Prepare for a massive recession.

[Jhhnn]

Yes, speculation that prices would keep going up. Remember all of the peak oil discussions and the thought that the last marginal barrel couldn't be pumped to keep up with the last marginal demand?

Yeh, the pundits of the right & the sheep of the financial sector also believed that the price of housing would go up forever.

We both know that when the big boys see the chance to make money from a bubble that they try to create one. Tech stocks. Housing. Oil. Stock market. The price of tea in China.

Bubbles have jack & shit to do with supply & demand but rather everything to do with exploiting perception.

Anybody who wants to know which way the economy is going needs to read these guys, then figure it's going the other way-

http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html

 

[LegendKiller]

Yeh, the pundits of the right & the sheep of the financial sector also believed that the price of housing would go up forever.

We both know that when the big boys see the chance to make money from a bubble that they try to create one. Tech stocks. Housing. Oil. Stock market. The price of tea in China.

Bubbles have jack & shit to do with supply & demand but rather everything to do with exploiting perception.

Anybody who wants to know which way the economy is going needs to read these guys, then figure it's going the other way-

http://economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html

When somebody asks me where I think rates are going to go, I laugh. I don't fucking know nobody does. It is laughable anybody thinks they can prognosticate it. I don't think a single forward interest curve in the history of forward curves has ever been right.

 

[3chordcharlie]

There have always been 84mo car loans, always. However, it's always been with prime and super prime borrowers and mainly new cars, but some used, and mostly with banks. That's still the case. I have yet to see one subprime lender utilize 84mo loans. Furthest they have reached is 75. Many? Where is the proof it is "many"? He provides no charts to show long-term trends in 84mo originations, or who holds them. Why? .

http://www.canadaautoapproval.ca/refinancing/taking-advantage-of-96-month-auto-loan-refinancing/

I'm not saying you're wrong. But have a look at this!

Edit: The existence of this product at all, like debt-help vultures and Payday-loan vampires is proof that things are not really right with the world

 

[JSt0rm]

When somebody asks me where I think rates are going to go, I laugh. I don't fucking know nobody does. It is laughable anybody thinks they can prognosticate it. I don't think a single forward interest curve in the history of forward curves has ever been right.

But you would pump and dump a thing to squeeze money out of it. Even if that thing was the entire economy, because if you didnt do it someone else would so fuck em right?

 

[LegendKiller]

http://www.canadaautoapproval.ca/refinancing/taking-advantage-of-96-month-auto-loan-refinancing/

I'm not saying you're wrong. But have a look at this!

Edit: The existence of this product at all, like debt-help vultures and Payday-loan vampires is proof that things are not really right with the world

lol. 96mo...

 

[3chordcharlie]

lol. 96mo...

96 month refi.

Most of the 'everybody drives' radio ads around here are to put you in a 6-7 year loan on a used car.

It may not signal the end of days, but it ain't good.

 

[Darwin333]

I have probably overseen the investment of close to 20bn, just at my current job. Add another 10bn or so to prior jobs. The biggest loss I have ever had was 300k, and that was my predecessors investment. Had we held that position we would have realized an 84% loss on principal , not 2%. That doesn't count the 8% annual returns we got for 2 years while I monitored it.

I don't speculate.

Isn't all investing speculation of some sort? Heck even investing in government bonds (don't jump on me about the US ability to print money, there are more than just US bonds) can be very speculative.

 

[LegendKiller]

Isn't all investing speculation of some sort? Heck even investing in government bonds (don't jump on me about the US ability to print money, there are more than just US bonds) can be very speculative.

Not the speculation he is implying.

 

[Jhhnn]

Isn't all investing speculation of some sort? Heck even investing in government bonds (don't jump on me about the US ability to print money, there are more than just US bonds) can be very speculative.

All investment carries risk. Speculation is based on the theory of the greater fool, somebody you can sell to before the bottom falls out. Tech stocks, Houses, mortgage bonds, oil or anything. It's not about actual demand for the underlying assets but about demand for profit in the financial sector. It's about profiting from transient ownership & leverage in acquiring it.

 

[bryanl]

https://www.entrepreneur.com/article/273598

Many car buyers are extending their car loans to 84 months!

Author Grant Cardone seems to have no qualifications, only anti-qualifications, according a favorable or self-written Wikipedia entry:

"Grant Cardone (born March 21, 1958) is an American motivational speaker and author."

"Cardone is a member of the Church of Scientology."

 

[compuwiz1]

I've been in the auto business for years, mostly in finance. There are 96 month loans now. 84 months has been going on for many, many years, even before the last recession. It's not an indicator of any trouble. The old school thinking, that cars were good for 100k miles, is no longer true. Cars will last longer than these loans, if properly maintained and retain more of their value because of that. Most customers need a FICO score north of 720 to get these extended terms, although it can be negotiable, if they are close to that.

Grant Cardone is well known in the industry, as a motivational speaker and sales trainer. He's actually pretty good at what he does. His fees for attendance are fairly lofty, as they are for most good speakers.

 

[cubby1223]

https://www.entrepreneur.com/article/273598

Many car buyers are extending their car loans to 84 months!

So what?

With interest rates on car loans under 2%, even financially secure people want the loans extended out as far as can be obtained. There's really no downside to long loans at those rates.

 

[Jhhnn]

I've been in the auto business for years, mostly in finance. There are 96 month loans now. 84 months has been going on for many, many years, even before the last recession. It's not an indicator of any trouble. The old school thinking, that cars were good for 100k miles, is no longer true. Cars will last longer than these loans, if properly maintained and retain more of their value because of that. Most customers need a FICO score north of 720 to get these extended terms, although it can be negotiable, if they are close to that.

Grant Cardone is well known in the industry, as a motivational speaker and sales trainer. He's actually pretty good at what he does. His fees for attendance are fairly lofty, as they are for most good speakers.

Then you know how it works. The buyer often pays more in payments the last year than the car will fetch when paid off, particularly at 96 months. Compound interest works that way.

If you can't afford to pay it off in 4-5 years then buy something cheaper. Grant Cardone won't tell you that nor will the salesman, bet on that.

 

[Jhhnn]

So what?

With interest rates on car loans under 2%, even financially secure people want the loans extended out as far as can be obtained. There's really no downside to long loans at those rates.

Other than being completely under water on the car for the term of the loan. You won't get a 2% loan for 7 years, anyway- maybe 3 or 4 with great credit & solid down payment.

 

[compuwiz1]

Then you know how it works. The buyer often pays more in payments the last year than the car will fetch when paid off, particularly at 96 months. Compound interest works that way.

If you can't afford to pay it off in 4-5 years then buy something cheaper. Grant Cardone won't tell you that nor will the salesman, bet on that.

Actually, we will tell you that. I don't want a customer out of the market that long. It's better for the industry and the customer to keep the term shorter, but what the customer wants drives the market. Too many want to drive the more expensive car and pay the lower payment the longer term makes possible. All I can do is advise them against the long term and show them the cost savings by shortening it up, but if I don't give them what they want, they'll go down the street where they will.

 

[cubby1223]

Other than being completely under water on the car for the term of the loan. You won't get a 2% loan for 7 years, anyway- maybe 3 or 4 with great credit & solid down payment.

Again, so what? If you can earn a higher percentage with the cash than you are paying in interest, the loan can run indefinitely and you will always be ahead.

The depreciation of the car's value is irrelevant. The car is either worth it's purchase price or it's not worth it's purchase price. How many years you choose to pay the purchase price has nothing to do with the effects of depreciation.

 

[ivwshane]

I've been in the auto business for years, mostly in finance. There are 96 month loans now. 84 months has been going on for many, many years, even before the last recession. It's not an indicator of any trouble. The old school thinking, that cars were good for 100k miles, is no longer true. Cars will last longer than these loans, if properly maintained and retain more of their value because of that. Most customers need a FICO score north of 720 to get these extended terms, although it can be negotiable, if they are close to that.

Grant Cardone is well known in the industry, as a motivational speaker and sales trainer. He's actually pretty good at what he does. His fees for attendance are fairly lofty, as they are for most good speakers.

Does he tell you how to rip off consumers? Does he tell you how to game the system? Does he essentially talk smack about consumers?

I'm curious as to what you think a good speaker is.

 

[Jhhnn]

Again, so what?

If you can earn a higher percentage with the cash than you are paying in interest, the loan can run indefinitely and you will always be ahead.

Which basically has nothing to do with many new car buyers. Their only investment is in their home & the necessary match for a 401K plan. But they want that BMW or that SUV really bad, if the dealership can just get the payment low enough for them to qualify.

A few years down the road when they have a kid, suffer some unemployment or get divorced they can't get out from under it.

Hell- the average job tenure at a given employer is only 4.6 years & a lot of separations aren't necessarily voluntary.

 

[Jhhnn]

Does he tell you how to rip off consumers? Does he tell you how to game the system? Does he essentially talk smack about consumers?

I'm curious as to what you think a good speaker is.

That's not really fair at all. Car guys are a special breed, 'tis true, but the motivational stuff is about closing the deal, making people happy with a good product. Sales guys often move around a lot but the dealership wants to develop loyalty & repeat customers.

 

[cubby1223]

Which basically has nothing to do with many new car buyers. Their only investment is in their home & the necessary match for a 401K plan. But they want that BMW or that SUV really bad, if the dealership can just get the payment low enough for them to qualify.

A few years down the road when they have a kid, suffer some unemployment or get divorced they can't get out from under it.

Hell- the average job tenure at a given employer is only 4.6 years & a lot of separations aren't necessarily voluntary.

If someone chooses to pay a purchase price they cannot afford, again, it is irrelevant to the length of the loan. People need to take responsibility for their own actions. Long-term loans at low interest rates is a good thing.

If you bought a car, and you had some life-changing event happen 2 years later - would you rather (A) be forced to pay off the remainder of the car's price+interest within the following 1 year, or (B) spread across the next 5 years?

 

[ivwshane]

That's not really fair at all. Car guys are a special breed, 'tis true, but the motivational stuff is about closing the deal, making people happy with a good product. Sales guys often move around a lot but the dealership wants to develop loyalty & repeat customers.

I'll let compuwiz1 respond since he's on the inside.

 

[OverVolt]

Guys like him wouldn't be able to run a business like that if they weren't resonating with a certain portion of the population. I think its something intrinsic, people either get it or they don't.

I've had similar feelings like "2014 seems all recession-y" but I don't really act on it. The way of life we have now versus how the way of life will have to be in the future is totally mismatched. Its going to cause alot of people to lose their shirts unfortunately by being in the wrong line of business at the wrong time. Going after the wrong certifications and getting the wrong degrees. Its bad. This stuff takes time to really come to light. You can make pretend everything is going swell for a long time, IE baby boomers taking from retirement or equity to pay for their kids degree and such. Bottom line though is that alot of wealth is being decimated and it'll catch up to us eventually. Recessions always happen, we're just totally unprepared for the next one. We were totally unprepared for the last one too but the whole "Avoid a great depression emergency measures" I believe is a one-time trick. It won't work twice.

Way of life in the future... much more conservation. Much less social flair. Meaning by historical standards people have extravagant weddings, have an extravagant extended adolescence, have very little social/family network, and just in general consume quite a bit more than they need for no good reason in terms of luxury cars and such. People are misallocating money on a rather large scale. Maybe its always been this way who knows.

People aren't really investing, saving, or understand the role of capital in capitalism. I guess thats what you'd expect with policy that accommodates borrowing at the expense to savers. Meaning people are going to be completely tapped out on the main street level for the next recession, whenever it happens. Generally every 7-15 years. People are just plain over-extended. Some parts of the economy are totally isolated and everything is going perfectly well. They are completely isolated and don't know how bad it is for many people. I've had the pleasure of dipping feet in both worlds. The bifurcation in values among different socioeconomic classes is becoming staggering.

 

[cubby1223]

Guys like him wouldn't be able to run a business like that if they weren't resonating with a certain portion of the population. I think its something intrinsic, people either get it or they don't.

I've had similar feelings like "2014 seems all recession-y" but I don't really act on it. The way of life we have now versus how the way of life will have to be in the future is totally mismatched. Its going to cause alot of people to lose their shirts unfortunately by being in the wrong line of business at the wrong time. Going after the wrong certifications and getting the wrong degrees. Its bad. This stuff takes time to really come to light. You can make pretend everything is going swell for a long time, IE baby boomers taking from retirement or equity to pay for their kids degree and such. Bottom line though is that alot of wealth is being decimated and it'll catch up to us eventually. Recessions always happen, we're just totally unprepared for the next one. We were totally unprepared for the last one too but the whole "Avoid a great depression emergency measures" I believe is a one-time trick. It won't work twice.

Way of life in the future... much more conservation. Much less social flair. Meaning by historical standards people have extravagant weddings, have an extravagant extended adolescence, have very little social/family network, and just in general consume quite a bit more than they need for no good reason in terms of luxury cars and such. People are misallocating money on a rather large scale. Maybe its always been this way who knows.

People aren't really investing, saving, or understand the role of capital in capitalism. I guess thats what you'd expect with policy that accommodates borrowing at the expense to savers. Meaning people are going to be completely tapped out on the main street level for the next recession, whenever it happens. Generally every 7-15 years.

The U.S. has been able to rebound well after past recessions primarily because the next generation of technology advancements have been pioneered within the U.S.

This isn't the case anymore. The U.S. is more interested in being fast-food workers than we are ensuring the new developments in energy, semiconductors, software, are happening to the benefit of American workers. If the people on this forum had even the slightest awareness of the lengths Asian governments are going through right now to ensure their nations are the center of future technological breakthroughs...

 

[werepossum]

Again, so what? If you can earn a higher percentage with the cash than you are paying in interest, the loan can run indefinitely and you will always be ahead.

The depreciation of the car's value is irrelevant. The car is either worth it's purchase price or it's not worth it's purchase price. How many years you choose to pay the purchase price has nothing to do with the effects of depreciation.

Not for most people. If the car's value depreciates to less than is owed and the car is totalled, then insurance will not replace the actual owed amount (unless one takes out a special kind of insurance) so that one has to write a check for the value of the car one no longer owns or else roll it into the next loan, meaning one gets upside down even more quickly. I've seen this happen several times.

The U.S. has been able to rebound well after past recessions primarily because the next generation of technology advancements have been pioneered within the U.S.

This isn't the case anymore. The U.S. is more interested in being fast-food workers than we are ensuring the new developments in energy, semiconductors, software, are happening to the benefit of American workers. If the people on this forum had even the slightest awareness of the lengths Asian governments are going through right now to ensure their nations are the center of future technological breakthroughs...

Good point. This fundamentally changed when we eliminated our barriers against technology transfers, especially to China. Now, even if Americans make the next technological breakthrough, China will reap most of the financial rewards whilst we try to redistribute ourselves back to prosperity with low-paying jobs doing each other's hair and selling those Chinese-made goods.

 

[Jaepheth]

Oh, I'm prepared.

I'm dumping all my worthless dollars in favor of real property. And what better than a commodity whose rarity will increase once it goes extinct?

That's right, I'm buying up all the bananas! Boxcars full of them. I'm stashing them in my attic and when the bottom falls out, and all the banana crops have failed I'll be rich!