Exponential Trend Failure of the Day: Motor Vehicle Loans vs. Wages

The following chart shows the 10-year moving average of motor vehicle loans owned and securitized divided by wages and salary accruals.


Click to enlarge.

If we want any kind of long-term financial stability, then there should be no growth in this chart at all, much less exponential growth. This is just insanity.

I therefore claim that someday this unsustainable trend channel must fail and we'll have a hell of a time getting back into it and staying there. Someday.



November 24, 2014
We're in an auto bubble: Here's how to play it

Brad Lamensdorf, portfolio manager at Ranger Alternative Management, tells Yahoo Finance that we’re absolutely in another bubble. He points to low quality loan exposure and artificially high auto sales because of easy credit.

I am a complete believer in the bubble theory. For what it is worth, I shall not be playing it though. I never play these things. I am content in long-term inflation protected treasuries and I-Bonds held to maturity, just like I was heading into the subprime housing bust. Been there, done that.

This is not investment advice. It is depressing though, I'll give it that. Don't worry, it could be worse.

August 4, 2008
The Onion: Nation To Try Its Luck Out West

Leaving behind the woes of their bustling cities, small mining towns, large auto-manufacturing towns, suburbs of auto-manufacturing towns, and the economically stagnant state of Nebraska, the pioneers will set out across the vast Western expanse with nothing but the promise of opportunity and a few old resumés. Although it remains unclear what they might find in that savage territory, some sources indicate the move may bring a significant boost in self-employment, prevent thousands of bankruptcies, and allow settlers an opportunity to learn agricultural techniques from the Mexican folk who sometimes wander over the border.

Source Data:
St. Louis Fed: Custom Chart