Easier Credit Fueling Automaker Resurgence

Hmmm, I seem to recall something similar in the news in recent years in which people who were the least likely to repay their debts were given great credit deals. And guess what? They defaulted on their debts, and nations' economies took a multi-year tail spin.

As long as we have a mentality in which borrowing and massive debt is a way of life, we'll keep seeing more of the same.

ditto...

Auto loans were probably the best performing loan category for banks through this financial crisis. While we are seeing an easing of lending in Auto space, it still isn't to the pre-crisis levels.

The reason auto loans performed so well are several. (1) Cars are easily repossessed, versus homes, which can take months if not years to foreclose on and sell. (2) Cars were ALWAYS expected to depreciate in value-- versus homes, which were assumed to appreciate against the loan. (3) Auto payments tend to be higher on a consumer's priority of payments versus home payments, because a car is often a person's last lifeline for job searching/living etc in most cities.

Don't expect what we are seeing here to be the cause of "a multi-year tail spin," Steve.