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"Some Folks Are Buying Cars..." President Obama Explains Why Subprime Auto Loans Are Great For America - Live Feed

Tyler Durden's picture




 

This should be good... On the same day as the administration pushes through 3% down FHA loans for some insane reason, President Obama is in Michigan to discuss the renaissance of the US Autoo industry (or more correctly described- the rebirth of the subprime lending bubble)...

 

* * *

As we noted previously, Americans need moar and will do anything for it... and as Steve Liesman says - credit is the briddge between work and play (or no work and moar play)... and is the backbone of America. What a sad joke!!

Because many lenders make the loan based on an assessment of a used car’s resale value, not on a borrower’s ability to repay that money, many people find that they are struggling to keep up almost as soon as they drive off with the cash.

 

As a result, roughly one in every six title-loan borrowers will have the car repossessed, according to an analysis of 561 title loans by the Center for Responsible Lending, a nonprofit in Durham, N.C.

 

...

 

The title lending industry, perhaps more than any other facet of subprime auto lending, thrives because of the car’s importance.

 

The threat of repossession turns the borrower into an annuity for the lenders,” said Diane Standaert, the director of state policy at the Center for Responsible Lending.

*  *  *

“It is a form of indenture,” said Robert Swearingen, a lawyer with Legal Services of Eastern Missouri, adding that “because of the threat of repossession, they can string you along for the rest of your life.”

 

“This is nothing but government-authorized loan sharking,” said Scott A. Surovell, a Virginia lawmaker who has proposed bills that would further rein in title lenders.

*  *  *

Which makes us wonder... if "everything is awesome", why are so many Americans in such desperate need for short-term cash at whatever cost? Silly question really.

 

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Wed, 01/07/2015 - 17:28 | 5634470 fuu
fuu's picture

Without subprime auto loans how will GM stuff those channels?

Wed, 01/07/2015 - 17:34 | 5634506 ZH Snob
ZH Snob's picture

on the bright side though, there should be plenty of well-priced used cars next year.

Wed, 01/07/2015 - 17:39 | 5634512 knukles
knukles's picture

Everything is Great For America....  So what elese is new?

Wed, 01/07/2015 - 17:40 | 5634525 hedgeless_horseman
hedgeless_horseman's picture

 

 

 

http://www.zerohedge.com/news/2014-12-18/obamacar-automobile-insurance-s...

Now is the season for action.  Now is when we must bring the best
ideas of both parties together, and show the American people that we can
still do what we were sent here to do.  Now is the time to deliver on
automobile collision insurance.  Now is the time to deliver on
driving.  

The plan I'm announcing tonight would meet three basic goals.  It
will provide more security and stability to those who have auto
insurance.  It will provide insurance for those who don't.  And it will
slow the growth of collision repair costs for our families, our
businesses, and our government.  (Applause.)

It's a plan that asks everyone to take responsibility for meeting
this challenge -- not just government, not just insurance companies, but
everybody including employers and individuals.  And it's a plan that
incorporates ideas from senators and congressmen, from Democrats and
Republicans -- and yes, from some of my opponents in both the primary
and general election.  

Here are the details that every American needs to know about this
plan.  First, if you are among the hundreds of millions of Americans who
already have collision insurance, nothing in this plan will require you
to change the coverage or the mechanic you have.  (Applause.)

Let me repeat this:  Nothing in our plan requires you to change what you have.

What this plan will do is make the insurance you have work better for
you.  Under this plan, it will be against the law for insurance
companies to deny you coverage because of a preexisting convictions. 
(Applause.)

Wed, 01/07/2015 - 17:40 | 5634536 McMolotov
McMolotov's picture

"He's got his sleeves rolled up! He's just like the rest of us — only better!"

Wed, 01/07/2015 - 17:45 | 5634553 knukles
knukles's picture

And a white guy with hair plugs who stands off to the side behind him sneering, proving that tough white testosterone charged, strong, virile America says Pajamas is A-OK.

Wed, 01/07/2015 - 18:48 | 5634823 MillionDollarBogus_
MillionDollarBogus_'s picture

"Some Folks Are Buying Cars..."   - car not in posession...

one in every six title-loan borrowers will have the car repossessed,  - these folks already posses the car, they are borrowing against its value

2 different scenarios...

Wed, 01/07/2015 - 19:56 | 5635058 BlindMonkey
BlindMonkey's picture

You are a weak immitation of the original.

Wed, 01/07/2015 - 21:43 | 5635346 clymer
clymer's picture

we channel-stuffed some folks..

Wed, 01/07/2015 - 17:45 | 5634546 negative rates
negative rates's picture

I propose that inorder to get your licence, you must first take a class on the combustion engine, just like they do in Italy. I mean who ever heard of bringing your horse in to get a part replaced when you over worked him.

Wed, 01/07/2015 - 18:41 | 5634797 booboo
booboo's picture

Yes, every woman should know where the 710 cap is located on their car

Wed, 01/07/2015 - 20:13 | 5635112 knukles
knukles's picture

Discount 710's and Synthetic Blinker Fliud available here ....

http://kalecoauto.com/index.php?main_page=index&cPath=9&zenid=UDmd0Q9i-p...

Wed, 01/07/2015 - 20:41 | 5635186 acetinker
acetinker's picture

No, the muffler bearing is far more critical, as is preventing a short-circuit between the steering wheel and the seat, imho.

Wed, 01/07/2015 - 23:15 | 5635618 acetinker
acetinker's picture

seriously tho, knuks, i am thankful for this experience.  i haven't particularly enjoyed it, but i learned a shitload.  i don't think God is some dude sitting on a cloud above me, recording every thought and action.

i think God made us what we are so that we could at least, in some minscule fashion, realize that we are part of God.

the bible kinda talks to that, but wants you to believe you need leaders to help you find God.

I call bullshit!

Wed, 01/07/2015 - 18:15 | 5634679 stant
stant's picture

Mcgruber mobiles for everyone! Except those at haavad

Wed, 01/07/2015 - 17:41 | 5634530 negative rates
negative rates's picture

Get your factory junk. This message was approved by your gvt.

Wed, 01/07/2015 - 18:34 | 5634760 Number 156
Number 156's picture

Subprime president.

Thu, 01/08/2015 - 08:38 | 5636272 de3de8
de3de8's picture

So what will the payment be on a Z06 with Z07 and LT3 over 7years?!

Wed, 01/07/2015 - 17:39 | 5634517 PoorMan429
PoorMan429's picture

Dealers make 3-4k on a used car sale. 

 

Dealers make 300-400 on a new car sale. They have to sell them with holdback in order to hit their numbers. 

Wed, 01/07/2015 - 17:49 | 5634568 Jameson18
Jameson18's picture

Dealers make money on the loan not the car. When you finance at the dealership they add percentages or part of percentages on to your loan that is how they stay in business. Along with extended warrenties ect ect.

Wed, 01/07/2015 - 17:38 | 5634518 pods
pods's picture

Oh great, a loan you can drive around and have to wash and insure.

You know what bugs me the most about new cars or new car commercials?

That they allow people to remain ensconced in the Matrix even while in between locations. WTF?

"Now you don't even have to live in the real world while you are OUT in the real world with our new 4G wifi enabled Matrix hopper, every passenger can avoid all human interaction!"

Fuck bailing water anymore, I am going to kick some ice around on the deck for a while.

pods 

Wed, 01/07/2015 - 17:41 | 5634541 mademesmile
mademesmile's picture

Have you seen the commercials when you can lease the car for an incredible $590 a month? And they make it seem like all Americans should be doing this.

Wed, 01/07/2015 - 17:57 | 5634611 Dave Thomas
Dave Thomas's picture

The language in car ads drives me up a wall. It's like from some distant galaxy where the only denizens are marketers.

Whoever came up with those terms like "Winter Sales Event" should be strapped to a saw horse and have a rotating carousel of boots repeatedly kicking him in the ass for fifteen minutes.

Wed, 01/07/2015 - 18:31 | 5634751 Lostinfortwalton
Lostinfortwalton's picture

You don't like Santa in his red Mercedes sports car being pulled by eight silver Mercedes sedans? You da grinch?

Wed, 01/07/2015 - 19:59 | 5635068 BlindMonkey
BlindMonkey's picture

Why only 15 minutes?

Wed, 01/07/2015 - 17:52 | 5634591 tarsubil
tarsubil's picture

I swear, every. fucking. stoplight. has someone who is sitting still on green because they are looking at their phone.

Wed, 01/07/2015 - 19:59 | 5635076 BlindMonkey
BlindMonkey's picture

You are the motherfuckin king of january non-sequiturs.

Wed, 01/07/2015 - 17:42 | 5634537 p00k1e
p00k1e's picture

I didn’t realize this until recently but GM extended the ‘Employee Discount’ to all extended family members of all employees. 

Wed, 01/07/2015 - 17:53 | 5634585 Uchtdorf
Uchtdorf's picture

And to all employees of all the supplier companies. Money for nothing...

Wed, 01/07/2015 - 19:05 | 5634874 Billy Sol Estes
Billy Sol Estes's picture

If you can't negotiate $1000 off of the car to begin with then you deserve to be duped.

Wed, 01/07/2015 - 17:54 | 5634586 Pig Circus
Pig Circus's picture

According to the White House, Obama will visit the plant on Wednesday to “deliver remarks highlighting the workers in the resurgent American automotive and manufacturing sector now that the auto rescue has been completed.”

But the Detroit News reports that the same plant will be closed this week due to low demand for its small gas and hybrid vehicles

 

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Of course, boasting of the economic recovery and the automotive sector’s success while you’re speaking at a plant that’s closed due to low demand might seem like it would be a little awkward — especially if you were the dude who’s been pushing to have a million of these hybrid vehicles on the road this year. And double especially if you wound up being more than 700,000 cars short of that goal — even as buyers apparently aren’t snapping up all the cars that the sometimes-closed factory is turning out.

 

But apparently, these details don’t faze Obama: The plant actually informed the White House before scheduling the speech that the plant would be closed while he was giving it.

 

http://www.nationalreview.com/article/395748/obama-brag-about-fixing-auto-industry-plant-closed-due-low-demand-katherine-timpf

Wed, 01/07/2015 - 18:42 | 5634753 The Wizard
The Wizard's picture

I believe the government is using the same theory as an individual when it comes to debt and bankruptcy. If one owes 50K on a 100K home, he has a problem. If he owes 500K on a 100K home the creditor has the problem.

So what the hell, party down while you can.

Wed, 01/07/2015 - 17:30 | 5634483 stant
stant's picture

By the time Japan quits printing the Dalla will be so up you will get a free Honda with your 5 th fill up of gas

Wed, 01/07/2015 - 17:34 | 5634496 LukeWorm
LukeWorm's picture

Back to normal. Everything is good.

/sarc

Wed, 01/07/2015 - 17:33 | 5634497 Rainman
Rainman's picture

Title loans are the worst ! ... I must have missed the part where .gov killed off the usury laws. 

Wed, 01/07/2015 - 17:42 | 5634535 pods
pods's picture

If a title loan won't float, you can always reverse mortgage your house.  You know, the one you signed for and created the money to buy, then paid back the bankers with interest for the privilege, and now you can let them create more fake ass FRNs and reloan it to you in exchange for your house.

Circle of life complete, banker style!

pods

 

Wed, 01/07/2015 - 18:51 | 5634834 booboo
booboo's picture

I reversed mortgaged my home to a shell company I set up in Bimini under a sub corp that will write me back a 140% LTV with a flipper on the backside and two eightballs for the sucker bank that I forged the note to on another loan on the same home...blowing it all on a prepaid vacation to Mars in 2045..I think I can do this.

Wed, 01/07/2015 - 23:10 | 5635607 Blano
Blano's picture

Some states may vary, but if it's not actually called "interest" it's not subject to usury laws.

You're welcome.

Wed, 01/07/2015 - 17:35 | 5634503 Dr. Engali
Dr. Engali's picture

"We have to keep borrowing money to keep from going bankrupt."

Joe Biden

Wed, 01/07/2015 - 17:38 | 5634523 knukles
knukles's picture

Damn, Joe...  You'd think you should be president

Wed, 01/07/2015 - 17:48 | 5634571 pods
pods's picture

Biden's college thesis:
"How can I be out of money when I still have checks?"

pods 

Wed, 01/07/2015 - 17:36 | 5634505 Yellowhoard
Yellowhoard's picture

I II I I I had to change the Chanel.

Because he he he he he's such an ass ass ass ass ass ass hole.

Wed, 01/07/2015 - 17:37 | 5634508 Seasmoke
Seasmoke's picture

Good times are here again. Back up the SUV !!!

Wed, 01/07/2015 - 17:36 | 5634509 PoorMan429
PoorMan429's picture

Cars are excellent stores of wealth, you can sell a 3 month old car for almost 80% of the price you paid for it new.

Wed, 01/07/2015 - 17:45 | 5634549 mademesmile
mademesmile's picture

Which begs the question how the heck does a bank justify an eight year loan at 1%

Thu, 01/08/2015 - 02:25 | 5635957 long-shorty
long-shorty's picture

banks don't give 8-year loans at 1%, only the captive finance companies do. well, i guess technically they become banks when they fuck up and get the bailout $$$ (see GMAC ----> "Ally Financial").

along the same lines though, apparently the banks actually do pay car dealers a finders fee for new loans these days. the fee is bigger for longer term loans, and the dealer gets to keep the money even if the customer repays the loan way early. the dealer is willing to sell at a lower price if you take a bank loan (from the bank they have the deal with) than if you pay cash.

Wed, 01/07/2015 - 17:55 | 5634602 Panic Mode
Panic Mode's picture

That just sounds like our fiat currency and stock market. What a deal

Wed, 01/07/2015 - 17:56 | 5634607 tarsubil
tarsubil's picture

In Soviet America, car own you!

Wed, 01/07/2015 - 18:50 | 5634837 silverer
silverer's picture

I like how the marketers even call them "investments".

Wed, 01/07/2015 - 23:13 | 5635615 Blano
Blano's picture

Govvie's been doing it for years.  I first noticed it with Billy Bob Blow Job Clinton.

Wed, 01/07/2015 - 17:36 | 5634510 DutchMadness
DutchMadness's picture

There are millions of new immigrants who need a job in order to buy a ( used ) car. To get a job, most of them need a car...Here is the problem.. like who was first : chicken or egg... Actually, a car is the most needed item, before housing, food and thus..a job...

Wed, 01/07/2015 - 17:56 | 5634613 Seasmoke
Seasmoke's picture

That's what the elite found out in 2008. Cars before mortgages. 

Wed, 01/07/2015 - 17:58 | 5634618 Bioscale
Bioscale's picture

Maybe in the USA. In Europe lot of people in the cities have no car or feel not comfort driving one daily to work and back. In Germany you will see a lot of people riding bikes.

Wed, 01/07/2015 - 19:14 | 5634905 Sokhmate
Sokhmate's picture

Public transportation is a farce in the US&A, as if sending the message: get a car; We're pretending to provide transportation. Local-anecdotally, 10-15 minute car trip to adjacent town takes 1.5 to 2 hours in public transpo.

Wed, 01/07/2015 - 20:36 | 5635169 lotsoffun
lotsoffun's picture

bike?  for losers.

/sarcasm.

Wed, 01/07/2015 - 18:36 | 5634772 silverer
silverer's picture

And a car is a cheap house too, now.

Wed, 01/07/2015 - 17:39 | 5634520 p00k1e
p00k1e's picture

Obama reduced FHA mortgage insurance rates for the dead-beat crowd too.

Something about ' debt junkies are locked out'.....

Wed, 01/07/2015 - 17:43 | 5634545 knukles
knukles's picture

Anyone but me notice the goobermenit mafia muscling in on private business?

Bad mortgage debt.  Bad for the poor and bad for America. 
Drive 'em out of business
Then start the very same business

Bad crappy car loans... bad for the poor and bad for America
Drive 'em out of business then go into the business

Calling Mr Soprano, would Mr Soprano please break up the lead pipe and his legs?

Thu, 01/08/2015 - 07:30 | 5636170 Arnold
Arnold's picture

Do you think that might work for my health care?

That $20 copay is really chapping my ass.

Wed, 01/07/2015 - 17:40 | 5634533 franciscopendergrass
franciscopendergrass's picture

"Betting on the American Car Industry was the right thing to do."  - Obama in the context of supporting the auto bailouts.

So was betting on the banking industry.

I guess when Obama bets on anything it fucks the middle class.

Wed, 01/07/2015 - 17:47 | 5634565 p00k1e
p00k1e's picture

The funnier angle, Bush bailed out the auto industry - but since Bush remains in hiding, Obama gets the credit.  LoL

Bush announces $17.4 billion auto bailout

Updated: 12/19/08 1:31 PM EDT

"If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy," Bush said at the White House, in remarks carried live by the national broadcast networks. "In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed."

Bush said that "bankruptcy now would lead to a disorderly liquidation of American auto companies."

Wed, 01/07/2015 - 17:55 | 5634608 Bill of Rights
Bill of Rights's picture

I blame you for allowing this to happen.

Wed, 01/07/2015 - 17:40 | 5634534 Bill of Rights
Bill of Rights's picture

If you like your subprime 8 year auto loan you can keep your subprime auto loan.

Don't pay it, let them take it go back for another! America for the win!

Wed, 01/07/2015 - 17:42 | 5634538 franzpick
franzpick's picture

wHAT A jERK.

Wed, 01/07/2015 - 17:52 | 5634594 BlackChicken
BlackChicken's picture

Some folks voted for him. Bastards.

Wed, 01/07/2015 - 18:17 | 5634686 laser
laser's picture

You liked McCain/Palin? Presidents are selected, not elected. 

Wed, 01/07/2015 - 17:48 | 5634559 SillySalesmanQu...
SillySalesmanQuestion's picture

"Subprime loans for new clunkers..Run, don't walk to your nearest Goverment Motors Dealer!"

Wed, 01/07/2015 - 17:47 | 5634560 Barnaby
Barnaby's picture

I can't believe anything he says.

Signing Agents, unregulated by only as much as a Notary Oath report these loans are "going apeshit crazy" and "are the best things since 2007 refis."

The biggest bloatiest loans? Mercedes. In fucking Denver.

Find a local Signing Agent and ask them how many car loans they just worked.

Wed, 01/07/2015 - 18:25 | 5634724 silverer
silverer's picture

I checked. They're not sure. They're all stoned.

Wed, 01/07/2015 - 18:33 | 5634759 Barnaby
Barnaby's picture

Yeah but Denver. A year ago it was a ridiculous RAM five-ring suspension and truck balls under a vanity plate that said BLCKGLD93. Fuck the meek, attorneys rule the earth?

Wed, 01/07/2015 - 17:47 | 5634563 Al Huxley
Al Huxley's picture

Maybe I'm missing something here, but how the fuck is 'threat of repossession' of something you've taken delivery of and are using, but have not paid for, under contractual commitment to pay for it over time at an agreed interest rate - how the FUCK is that a form of indenture?

Wed, 01/07/2015 - 18:47 | 5634824 Barnaby
Barnaby's picture

It's a form of Answerable Possession.

Out here, imagine somebody caught one of my stray mares. She's identifiable and possibly branded/chipped.

Similarly, your car brands you, and is a physical handle placed upon you by the looting usurers.

Thu, 01/08/2015 - 02:36 | 5635968 Harry Balzak
Harry Balzak's picture

It's not, which is why it's going to fail.  These cars get hammered to shit.  They'll end up getting repoed and auctioned.  But hey, it'll give tow truck drivers, auctioneers and used car lots some business.  In two years, the borrower's credit will be cleared and they'll get the next new model. 

Although I don't know for sure, I wouldn't be surprised if there is a behind-the-scenes mechanism to cover losses.  It gives the industry the appearance of working and provides good govt theater.  

Maybe BHO should get a Chrysler 300 rolling on 28s and some giant subs in the trunk.  He could do a Superbowl commerical.  

 

Wed, 01/07/2015 - 17:47 | 5634564 whoopsing
whoopsing's picture

I need to borrow for a new car so I can drive to an empty mall

Wed, 01/07/2015 - 17:48 | 5634566 Bell's 2 hearted
Bell's 2 hearted's picture

the equifax chart is only thru 2013 ... einstein not needed to figure which way 2014 went.

 

OCC & FDIC have warned on subprime auto loan delinquencies for MONTHS

 

cut back on vehicle sales (and all thru the supply train) as credit spigot tightens should mesh well with energy sector FUBAR

Wed, 01/07/2015 - 17:50 | 5634574 Bell's 2 hearted
Bell's 2 hearted's picture

my cable provider (comcast) would go broke if all the title loan ads pulled

Wed, 01/07/2015 - 17:51 | 5634581 WTFUD
WTFUD's picture

Obama the Clown having a good giggle and fucking oblivious to the animosity against him from every corner of the globe.

The bastard's left a legacy alright and one day when ' uncle tom ' hangs up his golf clubs he'll find out how deep the HATRED runs.

A nasty CLASS A CUNT

Wed, 01/07/2015 - 17:52 | 5634592 Panic Mode
Panic Mode's picture

So some folks can get fatter instead of riding a bicycle.

Thu, 01/08/2015 - 08:19 | 5636174 Arnold
Arnold's picture

Yesterday's high temperature was 6 (F). Today it is 0(F). I'm  very, very sorry I can't meet you bicycle or exercise expectations.

Wed, 01/07/2015 - 17:54 | 5634599 Counterpunch
Counterpunch's picture

They should be able to get cash direct from the Fed, just like Goldman Shafts.

 

Fuckin' Obama though - you know, 1 year into Hillary and that whole crew...  we may look back with quite a bit of nostalgia for the first black puppet in chief.

Wed, 01/07/2015 - 17:57 | 5634620 SheepDog-One
SheepDog-One's picture

Seriously if this Hillary lunatic is president I'll just give up and move to Paraguay or some shit....no way could I hear that cackle day and nite all over everything.

Wed, 01/07/2015 - 18:10 | 5634664 kowalli
kowalli's picture

Hillary will go to war...big one...

Wed, 01/07/2015 - 18:23 | 5634717 silverer
silverer's picture

I've seen in more than a couple of places where the writers felt she was most likely to go "nuclear" of the top presidential picks. Lovely.

Wed, 01/07/2015 - 19:11 | 5634895 ThroxxOfVron
ThroxxOfVron's picture

I was IN THE ROOM when Hillary promised AIPAC that the US would break out the nukes for 'em.

The Yids were standing on the hotel ballroom tables shouting. 

NO SHIT.  Scared the shit out of me worse than looking down the barrel of a gun.

Thu, 01/08/2015 - 02:40 | 5635973 Harry Balzak
Harry Balzak's picture

It won't be hillary, it'll be that fake indian bitch.  

Thu, 01/08/2015 - 07:47 | 5636181 Arnold
Arnold's picture

Pratibha Devisingh Patil ?

Wed, 01/07/2015 - 17:54 | 5634603 p00k1e
p00k1e's picture

The question I have is if everyone is eligible to finance a car, and are doing so…. Why did the remaining 670 steel workers get hit with layoffs? 

Wed, 01/07/2015 - 23:17 | 5635625 Blano
Blano's picture

Since when does a layoff disqualify someone?

/sarc

Thu, 01/08/2015 - 05:34 | 5636073 Wild Bill Kelso
Wild Bill Kelso's picture

Maybe the company realized that it would still be cheaper to purchase Chinese excess steel, even with the anti-dumping duties that get imposed. 

Wed, 01/07/2015 - 17:59 | 5634626 SheepDog-One
SheepDog-One's picture

Sure the sub-prime bubble was a huge black eye and everyone swore up and down they'd never do that shit again, but now it's OK they just didn't have the right ninja in charge.

Wed, 01/07/2015 - 18:02 | 5634630 Panic Mode
Panic Mode's picture

He needs the lemmings keep consuming the oil to slow the oil price free fall, otherwise oil companies will go bust even sooner.

Wed, 01/07/2015 - 18:07 | 5634657 starman
starman's picture

The proof that 90% of the populace is plain fucking dumb! 

But its the American way since birt. Live beyond the means do to easy credit!  

Wed, 01/07/2015 - 18:12 | 5634671 p00k1e
p00k1e's picture

This Internet thing is a problem for the bankers.

As soon as the Banekrs roll out the repackaged scam, we don’t have to wait months to figure it out.  Collectively, we can alert each other in 20 minutes…. 

Wed, 01/07/2015 - 18:37 | 5634778 BeerMe
BeerMe's picture

Exactly.  Why do you think .gov is trying to gain control of the internet?

Wed, 01/07/2015 - 18:12 | 5634673 Bill of Rights
Bill of Rights's picture

. Gov has been fleet buying as well, notice all the nice new shiny Police SUV's the revenue enhancers are now driving.

Wed, 01/07/2015 - 18:18 | 5634696 silverer
silverer's picture

I moved from NJ some years back. A good place to be from. The town where I lived would have an annual 4th of July parade. So I checked out their DPW purchases. How about Ford pickup short bed diesels with chrome wheels? A couple of towns over did manage to reel in their township a bit. They were going to build a multi-million dollar complex for their DPW which they didn't really need. It was so excessive it earned the nickname "The Taj Garage". Hey, what a way to "boost" the economy, eh?

Wed, 01/07/2015 - 19:32 | 5634970 SheepDog-One
SheepDog-One's picture

Revenue enhancers AKA 'pirates'.

Wed, 01/07/2015 - 18:15 | 5634680 silverer
silverer's picture

Folk you.

Wed, 01/07/2015 - 18:15 | 5634685 optimator
optimator's picture

Superb deal for the single Mom, you've seen them in those expensive SUV's, collecting benefits she'd need a real job at 79 thousand a year to match.  They get the car using the rebate as down payment.  She won't make payment one, will move every few months and if they ever find her and take the car it was nice while it lasted and one of her Baby Dadies will have to get her another one.  No loss as it was probably time to get that first oil change anyway.  Meanwhile we drive our ten year old cars to save a buck.

Wed, 01/07/2015 - 18:16 | 5634688 The Shape
The Shape's picture

And it will get worse. Oil drops under $50 and every halfwit thinks it's great time to finance a silverado or f-truck with 0 down over 7 years.

Wed, 01/07/2015 - 18:16 | 5634689 homiegot
homiegot's picture

I guess watching these people fail is a kind of sick sport to Obama.

Wed, 01/07/2015 - 18:18 | 5634692 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Subprime borrowing is a cash cow for Banksters and the entire World knows it all too well after 08. Subprime should be outlawed, but Banksters have no other means of raking in cash on Ponzi America

without it. In the long run of events the subprime debacle will be seen as America's undoing through rupture to the dark pool derivatives universe that Wall Street is attempting to pump up. Sooner or later their bicycle pump subprime inflation of the bubble will spring leaks in the hose and will not inflate no matter how much they PUMP you UP for

a gas guzzling SUV made by the BIG three. GM, FORD, CHRYSLER, are all losing market share each year. Sooner or later the Bnaksters will run out of SUCKERS whilst bottom feeding and then where are they going to shill?

Wed, 01/07/2015 - 18:19 | 5634697 wissen dass scheiBe
wissen dass scheiBe's picture

Next headline.... O takes on payday advance high interest loan sharking....

 

Title loan sharking to follow....

Wed, 01/07/2015 - 18:27 | 5634725 mademesmile
mademesmile's picture

Remeber during the housing boob everybody who thought they were somebody was driving a Hummer?

 

edit: I meant boom but decided I like the typo better.

Wed, 01/07/2015 - 18:34 | 5634761 JR
JR's picture

This has nothing to do with what’s good for America. But it has everything to do with more acceleration of the transfer of wealth to the supporters of the welfare state, i.e., open borders. Unfortunately, the policies of the socialists have no opposition in Washington, DC. Exhibit A: the reelection of John Boehner as speaker, a man clearly dedicated to the support of expanded social legislation from Obamacare to amnesty to consistent, flagrant increases in the size of government, the size of the debt and the punishment of any who would stand in opposition.

Thus, the media and Pelosi rejoiced with jubilation yesterday upon Boehner’s reelection.

As for the disappearing American middle class (“some argue that the most sensible income amount to attach to the middle class would be the median household income of around $54,000"), The Cheat Sheet wrote recently:

Bill Maher reminded us a few months back that 50 years ago, the largest employer was General Motors, where workers earned an equivalent of $50 per hour (in today's money). Today, the largest employer — Wal-Mart — pays around $8 per hour.

The middle class has certainly changed. We've ranked a list of things the middle class can no longer really afford. We're not talking about lavish luxuries, like private jets and yachts. The items on this list are a bit more basic, and some of them are even necessities. The ranking of this list is based on affordability and necessity. Therefore, items that are necessity ranked higher, as did items that a larger percentage of people have trouble paying for.

Vacations

A vacation is an extra expense that many middle-earners cannot afford without sacrificing something else. A Statista survey found that this year 54% of people gave up purchasing big ticket items like TVs or electronics so they can go on a vacation. Others made sacrifices like reducing or eliminating their trips to the movies (47%), reducing or eliminating trips out to restaurants (43%), or avoiding purchasing small ticket items like new clothing (43%).

New vehicles

Very few people who earn the median income can afford to buy a new car or truck. Interest.com recently analyzed the prices of new cars and trucks, as well as the median incomes across more than two dozen major cities, and found that new cars and trucks were simply not affordable to most middle-earners.

"Median-income families in only one major city [Washington DC] can afford the average price Americans are paying for new cars and trucks nowadays." As of 2013, new cars are priced at $32,086, according to the study. Mike Sante, Interest.com's managing editor reminds us, "just because you can manage the monthly payment doesn't mean you should let a $30,000 or $40,000 ride gobble up all such a huge share of your paycheck."

To pay off debt

These debt statistics come from Debt.org:

"More than 160 million Americans have credit cards.""The average credit card holder has at least three cards.""On average, each household with a credit card carries more than $15,000 in credit card debt."

Not only do we have large amounts of credit card debt, we also have student loans, mortgages, cars, and medical debts. Our debt is growing faster than our income, and many middle class workers have trouble staying afloat. Money-Zine evaluated debt growth and income growth over the past few decades and found that "back in 1980, the consumer credit per person was $1,540, which was 7.3% of the average household income of $21,100. In 2013, consumer debt was $9,800 per person, which was 13.4% of the average household income of $72,600. This means debt increased 70% faster than income from 1980 through 2013."

Emergency savings

To provide ourselves with a degree of financial security, we are supposed to have emergency savings to protect ourselves in the event of job loss, illness, or some other catastrophe. Most members of the middle class don't have at least six months of emergency savings, however, and some working people have no such savings.

A Bankrate survey found that only around one out of four households have six months of emergency money saved, and many of them are in the higher income groups. Another one-fourth have no emergency savings at all, and the remaining household have a small to moderate amount of savings, but not enough to cover six months of expenses.

Retirement savings

If you reach the retirement age with little or no money saved, Social Security is probably not going to be enough to cover your basic needs. Even if you want to work for your entire life, you have no way of knowing whether or not you will be physically capable of doing so.

Although having a lack of a retirement savings is a risky move, so many people bet on double zero, just hoping that things will work out in their favor. While some members of the middle class neglect this aspect of financial planning because they are procrastinating, there are also some workers who cannot afford to set this money aside. Nearly half of those who don't save for retirement say it's because they simply don't have the money.

As of late, around 20% of people near 65 have not saved anything for retirement at all, and the majority of people — 59% — worry that they don't have enough money saved for retirement, according to a Gallup Poll.

Medical care

Medical care is a basic necessity and something we'd think would be affordable for someone earning a middle income. A Forbes article published data indicating that workers in large companies — many of whom are members of the middle class — "face nearly $5,000 in premiums, co-payments, deductibles and other forms of co-insurance."

During the past few years, these costs have had a large impact on working Americans. A report by Feeding America found that a shocking 66% of households say they've had to choose between paying for food and paying for medical care — 31% say they have to make that choice each and every month.

Dental work

According to the U.S. Department of Health and Human Services, "the U.S. spends about $64 billion each year on oral health care — just 4% is paid by Government programs." About 108 million people in the U.S. have no dental coverage and even those who are covered may have trouble getting the care they need, the department reports.

Oftentimes, people will purchase medical coverage and forgo dental because it's so expensive. Plus, dental insurance may cover only 50% of the more expensive procedures, like crowns and bridges. This leaves those who have insurance with large co-payments.

In many cases, middle-earners will delay or even forego some of these procedures in efforts to save on costs. According to the CDC, nearly one in four adults between the ages of 20 and 64 have untreated dental caries (like cavities or infections).

http://www.usatoday.com/story/money/personalfinance/2014/10/25/cheat-sheet-middle-class-cant-afford/17730223/

Wed, 01/07/2015 - 18:51 | 5634833 Bangalore Torpedo
Bangalore Torpedo's picture

Let me recommend starting off with an executive summary at the beginning of all your posts.

Wed, 01/07/2015 - 19:21 | 5634922 Billy Sol Estes
Billy Sol Estes's picture

Do you fucking know how long it takes to skim off 6-months of your paycheck into savings?

Let's say I net $3000 a month. So now I need $18,000.

But I can only afford $200 a month to put towards this because there are other things to cover month to month.

It would take 90 GODDAMN MONTHS TO DO THIS!!!!!!!

Wed, 01/07/2015 - 19:38 | 5634990 JR
JR's picture

+1000. And in 90 months, under the Fed's 9+% annual inflation tax on purchasing power and zero annual earned interest on savings, you still ain't there.

If the America people continue to allow the private bankers who operate the Fed to confiscate their weatlh through debt and inflation and income taxes, sans economic mercy or justice, they will be moved under brute force into world control and universal slavery.

Wed, 01/07/2015 - 20:13 | 5635110 The9thDoctor
The9thDoctor's picture

"Saving 'money'" is a very quaint Bretton Woods era idea.

It makes no sense at all to "save" fiat currency.  A savings account has a .9% return, meanwhile credit cards offer 1% to 5% cash back rewards.

As for car loans.  Lets say you are 18 years old and would like to "save up" for a car from your minimum wage 20 hour a week job because that's all that is out there right now.  You'll be 23 years old by the time you get enough cash to buy a car that is relatively reliable.  So for 5 years you have to waste time sitting at bus stops waiting for buses that don't show up sometimes, or are late and you miss work.  Then you have to beg for rides, or ride a bike places.  All for what? To save a couple of months of payments that were paid in interest to banks.  The opportunity cost of having a vehicle now at 18, is much better than "saving up" fiat.

I know many on here criticize subprime and I agree with most of their criticisms, but for some borrowers, it actually ends up getting their foot in the door.  At least the said 18 year old can establish a credit score with these loans if they pay their bills on time.

I agree with Robert Kiyosaki that the number one issue facing the US in the new Millennium is that most Americans lack a financial education.  Americans cling on to obsolete ideas that are beyond irrelevant in the Information Age.

Wed, 01/07/2015 - 20:27 | 5635151 lotsoffun
lotsoffun's picture

my credit score stinks.  i have no debt.  'credit score'?  are you kidding me, so they can get deeper into debt?

well - you are right.  because i work and worked and pay for things and have no 'credit score'.  and they don't work and borrow for things and have more than me, and will never have to pay it back.  and the banks get paid back with my taxes.

it really is a great scheme.  somehow, i am still not going to do it.  or advocate it.  it is called stealing, i do not care how entitled you believe you are.

 

Wed, 01/07/2015 - 20:36 | 5635175 QQQBall
QQQBall's picture

Yeah, well if Rich dad has an online course you should buy it - preferably on a credit card. A fucking car is a depreciating asset; the value drops 20% when the rubber meets the road right out of the dealership. There are many other choices than buying a $30k ride to go to your WMT job. Establish a credit score? You're the 9th Doctor, the 10th must be a veternarian. fucking idjit. 

 

I have never owned a new car and I have no financial worries.  Live BELOW your means, work hard, save and invest.... and keep doing it.  

Wed, 01/07/2015 - 21:17 | 5635272 JR
JR's picture

Your attack on savings only uses the results of the banking cartel's Keynesian policy and it completely ignores the history of saving that built America and America's standard of living.

Bretton Woods destroyed America’s free market system and frugality; it phased the gold standard out of the monetary system and put the monetary unit as a commodity of honest weight and purity solely in the private hands of the international bankers; it enabled the private bankers at the Federal Reserve to print themselves ultimate power without restriction over the property of individuals and nations and to buy off and control the US Congress and the US presidency.

It gave Janet Yellen sole power to confiscate people’s savings and livelihoods and to transfer that wealth and assets of the nation to the bankers with no opposition from the US politicians.

In short, the Federal Reserve destroyed America’s history of cherished sound money.

Spending and borrowing and printing money do not make a country wealthy.

And, now, the economies of the world through their own inflationary policies are verging on collapse – possibly within the next six months.

As for America, Ron Paul says, “This country has overspent itself. Spending and inflating the currency is not a good thing for the economy. It’s old-fashioned work and savings that has to make a country wealthy.”

Without the ability to save and without viable work opportunities, thanks to globalization policies by the Fed and multinational corporations, America’s middle class is dying. Certainly, the bankruptcy and destruction of the middle class is a key objective of Marxism, of the Fed’s goal of universal socialism.

Henry Hazlitt explains:

“The wrong road has been the road of government economic intervention. The right road would have been to permit and encourage free markets…but there are very few people, even among economists, who understand why the free market solves so many intractable problems and performs so many near miracles.

“The market does this because it reflects and responds to everybody’s demand and to everybody’s supply, and it reflects to some extent everybody’s expectations regarding the future. This means that it makes the maximum use of everybody’s knowledge, and not merely the knowledge of a handful of officials. It reflects this knowledge by constant daily changes in prices of individual commodities and services. These price changes are daily directing production out of this commodity and into that, reducing surpluses and relieving shortages.”

And that includes the price of money, i.e., interest rates. 

“The market does not fulfill this function perfectly, because everyone’s knowledge is limited and subject to error; and these errors do not necessarily cancel each other. But the market is constantly and quickly correcting these errors. It works incomparably better in maximizing and properly directing incentives than any other imaginable system.

“Only when this truth is sufficiently recognized by the public will the free market be restored.” 

Wed, 01/07/2015 - 18:37 | 5634774 Lostinfortwalton
Lostinfortwalton's picture

So after twelve people are butchered in Paris by his fellow Islamists this asshole goes on a photo op to a closed car factory?

Wed, 01/07/2015 - 18:46 | 5634812 OV61FVF
OV61FVF's picture

"Change you got sucked into."

Wed, 01/07/2015 - 18:46 | 5634816 JamaicaJim
JamaicaJim's picture

We air black bagged some folks............

Wed, 01/07/2015 - 18:52 | 5634840 Bangalore Torpedo
Bangalore Torpedo's picture

This quote spoke to me: "credit is the bridge between work and play"

Let me modify it slightly so Idiot America can get it: "Credit is the bridge between no work and bankruptcy."

Wed, 01/07/2015 - 18:54 | 5634844 LawsofPhysics
LawsofPhysics's picture

Yes, because subprime has worked out so well for us in the past.

Wed, 01/07/2015 - 19:12 | 5634896 Barnaby
Barnaby's picture

Slaves haven't been invented yet. Credit is escapable, for now!

Wed, 01/07/2015 - 19:24 | 5634941 JR
JR's picture

Or do it like they do in the city of London. Charge a big fee for driving a private auto in the city's central area. That’s why you see so many expensive Mercedes, Lamborghinis, Ferraris, Bugattis and Audi R8s "clogging" the streets; the fee not only reduces traffic congestion, it keeps out the VW riff raff.

Wed, 01/07/2015 - 19:04 | 5634868 yellowsub
yellowsub's picture

If you want them to buy cars, at least create jobs for them to drive to.

Wed, 01/07/2015 - 20:24 | 5635141 The9thDoctor
The9thDoctor's picture

I look at it from the other direction.

The reason why these people need subprime car loans, is so they can drive their car to their shit job that pays $8 nothing an hour.

Wed, 01/07/2015 - 19:05 | 5634873 Last of the Mid...
Last of the Middle Class's picture

As prices rise as a result of infinite printing, simply lower the down payment requirement for large purchases. What could possibly go wrong?  Shitttttt what a dumbass

Wed, 01/07/2015 - 19:15 | 5634875 ThroxxOfVron
ThroxxOfVron's picture

" 3% down FHA loans "

ONLY $15K down to get a loan on a $500K house!

IF the Borrower defaults the very first month wouldn't the FHA be fucked for at least 4 or 5% since a R.E. Agent gets 6% to resell -and that is after unpaid property taxes and the legal fees incurred taking the Borrower to court to kick them out are paid?

Using the same $500K house price as a basis: the FHA is very likely down at least $25K on day one if the Borrower flops on the loan immediately after closing and moving in...

I'm sure glad the super-smart ivy league 'Folks' running the govenment learned so much from that crisis on 6 years ago!

Not that housing ever corrects by 8 or 10% nationally let alone locally.

IF it did the FHA might end up needing a seriously huge Fannie/Freddie stylee bailout!

Wed, 01/07/2015 - 20:30 | 5635157 The9thDoctor
The9thDoctor's picture

ONLY $15K down to get a loan on a $500K house!

Most Americans don't have $15,000 to put down!

Wasn't there an article on Drudge Report a couple of months back that most Americans only have $600 in savings.

$15,000 is a fortune for most people out there.

The median salary is $29,000 a year.  With rent, insurance, groceries, child care, etc. $15,000 down is quite a feat.

Wed, 01/07/2015 - 19:09 | 5634888 eclipse001
eclipse001's picture

Collateral based lending when you know the collateral value sinks like a stone!  What was learned from 2008?  Shampoo bottle instructions:  "Lather, Rinse, Repeat"  

Wed, 01/07/2015 - 20:11 | 5635105 Lumberjack
Lumberjack's picture

We clunkered some folks...

Wed, 01/07/2015 - 20:23 | 5635136 QQQBall
QQQBall's picture

There are a shit load of shiny new cars on the road and each driver thumbs their nose at my PIF beater. Now, I have to smog test my car every year which is bascially a "Used Car Tax." If i buy a new one, they get higher annual registration fees, sales tax, etc. Fuck the Matrix!

Wed, 01/07/2015 - 20:23 | 5635137 world_debt_slave
world_debt_slave's picture

who are these "folks" always spoken of?

Wed, 01/07/2015 - 21:38 | 5635335 Rakshas
Rakshas's picture

.... I think they - folks - are the people living in thier cars..... or the people we drone..... or the people we gas..... or the people whose countries we destroy..... or the...ummmmm..... I think generally Folks as used by the hemorrhoid-in-chief refers to anybody not an elitist and at very high risk of being fucked, bombed, burned or hideously mangled in some fashion or another...... 

Wed, 01/07/2015 - 21:43 | 5635344 Norm Alcybias
Norm Alcybias's picture

ObamaCar, fits in with that health care thingy

Wed, 01/07/2015 - 21:46 | 5635361 Bumbu Sauce
Bumbu Sauce's picture

Once you dispense with all presuppositions that Obama wants anything positive to happen to the American people, then the intent of this kind of silliness shines through crystal clear.

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