Josh Sigurdson talks with author and economic analyst John Sneisen about the clear struggles in the auto industry as demand falls significantly and subprime buyers disappear from showrooms.
The March sales pace fell to its lowest in seven months. Sales were completely flat for the first couple of months this year among the highest ratest borrowers. Deliveries to those with subprime scores fell 9%.
Banks are treating cars as investment despite cars being an obvious depreciating asset or liability the second you drive it off the lot.
Demand is going way down, gas demand is also being affected, the insanity of loans continue as we repeat many of the problems we saw back in 2006 and 2007. Auto backed securities for starters.
John breaks down several stats and talks about what we can expect this problems to turn into in the coming months and potentially years.
The fundamentals are off the table due to the level of manipulation in the markets, so one cannot put a date on the coming crash. We just know it will happen. The bubble has become totally unsustainable. It’s time we stop getting into debt and getting crazy loans or having trust in a system that has caused so much pain throughout the past. We must stop seeing cars as investments. We need to start saving ourselves financially. Financial responsibility and self sustainability are so incredibly important. Now more than ever.
Stay tuned as we continue to cover these issues!