Auto loan defaults are predicting we are in a recession

9 comments

1. Could be a recession or could because of COVID spending madness.

2. Cars also cost a lot more even as a percentage of mean income. I suspect the graph will have some drift due to the mathematics of the combo of higher car price and higher rates as a relationship to total defaults. Conditions are bad for buying cars and unwitting customers are putting themselves in financial harm thinking the car market is still like the early 2010s.

3. Since this is subprime, it might be an indication that credit was too easy in the subprime arena. It’s when the prime loans start going late that there could be recession.

   I look at unemployment as a more reliable indicator.
   >In the week ending March 15, the advance figure for seasonally adjusted initial claims was 223,000, an increase of 2,000
   from the previous week’s revised level

   So far, I don’t see it in the unemployment numbers.

4. Who would have thought that $1200/mo car payments are unsustainable?

5. The end state of capitalism is complete collapse. Capitalism can never work because it requires infinite resources to function. Watching capitalism collapse is very fulfilling and funny.

6. Lol, records only go back to 1994?

7. We will only know for sure if it’s a recession after GDP figures come out.

   Not sure if subprime car lending is big enough to bring down the whole market (like mortgages did in 2008)

8. Wait. That looks an awful lot like his signature…

9. Is there a causal effect with interest rate? Many were expecting that interest rates will go lower, esp with ones with mortgage as well

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