ABOUT TO GO POP?
Want to see what America’s automotive bubble looks like? The website Stock Board Asset has you covered. Over the weekend the investing website posted an aerial video (above) of the glut of automobiles at the port of Baltimore – which consistently ranks among the nation’s busiest automotive ports.
This is visual evidence of America’s automotive bubble – a.k.a. one of the two biggest threats to our nation’s tenuous economic “expansion.”
(This is the other).
Last November, the Federal Reserve warned of “notable deterioration” in the auto lending industry – with six million American households more than ninety days late on their car payments.
Also growing numbers of car buyers are finding themselves “underwater” – with 32 percent of all vehicle trade-ins worth less than the outstanding value of the loan during the first three quarters of 2016.
That’s a new record. Also a new record? The average $4,832 in “negative equity” auto traders brought to the table through the first three quarters of last year.
“None of this appears to be sustainable, and indeed, there is growing consensus among auto industry watchers that it won’t be sustained,” Streets noted recently. “It is as yet unclear, however, whether the auto bubble will deflate with a hiss or a pop, and how much collateral damage it might cause to the rest of the economy in the process.”
That’s a scary thought to contemplate …
Even scarier is that the “notable deterioration” in this industry has occurred a time when the economy is supposedly “doing well.”
WANNA SOUND OFF?
Got something you’d like to say in response to one of our stories? In addition to our always lively comments section (below), please feel free to submit your own guest column or letter to the editor via-email HERE or via our tip-line HERE …
Banner via Text