Gone very quiet
Discussion
loafer123 said:
SpeckledJim said:
The good people of the USA owe a gigantic amount of money on cars that are not worth anywhere near as much. The system has encouraged them to keep 'upgrading' and rolling-over (and increasing) their debt each time.
Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
The banks don’t own the risk, as the poster above says.Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
No one particularly cares if the investment banks lose whilst warehousing the next issue, either, as they have to be much more careful about how much risk they take on at any one time nowadays.
Your pension might lose money on the previously issued bonds if they are low risk, or a hedge fund you don’t realise you are invested in almost certainly would if the risk is higher.
What does happen if this a big portion of this debt goes bad?
SpeckledJim said:
The good people of the USA owe a gigantic amount of money on cars that are not worth anywhere near as much. The system has encouraged them to keep 'upgrading' and rolling-over (and increasing) their debt each time.
Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
Is this another subprime mortgage scandal? Do the holders of the bonds that represent those loans understand that there's not really any security underpinning them?Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
skwdenyer said:
SpeckledJim said:
The good people of the USA owe a gigantic amount of money on cars that are not worth anywhere near as much. The system has encouraged them to keep 'upgrading' and rolling-over (and increasing) their debt each time.
Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
Is this another subprime mortgage scandal? Do the holders of the bonds that represent those loans understand that there's not really any security underpinning them?Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
classicaholic said:
Engineering update - things have gone very quiet again, it picked up in Feb but not one enquiry this month, seems similar with a few others in our industry, lets just hope people start buying new equipment soon!
Lots of our manufacturing clients are reporting the same.SpeckledJim said:
loafer123 said:
SpeckledJim said:
The good people of the USA owe a gigantic amount of money on cars that are not worth anywhere near as much. The system has encouraged them to keep 'upgrading' and rolling-over (and increasing) their debt each time.
Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
The banks don’t own the risk, as the poster above says.Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
No one particularly cares if the investment banks lose whilst warehousing the next issue, either, as they have to be much more careful about how much risk they take on at any one time nowadays.
Your pension might lose money on the previously issued bonds if they are low risk, or a hedge fund you don’t realise you are invested in almost certainly would if the risk is higher.
What does happen if this a big portion of this debt goes bad?
I would assume lots of people get their cars repo'd. These repo'd cars go to auction, the second hand car market crashes a bit. Lots of people now without cars struggle to get to work, possible a minority of them get fired. Or at the least have to take more expensive public transport - have less disposable income to spend on other things.
Just another thing to fan the flames of a recession.
The delinquencies going up is also another big indicator of just how many people are struggling to make ends meet right now. I'd imagine if they're struggling to pay for their car, that their mortgage is going to be the next thing they struggle to pay...
Just another thing to fan the flames of a recession.
The delinquencies going up is also another big indicator of just how many people are struggling to make ends meet right now. I'd imagine if they're struggling to pay for their car, that their mortgage is going to be the next thing they struggle to pay...
Five years ago the car surplus was enormous. Cars coming off lease/pcp etc were getting parked up by the thousands and there was no market for them because people were just getting another new model. This was actually a huge and swiftly building problem for the car financing business.
Since covid and all the production and supply issues, the value of a 3-5 year old car has looked a lot more healthy and anything coming back off finance and onto the market is likely to find a new owner rather than a field to sit in.
It’s an odd set of circumstances but bottom line is that even if car financing takes a hit and repossessions rise, it will all just return it to a decade ago where a lot of people that can’t actually afford new cars will buy used ones (probably still on finance, just smaller numbers).
As far as this thread goes it’s a drop in the ocean and will barely make a ripple.
Since covid and all the production and supply issues, the value of a 3-5 year old car has looked a lot more healthy and anything coming back off finance and onto the market is likely to find a new owner rather than a field to sit in.
It’s an odd set of circumstances but bottom line is that even if car financing takes a hit and repossessions rise, it will all just return it to a decade ago where a lot of people that can’t actually afford new cars will buy used ones (probably still on finance, just smaller numbers).
As far as this thread goes it’s a drop in the ocean and will barely make a ripple.
SpeckledJim said:
rival38 said:
ben5575 said:
Does it matter though if VW finance for example goes tits up? Genuine question. Will that impact on wider banking/investment? Is it (for example) underwritten by something that would have a wider economic impact?
100% yes it would matter a lot.The credit that VW finance extends to its customers comes from elsewhere in the financial world. For example VW finance issue bonds to raise capital, investment banks underwrite those bond issues before selling the tranches on to pension funds etc.
Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
More so than PCP buyers in the UK? I find that hard to believe, as PCP is a very clever way to encourage high levels of debt on a car.
lornemalvo said:
SpeckledJim said:
rival38 said:
ben5575 said:
Does it matter though if VW finance for example goes tits up? Genuine question. Will that impact on wider banking/investment? Is it (for example) underwritten by something that would have a wider economic impact?
100% yes it would matter a lot.The credit that VW finance extends to its customers comes from elsewhere in the financial world. For example VW finance issue bonds to raise capital, investment banks underwrite those bond issues before selling the tranches on to pension funds etc.
Many millions of people are a long way under water. If a lot of them were to give up and just hand back the keys, the banks don't have an easy way of recovering their losses.
More so than PCP buyers in the UK? I find that hard to believe, as PCP is a very clever way to encourage high levels of debt on a car.
Saweep said:
American car finance is a whole degree of magnitude more insane than over here
O/T but we have a bit of finance outstanding on one of our business cars, with Lombard. The balloon was due last week and I had every intention of paying it off because I assumed the rate would be 10% or so to extend. They have rescheduled it at 5.3%. We may still pay it off, but it seems quite competitive in the current market.Louis Balfour said:
Saweep said:
American car finance is a whole degree of magnitude more insane than over here
O/T but we have a bit of finance outstanding on one of our business cars, with Lombard. The balloon was due last week and I had every intention of paying it off because I assumed the rate would be 10% or so to extend. They have rescheduled it at 5.3%. We may still pay it off, but it seems quite competitive in the current market.Gonna be a cash rich, buyers market for all sorts of things soon!
Saweep said:
Louis Balfour said:
Saweep said:
American car finance is a whole degree of magnitude more insane than over here
O/T but we have a bit of finance outstanding on one of our business cars, with Lombard. The balloon was due last week and I had every intention of paying it off because I assumed the rate would be 10% or so to extend. They have rescheduled it at 5.3%. We may still pay it off, but it seems quite competitive in the current market.Gonna be a cash rich, buyers market for all sorts of things soon!
Any minute now, we'll be all over those hot deals.... any minute I tell you.RicksAlfas said:
Saweep said:
American car finance is a whole degree of magnitude more insane than over here
$0 down! Nothing to pay for a year! Drive away today!
Aventador 700 said:
Quiet because you’re all too busy to post i hope!
Yeah, it’s steady away. A bit busier than average and has been for the last 4-5 weeks.Which is annoying, as the Wife has given permission for me to buy a new, (to me), car. Something pretty rare, something with a huge V8, something pretty bloody fast, but I’ve got to sort and sell the Jaguar (needs the rear suspension rebuilding / refurbing), and one of our C5’s first, but as always I’m struggling for time.
How’s everyone else doing? Quiet, average or busy?
Digital agency (Ecommerce), still very quiet but enquiries and referrals are beginning to pick up in the last few weeks. Still taking a lot of time to get things signed off though.
My feeling is if things don't start to pick up soon we're going to start seeing more and more bankruptcies and redundancies towards the summer. 2023 could end up being a rerun of 2008...
My feeling is if things don't start to pick up soon we're going to start seeing more and more bankruptcies and redundancies towards the summer. 2023 could end up being a rerun of 2008...
A local indicator I use is once we get into the warmer months is how busy my local pub beer garden is at 5pm on a Friday.
I have noticed during the good times its always rammed and during the times when money is tight its less busy.
You have to watch for false positives though, weather, football and funerals!!
I would use this as an economic indicator for my business and on the whole it was pretty reliable.
Last couple of weeks I think things have stabilised a bit. I think we are going to be ok for the next few months.
Looks like rate rises are slowing or might even stop. Warmer weather brings less pressure from utilities costs.
Central banks have clearly indicated they will bail out smaller banks at the first sign of trouble.
I dont want to count my chickens but I would be pretty confident we wont see any further wobbles now for 5-6 months.
Its when the pivot comes and the few months after that I would worry.
I have noticed during the good times its always rammed and during the times when money is tight its less busy.
You have to watch for false positives though, weather, football and funerals!!
I would use this as an economic indicator for my business and on the whole it was pretty reliable.
Last couple of weeks I think things have stabilised a bit. I think we are going to be ok for the next few months.
Looks like rate rises are slowing or might even stop. Warmer weather brings less pressure from utilities costs.
Central banks have clearly indicated they will bail out smaller banks at the first sign of trouble.
I dont want to count my chickens but I would be pretty confident we wont see any further wobbles now for 5-6 months.
Its when the pivot comes and the few months after that I would worry.
In terms of completions the housing market is at the point where it's being checked for any signs of a pulse.
Moving Companies, Conveyancers and Estate Agents will be either calculating how strong they are, or already panicking. The media reporting is always lagging the real view simply as all data is historic. I've been in the housing market for nearly 30 years and even including the 2007-2010 difficulties I have never seen a Spring start / Easter Holiday period as breath-takingly dead as this.
I'm moving and storage. I can confirm that month on month (March) from last year revenue has halved. However the moving revenue aspect of that is down by 2/3 and storage less so. April is about to be a s11it show. I can see moving revenue being down 4/5 from last year.
A friend in conveyancing has confirmed revenue is currently down 3/4.
Us and they were mindful (speak nearly every week) all through the ridiculously over stimulated period that there simply had to be a godawful crash and therefore saved like crazy. We both know though that many didn't. Debts were not paid down, cars were bought and good times were had.
We recently discussed somebody who bought at £1m in 2021 on a two year fix. £300k down, 70%LTV. Their payments if they stick to repayment will go from @£3k to £5250. Even if they go interest only this'll be £4-4500 per month.
There are a LOT in this boat. There's pain all over right now.
ETA the example above is NOT me (!). I did a ten year fix in 2019 at 2.39%
Moving Companies, Conveyancers and Estate Agents will be either calculating how strong they are, or already panicking. The media reporting is always lagging the real view simply as all data is historic. I've been in the housing market for nearly 30 years and even including the 2007-2010 difficulties I have never seen a Spring start / Easter Holiday period as breath-takingly dead as this.
I'm moving and storage. I can confirm that month on month (March) from last year revenue has halved. However the moving revenue aspect of that is down by 2/3 and storage less so. April is about to be a s11it show. I can see moving revenue being down 4/5 from last year.
A friend in conveyancing has confirmed revenue is currently down 3/4.
Us and they were mindful (speak nearly every week) all through the ridiculously over stimulated period that there simply had to be a godawful crash and therefore saved like crazy. We both know though that many didn't. Debts were not paid down, cars were bought and good times were had.
We recently discussed somebody who bought at £1m in 2021 on a two year fix. £300k down, 70%LTV. Their payments if they stick to repayment will go from @£3k to £5250. Even if they go interest only this'll be £4-4500 per month.
There are a LOT in this boat. There's pain all over right now.
ETA the example above is NOT me (!). I did a ten year fix in 2019 at 2.39%
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