Dialing For Leprechauns

More than once in these musings, there's been talk of where The Giant Pool of Money (yet growing) goes to find above market risk-free returns. Subprime auto loans is one avenue mentioned here. Regular auto loans, now, too. But that latter is as much an effect of a whithering middle class as anything else. Most folks can no longer afford the monthly for a standard car at the (once) standard 3 year note, which is what I did with my Capri. That was some years ago, of course.

By comparison, 36-month loans were the norm in the 1970s and '80s, while more recently, five-year loans were common.

When will this blow up, too? Soon, in all likelihood. The thing about cars is that, with only a handful of exceptions and none in the near term, their value only depreciates. As the stories point out, you're underwater on the note from beginning to end with these Methuselah loans. Once again, The Giant Pool of sharks goes looking for chum, and finds it.

Here's the link to the FRED graph (click to see it all, if needed).