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Atlanta Fed Q3 GDP Forecast Doubles Thanks To Subprime Auto Loans
Thanks to the economic miracle of offering cheap money to the least creditworthy of society, The Atlanta Fed just increased its forecast for Q3 GDP from +0.7% to +1.3% - though this is still less than half consensus estimates. The driver of this 'almost doubling' was due to a 15.3% increase in seasonally adjusted motor vehicle assemblies in July stuffing inventories even fuller. Of course, as we previously noted, this is entirely unsustainable and we await the mean-reversion in August and September.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.3 percent on August 18, up from 0.7 percent on August 13. The forecast for real GDP growth increased from 0.7 percent to 1.2 percent after Friday's industrial production release from the Federal Reserve. Most of this increase was due to a 15.3 percent increase in seasonally adjusted motor vehicle assemblies in July that boosted the forecast of the contribution of real inventory investment to third-quarter GDP growth from -2.2 percentage points to -1.8 percentage points.
But as we showed previously, this is simply unsustainable as automakers face a massive inventory already...
Automakers just unleashed a massive production surge to keep the dream alive...
With inventories at record highs (having risen for 61 straight months)...
Which would be fine if sales were keeping up - but they are not...
And now the subprime auto loan market is set to collapse...
To sum up...
- The only way automakers are making sales is by lowering credit standards to truly mind-numbing levels.... that cannot last.
- China's economic collapse has crushed sales forecasts for the automakers.
- Inventories are already at record highs.
- And July saw a massive surge in producton.
* * *
What comes next is simple... a production slump.. and we look forward to checing back with The Atlanta Fed as that data hits their forecast...
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Double your pleasure in the short run, theses loans will end up huge loses as usual!
Holy shit!
The Soviets won after all now!
How long do I get to drive the new Government Motors car without paying before someone comes to take it away? This is nothing down, correct?
For a while, the repo men use license plate readers to find them coupled with DMV data bases. So 1) keep changing your plate, 2) do not live where it says you do on your license. You should be able to dodge them for years. Can't wait to get that Tacoma on the Cheap once this implodes.
Seems like every Lakiesha, Tamika, and Jasmine in Houston is driving a new GMC Yukon.
Just a matter of time, now, before ObamaCar: Automobile Insurance Subsidized Hope Act.
Ain’t got no job
Aint’ got no life
Hooked on ‘dem drugs
Just lost my wife.
But I don’t despair
I got state aid
And now to boot
A new Escalade
Shouldn't that be the Automobile Subsidized Hope Insurance Act or "Au SHIaT"
Just have faith in the newest new 5 (7?) Year Plan, comrade. The Golden Age of the Proletariat is nigh!
Of course they are assuming that loans will actually be made and don't even worry about them being paid off......
Subprime auto loans spoken in pig latin is ...... ucked fa
unsustainable? what about "untrue"?
they can make up whatever BS seasonally adjusted number they want. like someone wasn't going to give the Atlanta FED a tap on the shoulder to stop this nonsense of zero GDP growth forecasts...
seasonally adjusted-whats the real number. there are so many variables nobody knows the answer, but at least they =keep peopl eemployed.
also, how are auto sales to govt holding up? Mount a few M-60's in pick up trucks and we can really see an increase in sales.
Uber drivers with subprime credit get a loan with monthly car payments deducted straight from their paychecks.
http://valleywag.gawker.com/uber-and-its-shady-partners-are-pushing-drivers-into-su-1649936785
What paychecks?
why can't i get a mortgage for $750,000 on my 56000 income?
because you are a corporate whore
If my local Ford dealer (the Chevy dealer is gone in 08) is any indication, I can't see any blank parking spaces left in the lot. They are now resorting to moving the trucks out closer to the freeway in the grass with the hoods up and the hazard lights flashing and ballons tied on the antenae so you can see them better I guess.
I personally just go on collecting the Rock Auto refrig magnets. got a bunch :7)
Disclaimer: 01 Dodge cummins for pulling cattle, 96 Thunderbird Super Coupe just cause I like it), 56 Cadillac garage queen and an 07 Cobalt for quick town runs and a few farm type 1.5-2 ton grain trucks from the 70s in various states of disrepair.
Newest car on my lot is now 8 years old and I have either extra whole cars or engines for all but the thowaway/ disposable Cobalt.
good luck selling one of those POS to me.
dealers by me are parking them in multiple lots, usually in abandoned retail lots just down the road. never seen it before.
I guess technically they can sell the cars to insurance companies as write offs if teens come and damage them.
I hear there are big car sales at Tianjin to insurance.
- I.G. Farben
- Standard Oil
- Union Bank Company
War corporations know how to make sales.
I wonder if anyone checks the insurance write offs for the material shipped to China...
Where were you in 2007 ?
Same here in Florida, new cars being put anywhere there's room.
Build and they will come doesn't seem to be working, again.
Lower the price. Too expensive.
C'mon man, try some debt, everybody's doing it
http://www.reuters.com/article/2015/08/18/us-ford-investigation-russia-i...
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Dear SEC, FUCK YOU. You failed to look into channel stuffing by GM et.al., among other very criminal actions by many of your revolving door cronies. I think that NANEX has something far more inportant for you that needs immediate attention and has to be dealt with immediately. You stupid, bought off, crooked fucking cocksuckers need to be taken out behind the wood shed with your cronies and...
Jesus H Fucking Christ on a Pogo Stick, investigating Ford for bribes in Russia?
Ain't noting happens in Russia without bribes, for fucks sake.
Hang some bankers hows about? Assholes ..... We're surrounded and led by assholes.
Around here it's called donations to the Clinton Foundation.
Bribe or high treason ?
Bribe
High Treason
http://www.reuters.com/article/2015/08/18/us-bny-mellon-sec-corruption-i...
Bank of New York Mellon Corp (BK.N) will pay $14.8 million to settle U.S. civil charges it gave internships to family members of officials linked to a Middle Eastern sovereign wealth fund, violating federal bribery laws.
The settlement by the U.S. Securities and Exchange Commission marked the first time regulators had charged a bank for violating the Foreign Corrupt Practices Act, which prohibits paying bribes to foreign officials.
It followed a 2011 industrywide sweep, undertaken as part of a broader foreign bribery probe, in which the SEC sought information about financial institutions' business dealings with state-owned investment funds.
The BNY Mellon case is also the first foreign bribery enforcement action in which internships, as opposed to cash, constituted the alleged bribe, SEC enforcement director Andrew Ceresney said.
Other banks including JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc (GS.N) and Deutsche Bank AG (DBKGn.DE) have also been investigated over whether their hiring practices violated the foreign bribery statute.
...given a 10 million dollar bonus, job at (insert name here), and a pardon with a wink and a pat on the back. /Sx10^50.
Where /S = Sarcasm.
When the price of a new car drops like the price of Silver, maybe then I will take a look. Other than that, screw them, I'll walk if I have too.
Well, if the FED says that Q3 GDP will rise, then you can take that to the bank. There is no way they would hand out a steaming pile of bullshit to the public to serve political ends.
This is a good thing. The average American is going to need that car to live in and raise a family.
Growth driven on the backs of cheaper labor costs.
What's the temperature of the frog in the broiler?
Can I have a 20 year auto loan at 0%?
Looks as though an interest rate rise is a go
Come again?
Looks as though an interest rate rise is a go
Looks as though an interest rate rise is a go
Looks as though an interest rate rise is a go
Apology for multiple posts...accident
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The Amount of Auto Debt in the U.S. Has Surged Past $1 Trillion
http://www.bloomberg.com/news/articles/2015-08-13/auto-debt-surpasses-1-...
Losses On Subprime Auto Bonds Reached 6.6% Last Month
http://www.bloomberg.com/news/articles/2015-08-11/here-s-one-sign-of-tro...
If the real data won't give you cover to raise rates - then invent your own!
Cash for clunkers... We just need to "adjust" the definition of a clunker. Anything older than 2010.
So what are they counting? Sub-prime auto loans, toilet paper, iPhone sales and what else?