The Coming Global Auto Abyss

By: Gordon Long | Tue, Nov 10, 2015
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Too Much Supply, Too Many Brands; Combine with Too Much Credit!

Full Report: Download pdf 25 Pages

The Federal Reserve's latest G.19 statement on US Consumer Credit indicates the US Government now holds over $1 TRILLION in car loans! How can this be?

This would indicate that a significant percentage of all US car loans are now being financed in some fashion by the US government! The problem is seen to be extremely serious when the financing of these cars is analysed.

Nearly a third of all autos are now leased with the residual values of the leases being struck to achieve low, affordable current monthly rates. Like the housing bubble in the 2008 financial crisis the question that must be asked is; are these residual values going to be achieved and if not, who is the 'dupe' holding the paper when these cars must be marked to market?

Short Answer: THE TAX PAYER!

Since a significant number of car loans are now increasing being held by owners with sub-prime credit scores it suggests that the present record car sales may be artificial and non performing loans may soon increase even further burdening further an already full capacity 'repo' industry and a crumbling wholesale auto auction market for used cars.

Research indicates that most developed economies are heavily dependent on auto exports and the broad array of feeder industries associated with the large global auto manufacturers.

Sustained easy credit since the financial crisis has fostered a global supply glut based on buyer segments who couldn't afford the cars in the first place.

Sound like the 2008 housing mortgage debacle? Sound like the student loan bubble where students can't pay the loans?

Short Answer: IT IS & IT IS GOING TO GET UGLY SOON!


What is Coming

 


 

Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

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