Looming Economic Reset: Recession Indicators Are Flashing Red, Student and Auto Loan Bubble Finally Bursting, Japanese 10-Year Bond Yield Is BREAKING OUT!!!
May 15th, 2013
ubprime 2.0 – Auto Loan Deliquency Balances Rise 24% YoY
As we warned six weeks ago, the Fed’s ZIRP side-effects have driven auto-lenders to scrape the bottom of the subprime-lending barrel once again (loans to subprime borrowers +18% YoY). It seems, based on the Fed’s latest data, that this over-exuberant lending is coming back to bite once again as delinquent balances surge 23.9% year-over-year (though optimistically Experian reflects “obviously, we never want to see a rise in delinquencies or repossessions, but… they are still lower than the recession-level rates,”). As Experian also notes today, repossessions rose 16.9% year-over-year.