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Strategies & Market Trends : Value Investing
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To: Micah Lance who wrote (57765)8/13/2016 1:25:19 PM
From: Graham Osborn   of 78918
 
With so many new vehicles issues under financing or lease in a relatively short period, it's inevitable that used car margins will come down. The subprime vehicles that bundle in auto securitizations (I think CDOs would still include these) are just one component of the overall CDO. Not that I've studied it that closely, but my guess is these pooled securitizations haven't proliferated to the extent the did before the financial crisis. CLOs is a different matter, and probably the single greatest source of systemic risk once the ECB stops buying and/ or rates come up. But for the auto industry specifically, the weakening of collateral values could be a very serious problem. Re student loans, when I see the number of kids coming out of grad school with 100k+ in student loans and either can't get a job or can't get one above 100k, I kind of wonder where we have come as a country. We are a nation of consumer borrowers with very little FCF. Happy thoughts ;)
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