Yeah, it's pretty stupid to blame Trump for failure of the American auto industry. They've been on the decline for decades. Asians will work for less pay and thus the Asian market produces superior autos for the dollar. Americans are convinced they deserve to be paid the unsustainable wages the auto industry could afford when it dominated the market. Auto making is easier than ever and these idiots still think they have some special talent. It's not the 1950s anymore.
Auto Credit Bubble To Burst?
- Thread starter cawacko
- Start date
Yeah, it's pretty stupid to blame Trump for failure of the American auto industry. They've been on the decline for decades. Asians will work for less pay and thus the Asian market produces superior autos for the dollar. Americans are convinced they deserve to be paid the unsustainable wages the auto industry could afford when it dominated the market. Auto making is easier than ever and these idiots still think they have some special talent. It's not the 1950s anymore.
Mott the Hoople
Sweet Jane
But was it the deciding factor?
cawacko
Well-known member
Yes. If I couldn't afford the car, and I wasn't pay all cash, I wasn't buying it.
But ultimately the issue is cheap credit causes people to purchase more than they can afford, like homes, and when rates increase they get hosed.
PoliTalker
Diversity Makes Greatness
Hello tinfoil,
In other words, capitalism has no compassion. Capitalism has no compunction at all over abandoning people, regions, cities. Capitalism only moves in where easier profits are possible, then moves away just as quickly when they are more attractive elsewhere. If it were not for our tax-supported socialist safety net the disastrous destruction of capitalism would not be mitigated.
In other words, capitalism has no compassion. Capitalism has no compunction at all over abandoning people, regions, cities. Capitalism only moves in where easier profits are possible, then moves away just as quickly when they are more attractive elsewhere. If it were not for our tax-supported socialist safety net the disastrous destruction of capitalism would not be mitigated.
cawacko
Well-known member
Considering capitalism has brought more people out of poverty than any other economic system that can be considered pretty compassionate. But that's not what this thread is about. Do you think it's compassionate that the Fed left interest rates at zero for years causing people to buy more car than they most likely otherwise could afford and putting us in this situation?
floridafan
Verified User
You make no sense, are car buyers defaulting on their loans in any sizable numbers?
MAGA MAN
Let's go Brandon!
My last car, 2012, I financed for 24 months at 2%. Money markets were paying maybe 0.75% (I forget). So the net was 1.25%. On a $20k loan that is about $21/ month. My cell phone bill is $70.
I traded that car in two weeks ago and my new rate is 3.9%. My money market is making 2.0%, so the net for the loan is 1.9%. That's still cheap as far as I'm concerned.
What is the bubble you're blabbing about?
I traded that car in two weeks ago and my new rate is 3.9%. My money market is making 2.0%, so the net for the loan is 1.9%. That's still cheap as far as I'm concerned.
What is the bubble you're blabbing about?
cawacko
Well-known member
This is from the article:
The reason why I criticized President Trump’s excitement about Ford’s decision was because I’ve been warning (then and now) that the U.S. automobile sales boom was driven by a debt bubble that would end very badly. As I wrote in March 2017:
This credit-driven auto boom is a major reason why you keep hearing stories about “Detroit’s resurgence” and the “U.S. manufacturing comeback.” Unfortunately, interest rates will rise and a bust is sure to follow. Cracks are already beginning to show even though interest rates have barely started to rise – “seriously delinquent” auto loans have been ticking up in recent quarters.
To my ear, when President Donald Trump praises the U.S. automobile boom, it sounds strikingly similar to economists and business leaders who were praising the economic activity and jobs created by the 2003-2007 U.S. housing bubble – “look at all these great jobs being created! Lots of new jobs for construction workers, real estate agents, and mortgage bankers!” Unfortunately, when that debt-driven boom turned into a bust, many of those jobs were lost and the entire sector dragged the rest of the economy down with it. I believe that the current automobile boom will follow the same path.
Capitalism OOGA BOOGA!!
Mott the Hoople
Sweet Jane
On variable rates. Auto loans, for the most part are fixed. I think that considering this a bubble is exaggerated and wouldn’t have near the impact as if gas were to rise $4/gal ($5/gal in Cali)