Repo Man’s Valentine’s Day Present

By Michael Pento – Re-Blogged From Silver Phoenix

The New York Federal Reserve recently sent out an early Valentine’s Day present to a certain group of individuals. However, this gift wasn’t to overleveraged American consumers; but rather to those who are employed repossessing one of those goodies they can’t afford. On February 12th the NY Fed made the announcement that a record number of consumers are falling behind on their car payments.

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Retail Apocalypse and Carmageddon Continue to Pick up Speed

By David Haggith – Re-Blogged From Great Recession Blog

We now know that the Retail Apocalypse took another trip downhill during the all-important holiday season. December reports show retail sales declined more in one month than they have since … the Great Recession. Notice what a common refrain that comparison has become.

Retail Apocalypse snowballs downhill

Retail sales dropped 1.2% month-over-month in December, the largest drop since September 2009, according to data from the Census Bureau released Thursday. The dip was broadly unexpected – consensus estimates had foreseen a 0.1% increase in retail sales for the month, according to Bloomberg data. Excluding autos and gas, which can be volatile, core retail sales plunged 1.8%. “[The] fall in retail sales in December was every bit as bad as it looks,” Capital Economics’ Michael Pearce said bluntly. The weakness was broad-based.

Yahoo!

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Subprime Auto Defaults Soaring

By Bloomberg – Re-Blogged From Newsmax

Private-equity firms that plunged headlong into subprime auto lending are discovering just how hard it might be to get out.

A Perella Weinberg Partners fund has been sitting on an IPO of Flagship Credit Acceptance for two years as bad loan write-offs push it into the red. Blackstone Group LP has struggled to make Exeter Finance profitable, despite sinking almost a half-billion dollars into the lender since 2011 and shaking up the C-suite multiple times.

And Wall Street bankers in private say others would love to cash out too, but there’s currently no market for such exits.

In the years after the financial crisis, buyout firms poured billions into auto finance, angling for the big profits that come with offering high-interest loans to buyers with the weakest credit. At rates of 11 percent or more, there was plenty to be made as sales boomed. But now, with new car demand waning, they’ve found the intense competition — and the lax underwriting standards it fostered — are taking a toll on profits.

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Carmageddon And The Retail Apocalypse

By David Haggith – Re-Blogged From http://www.Silver-Phoenix500.com

Summer closed in a whirlwind of weather chaos for the United States and its territories. At the start of the summer, the US economy began to show signs that it was flying apart. The two most obvious were the big blowouts in the auto industry and in retail, not all of which could be attributed to a shift to online sales.

The auto industry rolled over this year and began a decline similar to the one we experienced at the start of the Great Recession…. In response, car markers started offering record incentives (like $0 down, 0% interest on a 80-month loan), which brought an improvement to sales in July. You have to ask, just as I did back in 2007, “What is the end game when such incentives take profit down to nil?”

…Even with such pricing and financing incentives, one firm, SouthBay Research, threw cold water on the Census Bureau’s July sales report, declaring the figures “unbelievable.”

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‘Deep’ Subprime Car Loans Hit Crisis-Era Milestone

From Bloomberg – Re-Blogged From Newsmax

Amid all the reflection on the 10-year anniversary of the start of the subprime loan crisis, here’s a throwback that investors could probably do without.

There’s a section of the auto-loan market — known in industry parlance as deep subprime — where delinquency rates have ticked up to levels last seen in 2007, according to data compiled by credit reporting bureau Equifax.

Image: 'Deep' Subprime Car Loans Hit Crisis-Era Milestone as Woes Mount

Next Big Shoe To Drop…Student Loans

By Jeffrey Lewis – Re-Blogged From Silver Coin Investor

More than 40 million young Americans carry federal and private student loan debt – amounting to over $1 trillion. Defaults are on the rise and the issue has grown to become a nasty wealth transfer mechanism, as well as sad example of the failure of finance in general.

This week, President Obama announced a new initiative framed as a way of addressing the issue. Sadly, it is far from the mark, and just one more indication that monetary masters are the real puppeteers.

Many have pointed out that the student loan debt bubble could be the next subprime crisis.

Perhaps so, but it is potentially much worse, acting as an anvil when considered in the context of other consumer debt like car loans and credit cards.

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Housing Bubble II – It’s Happening Again

By Andy Sutton & Graham Mehl – Re-Blogged From http://www.Gold-Eagle.com

This will be a bit different article because we are not reporting on something that has already happened; we’re dealing with something that is ongoing and developing. Graham will handle roughly the first half of the article, then Andy will handle the second. Please bear with us as we try to break this editorial into two distinct pieces. You’ll understand as you read it why we chose to handle this in such a fashion.

Since everything in the blogosphere goes by what is officially declared by who, so forth, and so on, ditto, ditto, etc, etc, we are officially declaring there is yet ANOTHER bubble – this one in housing. Again. Perhaps ‘still’ is the proper word rather than ‘again since the first one never really was totally washed out of the system. As an addendum to our very well-received ‘American Economics’ piece, we’ll add a corollary: binges are good, purges are not to be tolerated unless absolutely necessary. If a purge becomes necessary, it will be only enough to give the Proletariat the idea that the problem is actually gone. A purge will never last longer than is absolutely necessary since that might affect consumer spending and the consumetariat’s voracious appetite for debt and financial self-mutilation.

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