- cross-posted to:
- news@lemmy.world
- cross-posted to:
- news@lemmy.world
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Here we go. It’s 2008 again.
While this isn’t a positive indicator, no, this isn’t anything like what happened in 2008.
Let’s follow up on this in 12 months.
I suspect it will be worse. Much worse.
Why?
Not who you asked, but I see it within the realm of possibility because of all the commercials I saw urging people to finance a pizza.
Lol I guess I’m out of the loop on that one. In that vein, though, the entire point of commercials for decades has been to convince you to make bad decisions
The economy must transition from fossil fuels to other forms of energy. The longer we take the worse it will be, but nobody in power feels any urgency.
Add to that the GFC of 2008 that we “fixed” by printing money, and which was followed by a global pandemic and financial slowdown that… we fixed by printing money.
Now factor in the fact that we didn’t use 2008 to tighten banking regulation, and we have just as many opaque financial instruments (derivatives, swaps) as we did back then.
And all of this as global warming kicks into absolute overdrive, likely due to a feed forward mechanism being tripped such as the methane release from Siberia and/or the clathrate gun going off.
We are well and truly fucked. This reality is noticable if you’re paying attention, and will slowly become impossible to miss (let alone ignore).
Ok doomer. Nothing you just said is anything new to any of us, and nothing you just said makes any argument for expecting another global financial crisis within the next 12 months. It just seems like that’s what you’re hoping for lol
Except this time it’s Commercial real estate.
Back to the office is really a cry for help as those values plummet.
If you want to lose money as fast as possible, either buy commercial real estate or invest in CMBS.
Yeah, commercial real estate has been hot for the last 25-ish years, I think its time has come.
Considering the ridiculous loan terms I’ve seen, I’m surprised that this hasn’t happened sooner. The cars can’t possibly be worth that much money.
Unfortunately when you need transport, it more often than not becomes worth whatever the price they charge is. A lot of unfortunate people fall into awful loans because they lack viable transport options otherwise. Rto hasn’t helped at all either.
Agreed. I wish people in general were more confident in repairing their cars, because that’s a great way to put off a big purchase. However, I just mentioned to a coworker a repair I did (which saved me like $800-1000), and they were shocked and didn’t understand how I could do it (basically ripped apart the dash and sent the odometer chip to a repair place; if I didn’t suck at soldering, I could’ve saved another $70 or so).
But most aren’t, or they don’t have space to do it even if they had that confidence. And the result is getting sucked into paying 10% interest over a 7-year term in 2020/2021 because your car broke down at just the wrong time and parts aren’t generally available.
However, the silver lining is that the more people that default, the better the used car market will get, so there will be more options for people who can’t afford new cars. So I think it’ll even itself out, it just might take a year or two to stabilize. I’m in the market for a car, and honestly, the options suck. The cars I want are out of stock, and the cars that are readily available are available for a reason. I’ve never financed a car (newest car I bought was 8 years old), but it’s looking like that’s the best option right now. So, I’m holding off and just maintaining our aging cars (both >15yo), but that’s not a realistic option for a lot of people.
Here we go…
Good news for the used car market. Lots of new inventory about to become available.
Bad news for American car manufacturers, who are already struggling while they’re in limbo between ICE and EV and can’t commit to either, but certainly will help to correct used car prices.
House repos are probably up there too
There’s data for that. At least as of Jan, it has largely stabilized (as in, rate of forclosures isn’t increasing), and it’s way below pre-2008 levels. The foreclosure rate seems to track pretty closely with rate increases, and that’s held steady for about a year now, and there’s talk of a small decrease.
So I don’t think house repos are related at all to the trigger for the headline. I’m guessing a lot of the car repos are due to paying way too much for an EV (the used EV market is really attractive right now) or luxury ICE (average purchase price Is way above modest new car prices), and then losing a job (lots of tech layoffs recently). I’d like to see more details, but I highly doubt regular working class cars are getting repoed.
Sniff sniff, I smell recession
Eh, I think this will just reinvigorate the used market and push prices of new cars down. I doubt the car market would trigger a recession.
Oh it’s so much more than the just the car market. Housing is too expensive as well. And so many other goods and services. I don’t know anyone that’s not in crazy debt
The home foreclosure rate is way below where we were at around 2008. It is trending up, but slowly. Consumer debt is high, but debt to income is in a pretty consistent range.
The problem with 2008 wasn’t high foreclosure rates (that was just the trigger), it’s that the foreclosure risk wasn’t properly baked into lending rates. So banks thought they had less risk than they did, and that was due to greed (i.e. banks selling loans in buckets that masked the risk). Since then there have been a lot of changes in how risk is managed, so I highly doubt we’ll see a similar cascading failure. We may see higher foreclosure rates due to high borrowing rate shock, but that shouldn’t translate to a recession, it would just hurt bank profits in the short term. At least that’s the theory.
So if banks don’t start failing, we shouldn’t see a big disruption to employment, therefore no major recession. At least that’s my take.
As for anecdotes, most of the people I know aren’t in crazy debt. Looking around the neighborhood generally doesn’t match what’s going on more broadly.
This is good for public transport? Right? Please tell me it’s so.
