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Auto loan delinquencies in the fourth quarter hit their highest level since the financial crisis, a report out Thursday revealed.
About $23.27 billion in loans were 30 days or more late as of Dec. 31 — a whopping 14 percent increase from the year earlier and the most since the $23.46 billion in the third quarter of 2008, according to the New York Federal Reserve.
Delinquencies have moved up as the credit quality of the loans has deteriorated and the length of the auto loans has increased — sometimes to 84 months. [...] Delinquencies are the canary in the coal mine when it comes to losses for carmakers.
[...] The average monthly car payment in the fourth quarter rose above $500 for the first time, according to the credit-rating agency Experian.
(Score: 1) by anubi on Sunday February 19 2017, @12:57PM
If I go to the store for a box of nuts, and they don't have any, I simply don't get any nuts.
If I go to the bank for a box of dollars, they simply "create a ledger entry" that I owe them a box of dollars and then some, and its now up to me to get yet even more dollars to repay the debt. Combine this with everyone else in the same situation, and we have a global system where everyone is in debt, and the bankers live high on the hog doing nothing but collecting usury.
Seems like every dollar out there is a dollar someone had to borrow from those who have the charter to print dollars out of thin air... while the rest of us have to work for them.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 3, Informative) by TheRaven on Sunday February 19 2017, @01:38PM
You're conflating usury (taking money in exchange for providing access to capital) with fractional reserve banking. Fractional reserve banking is a mechanism that allows the supply of money to grow at the same rate as the economy. It's generally worked pretty well, though when the economy contracts it contracts the size of the money supply by calling in loans, which can cause a lot of problems. You need some mechanism that's roughly equivalent to this, because if the money supply doesn't expand as the economy expands (as happened with several currencies on precious metal standards, for example), then people suffer from a lack of liquidity: I produce something, but no one can buy it even though they have capital and a desire for it, so I can't then buy the things that I need and so on.
Most of the objections to fractional reserve banking come from people failing to understand that the entire point of money is to track debt. If I buy something from you, then I am in debt to you for the (mutually agreed) value of that thing. I might not have something that you want right now, so I give you some tokens that represent this debt. You can then call in this debt on someone else who does have a thing that you want and pass the tokens on to them. As such, the amount of available money must reflect the amount of available debt, which, in turn, reflects the amount of production in the economy.
sudo mod me up