"President Trump came in for much jeering when he told reporters he had “inherited a mess” from President Barack Obama.
On the economy, though, Obama did indeed leave behind a hidden mess: a seemingly healthy jobs market dependent on cheap debt.
...A Standard & Poor’s analysis of just one big subprime auto bond tells the story.
Last week, a company called DriveTime, which sells used cars in 26 states to people with bad credit, was in the market to issue $442 million worth of bonds backed by auto loans.The average credit score of borrowers was 538 — indicating a history of serious default.
And, as S&P notes, “today’s subprime customer appears to be . . . weaker . . . than that of several years ago,” because people who defaulted right after the housing crash at least had the excuse that they were caught up in a global bubble.
These loans are for people who have no choice but to borrow to buy a car, and no bargaining power on the interest rate they pay: close to 20 percent.
...If the auto-credit market sputters out during Trump’s first term — and it’s hard to see how it won’t — Trump would be justified in blaming his predecessor.
But he’ll face the same bad options previous presidents have.
No one has quite figured out how to fix this economy without a lot of short-term pain."
2 comments:
those numbers are incorrect.
What numbers do you have?
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