How The Automobile Industry Is Going To Help Crush The Economy
The automobile industry has a credit issue and the paper is turn worthless. We are seeing a great deal of defaults along with people falling further behind. Repo rates are accelerating.
In this video I discuss how the indicators in the automotice industry regarding the paper and how this is going to crash things. It will only get worse as the next few months unfold.
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BEER.Very few have the economic muscle to buy a vehicle in cash, so if they are late in credit payments, the truth is that this industry will be in serious trouble.
Thank you for this grate analysis here friend.
I pray the worst dosent happen.
Sometimes you sound like somebody running a car dealership :D
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What do you mean?
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I mean that sometimes you are talking like a person who buys and sells cars for profit :D
!LOL cheers !BEER
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There has been a lot of people talking about it and I am not surprised to see this happen. I am sure a lot of those cars bought had people who didn't even make payments and it's quite bad.
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Man, I remember when I bought my 2017 Toyota Corolla at the end of December 2017. Price was around $25k. Normally, car values get cut in half when you drive off the lot. When i looked up KBB valuations, I was seeing anywhere from $20-$22k for my vehicle, despite it being used, and now nearly 6 years old. What a crazy market we have. I hope used cars come crashing back down to earth, and new cars follow suit, because no one will be able to afford to buy one if they keep increasing in price month-after-month.
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Summary:
In this video, the speaker discusses the current state of the car industry and its potential impact on the economy. He highlights how lending practices in the car market resemble those of the housing market before the financial crisis, leading to a situation where people are taking out high-value loans based on inflated incomes. This has resulted in an overvaluation of cars and a growing number of defaults, potentially causing significant financial turmoil. The speaker mentions a YouTuber, Lucky Lopez, who provides insights into the issues within the automobile industry. He emphasizes that the car market is facing challenges similar to those experienced in the housing market crisis, albeit on a smaller scale in terms of dollar volume but with comparable risks.
Detailed Article:
The speaker begins by drawing parallels between the current state of the car industry and the situation in the housing market before the 2008 financial crisis. He discusses how the lending standards in the car market became lax after lockdowns, leading banks to extend loans based on questionable income sources, such as stimulus checks. The speaker criticizes this practice, highlighting how borrowers were being approved for loans well above the actual value of the vehicle, causing a discrepancy between the loan amount and the depreciating car value.
Furthermore, the speaker points out that individuals struggling to meet their payments face challenges in refinancing due to the inflated loan-to-value ratios. This could potentially lead to a significant number of defaults and repossession of vehicles, ultimately impacting individuals' credit scores and pushing them towards bankruptcy. He notes that the problem extends beyond just subprime borrowers, affecting prime borrowers as well, indicating the widespread nature of the issue throughout the car industry.
The speaker mentions Lucky Lopez, a YouTuber who sheds light on the irregularities in the car market, particularly in auctions where repossessed cars are accumulating. He explains how lenders are hesitant to flood the market with repossessed vehicles to avoid crashing prices, creating an artificial scarcity that masks the underlying issues in the industry.
Additionally, the speaker expresses concerns about the broader economic implications of the car market crisis. He predicts that as economic conditions worsen, with a potential contraction in real estate and related industries, the ripple effects could amplify the challenges faced by the car industry. He speculates on the possibility of a domino effect as various sectors linked to real estate and automotive industries enter into a downward spiral, exacerbating the economic situation further.
Overall, the speaker paints a bleak picture of the car industry's future and its potential impact on the broader economy, emphasizing the need for caution and preparedness in the face of looming challenges.