CRISIS IN THE AUTO INDUSTRY – The Bubble Has Become Unsustainable!

Josh Sigurdson sits down with author and economic analyst John Sneisen to talk about the massive bubble burst creeping closer and closer in the auto industry following the biggest subprime auto lender Santander (being dubbed the New Century of auto finance) skipping income verification on 92% of auto loans.

We are watching the type of manipulation we’ve been warning about in the housing market. The same type of manipulation we saw just before the 2008 recession.

Instead of mortgage backed securities (MBS) we are seeing auto backed securities (ABS) on an aggressive level.

Santander’s ABS deals from 2015 sported an average FICO (or credit rating) of 595, LTV of 110%, APR of 16.2% and a term of 70 months. This is actually worse than New Century!

Santander as reported is the largest subprime auto lender in the country with more than $15 billion in outstanding loans to under-qualified buyers.

As we continuously call out the vast manipulation and central planning in both the markets and monetary system, people continue to turn their heads and pretend nothing’s happening and that everything’s okay. We are continuously vindicated but all the same, no one seems to care.

This market manipulation and destruction affects everyone eventually and it’s incredibly important we call it by its true name. It’s a PURGE of the markets, free of actual free market demand or decisions. It’s centrally planned and built to fail. People end up in debt servitude and the script plays on.

The sooner we understand these inherent problems, the sooner we get out of the Hegelian nature of problem, reaction, solution, repeat and instead protect ourselves via voluntary interactions between free individuals. Market manipulation is put forward to fix the problems when it creates the problems in the first place.

Be self dependent and responsible and deny the social constructs of these massive failure.

Stay tuned as we continue to break this down!

Video edited by Josh Sigurdson

Featuring:
Josh Sigurdson
John Thore Stub Sneisen

Graphics by Bryan Foerster and Josh Sigurdson

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World Alternative Media
2017

“Find the truth, be the change!”

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16 Comments

  • J Doherty_Primary
    Reply

    So what are the options to profit from the auto collapse or general market crash? (short automakers, go long VIX call options?)

  • resop3
    Reply

    I think another way to look at this problem is that it is a form of counterfeiting. In this case, shady banksters create a worthless product (auto-loan backed securities) which they sell to gullible institutional investors (the small investor would not be able to buy these vehicles) and then when the investment goes South the government is “supposed” to bail out the institutional investors since the politicians are awash in bribe money (campaign contributions) from the institutional investors. Another current example is the college education bubble. Shady lenders sell student loans to students with no chance of getting a job (due to the automation explosion). These lenders turn around and see student loan backed securities to the same politically connected institutional investors. It’s all about privatizing the profits if their investments pay off and publicizing the debts if they don’t. The solution would be to stop bailing out billionaires with taxpayer money and let them lose their shirts. This might mean that it would be hard to get a car loan if you have no way of paying it off, and it might mean that colleges might take a bath since 50%+ of their student body would have to drop out since they could not pay for their education, but they need to stop counterfeiting even if there is some pain involved.

  • MrGchiasson
    Reply

    ABS? Auto Backed Loans. And I’ll bet that some scuzzy banker will t lump the ABSs all together and call them, ‘Collaterized car loan debt obligations’ CRLDO’s and sell them off for even more profit. And to think that the gov’t actually prosecuted Enron.

  • Josh_ in the IE
    Reply

    Just last year I was working at an auto auction and was a coordinator for getting units ready for sale. Santander was one of my accounts. They were the worst people to work with. Very demanding wanted their units to be put ahead of everyone else’s in terms of mechanical checks, body work etc. They also demanded their units to get ready within a very quick time frame – which we couldn’t accommodate. Turned out they owed our specific location over 275k in unpaid bills. My manager was such a yellow bellied coward that when the auction couldn’t fulfill Santander’s rediculous expectations he would have the auction eat the costs…
    I saw the writing on the wall and got out of that business.

  • paul ducharme
    Reply

    You didn’t think you could keep selling cars which one year later can buy at a half to three quarters the price did you?

  • Charles H
    Reply

    OK – so let’s say this auto “bubble” explodes. What EXACTLY can we expect to happen? What EXACTLY will occur when the student loan “bubble” explodes? I say nothing. You say?

  • Kenneth Rothey
    Reply

    Most ignorantelligencia ( my word) should gave seen thus tsunami coming just by observing the financing market for cars starting about 5 years ago. A startling correlary can be seen through the “matress market”. Who could imagine a financing market for bedding at 0% interest for 7,8 even longer terms. I find it terrifying to think I need such terms just for a mattress.

  • withoutexcuse2011
    Reply

    There is a mountain of hard evidence PROVING the crimes of the bankers. Yet we see no indictments, no prosecutions, no imprisonments. There can only be one reason for that:
    *THE BANKERS ARE ABOVE THE LAW … THE BANKERS ARE SUBJECT TO A SET OF RULES THAT OVERRIDES THE SOVEREIGN LAWS OF THE UNITED STATES.*
    Until that changes — if it ever does — then Josh and John will be talking to themselves because **NOTHING** is ever going to happen. Wake me up when this changes.

  • r a feiel
    Reply

    AUTO LOANS ARE NOT THE SAME AS HOME MORTGAGES.THE AUTO LOAN CAN DEFAULT AND THE LENDER WOULD NOT BE OUT MUCH AT ALL AS AN EXAMPLE A 10,000 USED CAR WOULD HAVE BEEN AT WHOLESALE 7,000 TO 8,000 AND IF REPOSSESSED WOULD BE ABOUT 6,000 TO 7,000 IN ACTUAL VALUE .THE CAR LOANS WERE NOT BASES ON THE CAR INCREASING IN VALUE LIKE THE HOMES WERE .IF THE ENTIRE SUBPRIME LOAN IND COLLAPSED THEY WOULD LOSS ABOUT 20% PLUS OPERATING COSTS.

  • ghostcar
    Reply

    You can tell the guy on the left stares at himself in the mirror a lot. Maybe there should be a study done on him to find out what happened?

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