Lawrence Person's BattleSwarm Blog 4/11/2023
I’ve already covered how small business bankruptcies are at record highs and manufacturing is at a three year low. To those woes add a severe credit crunch.
How severe? How about $105 billion drop in loans in just two weeks.
https://www.youtube.com/watch?v=Uh8Jnbafrwc• “This credit crunch greatly increases the chances that America is going to have a deflationary recession or depression at some point in 2023. And, in fact, we could already be in it.” Ya think?
• “We’re going to see the unemployment rate start to spike in America in the second half of 2023, In fact, we’re already seeing a big increase in unemployment claims data from the Federal Reserve shows that continued unemployment claims has surged since September.”
• “We’re seeing a big surge in mortgage defaults right now across America, particularly on what’s called FHA mortgages. FHA mortgages are these first-time home buyer loans that the US government sponsors and allows people to only put three to five percent down. Well, these loans now have a 12% default rate in the most recent month of February 2023.”
• Debt-to-income ration is now higher than it was at the pre-subprime meltdown peak in 2008.
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https://www.youtube.com/watch?v=jfVQlSgsqx8• Banks are cutting off backing loans and providing credit to dealerships.
• Not just used car dealers, but even national brand, nameplate dealerships.
• This all started back in 2020, when banks started lending way too much money on cars that simply aren’t worth it, to consumers that simply couldn’t afford these payments, and shouldn’t have got the car in the first place…Let’s fast forward to 2023. We’re seeing record high repossession rates, and we’re seeing record high portfolio sell-offs, where people are just liquidating their paper because they don’t want to take on the risk of all these really bad auto loans, because they owe too much money. People are not making payments and they see the value of cars going down.
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https://www.youtube.com/watch?v=V9CA-yOtXIQ• “Capital One is going to start pulling their floor plans from dealers.”
• “Floor plans” are the lines of credit dealers use to purchase cars to populate their lots, even the big nameplate dealers.
• “Dealers are overexposed right now. They have paid way too much for their inventory and now they are having a hard time selling it.”
More:
https://www.battleswarmblog.com/?p=54634
