 2017

Subprime auto loans face mounting problems: With $1.1 trillion in loans outstanding we all know bad deals are made in good times.

Exuberance breeds bad decisions as inhibitions and due diligence get tossed out the window like dirty water.  This is exactly what is unfolding in the rampaging auto market.  The latest data from Fitch Auto ABS Indices shows that 60+ day delinquencies for subprime loans are now at 5 percent of all outstanding balances.  This is […]

Feb 26 2017

Americans now Hold Over $4.1 Trillion in Consumer Debt: Last Debt Bubble Peak was at $2.5 Trillion.

Americans now hold an incredible $4.1 trillion in consumer debt.  This latest data shows that Americans are now back to having an insatiable appetite for spending beyond their means.  Unlike mortgage debt, consumer debt is not building up any future equity here.  The largest category of consumer debt is student loan debt.  Even at the […]

Dec 2 2015

Unable to afford homes, Americans dive into subprime auto debt to purchase cars: Auto debt getting riskier with extended terms and chasing borrowers with lower credit scores.

The word “subprime” was synonymous with the toxic loans that were made during the credit bubble.  Some tend to think that those days are long gone but we simply have shifted the form in which toxic debt is filtered into the system.  Instead of making no-doc no-income loans on houses, we are now offering no-income […]

Sep 16 2015

How subprime loans keep the bubble going: Subprime auto loans continue to grow as credit worthy customers drop out of the market.

Low interest rates create an environment that encourages debt based spending.  In regards to monetary policy, this is how you grease the wheels to get the economic engine spinning.  As part of your financial arsenal this can be used in moderation but the Fed has been using maximum credit leverage since the economy imploded and […]

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