Another Bubble… On The Verge of Popping

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Termites start low and work their way up. By the time you notice them, it’s often already too late to save the place. All you can do is rebuild, start over.debt lead

This analogy may be useful in terms of understanding what’s going on in the car business… on the lower end of that business. And what that could portend for the rest of the business – ostensibly “doing gangbusters,” according to mainstream media accounts.

You know … like the housing market was “doing gangbusters” a few years back.

Until, of course, it wasn’t.

Well, check this:

The number of “subprime” car loans being sold is increasing – and so is the number of delinquencies on those loans. They are up to 5.16 percent, the highest level in 20 years.

Consider what this means.debt graphic

First, a growing number of people cannot get traditional loans for new cars. They lack the verifiable income to qualify – or their credit scores suck. But financial flimflam outfits are loaning them money – often, at exorbitant interest – nonetheless.

Sound familiar?

It does to Comptroller of the Currency Thomas Curry, who recently said “… what’s happening in the auto loan market reminds me of what happened in mortgage-backed securities in the run-up to the (housing) crisis.”

Second – and not surprisingly – these loans are being defaulted on in growing numbers. Apparently, people who can’t swing a mainline loan at 3 or 4 percent interest are having trouble keeping up with loans that have interest rates twice as high.

Who’d a thunk it?sale image

Now, are talking about $25 billion in subprime auto loans. Will Uncle step in – once again – and bail out the shysters issuing these loans with more of our money?

Of course he will.

Spending other people’s money is not only what Uncle does best – it’s all that Uncle does. He hasn’t got a penny of money that’s not been taken from others first. Why not be generous? There’s always more where that came from.

But this rant is not primarily about Uncle and his bottomless generosity with other people’s money.

It’s about what the bubbling trouble in the subprime auto loan mark says – canary in the coal mine-wise – about the health of the car industry generally.

Consider:graphic 3

If – as the numbers suggest – more and more people are having trouble getting conventional car loans, either they are uncreditworthy or cars are too expensive for them (relative to income).

This latter thing is the canary in the coal mine.

A few weeks ago, I wrote about the average price paid for a new car last year – about $32,000 – a record high. And about the corollary to this: The ever-increasing duration of new cars loans. They are now on average six years long – and seven year loans are becoming pretty common. In order to spread out payments (now averaging almost $500 a month) that have become simply too much to manage for most people.

All these things are canaries in the coal mine.

And the canary’s looking woozy.

Even a slight upticking of interest rates will send him toppling off his perch, to land lifeless on the newspaper below. The private banking cartel that manipulates the American economy for its benefit – you know, the “Federal” (like “Federal” Express) Reserve  – has been threatening to raise the cost of money (interest) for some time now. The only thing holding it back has been flaccid spending, a general reluctance on the part of the public to buy stuff with money they haven’t got.

Which includes cars.bubble pic

There was a time – within living memory – when you didn’t have to hock yourself to a six or seven year loan to be able to drive home a new car car.

Many people paid cash.

Today, almost 90 percent of all new car “sales” are financed.

And more than 55 percent of used car “sales” are financed, too.

The Fed has been attempting to “stimulate” (false) demand by tempting people with low-cost money (i.e., low interest rates) and that is probably the main thing propping up demand for new cars – much in the same way that artificial demand for homes was confected by the very same Fed.

Especially given that Uncle succeeded in executing a kind of mechanical genocide of good (and affordable) used cars via the odious “cash for clunkers” program several years back.

There are not many serviceable used cars available as a result – and the ones that are cost a pretty penny.

Hence the need to finance them.hold on

But the high cost of used cars plus low-cost (even “free”) money in the form of interest-free (or interest so low it pretty much tracks with inflation) loans on new cars makes it very tempting to sign up for a new car loan… Check New World Mailer on Catalogue AU. even one that’s six or seven years long (about the same time as the typical indenture contract during the early colonial era, if you’re interested in a historical parallel).

But when, inevitably, the cost of money goes up – as it must if the private banking cartel is going to resume its profiteering – it will have the same effect on the car business as the same thing had on the housing /real-estate business.

Better grab hold of something.

The spreading evidence of a new round of subprime rot is just the beginning.

And it won’t be confined to just this one thing, either. depends on you to keep the wheels turning! The control freaks (Clovers) hate us. Goo-guhl blackballed us.

Will you help us? 

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  1. “But financial flimflam outfits are loaning them money – often, at exorbitant interest – nonetheless.”

    If you are a libertarian, you should understand that those businesses exist because there is a demand. The rates are high, because the risk is high. The losses are staggering on repossessed cars.

    • Ken, a great deal of that expensive bling on new vehicles comes at a very low cost to the manufacturer. I’ve heard those in the know speak of $20K profit on some new pickups and SUV’s. That’s Timex bud, take a lick and keep on ticking. I wouldn’t start shedding tears just yet.

      • It depends on how profit is measured. Physical parts yes it’s going to look really cheap. But tooling is a lot of money. That piece of trim that is a couple bucks to mold may have a six figure tooling bill behind it. And with today’s volumes per model and change frequency recovering tooling expense isn’t what it used to be. Then there is the development cost. Warranty cost. etc and so on. The real profit after all the costs are considered is much less.

        • Brent, no doubt you’re right to an extent. Just look how many of the same parts are used in different vehicles. The pricing for various options is kinda crazy too.

          I don’t recall what the SS option on my Elco was but the trailer package wasn’t expensive yet it changed every part in the entire driveline and running gear except the transmission and engine, even down to a unique wheel. The entire SS interior was straight out of a Monte Carlo except the carpet and headliner were cut down…..and that’s what they were, cut down and it was all made in Mexico.

          Now GM has who knows how many vehicles using the same parts nearly everywhere except the interior and most of that is only minor trim. I’ve noticed in the newer GM truck line there is little in the way of outside trim so everything from a half ton pickup to an Escalade is the same thing with a bit different springs and shocks….sometimes. There used to be mechanical differences in Chevy’s and GMC’s but that went away and now GMC’s are merely loaded to the max Chevy’s.

          I remember when the first Wagoneer’s came out. They were made with parts straight out of the Ford and Chrysler parts bins and cost $21K back in ’83. Now that’s making some money out of an old design simply vehicle and just adding bling for the main part. I wish I had a body in good shape. I’d strip that asthmatic 360 and Torqueflite out and go to a GM 400 and TH 400 like the very first ones were made. A friends was parked under a big tree in our yard during a big storm. A large limb(5-6″) was knocked out of the tree and the Wagoneer had a small shiny spot where it hit. That was some serious sheetmetal.

  2. I don’t even know what all’s sprouted in Brussels. Nor do I care to. Stay away from idiot glossies, rags, and boxes long enough, the idiocracy evaporates out of you and you dry out back to standard issue dumbness.

    Hilary. Isis. Those sound like some of Wonder Woman’s sidekicks. If so, I wouldn’t mind them or that 70’s Texan babe Lynda Carter getting me all bound up in their lassos of truth.

    Getting tied up with Cruz Control or roped into a weekend at Bernie’s sounds gayer than a clusterfuckfest cast reunion of Deliverance and Pulp Fiction in a gimp suit masquerade ball at 2 am in a DC LGBT district page rave after party.

  3. You know, it’s funny…my company car is an 07′ HHR with a shade over 180,000 miles on it.

    All my personal vehicles are paid off “old” cars, vintage early to mid 90’s stuff for cost reasons. (low insurance & taxes)

    But, when it comes to a car for my business work I have to having something a little newer because I put decent mileage on it yearly(around 15k) and I have to present a certain image to my customers.

    So anyway, I was debating a three to five year old car purchase vs. leasing…right now Mazda in my area is by far giving away the best leasing deals on their Mazda 3 and CX5…really cheap in those car classes…but then my insurance rates are going to jump(leasing limits requirement) if I do it…everyone else in that smaller car range is a solid $100 more a month in leases plus more down right now for some reason. (Ford focus hatchback range vehicles…I really need a hatchback because I load stuff up sometimes)

    The thing that stopped me from a 3-5 year old used car? I’m terrified of all the GDI carbon deposit nightmare stories….so that really puts me back further on a “new” used car than I want to go.

    So really, I can’t even feel good about purchasing a “new-old” car because of turbo’s, GDI’s, etc.

    The squeeze is on….I’m not even totally happy having to consider leasing even though I have a small business and get some decent depreciation…it just goes against my focus on living as fiscally conservative as possible, especially in light of this mega-bubble of epic proportions that’s going to pop down the road.

  4. Sadly, the new/late-model-used car bubble’s big leak is driving the prices of older serviceable cars through the roof. I wouldn’t have anything newer than ’03, and I am just flabbergasted at the prices I am seeing (private-party, no less) on 13+ year-old vehicles. A friend of mine sold an 00 (or was it an 01?) 7.3PSD Excursion with over 200K miles for $11K!!!!! I mean, O-K, the motor will hold-out for another 100K-200K miles without much trouble, but paint, effects of rust, suspension, electronics, and all the little stuff are all going to be issues sooner or later (Not to mention that automatic trannies don’t live too long). When people pay so much for old vehicles, do they not consider these things? But then, perhaps these are the same people who financed a new car that they couldn’t afford, and lost it, so maybe they just don’t think ahead; but the problem is, there are LOTS of such people, so much so, that they keep old vehicle prices high, so that even the more realistic among us have little choice but to either keep what we already have or pay the exorbitant prices. I think when the bubble finally fully bursts, this is going to get even worse.

    I just snagged an ’00 V10 Excursion LTD for $4500 from that same friend, so be prepared for gas prices to rocket back up, a week or two after i take possession! (Thank goodness for that friend, he’s my only source of reasonably-priced used vehicles!)

    • I don’t know what area of the USA you’re in, but I’m not seeing a lack of affordable vehicles here in Phoenix. I’m seeing older Expeditions around here for $2k to $3k. And in Phoenix we have no rust issues. What youre seeing may well be just the Excursion. Ford didn’t make a ton of these& they are VERY desirable trucks especially with the V-10 or the deisel engines. I’d like to see what a 2010 Camry or Accord or Crown Victoria goes for in your neck of the woods.

      • I’ve been listening to a dealer ad locally(well, 100 miles is local in Tx.)advertising Silverado’s at $11,000 off MSRP. I’ll look for an older pickup(GM to compare apples to apples)soon to see what their price is now.

        Oil crashed last year(year before last…late)and we lost 25,000 non-ag jobs in Tx. alone, in the first quarter, with continued loses of who knows what. A guy I worked with had bought a new Dodge gas engine crewcab 1/2T 4WD the year before and was miffed. He paid $42,000 for it and the new ones were going for $30,000. Ford’s were much cheaper too but GM’s weren’t any cheaper I could tell and the used ones were out of sight.

        An example is ’08 Duramax’s with a bit of warranty left(this was last year)crewcab, longbed, 1T (single wheel)4WD and every damned one of them with professional looking gooseneck setups for over $40,000, many of them a couple years newer going for high $40,000s. Of course there’s a premium for pre-DEF pickups. It’s not just the DEF itself but the reliability with DEF engines.

        I fuel Step Child, the ’96 Pete I drive every day and every time the reader asks for DEF I say “fuck you” and mean it more than I can say. A common scenario is a brand new big rig on the side, hood open and a service truck there soon. Everybody from Dealers to techs(mechanics, new style)cuss DEF along with the operator sitting there going broke.

        • “100 miles is local in Tx” – that’s just what I tell my wife about her Aunt and Uncle ‘near’ (100 mi. from) Fairbanks. Practically next door.

      • Nunzio, Paul is right, the Excursion are being snagged as custom hunting vehicles. They had some at the safari club international convention. They looked brand new, was all redone. They were sprayed in scratch proof bed liner type exterior coating. Cool.

      • Nah, Paul, I look at Craigslist almost daily, just for fun, and it’s crazy here in the mid-west. Cars with high miles and rebuilt titles, and the seller makes it sound like he’s doing you a favor by only wanting Blue Book price.

        Excursions, forget about it! That’s why I’m buying one from 1000 miles away from my friend. There was a similar one here; it had slightly higher miles; same V10; and a few silly modifications (and same model year as mine). The price? $13K!!!!!!!

        Not to mention that most of the over-priced cars have issues when you go to see them. I should come to AZ! No rust and reasonable prices…wow!

  5. Jean posted an apropos to this site narrative that y’all would do well to read and grok. Eric shouldn’t be the sole or nearly the sole provider of value here. There’s lots of us who are also eminently capable.

    This can be the premier librotarian site. We are the Bro Libertate.

    It’s starts with education and algorithms. These two then progress to erudition and mechanical prowess to keep our expenses low enough to be debt freemen and not debt slaves.

    We become gypsies with a healthy fear of the lash. All gypsies are unruly able yet abhor murder and punishment. And take no joy in the suffering and screams of the other. Even the guilty other. We seek only to be free and apart from the ruling savage cretins. And even the anarchist free savage who lives free today but dies young tomorrow and makes existence intolerable due to excess violence and impoverishing urban chaos.

    Back to Rain Man auto response of unorthodox source using unorthodox meaning of money not in compliance with Lew Rockwell Institute at 408 Oak Street Austrian understanding of money.

    All well and good to win at Gotcha but what of the Kid Nation truth. Can humans provide value. Or are we only the Governors of the land and other animals provide value we only take and harvest.

    Possums kill 96% of the ticks trying to infest them. Hoover them up like a mini protein blast.. Beavers make lakes. Earthworms make topsoil. Man makes only fleeting ruins. Soon an entire civilization vanishes. And the Opera Carmen.

    Carmen began as Pushkin’s The Gypsies Poem. Then became Merimee’s Carmen. Then Bizet’s Carmen released in 1875 4 decades before fiat mone and the Fed Reserve Value Holocaust. Now every city is filled with struggling Fiat Gypsies. But still their is Carmen And the Habanera. Whereby love is a rebellious bird you can not tame nor cage.

    And we are rebellious Paleo Gypsy birds you cannot change tame or cage. All of us rebellious and filled with a love for freedom and self actualization. And we will await our beautiful Zemfiras and Carmens or die alone.

    Alone with our masturbatory hobby of making live to a dead mechanical life. Auto erotic aficionados of a non living mechanical blow up doll fantasy chassis. Ride or die you two wheeled young vixen our busty fertile four wheel filly game to take in all our seed and vomit out all manner of replica brood and herd.

    At least we might buy a horse. And so become masters of living breathing things. But we are Rain Men and where is the manhood in maintaining a maiden who acts against our wrenching a and often times goes homicidal like King’s Christine Fury even.

    The keys is we can work with our hands. Not just amuse with mere words. Eloquent and Erudite, we seek a Gypsy hill or wood off the beaten paths or a lesser travelled urban backwater away from Uncle and debt saddle city donkeys and beasts of burden of all kinds.

  6. My first car was a new one in 1972. A Ford Mustang Grande which with tax and license was $3300.00, ( about $18,500 in todays dollars).
    Three year term.

    On a cheap lease now but looks like used cars in the future.

  7. Its headed toward a brand of feudalism again ,I dont understand why people dont see it coming,soon most of the only thing that has real value (land ) will be in govt hands and wealthy people that strive to not pay taxes will have a lot tied up in “conservation easements ” the govt has a history of seizing land from private people (the big survey ‘ ,the relocation of people to make that crazy road that runs through the spine of the Applachains ,etc .
    Wake up people ,when Baron sez ,gimme half your crops ,you better comply .

  8. The subprime auto loans will not play out like the subprime mortgage crash. Lenders know up front that a sizeable percentage of the loans will default. Unlike real estate or tech stocks, automobiles are easily reclaimed and resold, the lenders are fully able to hound the loan balance and fees from the borrower. Automobiles, brand new and perfect or used up and junk, are a desirable commodity. All those repo vehicles will find new owners, even if it’s the U-Pull-It parts yard. And the borrowers will be harassed, sued and garnished until the loan is repaid twice over. At least the borrower earned $250 per week before buying a 2-door Speck. That story has been playing for decades with a mature infrastructure handling it.

    The elephant in the room is student loans. Trillions of dollars backed with zero collateral, borrowed by people without jobs, no skills, following passions, pursuing dreams. And credit card loans is the gorilla in the same room, another no money down with monthly payments until the day you die racket. These defaults will destroy everyone.

    Obamacare. Hours cut back to minimize employer overhead. Everyone on Medicaid, Medicare and SNAP.

    And outrageous minimum increases. Entry level jobs replaced by computers, robots and even customers. Illegals will work under the table for half price and send most of it back to Central America.

    • “Unlike real estate or tech stocks, automobiles are easily reclaimed and resold”
      True, but at what price and what loss? If you get only 1/2 the value of the ‘new’ car when resold, that’s a little ‘mini-liquidation.’

      • PtB, I just had that thought about autos a few hours ago when I walked into a friend’s shop and found a decent mid-50’s Hudson Hornet. It wasn’t original under the hood with a SBC stuffed in years ago. But it made me wonder what the car is worth. It appears that minus 4 windows(it has 4 down each side with two front and two rear vent windows), it’s still pretty close to original sans engine. It appeared to still have the 3 or 4 on the tree.

        So who’s to judge its value? Someone who wants it and someone who wishes to keep it will determine that. Nothing’s written in stone so to speak…….except stuff written in stone.

      • The repo goes to court and judgement garnishes similar to alimony and child support ensue to repay the outstanding loan minus what the vehicle in question sold for at auction. The vehicle is gone but the debt plus fees remains until repaid. The debt now includes repo fees, auction fees, late fees, backed up interest, legal fees. And the interest still ka-chings at whatever outrageous rate was on the loan agreement.

    • CC, right you are. 3 years ago there was a push to kill off student loans since everyone but the students and their poor folks don’t know, it ain’t possible except when the bank forecloses on your parent’s house(how were they to know? They couldn’t read the fine print or even read for many). The banksters went apey and stifled the abolishment of that cash cow toot sweet. That thought died without a whimper. Since I don’t do tv, i’m guessing the “network”crowd never touched the subject and if they did, fleetingly.

      Meanwhile, I continue to get fleeced every year and not pay for mandatory health insurance but it’s better than getting fleeced a great deal more and “join up”. FEAFEFH’s.

  9. I’m just about convinced that, as is the case with retarded children and dangerous chemicals and sharp objects, Americans need to just be kept away from money unless they’re under adult supervision.* It seems pretty obvious by now that they can’t be trusted to use it responsibly. And we’re talking about fiat (digital) money; imagine how reckless they’d be with the real thing!

    (*Look, I have no idea where we’d find such “adults.” If I had all the answers to such common-sense questions I’d be too rich to care about any of this.)

    • “What is money?”
      Question my dad asked ages ago…
      Money is a store of value.

      I think this one question would turn people around VERY quickly if asked when they were young. If you don’t understand what money is, that you must work to create value, which is then stored in the scrap of paper, and then that value can be exchanged for something else of value – whether a CD player, food, or a home – which someone else, in turn, worked on, to create that value…
      I think that understanding would get rid of the socialists pretty fast.

      However, the point I wanted to make was… Americans en masse don’t create value. They are mostly worthless eaters. I referenced Madam Secretary earlier; I went to school with people like that. Scream, throw a temper tantrum, lie, whatever, only the onanistic narcissist self matters. This is the mind of a 2 year old… Ruled by WANTS….

      See for a good take on it.
      Key excerpt:
      Kid Nation

      Until recently, this was the norm in Western society. Today we think we have opportunities to avoid real work, and in fairness we did for a brief period. But this is 2015, not 1970. We want to have a fun career, so we think we need and should go to college. Then we get on the other side of graduation and realize that we are making as much money as we did in high school. “Maybe when the economy turns around,” we tell ourselves.

      High school boys ought to say, “I should provide a single-income family so that my future wife can take care of our children when they are young. The only real market for that now is the blue collar fields. Even though these jobs are embarrassing to my parents, I should pursue them, because I want to be able to provide for my future family. They will also cost much less time and money to learn. Beyond that, I could also save a lot of money on repairs if I were to learn home and car maintenance in my spare time.”

      Do you see the difference between the two? The first says “want” and bases the should off of that, and the second says “should” and bases the want off of that. The first wants to enjoy life, and the second wants to be a functional adult.

      Likewise, high school girls ought to say, “I know that my beauty and fertility is very valuable to men, but it is also fleeting. So while I am still young, I should use that beauty to attract a top-notch man to marry. It will be in the best interest of my future children to be a stay-at-home mother, so I should learn as much about home economics as possible. As for college, a $60k bachelor’s degree in English will not do much for my future, and I can learn all of that at the library anyway. Instead, I should spend these pre-marital years as an investment in my future. Since I will likely be having children and quitting work, I should study a career I can pick up or drop as needed, like nursing, cosmetology or teaching. This will also be useful should my future husband unexpectedly die or become disabled.”

      The difference between wants ruling you (First level of the Inferno, BTW), and the outcome creating the action plan – that’s where our disconnect really is.

      I was “disabused” of any leadership or self-control early on.
      I still made SOMETHING of myself, and I’m filling in the weaknesses.
      What’s the excuse of those who were normally socialized and even encouraged to step up? I knew a few who were good – but out of a school of hundreds, most weren’t good to begin with; the key players are invisible. (One was a sports star for a uni, but then dropped out of sight. The rest, not even that. Maybe it’s just local fame, and I’m not in that company? But if you create real value, you should be somewhat known… Unless the previous bit, about surviving the decline of your civilization, is so accurate that those who create value are buried, while those who market themselves are the ones perceived to HAVE value? [] Maybe that’s really it… Ben Franklin wouldn’t have any fame today, basically, because he DID create value. Washington, Lincoln, Roosevelt, Jefferson, Jackson, et al, would be unknown. )

      Which again asks the question: What value are Americans? So how could they be trusted with money as a store of value, when they value themselves so cheaply, and have no idea the work required to create value?

      • That was very well said Jean, even eloquent. My wife and I try to steer ‘kids’ to the trades all the time.

      • Money is not a store of value. Commodity metals are a store of value. Money is information about what the market says a product (including commodity metals) are worth. The problem all along is that the FED keeps changing the value of money to suit its masters’ need.

        • “Money is not a store of value. ”
          Yes, it is. That is why commodity metals are real money and fiat currency is not, It is convenient for exchange, as long as it is accepted, but when faith is lost, it is worthless.

          • you just echoed what I said, just in a different way. Fiat currency is certainly NOT a store of value. The definition of money is fiat currency, not metals. We libertarians and anarchists might not like that fact, but we don’t get a say in how things are done.

            Try to spend 1 oz silver rounds at Walmart, ain’t gonna happen (hell, try to spend a $2 bill and see what the cashier does). Sure, I’ll barter with you and take your silver, but I’m under no obligation to accept your silver coins.

            • “you just echoed what I said” – no, I am contradicting what you said. No matter what the Fed, the banksters, and your college Econ textbook said, money is a store of value, and currency, whether fiat or legitimate ‘warehouse receipt’ is not. It is simply a substitute means of exchange, more convenient than carrying ‘money’ around.

                • You guys are confusing money with currency. Money is a store of value. Currency is information (or, in our case today: Just exchangeable debt)

        • If it’s not a store of value it’s not money. Being a store of value is what defines something as money.

          Because it is a store of value that’s what’s why people seek to manipulate it. Even under the gold standard the powers that be would manipulate the gold supply. There was a political push once upon a time to move the currency from gold based to silver based because silver was seen as more difficult for the so-called elite to manipulate to their ends. There is a desire to get rid of paper money now because electronic currency is so much easier to manipulate. The masters have always manipulated what is called money one way or another, it is simply the degree of difficulty that changes.

  10. There is a commercial on for a rent-to-own company the local Buffalo NY market. With a millennial couple asking salesman if instead of buying a TV they could just pay a monthly subscription price for it.

    Then there’s Rocket Mortgage, hit a button on your sailfawn and go into debt.

    The masses are being conditioned.

  11. Look on the bright side. There will be a lot more low mileage, used cars available at much lower prices than now, once those high interest rate, “EZ-Qual” car buyers begin to default en masse. 🙂

    • But will want to buy them? Abused or sabotaged by their former no0n-owners; warranty ticking away or gone already (So you wouldn’t be able to afford to fix it when it breaks, which it will do frequently, what with all the electronics); Most people will need financing, which may be hard to come by; It’ll be hard times- who wants the obligation carrying comp and collision on a newish vehicle + interest + higher taxes/registration costs? And by the time the car companies realize and accept that they have to sell the cars at fire-sale prices, the cars will have sat for a while, and electronics don’t do too good sitting unused- not to mention exposure to natural disasters and such… It’s gonna be interesting to see how it plays out.

  12. Just for fun – what are your predictions on the ripple effects of this bursting bubble? obviously reduced new car prices…and used prices too? the end of GM and/or Ford?

    • Hi Ryan,

      My sense of things is that we are nearing an economic event horizon – and there’s no turning back. The country exists on credit and debt. It is unsustainable. As bad a ’08 was, what’s coming will be worse.

      • If the burst bubble of 08 had been allowed to unwind, we might make it. Heck, if the burst bubble of Y2K had been allowed to unwind, 08 might not have happened. The gunvermin and ‘The Fed,’ although technically separate, are in cahoots to destroy the economy, possibly with all the best intentions due to economic ignorance. Or maybe not.

        • PTB,

          It is my belief the economic situation is by design. When the stock market crashes it allows the wealthy aka TPTB to purchase assets for pennies on the dollar. So they get the property and make slaves of the entire population to boot. No need for Debtors Prisons when you have courts and garnishments.

          David Ward
          Memphis, Tennessee

      • I think a correction is coming too. I don’t think it’ll be as painful as 07-08, but I think it’ll be even more protracted. October is the traditional time for things to go seriously south…

        The millennials aren’t really participating in the economy – they’re paying cash for their purchases, and they’re delaying their purchases of cars and homes. They saw the pain that their parents went through in 2007 and are saddled with college debt that can’t be discharged, so they’ve opted-out.

        Consumer spending is what got us out of the last one, but if an important portion of the population isn’t buying, this one is going to last a long time. I’m thinking “Japanese Economy” painful.

        • “Consumer spending is what got us out of the last one” – well, so say the Keynesians anyway. What really gets an economy out of a downturn is not spending, but capital formation, which leads to wealth creation.
          As for ‘getting us out of the last one,’ we are not really out of it, at least not yet. If gunvermin spending were not illegitimately included in ‘GDP’ figures, GDP would at best be flat if not still declining. The O-Bomb-Ya administration keeps crowing about declining unemployment. Why don’t you ask someone who is working a part-time job (or 2 or 3) about unemployment. Better yet, some of the many who are no longer counted as unemployed because they are no longer ‘actively seeking’ employment, having given up.

          • I also think that anyone who draws a government paycheck should be excluded from the employment statistics. Those who are employed by a private entity have a positive impact on the economy, while those who are employed by government have a negative impact on the economy.

            • Hi Brian,

              You are correct. All gov jobs are paid for with wealth taken from the private sector. Adding gov jobs will reduce unemployment but it will also Increase the ratio between “public” and private employment which is unambiguously harmful. I would go even further. “Private” jobs that exist solely because of government spending should also be excluded.

              I would go still further and disenfranchise anyone whose livelihood derives from government spending or government subsidies. I am opposed to voting in general but, allowing those sucking at the teat to vote is an obvious conflict of interest.


              • “disenfranchise anyone whose livelihood derives from government spending”
                In the early ‘colonies,’ only property owners, i.e., those who would be paying the freight, were allowed to vote.

            • Of course, that’s the heart of Keynesian economics. Instead of a marketplace of buyers and sellers making up the GDP, Keynes introduced government spending as a force multiplier of sorts (government roads will lead to economic expansion). To some extent it is true, but not when all the roads are built and now you have to maintain them (or worse, the roads become political boondoggles AKA “bridges to nowhere”).

              Great theory for politicians, but Keynes never really spells out where the money for all the government spending is supposed to come from, nor does he ever address the failure of government spending because there’s no cost benefit analysis to be had.

  13. “And it won’t be confined to just this one thing, either.”

    No kidding.

    Are you sitting down? OK, get this, I was watching the local morning news when an ad came on…no, not for cars, although it seems they fill most breaks…it was for RoomsToGo wanting to sell me a mattress. Not just any mattress but, one of those fancy Thermocouple ones that are pretty dang expensive compared to the Serta I bought a few years ago for $300 at Sam’s club. Not to worry, they’re offering me NO INTEREST on a loan for said mattress. FOR EIGHT YEARS!!!!!!!!!!!!!!!!!!

    You think the used car market is lousy, have you looked into the used mattress market?

    We are sooooooo screwed.

    • Yeah, they start off saying that your mattress is only good for 8 years and then throw some fear-mongering in there too (“It could double in weight from the dust mites!”).

      So the obvious answer is to always have a mattress payment.
      {sarcasm intended}

      Actually, all you have to do is run the vacuum over it (with the beater bar turned off) when you flip it over every 6 months. Lasts a long time that way.

  14. It doesn’t hurt my feelings at all not to participate in the financial game with these vultures. Though it has gotten me accused of failing to participate in the “American way”, I maintain a total of 2 credit accounts – one credit card that exists solely for emergencies and a line of credit with the Snapon truck for those occasions that I need something to finish a job.

    Between government greed, sleazy lawyers, corrupt banks and spineless, soulless hacks running the car companies, the only way to fix the system is to let it collapse. You don’t kill a parasite by feeding it, but that is how we engage in “maximizing shareholder value” and other cute euphemisms for the act of covering the financial gamblers lack of skill with endless markers comped by the taxpayers.

    Maybe I am a little too militant about the whole thing, but I welcome the idea of this horribly constructed house of cards coming down. Clearly “the market” as envisioned by the suits doesn’t work, so why not toss it into the scrap pile and let an actual FREE market flourish. Let the politicians, lawyers and speculators go down with the top heavy ship that they created.

    • If the lawyers, politicians and speculators actually went down with their ship I would say fine. Problem is that it’s the working stiffs in steerage who don’t get a spot on the lifeboats.

      • Agreed, Fred.

        And that’s the tragedy. Millions of decent people dragged under by the rip tide.

        We’re like a dog covered with ticks. We could dive under water until the ticks die from lack of air. But then, so do we.

        • Plus, they will concoct some big war to “save” the economy by sending unemployed young men off to die and the rest of us to feel better because items are rationed for the “common good” and “freedom”.

          • I think that’s very possible. It’s the common resort of Dear Leaders throughout history.

            Recall the words of Reichsmarschall Goring at Nuremburg. He was a thug – but an admirable one, in his way.

            • Yup. Hillary was frothing at the mouth last night over ISIS and Brussels; the wildcard is The Donald. As you wrote about so well earlier, this will be a long, hot summer.

              • Hi trying,

                Yup. The Reichsmarschall was a cynic and a cold son of a bitch. But he was not a coward – and he conducted himself like a man at Nuremburg.

                And, he was right. It was “victor’s justice,” a show trail.

                One of the judges was literally that. Vyshinsky, the Soviet judge, presided over Stalin’s show trails.

                Arthur “Bomber” Harris should have been in the dock as much as any of the German military leadership.

                And why was Streicher sentenced to death? An asshole, certainly. But who, exactly (specifically) did he kill? He produced an anti-Semitic newspaper. Obnoxious, hateful – without doubt. But the death penalty? For printing shit and mouthing off?

                Hess? He was in custody long before the machinery of the death camps clanked into motion – and the poor bastard was caught while (he thought) trying to broker a peace deal with Britain. His life sentence was way over the top.

                None of this is a defense of Nazis.

                It’s criticism of injustice.

                Truman elected to atom-bomb Japanese cities full of civilians knowing the Japanese were beaten, knowing the leadership was desperately trying to find a way to end the war.

                But no show trails for him.

                • eric, they were just getting the world ready for Bushco. That bunch of vile and evil scum were the writers of the Patriot Act that allows the killing of anyone, anywhere for any or no reason and without telling anyone about it. But let’s don’t let Bushco take the complete blame. When the Dems voted for it without reading it, every single person(I didn’t mean human)who voted for it should get their just deserts and be slowly roasted, very slowly.

                  • Remember, Prescott Bush (W’s grandfather) and his father-in-law, George Herbert Walker, were both admirers and financiers of der Fuerhrer.

                    • Amen, Phillip.

                      And – my opinion – anyone who despises Obama must despise the Bushes. The current occupant would have been inconceivable without the trauma visited upon the nation by The Chimp. We have Obamacare because of The Chimp. We have a “Homeland” security department because of The Chimp.

                      Cruz is another Chimp.

      • “a spot on the lifeboats” – this is the definition of ‘moral hazard.’ If I bet right, I make a ton of money and keep it – if I bet wrong, the taxpayers bite it.


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