Summary: Two new reports warn us about the predictable but so far ignored consequences of so many Boomers' retiring with low savings, no pensions (other than SS), large debts -- and long expected lives ahead. Unless we act, the effects will prove painful for not just them -- but also on asset prices and US … Continue reading Poorly prepared Boomers retiring means hard times for them and for America
Summary: One theory of the bulls is that the slow recovery since 2008 means that there are few imbalances in the US economy, the strong sectors whose busts cause recessions. That is not correct. Here we look at one strong sector: automobile sales. As usual in America, we start by looking at the lending that … Continue reading What Happens When the Auto-Loan Boom Blows Up?
Summary: Reading news about trends and events without explanations of why provides entertainment, but seldom gives actionable insights -- whether for individual action or public policy initiatives. Now we have the explanation for the boom in what seemed like unsustainable subprime auto lending: new technology makes it profitable. “When I was sixteen, I went to … Continue reading New technology makes subprime auto lending usury easy and profitable
Summary: One of the many oddities of this cycle is that many things that were good during the post-WW2 era have become bad in the new era now starting (unrecognizably so, as we remain unaware of our changed circumstances). Like debt. As we see with auto loans, once useful -- now malignant. Our use of … Continue reading Auto loans: once a boon for America, now a bane
Summary: Let's look at the small and large implications of the auto loan boom. It's an example of our inability to learn, resulting in our credit-driven business cycles. Corporations profit from more sales and interest charges. People suffer from excessive debt burdens, and bankruptcies. Governments run deficits from the eventual busts. So it goes cycle … Continue reading Debt unleashed again to ravage America: out of control auto lending