The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst

 By Michael Snyder, on September 6th, 2016

Do you remember the subprime mortgage meltdown from the last financial crisis?  Well, this time around we are facing a subprime auto loan meltdown.  In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances.  Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way.  Delinquency rates are up by double digit percentages, and major auto lenders are bracing for hundreds of millions of dollars of losses.  We are a nation that is absolutely drowning in debt, and we are most definitely going to reap what we have sown. 

The size of this market is larger than you may imagine.  Earlier this year, the auto loan bubble surpassed the one trillion dollar mark for the first time ever… 

The average size of an auto loan is also at a record high.  At $29,880, it is now just a shade under $30,000. 

In order to try to help people afford the payments, auto lenders are now stretching loans out for six or even seven years.  At this point it is almost like getting a mortgage. 

But even with those stretched out loans, the average monthly auto loan payment is now up to a record 499 dollars. 

That is the average loan size.  To me, this is absolutely infuriating, because only a very small percentage of wealthy Americans are able to afford a $499 monthly payment on a single vehicle. 

And it is undeniable that the stage is set for a crisis that will absolutely dwarf 2008.  Our national debt has nearly doubled since the beginning of the last crisis, corporate debt has doubled, student loan debt has crossed the trillion dollar mark, auto loan debt has crossed the trillion dollar mark, and total household debt has crossed the 12 trillion dollar mark. 

We are living in the greatest debt bubble in world history, and there are signs that this giant bubble is now starting to burst.  And when it does, the pain is going to be greater than most people would dare to imagine.

The Percentage Of Working Age Men That Do Not Have A Job Is Similar To The Great Depression

 By Michael Snyder, on September 7th, 2016

Why are so many men in their prime working years unemployed?  The Obama administration would have us believe that unemployment is low in this country, but that is not true at all.  In fact, one author quoted by NPR says that “it’s kind of worse than it was in the depression in 1940″.  Most Americans don’t realize this, but more men from ages 25 to 54 are “inactive” right now than was the case during the last recession.  We have millions upon millions of strong young men just sitting around doing nothing.  They aren’t employed and they aren’t considered to be looking for employment either, and so they don’t show up in the official unemployment numbers.  But they don’t have jobs, and nothing the Obama administration does can eliminate that fact.

DYI