News More about that economic boom we're supposedly having

Discussion in 'The Howard Stern Show' started by SouthernListen, Mar 23, 2015.

  1. SouthernListen

    SouthernListen I don't follow the crowd. Sorry about that. VIP

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    More US Consumers Signing Long-Term Auto Loans
    By Cameron Aubernon on March 20, 2015


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    In the past, six-year auto loans were few and far between. Today, more of those loans are being issued, with seven- and eight-year loans gaining popularity.


    NPR reports such loans are helping to fuel a boom in U.S. new-car sales, with one-third of the loans lasting 74 months and beyond. AutoPacific analyst Ed Kim says the cars are one of the reasons for the long loans:

    Consumers are demanding a lot more technology in their vehicles, infotainment technologies. There’s also a lot more safety features that are in vehicles right now. Emissions and efficiency technology that are in vehicles right now, that are making vehicles cost a lot more.

    Kim adds that the main driver is that most consumers are still crawling out of the Great Recession, which Experian Automotive’s Melinda Zabritski says isn’t much of a problem as far as lending goes. She says that while it would be sensible to take on 36- or 48-month loans on a new vehicle, “the average consumer just can’t afford that.”

    Critics counter that the long-term loans could hurt consumers and automakers alike in the near- and long-term. Consumer advocate Mike Sante states that those who are taking out those loans have no business doing so in the first place, and should buy a less expensive new or used vehicle with a loan of no more than four years. Honda Executive Vice President John Mendel, whose company offers 36- and 48-month loans, says loans beyond five years are too long, and adds that he hopes his competitors come to their senses.
     
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  2. DarkFriday

    DarkFriday Fired as a MOD...Twice. Gold

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  3. Uncle Larry

    Uncle Larry Well-Known Member VIP

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    The long term loan trend is getting worse - last year only around a quarter of the new car loans were 6-7 years. http://www.cnbc.com/id/101721466

    People are taking on more debts that they can't really afford - lessons not learned from the last financial crisis just a few years ago.
     
  4. God

    God Well-Known Member

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    Eight year car loans??? Are these people insane?

    I put a bit away each week and bought a slightly used car a few months back in cash. If one lives within their means and stays out of debt, life can be simple.
     
  5. Avery

    Avery Well-Known Member Banned User

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    Home ownership

    [​IMG]

    Velocity of money

    [​IMG]

    employment rate/population

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    Median house income

    [​IMG]

    CPI

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    .gov dependence

    [​IMG]


    Any questions about the wreckovery, @Ving or @Bosch76
     
  6. SorryBoff

    SorryBoff Well-Known Member

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    Although i didn't vote for him I wanted Obama to succeed, he didn't though. I know there are people who will point to the low UE rate as proof the economy is fixed, but how does the workforce participation rate stay the same even though the UE rate was cut in half? It doesn't add up. Also for the UE rate to improve so much we would have had to be in a 90's type hiring boom, when exactly did this boom take place because I must have missed it??
     
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  7. Droog

    Droog Well-Known Member VIP

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    I remember when most auto loans were 4-years, and my dad told me that 3-years used to be normal too. The problem is a combination of factors. One, middle class wages started to stagnate going back to 1980. Cars have gotten to be pretty damn expensive. The average car today is over $31k. But, unlike the days of the 3 & 4 year loans, cars aren't garbage by 100 thousand miles. Todays cars easily reach 200 thousand with nothing more than routine maintenance - especially outside of the rust belt. A longer term loan for a good car isn't necessarily a rotten thing when they easily last 10 years.
     
    Last edited: Mar 23, 2015
  8. yahoo

    yahoo Well-Known Member

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    I know all about charts. And statistics. Both parties have them to make their case. I've used them to make my case. Nothing is ever black and white.

    The economy of the United States will never be the same again. Internet companies with 30 employees are worth more than huge companies with 40,000 employees. College educations cost more and mean less than the ever. Automation, robotics and computers will continue to slacken the need for human employees.

    You can blame Obama as much as you want, but if he had gone on an austerity cost-cutting spree like they did in much of Europe, we most likely would have been in worse shape.

    There are no easy answers anymore. And anyone who says there is on either side of aisle is just delusional.
     
  9. Droog

    Droog Well-Known Member VIP

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    These two charts don't jive if supply and demand is to be believed. Why would consumer prices be rising at a time when wages are declining? The cost of goods should only go up when people can afford it. If wages are staying low, then why the need for prices to rise? Productivity is at an all-time high in the 3rd quarter of 2014. So what in the world is driving higher prices????
     
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  10. Droog

    Droog Well-Known Member VIP

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    Take a look at Europe today vs the US. The dollar is strong and the euro is weak. We'll see if austerity pays off for Europe in the long run. Right now, the recovery is far worse than ours. And, let's face the facts here. The rich have really made out since the recession and they are the ones controlling things. They don't want austerity, so austerity will never happen except for taking away money going to the poor.
     
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  11. Droog

    Droog Well-Known Member VIP

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    Corporations have more money than ever before, and productivity is through the roof at 107 index points. Americans are doing more work for less. It shows up on the bottom line of corporations.
     
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  12. Rodney21a

    Rodney21a Well-Known Member Banned User

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    Economics 101. They(Obama and Bush FED and Policies) printed shit tons of money to get us out of the economic crisis. So your money is devalued. Can't get around it. So a 1 dollar on the day of the crash the crisis is 1 dollars of value they print 3 dollars for every 1 then it's a fourth of the value even if the economy recovers.

    Home ownership is supposed to be at 65%. It was at 65% for decades. This is it's natural position. Some dude in the Nixon administration said we need 75% home ownership because more is better. So decade after decade administration after administration congress after congress pushed for by all means necessary to get to 75%. They broke the thing. It's in the process of fixing itself, or maybe 63% is the new level.

    This strategy of getting more money out of banks an into the system is sound. However the disease of more is a virulent one. Once things get rosy and nice people will forget because they(republicans and Dems) know that a bail out is around the corner. Bail out in the Depression. Bail out in the 70's Bail out in the 80's Bail out in 2008.

    If a baby doesn't burn its hand when touching a match(or feel pain...bail out) then it will NEVER stop touching the match.

    The business cycle is big long upswings and short bust over times.

    That's how its supposed to work.

    If your a smart and not a smart ass and can get your head out of the bullshit of politics you should buy ANYTHING SOUND in stock. Sit on it for 5 -9 years(depending on this jump start the the economy) cash out an wait for the next bust bail out and then recovery.
     
  13. newcastlefan

    newcastlefan גֵּרְשֹׁם VIP

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    Think the issue is that cars which would have sold 50 yrs ago for $4000 now cost $40k+ while jobs that paid $40k 50 yrs ago only pay $120k now. The cost of the cars has increased 10x while salaries has only increased 3x. The longer loans make it possible to afford these overpriced cars. People should not buy or lease them till the prices are more appropriate, but they won't because customers are sheep.
     
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  14. Samurai

    Samurai Well-Known Member VIP

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    Nice analysis. Ownership isn't for everyone. Some people are irresponsible and should be renters.

    The other problem is that so many want have our cake and eat it too. When we're relatively young and first entering the house buying market, (A) we want nice houses that are "affordable." Then as soon as we move in, (B) we want the value of the house to climb annually faster than inflation and wage growth. We fail to see that over the long term and across the large swath of middle class buyers, A and B are mutually exclusive.
     
  15. Hugh Blowmont

    Hugh Blowmont Just be funny

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    The reality is that America has the resources at our disposal to fix our problems virtually overnight. What we don't have is the will, not among our politicians and certainly not of our society.

    Fixing our economy requires a few things. It requires revamping the tax structure so that the middle class stops bearing the brunt. The rich pay a very large percentage of our tax revenue but benefit disproportionately under the current codes on loopholes , but the bottom half pay virtually nothing. Both are wrong. I am a firm believer of a VAT as a substitute for an income tax as it encourages savings and it evens the playing field.

    If youre a rich fuck who wants to buy a Rolls Royce for 250k, rock on, but youre going to pay 18% VAT. If you're middle class and make 50k a year, and youre spouse gets a job making $35k that extra income is going to get banged at 30-39%. if you go buy a $35, 000 vehicle, you get an 18% tax, but if you're still ahead 12-21% depending on your bracket and if you decide to save that money instead for college or retirement, you pay no additional effective tax.

    If you're a dipshit working minimum wage and pay no income tax because you fall below the line, but decide to buy a set of $250.00 rims for your shitty Honda CRX, congratulations, you're finally paying Federal taxes.

    That being said, we need to crank down on welfare and medicare scams, hire private firms to monitor and bonus them on people they catch. The safety net is there for the truly needy and misfortunate, not for fat fuck lazy asses in Detroit AND trailer squalor in Kentucky.

    Finally, we need a real energy policy that involves EVERYTHING. We should be drilling in Alaska and the Gulf, putting up wind farms on the midwest, raise the CAFE standards on cars, convert all our overland trucks to natural gas and come up with a standard blueprint nuclear energy plant to ensure uniformity of training, safety and maintenance, then build fifty of them all over the county.

    In short, we need to do what both parties will hate. Effectively raise taxes on the rich AND the poor, cut government spending for both the inner city AND appalachia welfare frauds, embrace clean energy AND carbon based fuels AND force more stringent environmental standards on car companies AND embrace nuclear energy.

    In other words, do the impossible: piss everyone off, but fix the problem.
     
  16. wife is a whore

    wife is a whore Stripped of POTY for butthurting staff VIP

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    Car is the largest disposable commodity a person will purchase. As such, I refuse to take a loan out on one. I'm quite happy taking a vehicle from 100kmiles to death than burning all that money.
     
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  17. A. Genius

    A. Genius Well-Known Member Banned User

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    1970 a new car cost about a third of a workers annual salary. House cost about 3x average annual salary. So fucking out of control now. Just happy to enjoy my diversions. Unemployment rolls don't matter because when you use up your benefit, you drop off the rolls and aren't counted.
     
  18. Droog

    Droog Well-Known Member VIP

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    Home ownership of 75% wasn't the problem. The rate by which prices of homes were going up was a big problem that was caused by low interest rates and the ease of obtaining loans since money was dirt cheap. The problem plaguing today's society is bad debt. Credit cards and expensive cars are a way of American life. There are millions of fools out there living above themselves thanks to credit cards. They're paying over 20% interest and carrying thousands of dollars in balances every month. They'll never build wealth because of it. Renting a home isn't cheaper than buying. When you rent, you're buying property for someone else. The costs (plus a profit) are merely passed on to the renter. We owned rental property for years. The renters always paid above what we paid in mortgage payments plus non-homestead property taxes. They built equity for us.

    I'm waiting for oil prices to cause oil companies to drop even further than they have. Exxon is off over 20% from its 52 week high. Oil won't remain cheap forever, and energy consumption will continue to grow in spite of new technologies. I have done extremely well in low cost index funds and am starting to get nervous because of it. I don't want to get caught in a correction. I want to be quick to maneuver when the time comes.
    Prices are appropriate for what you get. Look at how well equipped even base models are today. In spite of using thinner metals and more plastic on cars than there were 30 years ago, cars weigh more. An '85 Volkswagen Golf weighed 2000 - 2700 lbs depending on what options you got. Today's start at 2700 lbs and go over 3000. You can compare any similar model from yesteryear to today and they'll weigh more today in spite of far more lightweight materials being used today. What's inappropriate is that we're pretty much forced to buy all that extra stuff that's there today. The nice thing is that today's cars last longer. Total cost of ownership gets reduced when a car easily lasts over 10 years when they used to be good for about six.
    We've become idiot consumers. I watch young people move into my subdivision all the time buying $300 thousand homes as their first home. They buy all new furniture and drive new cars as well. The wives are all wearing enormous diamond rings. We know when the bills become a burden because they won't turn on their sprinkler systems in spite of their grass dying. Water is really expensive in our town thanks to a high end system for too few residents. I also read that dummies are now spending an average of almost $30k on their weddings. I can't fathom that. Talk about a ripoff and a stupid way to start out a life together. Everyone wants to act like they're rich these days. They don't care if they have the money or not.
     
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  19. Droog

    Droog Well-Known Member VIP

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    Me too. My wife wants new cars. I couldn't give a shit about them. Our neighbors (good friends) are both pharmacists. They make a lot of money. The wife wants to spend it, but he doesn't. He's driving a 15 year old pickup that's starting to rust and is just now thinking about his next car. The young couple next door to them makes fun of him for being cheap. The joke is on them. Our friends paid off their house before age 50. Those two idiots next to them are always bitching about money.
     
  20. Rodney21a

    Rodney21a Well-Known Member Banned User

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    [​IMG]

    Equilibrium
    dude.

    The equilibrium quantity of home ownership(end of the dotted Line) was 65% for YEARS.

    That'[s where is supposed to be

    Unless

    The Government mucks it up

    like giving home loans to unqualified people to spike it to a home ownership. Which causes a shift in the Supply and Demand curve.

    They shouldn't have mucked with the housing markets. But many administrations many Feds many congresses did it over the years.

    They knew what they were doing.