Michelle Krebs, senior analyst for car-shopping researcher Autotrader, told Bloomberg: “Affordability is going to be a challenge for consumers going forward, and we’re beginning to see that…”
New car prices hit a record high in Q4 2018, with Edmunds reporting that the average transaction price for a new vehicle in December hit an all-time high of $37,260, an increase of $6,598 from December 2010 largely thanks to record high average loan amounts for both new and used cars.
Carmageddon was supposed to happen last year, when an unprecedented number of automobiles came off lease and were about to flood the market. Instead, the leasing companies held onto these cars, releasing them to wholesalers so as not to disrupt the market.
#1 Farm loan delinquencies just hit the highest level that we have seen in 9 years.
#2 We just learned that U.S. exports declined by 4 billion dollars during the month of December.
#3 J.C. Penney just announced that they will be closing another 24 stores.
#4 Victoria’s Secret has just announced plans to close 53 stores.
#5 On Thursday, Gap announced that it will be closing 230 stores over the next two years.
#6 Payless ShoeSource has declared bankruptcy and is closing all 2,100 stores.
#7 Tesla is also closing all of their physical sales locations and will now only sell vehicles online.
#8 PepsiCo has started laying off workers and has committed to “millions of dollars in severance pay”.
#9 The Baltic Dry Index has dropped to the lowest level in more than two years.
#10 This is the worst slump for core U.S. factory orders in three years.
#11 We just witnessed the largest decline in the Philly Fed Business Index in more than 7 years.
#12 In January, sales of existing homes fell 8.9 percent from a year earlier. That was the third month in a row that we have seen a decline of at least 8 percent. This is an absolutely catastrophic trend for the real estate industry.
#13 U.S. housing starts were down 11.2 percent in December compared to the previous month.
#14 Compared to a year earlier, home sales in southern California were down 17 percent in January.
#15 In December, home sales in Sacramento County fell a whopping 22.5 percentcompared to a year earlier.
#16 Pending home sales in the United States have now fallen on a year over year basis for 13 months in a row.
#17 More than 166 billion dollars in student loan debt is now “seriously delinquent”. That is an all-time record.
#18 More than 7 million Americans are behind on their auto loan payments. That is also a new all-time record, and it is far higher than anything that we witnessed during the last recession.
We’ve known for some time that a lot of the retail stores in trouble should never have been built. Private equity firms bought these companies and perceived growth was the only way to please stockholders, most of whom have dropped these unperforming assets.
Indeed, once the retail shakeout is over, those which remain will only exist by virtue of their perceived stock value in a market currently marked at 17 times earnings.
Central banksters have done everything possible to increase inflation, which lowers the value of debt. Unfortunately, a global recession indicates a lack of demand or deflation, which increases the value of debt.
It could not come at a worse time, with Christofascists enslaved with debt by the false promise of Prosperity Gospel. Otherwise, our worship of materialism has enslaved young people with college loans which are not available to bankruptcy, a fascist banking reform which dooms a generation and destroys the housing market.
The USA no longer makes anything and a generation of neoliberal education has produced a workforce with no skills. The globalists have exhausted low cost labor and the Chinese are demanding higher wages. As prices at Walmart and Dollar General inexorably rise, American consumers could not be in a worse position. Indeed, China’s biggest problem is our inability to continue buying their exports.
More and more, the only thing worth watching on cable are shows where old cars are rehabbed. Today, I was putting gas in my old truck, when a guy pulled up in a seventies Chevy truck. You could hear something very cool under the hood.
I complemented him on the truck as he approached, and he stopped to say he’d bought it sixteen years ago for $500 and had lots of fun with the engine.
John Michael Greer wrote a series of blog posts which he published as Retrotopia. It is a treatment of dystopia that is hopeful. After the US is balkanized, regional governments revert to technology of the nineteenth century, which means candles, fireplaces and horses.
JMG has also published blog posts based on the work of Oswald Spengler, who warned that our Faustian civilization is completely unprepared to deal with collapse, whether financial or environmental, and very probably both.
Fortunately, JMG has also written that collapse will be catabolic, or in stages, rather than catastrophic. That’s about as close to good news regarding the future, that you are likely to find, especially as we continue to dash headlong into the unknown, bloated with debt and heedless of our effect on the environment.
Actually, it’s much worse, as millions of Americans on both sides of the political spectrum ignore the plight of innocent Yemenis and support a ludicrous coup in Venezuela, in order for the promise of cheap gas to be fulfilled.
Meanwhile, those of us who’ve manage to live within our means will profit by the misfortune of our neighbors. As the automobile and housing markets finally undergo corrections which might have been eased by government action, we will take advantage.
As retail continues its slide into oblivion, we will sign leases for better properties at greatly reduced rates.
Those of us who decided not to have kids will continue to visit the doctor and dentist, outliving many younger people unable to afford insurance.
Whatever happens this Summer, those of us without debt will prosper.
James Howard Kunstler described American purchases of McMansions and vehicles as the greatest squandering of resources in the history of the world. And since the world will end when power fails to several of the 23 GE Mark I Boiling Water Reactors in the US, he’s probably right.
This fatal national Bacchanalia is based on what Jeremy Grantham said are two-hundred years of unprecedented cheap energy.
We should’ve educated our children and guaranteed their future. Instead, we’ve bequeathed to them unending suffering and debt.
A lot of debt was acquired to maintain the appearance of wealth and all that will evanesce as markets finally correct, bloated inventories are released and asset values are destroyed.
Of course, our military gets up to $1T per year to kill people and break things, which results in the USA being regarded as the most evil force on the planet. So, it’s only natural to assume our Ospreys and F35s invite attack.
It’s remarkable that our actions abroad haven’t already turned the world into an ash tray. But the days of being the world’s bully are numbered.
Trump is burning daylight to ruin the USD as the world’s reserve currency. The appearance of alternative currencies for trading is good for the world, but necessarily greatly reduces opportunities for domestic wealth generation, especially in oil.
NATO is done, as is the EU. The US is in a deadly economic embrace with China, which means they are also our greatest partner. Neoliberalism has taken us in three generations from enemies with the Chicoms to practically being owned by them.
Trump denied Pakistan $1.3B in annual foreign aid. We know this precipitated the resurgence of the Taliban in Astan. And then Netanyahu gets Modi to attack a Jaish e Mohammed camp in Kashmir. A week later, the Paks shot down two ancient Indian jets shooting Israeli stand off missiles into Kashmir and captured the pilots.
Trump and Bibi putting the old one-two on the Paks, just before Modi’s election risks a nuclear conflagration. Fortunately, Pakistan came out smelling like a rose, not the intended consequence.
The Venezuelan coup is another pratfall, with the source of shortages being US sanctions. One of the richest families in Caracas supplies 88% of the nation’s corn flour, a staple. It’s absence in stores provides anecdotal evidence of Maduro’s ineffectiveness and unpopularity.
Trump, Pence, Pompeo, Bolton and Abrams are a clown act performing their tired Banana Republic death squad routine on the world’s most progressive government, whose sovereignty is unfortunately pegged to the value of its oil, which is thick and requires specialized refining. BTW, the IMF and World Bank made sure the Chavez government possessed no refineries, being forced to use those in neighboring countries.
Again, a worldwide recession ruined oil prices and the Chavez communist miracle. US sanctions merely problems worse. Citgo, the national oil company, is heavily indebted.
Worse, Trump is coming to the aid of the wealthy citizens, whose grandchildren are protesting in the streets and assaulting poor people. Juan Guaido is their guy.
But two generations of drug running in Colombia makes the destabilization of Venezuela too tempting to turn down. So, the US will repeat its support of the oligarchs and the rebels, playing one against the other, as required.
Venezuela is apparently the deal Trump made with the Pentagon for leaving Syria. Shutting down CENTCOM and manning up SOUTHCOM had already begun as counterinsurgency assets who worked for Petraeus and McChrystal left Astan for Honduras, several years ago.
The privatization of Honduras has not gone well, with the resulting rise in gang violence, in the absence of adequate law enforcement and use of death squads. The violence has also migrated to El Salvador.
But the neocons didn’t have to deal with the Venezuelan army, democratized as it was by Chavez. So, it’s rich white people against poor brown and black people, who, despite US sanctions, are doing fine.
Trump’s clown act is guaranteed to fail as just the latest foreign policy pratfall going back to Vietnam. Truth be told, the only reason we won WWII is 27 million Soviets died killing the Nazis.
Regarding pending environmental collapse, I’m more concerned about the Pentagon having a nuke with 1/3 the power of Hiroshima. There is no such thing as a tactical nuke. Any use of nukes begins a process we can’t control.
Trump is fearmongering with mini-nukes. I try not to ascribe low motives to Trump, but it looks like a way of appealing to the magical thinking of his supporters. It didn’t help that he recognized Jerusalem and cut off funding to the Palestinians.
I’m assuming the US, Japan, South Korea, China and Russia are together on the Nork negotiations. Ollie Richardson says there is much going on behind the scenes which is not privy to the corporate media.