2009-02-05 20:24:28.430621+00 by Dan Lyke 3 comments
The car shopping has exposed us to a number of credit offers, most of them are fixed for a moderately long (in this volatile market) time, for cars that's generally 3-5 years. So, here's my prediction: In about a year and a half we're going to see the next big crisis of this recession/depression, when the inflation starts to kick in and the banks realize just how much fixed debt they're holding.
[ related topics: Automobiles Economics ]
comments in ascending chronological order (reverse):
#Comment Re: made: 2009-02-05 23:27:22.460084+00 by: ziffle
We are in for a deflation, then an inflation of consumables, but assets like houses will stay deflated for a good long while.
Of course they will try to inflate assets but will fail:
Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.
Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees.
Its like putting gas on a fire to try and put it out.
#Comment Re: Recession/Depression/Credit Classes made: 2009-02-05 23:51:37.623371+00 by: jeff
One of my clients is BMW Financial Services for North America, and it was interesting to hear today in person what was mentioned along those lines (I can't repeat it here).
#Comment Re: made: 2009-02-06 03:17:08.088231+00 by: Dan Lyke [edit history]
Ziffle, there's enough political will to inflate house prices that I can't see how it's not going to happen by just printing more money. I saw some bizarreness today about a plan to give home buyers a 10% tax credit, it sure looked like enough to find a friend to trade houses with, and since that money is coming out of a common pool of debt, that debt will get so onerous that there'll be nothing left to do but inflate the money supply.
In my humble (and often wrong) opinion.