This page has been archived and commenting is disabled.

Consumer Credit Jumps By Most In 10 Years On Surge In Car Loans

Tyler Durden's picture





 

What happens when consumer savings plunge to year lows, when a major shopping holiday is just around the corner, and when every TV station tells you to spend, spend, spend for Thanksgiving just to show your friends and family you care for them? Why people go out and buy on credit of course. Lots of credit. As the just released G.19, aka Consumer Credit, data from the Fed indicates, in November US households borrowed a 10 year high amount of $20.4 billion. Of course, reading between the lines confirms that all is as usual not as it seems, and not to conclude that the money multiplier model is back in action. Because of the $20 billion, only $5.6 billion was revolving credit, with the bulk in cheap Subprime loans funded by the government for purchases of GM vehicles and student loans. Granted even so the revolving credit jump was the biggest since February 2008, when deleveraging was the last thing on consumers' minds. So are consumers relevering again? And if so are they doing so because they are confident the economy is improving? We doubt it, and we are fairly confident December data will be quite different and will show a notable reversal when effecting for all the record merchandize returns following the early Thanksgiving retail splurge. Judging by the market's non-reaction to this news, it seems to agree. Because if it didn't it would also means that it is about time for the Fed to start tightening: and if there is one thing that would guarantee a 30% instantaneous correction it is the mere whisper that the Fed needs to withdraw some of its $1.7 trillion in excess liquidity out of the system.

Consumer credit: revolving and non-revolving.

Consumer credit by source:

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 01/09/2012 - 16:34 | Link to Comment Gully Foyle
Gully Foyle's picture

Must be Volt sales

Mon, 01/09/2012 - 17:00 | Link to Comment Midas touchmenot
Midas touchmenot's picture

nice consumers consuming as opposed to obama.

Mon, 01/09/2012 - 17:03 | Link to Comment trav7777
trav7777's picture

yay!  more credit!!!!

Mon, 01/09/2012 - 17:13 | Link to Comment Sudden Debt
Sudden Debt's picture

The repo man is going to be buzzzzzzzzzyyyyiaaaahh the comming months!

Mon, 01/09/2012 - 17:47 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Because of the $20 billion, only $5.6 billion was revolving credit, with the bulk in cheap Subprime loans funded by the government for purchases of GM vehicles and student loans.....

I respectfully disagree with this statement. 

First of all, just because GM was bailed out and then purchased AmeriCredit does not mean that the US government funds consumer purchases through GM - that's a gigantic leap.  Using this flawed logic, you must also say that Eric Sprott was bailed out by the US government since he used HSBC to help underwrite PSLV, and HSBC benefited by over $3B through the backdoor AIG bailout.  In both instances, the dots are close by, but not connectable.  

Second, there is no proof provided that the "bulk" of credit was "cheap subprime loans funded by the government."  Only the smallest percentage of car sales nationwide are funded through AmeriCredit.

Thrid, if someone would do some forensics on AmeriCredit's portfolio, you'd find that the vast majority of their portfolio is NOT GM.  They fund for all manufacturers and most dealers in the United States.  Paper from GM is just a small fraction of their outstanding loans.

Fourth, some empirical data is necessary to prove that the majority of GM subprime paper is being sent to AmeriCredit.  In truth, it is not.  GM dealers send subprime paper to a wide variety of lenders.  In fact, GM dealers avoid AmeriCredit because they require Proof of Income on absolutely every deal. Many other lenders do not.

I'm not trying to be a jackass, but I think it's important if readers disagree with a post that they can make a respectful counterpoint.  I'll be the first to admit that I thoroughly enjoy this site, whether I agree with stuff or not.   

Max Fischer, Civis Mundi

Mon, 01/09/2012 - 21:48 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Well put. But...... WTF are they buying then with all that credit? Guns for Fast and Furious, drones, Guy Fawkes masks? I'm more worried that it isn't GM cars, because that means there are even more GM's just sitting around unsold. So, what are they buying?

Tue, 01/10/2012 - 02:10 | Link to Comment AustriAnnie
AustriAnnie's picture

Yet, per the document, "Federal Government" amount held of nonrevolving is listed.  

The fact that the loan amounts are increasing and that the Federal gov't is the holder seems fairly straightforward.  I'm not sure the focus on Americredit? 

Also, I think that whether the loan went to a GM car or a useless degree or a vacation to Cancun doesn't make as much of a difference, given the state of the average American's ability-to-repay what was borrowed.  Given the various choices, one can only hope they chose the car over the useless degree or the vacation, since they can at least use the car to get to a job interview...

 

(*With nonrevolving definition as:

"Includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers, or vacations. These loans may be

secured or unsecured.")

 

Mon, 01/09/2012 - 19:03 | Link to Comment NumberNone
NumberNone's picture

Obama can now hold his extravagant parties in the open.  No need to hide when apparently none of us give a shit about debt!

http://www.telegraph.co.uk/news/worldnews/barackobama/9001133/White-House-covered-up-Tim-Burton-staged-Alice-in-Wonderland-Halloween-party.html 

Tue, 01/10/2012 - 00:46 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I know a highly irresponsible 29 year old who just signed a 24 month lease on a Cadillac CTS with a MSRP of around 40k for nothing down (not even first month payment or security deposit due at signing) for $278 per month OTD (tax included).

He only had to pay a plate/tag transfer fee and tax on the rebates at signing, which amounted to under $400.

The reason I know this is I have him do some work from time to time out of loyalty that I owe to his cousin, who has been a great friend of mine.

The kicker is that this 29 year old's FICO score is less than 550. This, I shit you not.

 

The Bernank's got the joint jumpin', thumpin', pumpin'.

It will all end very badly.

Mon, 01/09/2012 - 20:32 | Link to Comment Mareka
Mareka's picture

If only there were a way to transfer the coming losses on piles of subprime auto loans to taxpayers then the criminals who wrote them could avoid taking any losses.

If only they could be rolled into marketable securities and sold to pension funds like subprime mortgages.

Wait!  It's already in the works. 

The Hagan Corker Covered Bond Bill allows for bundling of auto loans, credit card debt and student loans into marketable securities to be insured by... wait for it... The FDIC.

Once again our senators are thinking outside the box & only with your best interest in mind.

See the bill here.   http://www.hagan.senate.gov/files/111109_CoveredBond_BillText.pdf

Who gets to decide what can go into these bonds?  It is at the sole discetion of the Secretary of the Treasury.

Read it and weep. 

So far the FDIC is stating that it has some "concerns".  See where it goes.

 

Tue, 01/10/2012 - 08:02 | Link to Comment Mareka
Mareka's picture

Morning Rant.

It makes me madder than hell that I've been over paying for everything for the last 30 years.

When I go to buy a car I am writing a $30K check to transfer savings out of a bank account but the price of the car is determined in a market where I am competing for all goods with anyone willing to scribble their name on a contract.  In this environment prices are driven by the lowest common denominator, the least educated & most irresponsible. 

Here is an example of how out of whack things are.  I know a man who's family is disposing of all of his assets so he can get decent health care.... Not to PAY for health care.  They need him to qualify as poor, < $2,000 total assets because if he has any wealth he is on his own.

The Bankstas have built the worlds most comprehensive wealth extraction machine ever devised and we have all been herded into the milking barn.

OK I feel a little better.

Mon, 01/09/2012 - 16:37 | Link to Comment lizzy36
lizzy36's picture

Turns out the solution to, too much debt is more debt.

Which mean Larry Summers was right http://www.zerohedge.com/news/quote-week.

Mon, 01/09/2012 - 16:37 | Link to Comment HoofHearted
HoofHearted's picture

I just defaulted on the credit card that I used to pay the old car's car payments, so I didn't have enough debt to patriotically help the US in its economic problems. So I corrected this by taking out a subprime loan on a brand new GM car. Thank you, Uncle Sam.

Love, U.S. Taxpayer

Mon, 01/09/2012 - 16:48 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Hey, "you owe it to yourself."

And, you owe it to yourself.

Mon, 01/09/2012 - 21:57 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

It's OK, we rolled the credit card, and loan on the old car into the new loan, is a 120 month car loan at 19.5%, which is good as long as you pay, and will just magically inflate itself away. Just sign and keep working and fighting you good little serf, and it's all going to be OK. We invested your pension in Chinese real estate, so we can't loose by just chasing gains. Goldman told us so, and if you can't trust your Sachs, what has the world come to?

Love, your Pedophile Uncle S(c)am

(He touched my PM's!)

Mon, 01/09/2012 - 16:40 | Link to Comment docj
docj's picture

Drinking ourselves sober.

Yeah, this will end well.

Mon, 01/09/2012 - 16:41 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

Could the car sales bump be because of the business depreciation benefit that was ending 12/31?

Mon, 01/09/2012 - 16:55 | Link to Comment Tortfeasor
Tortfeasor's picture

In my experience, people take out loans right before declaring bankruptcy.  Most common type?  

Auto loans. 

Mon, 01/09/2012 - 16:59 | Link to Comment CClarity
CClarity's picture

Prepare for car keys to be dropped off at dealers and banks again.  That went on aggressively before foreclosures on homes cascaded.

Mon, 01/09/2012 - 17:05 | Link to Comment economics1996
economics1996's picture

One last car before the bust.  

Mon, 01/09/2012 - 17:28 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

...or a get-outta-Dodge vehicle.

Mon, 01/09/2012 - 21:59 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

And the Budda said, "can you flee dodge in a Dodge?" 

Tue, 01/10/2012 - 02:23 | Link to Comment AustriAnnie
AustriAnnie's picture

Cars don't exempt people from entitlement programs.  And since loans can be had even with bad credit, you can default on your house, then buy the car.  Or buy the car then default on your house.  Either way, you get away with it.

Also, some people took out home equity lines of credit, used it to buy cars, knowing full well in this environment, nobody would even blink when they later walk away from the house, er drive away from the house in their brand new SUV.

Mon, 01/09/2012 - 16:42 | Link to Comment karzai_luver
karzai_luver's picture

american consumers must buy  and best on credit , it's the american way and it will be either this or the country will be consumed in fire as the american drugged consumer will lash out if not allowed to consume consume consume.

SOLD to you bitchez!

 

 

 

Mon, 01/09/2012 - 16:53 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

One of my favorite shows on tv is Pawn Stars...obviously a big hit with many....BUT...the fact that got me and it's an obvious one too is the reason for Pawn shops in general throughout history WAS BECAUSE WE HAD NO CREDIT CARDS BEFORE....IF YOU NEEDED CREDIT YOU GO PAWN SOMETHING.....That is how it was in the 1st depression.....

 

Thus the 3 ball symbol of Pawn shops....when people couldnt read how could you tell it's a pawn shop??? the 3 ball symbol.

And, literacy was not common back 100 years ago...GO TO ANCESTRY.COM or try to pull up a census from late 19th century....

 

1.) CAN YOU READ?

2.) CAN YOU WRITE?

Interesting as hell....you had two boxes on the top of the form that the person taking the information had to check...obviously it was a person taking the info since not many could read or write.....CHECK IT OUT...IT'S CRAZY. So interesting. I checked my families and they could read and write....but quite a few could not do either!!! But, that could mean English instead of any language too.....So many obviously were fresh off the boat so they could speak German or Spanish but not English...dunno....it could mean English and that would make sense....You know German but not English...??

 

seriously....intersting.

Mon, 01/09/2012 - 17:18 | Link to Comment CvlDobd
CvlDobd's picture

Strange. I can read and write yet I have no idea what you just tried to say.

Mon, 01/09/2012 - 19:05 | Link to Comment MobBarley
MobBarley's picture

I think they just said that DO YOU HAVE ANOTHER ROCK?

 

Mon, 01/09/2012 - 17:19 | Link to Comment trav7777
trav7777's picture

credit with collateral...what a concept

Mon, 01/09/2012 - 22:01 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

The original rehypothecation

Mon, 01/09/2012 - 22:06 | Link to Comment JohnG
JohnG's picture

 

 

It is interesting.  I've done quite a bit of genealogic research on my forebears, and this makes some of that hard.  People knew thier names, but not how to spell them.  So it was up to the census worker, on back to the ensign filling out the ships manifest to "guess" how to spell the name.

Then, it get's even worse if you go to say, Scotland in my case on one side, and start getting names in Gaelic.

Quite a puzzle to unravel.  I've managed to trace back to a guy in Scotland in 1346, but not past that.  It was seriously difficult and took hunting around in document rooms in ancient churches to get that far.

It's a little easier in England on the other side, but not much.  Spelling, that seems to be the key.

Mon, 01/09/2012 - 16:43 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

"IT'S ALL ABOUT A SALARY AND NOT ABOUT REALITY...REALITY"...NWA

 

KEEPING UP WITH THE JONESES....(OR OBAMAS).....

Mon, 01/09/2012 - 16:49 | Link to Comment Bolweevil
Bolweevil's picture

Cash Credit Rules Everything Around Me

Mon, 01/09/2012 - 16:57 | Link to Comment I Got Worms
I Got Worms's picture

Bankstaz, bankstaz...

Mon, 01/09/2012 - 16:43 | Link to Comment Lothar the Rott...
Lothar the Rottweiler's picture

Relax, it was just everyone charging their Thanksgiving turkeys and Christmas hams on the 'ole Visa/MC/Discover.

Mon, 01/09/2012 - 16:44 | Link to Comment Snakeeyes
Snakeeyes's picture

Yup, we are addicted to debt. This is BAD news in that consumers didn't learn anything from the credit bubble and crash.

Mon, 01/09/2012 - 16:56 | Link to Comment Irish66
Irish66's picture

I take it you guys don't do the grocery shopping!  Everyone in line is either credit card or snap.

Women are trying to feed their families

Mon, 01/09/2012 - 17:35 | Link to Comment ucsbcanuck
ucsbcanuck's picture

I'm on credit card, but pay my bill at the end of every month. That way I get the points and don't have to carry a wad of cash around and don't pay ridiculous amounts of penalties

Mon, 01/09/2012 - 21:09 | Link to Comment DosZap
DosZap's picture

Snakeeyes

Bud, it's like this.......for  my entire adult life,every recession we have had that was over a year.

Americans will stop/slow discretionary spending to crawl.

After 18 months, they can no longer deprive themselves of that THING.No matter what it is, or if they really need it.

My money is on 85% of Americans have ZERO clue as to what is going on for real.

And, would not understand it if they did.

BORN to shop............is ingrained in every Americans psyche.

It has been this way since the late 70's. It's a cycle...................an addiction.

Mon, 01/09/2012 - 16:47 | Link to Comment papaswamp
papaswamp's picture

So much for deleveraging....back to 2006-2007 we go. So I guess we will see an increase in defaults by April-May? Just in time for QE3 to be launched.

Mon, 01/09/2012 - 16:47 | Link to Comment chump666
chump666's picture

well done obama.  you were able to credit flowing again.  problem is....so will the defaults.  now you bail out wall street again say prior to elections you might as well back your sh*t  up and move to Greece.  the voter backlash will be brutal.  and there is a very good chance once china crashes wall street will get decimated.  could happen in the next 6mths

Tue, 01/10/2012 - 01:09 | Link to Comment StychoKiller
StychoKiller's picture

Decimation (Latin: decimatio; decem = "ten") was a form of military discipline used by officers in the Roman Army to punish mutinous or cowardly soldiers. The word decimation is derived from Latin meaning "removal of a tenth".

Most people use decimation when they really mean:

Devastation - Bringing to ruin or desolation by violent actions.

Mon, 01/09/2012 - 16:48 | Link to Comment Shizzmoney
Shizzmoney's picture

Dad bought his car on loan from TD bank.  He's a cop, so they obviously snap-called it in for him, but a few banks actually declined.

I'm probably one of the few PAYNG down debt.  I, unlike most of my Millenial friends, will be debt free and in the "Life Black" by the end of the year.

Mon, 01/09/2012 - 16:56 | Link to Comment RichardENixon
RichardENixon's picture

Well if you're a taxpayer, you will likely end up paying down your friends' debt as well.

Mon, 01/09/2012 - 17:09 | Link to Comment pine_marten
pine_marten's picture

Not taking on any additional debt is also many peeps wish.  Don't reckon I'll ever finance another vehicle.

Mon, 01/09/2012 - 17:16 | Link to Comment MachoMan
MachoMan's picture

Timing is a fool's errand.  Those planning on spending til they bust are making a timing decision.  If timed incorrectly, then there can be a lot of pain between here and the jubilee...  not that deleveraging will necessarily avoid anything, it just provides a little more buffer for future biflationary pressures.

Mon, 01/09/2012 - 19:21 | Link to Comment lotsoffun
lotsoffun's picture

macho man - unfortunately - i'm afraid you are wrong.  they aren't making any decisions at all - they are doing as told - buying things they can't afford with money they don't have (for things they don't need).  there is no tomorrow for them.  and was there no past.  it's only to buy and have it today.  that's the power of advertising via TV.  now.  you want it now, have it now, take it now. 

what was the downside for any of these people?  tell me?  yesterday they had nothing, and today they have flat panels in every room.  and haven't and won't ever pay for it.

you and me - if you have a job, pay taxes and have savings will simply see all of that erode and disappear.

just the way it is.

 

Tue, 01/10/2012 - 11:12 | Link to Comment MachoMan
MachoMan's picture

See post below for expansion.

Mon, 01/09/2012 - 16:48 | Link to Comment fbrothers
fbrothers's picture

It appears the banks have started buying garbage loans again. Got to have another bailout from taxpayers. QE3 coming even if employment rate 4.5%.

Mon, 01/09/2012 - 16:48 | Link to Comment non_anon
non_anon's picture

just following the example of our Dear Leader

Mon, 01/09/2012 - 16:48 | Link to Comment chump666
chump666's picture

meantime we await Aloca earnings...could be very crap

Mon, 01/09/2012 - 16:57 | Link to Comment papaswamp
Mon, 01/09/2012 - 17:03 | Link to Comment Randall Cabot
Randall Cabot's picture

Bullish

Mon, 01/09/2012 - 19:07 | Link to Comment MobBarley
MobBarley's picture

Oh this is bullish on flouride then.

Have to make aluminum to have waste flouride to sell

to municipalities as cavity preventative and frontal

lobe neuron de-louser.

 

 

Mon, 01/09/2012 - 17:18 | Link to Comment chump666
chump666's picture

and it is crap.  nice.  credit expansion - commodities crunch = fubar

Mon, 01/09/2012 - 17:25 | Link to Comment SheepDog-One
SheepDog-One's picture

Alcoa 3 cents short on earnings, margins in the crapper.

Should be good for +100 futures pop? 

Tue, 01/10/2012 - 01:12 | Link to Comment StychoKiller
StychoKiller's picture

Dow component Alcoa reported a loss from continuing operations, excluding items, of $34 million, or 3 cents a share, on revenue of $5.99 billion for the fourth quarter. The aluminum-products maker lost $193 million, or 19 cents a share, in the quarter on a continuing operations basis.

Mon, 01/09/2012 - 16:49 | Link to Comment alien-IQ
alien-IQ's picture

When people buying shit they don't need with money they ain't got is perceived to be a "good thing" for the economy...you know we've become a nation of consumer gerbils.

More credit = more defaults. It's that simple.

Mon, 01/09/2012 - 16:57 | Link to Comment angelsand
angelsand's picture

This time will be different

Mon, 01/09/2012 - 17:03 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

it always is....lol....

Mon, 01/09/2012 - 17:10 | Link to Comment alien-IQ
alien-IQ's picture

"I promise this time I'll pull out" said the father of six unplanned children....

Mon, 01/09/2012 - 16:51 | Link to Comment flacorps
flacorps's picture

If they can get car sales going they'll be able to help China out by letting in Geely, BYD and Chery. Oops, that'll kill GM, Ford and Chrysler. These things get SO complicated!

Mon, 01/09/2012 - 22:05 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

To sell GM too! Then the chinese bail out GM with all those T-bills, and BAM, US deficit is at 0%. Someone call Obama, we're on a roll here. 

Mon, 01/09/2012 - 16:51 | Link to Comment Schmuck Raker
Schmuck Raker's picture

On a non-seasonally adjusted basis,

Three Quarters of the increase in non-revolving debt is owed to...the US Government. -yay-

Mon, 01/09/2012 - 16:56 | Link to Comment Excursionist
Excursionist's picture

I have a sister-in-law who, together with her husband, grosses about $120k per year.  They have filed for personal bankruptcy twice in the last ten years, and both times she promised to find religion in this respect.  Now, they're again in credit card purgatory with more than $10k carrying over month to month.  Neither she nor her husband could be qualified as 'dumb', yet their actions speak to the contrary.  Income aside, I'd say they are a typical suburban household, representative of the American norm.

If truly representative, then I'm beginning to wonder whether there's something in the water here in the U.S. to make the majority act like nomadic neanderthals circa 100,000 B.C., maximizing the today because there's no tomorrow.

Mon, 01/09/2012 - 17:00 | Link to Comment Tortfeasor
Tortfeasor's picture

For the sake of sanity, direct them to daveramsey.com

 

Mon, 01/09/2012 - 22:08 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Only if it has electrolytes

Mon, 01/09/2012 - 17:07 | Link to Comment karzai_luver
karzai_luver's picture

It has to be a hollow inside, that's the only reason I can think of.

No sane person with any self respect would function that way all else being equal.

sad.

 

Mon, 01/09/2012 - 17:24 | Link to Comment MachoMan
MachoMan's picture

Not really, this type of behavior is only curbed when forced.  (hence the deleveraging to date has only materially been "forced" deleveraging rather than voluntary).  When they spend til they blow up and then file BK and can get credit easily again, why should they gain "religion"?

The thing that they're not counting on is the availability of credit post jubilee and when the decline overshoots and growth can be had again...  they'll be left in the cold, given their prior transgressions will be permanent fixtures in their consumption file...  aside from the fact that credit gets pulled for scratching your ass anymore...  trying to get a job?  2 BKs in the last 10 years won't help...

The "hollow inside" is simply the manifestation of an unmonitored existence.  Ultimately, it's born of the nanny state.  They're just different ninnies than many (although having similar characteristics).

Kudos for gaming the system from the small fish side, but like all gamblers, I doubt they know when to quit.

Mon, 01/09/2012 - 21:15 | Link to Comment DanDaley
DanDaley's picture

It's a character issue, no offense.  Been there, and done that, but when I finally started listening to what my parents (who lived through the 1st depression) told, then things got better.

Mon, 01/09/2012 - 17:08 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

There is something in the water - flouride.

Mon, 01/09/2012 - 17:11 | Link to Comment object_orient
object_orient's picture

By chance, are they both government employees?

Mon, 01/09/2012 - 17:18 | Link to Comment Poetic injustice
Poetic injustice's picture

First credit card humans maxed out was Africa, once the greenest continent on Earth.

Mon, 01/09/2012 - 16:55 | Link to Comment hmmmstrange
hmmmstrange's picture

Is GM offering 120% "stated income" loans net?

Mon, 01/09/2012 - 17:01 | Link to Comment Tortfeasor
Tortfeasor's picture

If you consider loan-to-value, they have done that for decades.

Mon, 01/09/2012 - 17:08 | Link to Comment karzai_luver
karzai_luver's picture

Yep, zero down cash back no pay for 3 months, you start the thing you are underwater.

idiots.

 

Mon, 01/09/2012 - 19:12 | Link to Comment lotsoffun
lotsoffun's picture

smarter than i am.  but i have savings - and that they could take.  obama doesn't care if they ever pay it back, as long as they are living LARGE and voting for him.

 

Mon, 01/09/2012 - 17:25 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

And they don't do loan-to-value on student loans because ya can't divide by zero.

Mon, 01/09/2012 - 17:00 | Link to Comment kito
kito's picture

"What's in your wallet?"

Mon, 01/09/2012 - 22:09 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Fiat! I got free fiat with my Fiat!

Mon, 01/09/2012 - 17:02 | Link to Comment Whoa Dammit
Whoa Dammit's picture

In Atlanta's alledgely well off northern 'burbs, I'm not seeing people driving new cars. The dealer drive out tags I am seeing are mostly on small older used cars.

When I go grocery shopping, my 10 year old car is generally one of the newer nicer vehicles in the parking lot. And about 15% of the cars in the parking lot are bashed up from minor accidents that have not been repaired.

Mon, 01/09/2012 - 17:31 | Link to Comment MachoMan
MachoMan's picture

Noticing a lot of this too...  basically people have increased their deductibles for cheaper insurance premiums, get in a wreck that's at or below their deductible, and don't have the wherewithal to pay for the hickey or, alternatively, it's cheaper to not file a claim considering the probable increase in premiums.

Of course, the neat thing about it...  these are generally only aesthetic issues with the automobiles...  so people are at least, in part, playing triage well.  The problem is that if there is any extra money, it's just wasted on some other consumer nonsense.  The whole "i'm not paying my mortgage so i can buy another ipad" meme.

Mon, 01/09/2012 - 19:11 | Link to Comment MobBarley
MobBarley's picture

I'm welding up a giant rusty spiked 'Mad Max' steel cage around my vehicle

in anticipation of all the free bumper car action to be had on american

roads in the coming years. Gonna find me a genuine cattle catcher

at a scrap yard and put than on too.

 

 

Tue, 01/10/2012 - 11:18 | Link to Comment MachoMan
MachoMan's picture

If you were in the south, you would have already done this...  although, it would sport a lift kit, "blinged out rims," and incredibly dark tinted windows...  probably with an "in loving memory of" or "insert brand logo here" (possibly with calvin peeing on it) stenciled on the back glass.

Get with the program.

Mon, 01/09/2012 - 17:02 | Link to Comment Dick Darlington
Dick Darlington's picture

So whaddaya do when you're maxed out, out of job and underwater on your mortgage? Well u buy a car of course to make u feel better. And maybe some chinese trinkets with that shiny new nth credit card coz the company was so nice to send u a prefilled card application.

And this my friends was a chapter from the Ben's fairytale eCONomics part 1. (cowritten with Timmayyy)

Mon, 01/09/2012 - 17:06 | Link to Comment STP
STP's picture

I saw a news segment on car sales on the local Los Angeles NBC affiliate and the clip showed an interview at a car dealer, with an obviously 'inner-city' woman who just purchased a new car: "I just gots me a job and now I'm getting a car"....

Meanwhile at the Aerospace plant, I'm seeing a whole lot less 'paper plates' than I used to in years past.

Mon, 01/09/2012 - 17:07 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Lots of people buying new cars (and used houses) before bailing on their existing mortgage.

Mon, 01/09/2012 - 17:08 | Link to Comment HarryM
HarryM's picture

Well let's hope they bought cars which were made primarily in the USA , as opposed to buying Made in China crap being sold at a loss by the stores.

Mon, 01/09/2012 - 17:33 | Link to Comment MachoMan
MachoMan's picture

It's not like GM is going to keep from offshoring jobs...  and, further, most of the popular foreign cars are made here anyway...  for the most part.

Mon, 01/09/2012 - 17:13 | Link to Comment taniquetil
taniquetil's picture

Debt-spending is bullish right?

Mon, 01/09/2012 - 17:15 | Link to Comment Dick Darlington
Dick Darlington's picture

That's what the Nobel prize winning eCONomist has been telling us so it must be true.

Mon, 01/09/2012 - 17:29 | Link to Comment Texas Ginslinger
Texas Ginslinger's picture

"Riskier Loans Make a Comeback, as Private Firms Take the Field"
http://online.wsj.com/article/SB10001424052702304793504576434221237511868.html

 

 "According to data from credit bureau Equifax, new credit card accounts to subprime borrowers, those with a credit score below 660, rose 64 percent in the past year to 5.4 million during the first half of 2011."http://www.loan.com/blog/2011/10/12/credit-card-lenders-look-to-subprime-borrowers-again/

 

"The number of new credit cards issued by banks this year has increased 25 percent, according to new data from credit bureau Equifax, but the number issued to subprime borrowers jumped 58 percent."http://moneyland.time.com/2011/10/14/yikes-the-rise-of-subprime-credit-cards/#ixzz1izxb9hdg

 

 "This move toward higher charges has pushed prime consumers out of the market and has predicated bank product strategy toward sub prime consumers."
http://www.pfsdebtrelief.com/blog/preferredfinancialservices/2011/09/20/sub-prime-lending-the-credit-card-market-2/

Mon, 01/09/2012 - 17:38 | Link to Comment ucsbcanuck
ucsbcanuck's picture

So the mistakes of the past have already been forgotten?

Mon, 01/09/2012 - 17:16 | Link to Comment bnbdnb
bnbdnb's picture

75% of new debt was non-revolving. Thats crazy high.

Mon, 01/09/2012 - 17:24 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

What?  Is deleveraging no longer in vogue?  I didn't get an e-mail...

Mon, 01/09/2012 - 17:26 | Link to Comment SheepDog-One
SheepDog-One's picture

'Car bubble'...LOL even worse than the stupid housing bubble because cars never go up in value. 

Mon, 01/09/2012 - 17:32 | Link to Comment mayhem_korner
Mon, 01/09/2012 - 17:52 | Link to Comment supafuckinmingster
supafuckinmingster's picture

Jeeeeezus that was one ugly automobile.

Mon, 01/09/2012 - 19:14 | Link to Comment MobBarley
MobBarley's picture

Even Nuns drive sexier cars than that.

 

Mon, 01/09/2012 - 20:12 | Link to Comment smiler03
smiler03's picture

Sorry, you're wrong. This is the genuine bubble car.

http://tiny.cc/k1f8s

http://en.wikipedia.org/wiki/Bubble_car

Mon, 01/09/2012 - 17:49 | Link to Comment sabra1
sabra1's picture

cars, it's what people are calling home now! if they were smart, they'd buy a van. more room for a mattress etc.

Mon, 01/09/2012 - 17:28 | Link to Comment Great Depressio...
Great Depression Trader's picture

Poor Rosenberg was so convinced that we would be in recession by 4th qtr 2011. Looks like the USS Ponzi will continue to steam along.

Mon, 01/09/2012 - 17:34 | Link to Comment andyupnorth
andyupnorth's picture

It really ticked me off when I found out last month that my province (Quebec) will start penalizing car owners whose cars are older than 8 years.  The government will start with mandatory, certified car inspections prior to the sale of an older used-car.  And then in a few years from now, there will be a mandatory annual certified car inspection for all cars that are 8 year or older.

I think that's just outrageous and opens the doors to corruption in the government "certified" inspection process.

Furthermore, why should those who take good care of their older car pay an annual penalty of several hundred dollars to prove that their car is in decent shape?

So the dummy that lets his/her 4 year-old car engine burn-out due to negligence and creates a traffic jam that lasts 4 hours doesn't pay any damages to the tens/hundreds of thousands of cars affected, but the good car owner who properly maintains his/her 8+ year old car has to pay an annual penalty?

Do the government think it's being "environmentally friendly" in pushing everyone to buy a new car every 7 years?  What a terrible waste!!

And won't carmakers cut costs through decreased reliability/durability due to their target of cars only lasting 8 years?   And won't car maker increase their car prices because of the government induced increase in demand?!?!

This whole thing makes my blood boil!!  And the lousy argument of "well, other provinces have been doing it for years" absolutely sucks!!

I say that the government can impose fines on the negligent car owners who cause traffic jams or have huge puffs of black smoke coming from their exhaust or a rust-eaten body that's about to fall off and cause an accident, rather than punishing those who love and maintain their old car.
[/end rant]

Mon, 01/09/2012 - 17:38 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

I can see why there is/was a strong secession movement in Quebec...

Mon, 01/09/2012 - 17:40 | Link to Comment ucsbcanuck
ucsbcanuck's picture

You do realize that Quebec's debt-to-GDP is approaching 100% right? If they seceded today, there would be a financial crisis overnight. And no doubt they would pull a France and try to deflect to the other provinces...

Mon, 01/09/2012 - 17:46 | Link to Comment sabra1
sabra1's picture

as a fellow quebecer myself, no matter the age of the car, when the total infrastructure is collapsing, literally, tis better to drive a wreck!

Mon, 01/09/2012 - 20:24 | Link to Comment smiler03
smiler03's picture

And then in a few years from now, there will be a mandatory annual certified car inspection for all cars that are 8 year or older.

The UK has had annual certified car inspections (MOT) since 1967, ie 45 years. They are compulsory for cars over 3 years old. Quebec must have death traps everywhere. Unbelievable.

Declaration: My car is 11 years old. If your car hasn't got this certificate it is impossible to insure or to pay "Vehicle Exise Tax", aka "Road Tax". Without all three of these, you're breaking the Law and it will cost you dearly. We have just about the safest roads in the world.

Mon, 01/09/2012 - 21:11 | Link to Comment DosZap
DosZap's picture

smiler03

Dude we have them yearly.

Mandatory.

Tue, 01/10/2012 - 11:23 | Link to Comment MachoMan
MachoMan's picture

and the number of pirates has decreased as global warming increased...

Mon, 01/09/2012 - 21:51 | Link to Comment gmak
gmak's picture

Tick tock. Tick tock.

Living inside a broken clock.

Mon, 01/09/2012 - 22:39 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

But what will Ricky and Julian do? Bubbles will be without his cart!

Mon, 01/09/2012 - 17:36 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

Pimp my bank-owned ride...

Mon, 01/09/2012 - 19:21 | Link to Comment MobBarley
MobBarley's picture

I see lots of turdmobiles on the road today with missing fenders

and body panels and nice crush dents and cracked windows.

It looks like one big trailor park parking lot with the occasional

pristine Bentley or Beamer thrown in.

Yet, somehow, in the middle of this fiscal trainwreck

directly affecting every municipality in the country,

all the Police departments just took delivery on about

5000 Dodge Chargers with the luxury police cruiser

package including fine corinthian leather package,

recheargable nightlight , computer desk, exercise room, and

french polish finished solid madagascarian mahagony running boards.

 

 

Mon, 01/09/2012 - 19:26 | Link to Comment 847328_3527
847328_3527's picture

I see more people maxing out their cards before they "just walk away" from the unsecured credit card debt.

This will not end well either.

Mon, 01/09/2012 - 21:34 | Link to Comment Snakeeyes
Snakeeyes's picture

Why are we celebrating the Eurozoning of the American consumer?

Consumer Credit Increases, Personal Savings Fall, Median Household Income Declining: “All Aboard The Debt Train! — Again”

http://confoundedinterest.wordpress.com/2012/01/09/consumer-credit-incre...

 

Mon, 01/09/2012 - 23:34 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Helicopter Ben BurnYankee and lil Timmy the tax cheat....are at the Roulette table....

They are losing but their strategy is to keep doubling down on Red.

Feckin morons....

 

Fri, 02/24/2012 - 05:18 | Link to Comment AmeliaV
AmeliaV's picture

I think that people are desperate now and HAVE TO use their credit cards. We cannot come out of the past 6 years of less and no income and just bounce right back.  People have used up their 401ks just to stay above water.  Just because I find a job tomorrow, everything is coming up roses?! I am so behind with all my bills thanks to banks who committed crimes and caused this mess. I say charge to your limits! Then when there are enough bankruptcies to cause a national scare, the government can demand that the banks bail us out! People in a desperate need of some extra cash apply to payday loans no credit check only due to the fact that they can't qualify for bank loans with their bad credit scores.

Do NOT follow this link or you will be banned from the site!