Loan Default Rates Deja Vu 2008: “RIGHT BEFORE THE SHTF”

Thursday, August 3, 2017
By Paul Martin
August 2, 2017

Fund Manager says “fog a mirror test” car loan applicants are tapped. We find ourselves at the onset of Debt Armageddon.

From Dave Kranzler of Investment Research Dynamics

July auto sales was a blood-bath for U.S auto makers. The SAAR (Seasonally ManipulatedAdjusted Annualized Rate) metric – aka “statistical vomit” – presented a slight increase for July over June (16.7 SAAR vs 16.5 SAAR). But the statisticians can’t hide the truth. GM’s total sales plunged 15% YoY vs an 8% decline expected. Ford’s sales were down 7.4% vs an expected 5.5% drop. Chrysler’s sales dropped 10.5% vs. -6.1% expected. In aggregate, including foreign-manufactured vehicles, sales were down 7% YoY.

Note: These numbers are compiled by Automotive News based on actual monthly sales reported by manufactures. Also please note: A “sale” is recorded when the vehicle is shipped to the dealer. It does not reflect an economic transaction between a dealer and an end-user. As Automotive News reports: “[July was] the weakest showing yet in a year that is on tract to generate the industry’s first decline in volume since the 2008-2009 market collapse.”

The domestics blamed the sharp decline in sales on fleet sales. But GM’s retail sales volume plunged 14.4% vs its overall vehicle cliff-dive of 15% And so what? When the Obama Government, after it took over GM, and the rental agencies were loading up on new vehicles, the automakers never specifically identified fleet sales as a driver of sales.

What really drove sales was the obscenely permissive monetary and credit policies implemented by the Fed since 2008. But debt-driven Ponzi schemes require credit usage to expand continuously at an increase rate to sustain itself. And this is what it did from mid-2010 until early 2017:

The Rest…HERE

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