Tag: news

Submitted by Martin Armstrong via ArmstrongEconomics.com,

Are you more worried about a 1984-esque future or 'A Brave New World'-esque future?

Unfortunately, the two go hand in hand. George Orwell simply took the past and laid out what government ALWAYS gravitates toward – total control. We live in a delusion with our brains filled with propaganda. Over the years, I have encountered comments from people who ask, “Why would anyone want to live outside the USA? We are the greatest nation on earth!” I typically reply, “Have you ever traveled outside the country?” The response is telling: “No. What’s the point?”

Perhaps I am the doubting Thomas. I went through Checkpoint Charlie into East Germany before the wall fell because I really wanted to see what was true and what was false. You cannot just accept the indoctrination of society as it is systemic.

So what George Orwell wrote was not pure fiction; no more than “Star Wars” being based on nothing. “Star Wars” is the epic battle between the Republic and Imperialism that dominated the Roman period going into the 1st century AD. They just changed it to planets and updated the swords to light sabers. In the case of Orwell, he took history and postulated what would happen in a modern context. He was only off in terms of technology advancement.

So the bottom line is both will unfold.

However, you cannot reach the second without causing pain with the first. With the NSA and socialism, you have seen terrorism used as the excuse to further the control of society so we cannot buy or sell anything ultimately without government approval. The IRS can revoke your passport if it even THINKS you owe more than $50,000 in taxes, fines, or penalties. You cannot travel on a train, plane, or ship, no less stay in a hotel without providing photo ID or in many cases possess a passport. So why do we need a passport, which can be revoked if we owe taxes, to travel? Well, passports were invented by the Romans and appeared in the 3rd century AD when government was in fiscal ruin. If everything was the Roman Empire, what was the purpose of a passport? It was to prove you paid your taxes and were free to travel.

History repeats because the passions of humanity never change from one century to the next. We MUST move closer to absolute oppression in order for the silent majority to get angry and demand change. So until that tipping point is reached, be prepared to lose any concept of human rights you thought you once had. We are not living the “dream” but the nightmare of history.

Only when it gets bad enough will we see the change toward the light of the second. Hence, this is why I do what I do, and it is why I say we first must crash and burn. Open your eyes. It is happening. If you understand the pattern, you will survive. If you want to leave a better world for your children, that is ONLY possible by identifying the trend in order to change it. History is our map to the future.

via Zero Hedge http://ift.tt/1pzvqif Tyler Durden

Eight years of unconventional monetary policy, NIRP, ZIRP, QE, and asset bubbles as far as the eye can see, but where is that all important product of successful monetary policy – at least in a conventional Keynesian sense, where a steady increase in the cost of living and the loss of purchasing power is defined as success – namely inflation?

For the answer we go to Deutsche Bank’s “Inflation Sensation” global inflation monitor. According to DB “it includes more than 150 time series covering consumer prices, producer prices, inflation surveys and wages across the G10. It uses PCA analysis to provide a global snapshot of where different countries stand on inflation.”

Here is DB’s finding verbally:

At a global level, our monitor remains a “sea of blue”. Little progress has been made in generating inflation in recent months. The most notable downward price pressures are in the Euro-area, Switzerland, New Zealand and Australia.

And in graphic terms, here is the full G-10

the U.S.

Euro Area

U.K.

Canada

Japan

 

Or as Deutsche puts it: “a sea of blue.”

* * *

But why? Why this grand failure to achieve the central bankers’ only goal? One simple reason: they have been unable to create wage inflation: without rising wages there is no pickup in end demand, and instead what central banks create are bubbles after asset bubbles.

Per Deutsche: “Wage developments are striking across the G10. While there are tentative signs of producer and consumer price disinflation bottoming in some countries, wage growth remains particularly weak.”

That a mild way of putting it, because one look at global wage inflation, or the lack thereof, and it all becomes immediately clear.

Presenting Exhibit 1, and only:

 

And that is why central banks have failed. However, nearly a decade later, they continue to mask their inability to boost wages and living standards for everyone, but making the life of the 1% better than ever, and where they have certainly succeeded, is to reflate the S&P500 back to within a few percentage points of its all time high.

via Zero Hedge http://ift.tt/1nVTlGV Tyler Durden

Submitted by Jeff Nielsen via SprottMoney.com,

For five thousand years, gold and silver have been humanity’s premier form of money; real money, not the faux-money manufactured by our central banks. During that same period of time, these metals have been our premier instruments of wealth preservation and therefore our “safe havens.”

There is nothing accidental about this phenomenon. Gold and silver have obvious aesthetic appeal. Indeed, silver is actually the more brilliant of the two metals. It is their aesthetic appeal that makes these metals “precious.” But more than simply their aesthetic appeal, they are also (relatively) rare.

If diamonds were as common as pebbles, it would be impossible to impress one’s potential bride-to-be with such stones, even in a setting of gold. Diamonds have their value, both real and sentimental, not only because of their aesthetic qualities but also because of their perceived scarcity.

The situation is the same for gold and silver. If gold and silver were as common as iron, zinc, or even copper, they would not be coveted as greatly, regardless of their aesthetic appeal, because of their abundance. It is the qualities of being “rare” and “precious” which are essential in order for any commodity to be considered a suitable currency. It is these properties that make a commodity a source of value. There will always be demand for these metals; therefore, they will always have value. For these reasons, gold and silver preserve and protect wealth.

Gold and silver are both precious and rare, but they are more than that. As metals, they also exhibit uniformity. Once refined, any gold or silver coin is indistinguishable from any other. Conversely, diamonds lack uniformity, therefore they are not a good candidate to be used as “money.” Venders would complain that a particular buyer was using “low-grade” diamonds for payment. On the opposite side of the ledger, purchasers with stones of superior size or quality would seek to negotiate premiums on their “money.” It would wreak havoc for commerce.

Gold and silver are perfect money, but they are also more than that. They are forms of money that are available at what must be termed near-optimal quantities and fulfill two separate but equally important functions. Silver is rare enough to be valued for its scarcity yet plentiful enough to be the ideal Peoples’ Money. It can be the wages of the workers; the payment used in basic commerce.

Gold is more scarce than silver. Because of its greater degree of scarcity it derives greater value, yet it is still plentiful enough to be a tool of commerce. However, gold is not the Peoples’ Money. Rather, it is the money of nations or, alternatively, the wealthy. It is the money of investment and industry. This additional level of prestige makes gold ideal as a “standard” for a national or global monetary system.

A White Paper previously released on this topic explained how and why “a gold standard” was the optimal basis for a monetary system in our modern economy. That same paper then provided extensive empirical evidence documenting the horrific economic carnage that resulted from the loss of our gold standard in the early 1970s.

When our nations had gold as the money of governments and silver as the money of the people, we enjoyed a level of prosperity and economic stability that we have not seen either before or since that era. In the four and a half decades since these metals have lost their official monetary status, our economies have been destroyed, our governments have been bankrupted, and the currency in our wallets is fundamentally worthless.

Decades of relentless brainwashing in the West have convinced the vast majority of our populations that there is no longer a place or role in our modern economy for Perfect Money. Consequently, the masses in the West generally shun gold and silver by storing and protecting only a tiny percentage of their wealth with these metals, in comparison with any other era in our society’s history.

This is how gold and silver stand today from a Western perspective. What is continually forgotten beneath the veneer of our cultural arrogance is that the rest of the world, and the vast majority of humanity’s population, have a fundamentally opposite perspective regarding the world’s only Perfect Money.

Unexposed to the decades of monetary brainwashing directed at Western populations, Eastern populations have never forgotten the important role of precious metals in our societies and economies. Even the most humble peasant understands why we store our wealth in gold and silver money – not the diluted and debauched paper currencies of bankers.

Real money is a store of wealth. Mere paper currency is only a tool of commerce. As a store of value, these currencies are the equivalent of a “leaky bucket.” Over a period of thousands of years, gold has perfectly preserved the wealth of its holders. In the mere century in which the Federal Reserve was entrusted with “protecting” the dollar, it has lost 99% of its value and the wealth contained.

Now that is a big leak. And it’s getting worse. Thanks to the ever-increasing rate of Fed money printing, and thus U.S. dollar dilution, 75% of that loss in value has occurred over just the last quarter-century of Federal Reserve fraud and mismanagement.

We needed gold and silver for our financial protection a century ago. We really needed gold and silver 45 years ago when Paul Volcker assassinated the last vestige of our gold standard. And we really really need gold and silver to protect our wealth today – as the monetary crime of “quantitative easing” has rendered these faux currencies fundamentally worthless.

In the East, China and Russia are relentlessly accumulating gold, observing a “rule” which is now forgotten by the arrogant oligarchs of the Corrupt West: the Golden Rule. He who has the gold makes the rules.

Conversely, the Corrupt West has squandered its own once-vast reserves, both officially and surreptitiously. For the better part of two decades, Western governments were dumping hundreds of tonnes of gold per year into the market to suppress the price. Meanwhile, the central banks of these regimes were secretly dumping at least that much gold onto the market.

This process was done via what these crooked bankers call “bullion leasing”: (supposedly) ‘lending’ their gold. Regular readers are already somewhat familiar with such frauds. “Gold generates no income.” The bankers tell us this all the time. Thus there can be no legitimate commercial purpose to so-called bullion-leasing.

Instead, this “borrowed” gold is also dumped onto the market (i.e. sold), with much or most of that gold gone forever. Yet our corrupt central banks continue to register every ounce of gold on their books – pretending to continue to have legal title and possession of this gold.

No one has seen any of this gold in decades. In the case of the United States’ mythical “gold reserves,” there has been no public accounting of this gold in over 50 years. The farce has grown to such an extreme that any time any significant quantities of this Western “gold” is transported, it is done secretly so that no one outside of these corrupt regimes ever gets even a glimpse of this myth-gold, let alone a touch or an official audit.

The West’s gold is gone. Yet out of one side of their mouths, these rancid governments boast of supposedly gigantic reserves, while out of the other side of their mouths they continually denigrate its importance as a monetary asset. “Gold is a barbarous relic.” One would never hear such ignorance and idiocy emanating out of the East – or anywhere outside of the Corrupt West.

Western governments and their deluded populations are about to get a history lesson and economics lesson all rolled into one. It could and should also be a lesson in humility, though that is likely too much for us to hope.

Clearly China and Russia are not accumulating vast reserves simply to engage in idle boasting, as does the West. Both of these nations are deliberately understating their total reserves – significantly – though not declaring the gold they acquire domestically. With any gold acquired from domestic sources (i.e. gold mining) such declarations are entirely voluntary.

The purpose of such massive stockpiling can only be with the intent of resurrecting “the gold standard.” The difference would be that these Eastern nations could and will occupy the drivers’ seat of the new system, which will replace the fraudulent Western system of un-backed and totally debauched paper currencies.

He who has the gold makes the rules. The “world” in the East has never ceased to recognize the Golden Rule. The “world” in the West now contemptuously scorns this eternal wisdom. Another expression long forgotten in the arrogant West: pride cometh before a fall.

via Zero Hedge http://ift.tt/1LvRO5P Tyler Durden

“Man, you guys cannot stop talking about him. He is a dangerous presence and, you know, it’s just like candy by the bushel.”

That’s what Hillary Clinton – who possibly didn’t know her mic was live – told MSNBC last Monday night. The former First Lady was of course talking about Donald Trump, and the media’s interest is a byproduct of the public’s fascination.

But if the media and voters “can’t stop talking about him,” America’s entrenched political aristocracy (on both sides of the aisle) wishes everyone would just shut up. While Democrats fear Trump as a kind of threat to the ideals and values that supposedly underpin American democracy, for the GOP this is an existential threat. Trump’s success has sent the establishment back to the drawing board and if he wins the nomination outright, the party will die.

That’s not to say it won’t be resurrected, but it would be an enormous blow in the short-term.

This is complicated by the fact that Republicans are facing a tough choice with Obama’s Supreme Court nomination. Here’s NBC outlining the GOP’s set of “Sophie’s Choices”:

On Trump:

• Acquiesce/surrender to Donald Trump, who is on track (though it’s not a slam dunk) to obtain a majority of Republican delegates. The problem here? Almost every poll we’ve seen shows Trump to be the weakest GOP candidate to face Hillary Clinton.
• Fight Trump to stop him from getting the 1237 delegates he needs. The problem? Trump has talked about “riots” if he’s leading in delegates but is denied the nomination, and we don’t think he’s kidding.

On SCOTUS:

• Oppose the older and more moderate Garland (even hearings and consideration of his nomination), and hope that Republicans don’t lose the 2016 election, which would result in, say, a President Hillary Clinton nominating younger and more liberal replacement.
• Relent on Garland, knowing the opposition hurts your vulnerable Senate incumbents up for re-election (Kelly Ayotte, Mark Kirk, Ron Johnson, Rob Portman, Pat Toomey), but welcome the wrath of the GOP base.

Bear in mind, this isn’t a criticism of the GOP. Those are the choices they actually face in the months ahead, and there are no right answers. 

Not mentioned are other concerns. For instance, if the Republicans “surrender” to Trump, they risk reputational damage. That’s not a comment on Trump – clearly he’s struck a (loud) chord with large swaths of the electorate – but the simple fact is that most establishment Republicans do not want to be associated with him and it’s not out of some petty jealousy. Well maybe it partly is, but part of it is that the GOP doesn’t believe that in the long-run, what Trump says should represent the party line. Perhaps the party should look at Trump’s spectacular numbers and consider where they went wrong in terms of connecting with voters because as the soon to be “private citizen” Marco Rubio will tell you, “we misjudged some folks.”

On top of that, fighting Trump at the convention could be a disaster – and not just because of Trump’s “riots.” If the GOP stands up and essentially tries to nullify the people’s will, the party will make a fool of itself going into the national elections. That is, they would be playing from a position of weakness, especially if they end up nominating someone who didn’t even run. That could hand the election to Hillary which, if you’re a conservative, is the worst outcome possible.

As it turns out, some Republicans are war-weary when it comes to the frontrunner. Here’s Politico with more:

While some Republicans insist on standing firm against the businessman, more and more are contending that it’s time to reach a point of acceptance — and that a drawn-out primary or convention battle could be worse.

 

“I’m soul-searching right now,” said Penny Nance, president and CEO of Concerned Women for America, who last year explored the possibility of launching an anti-Trump campaign. “There’s still a pathway to defeating him, but it’s getting harder to see that.”

 

“We’re at a turning point,” conceded Randy Kendrick, wife of Arizona Diamondbacks owner Ken Kendrick and a major contributor to the stop-Trump effort.

 

“It’s a fork in the road — a political fork.”

 

 

At a posh resort in Palm Beach, Fla. — just minutes from Trump’s Mar-a-Lago estate — many of the Republican Party’s biggest donors discussed whether to continue shelling out millions on an anti-Trump offensive that so far has done little, if anything, to halt his rise. Many of those gathered, including New York hedge-fund manager Paul Singer and members of the Chicago Cubs-owning Ricketts family, have been the primary funders of Our Principles, a super PAC that spent heavily to defeat Trump, plastering Florida and other states with TV ads that portrayed him as a heartless businessman. Several of the donors reiterated their hope that Cruz or Kasich could still somehow win, sources familiar with the gathering told POLITICO. But others indicated they would be open to supporting Trump in the general election.

 

Another factor: Though Trump remains wildly unpopular with the establishment, many in the party hierarchy now lack a figure to support. While Kasich has a virtually impossible path to the nomination, Cruz, who has devoted his Senate career to poking his finger in the establishment’s eye, is seen as an unpalatable choice.

 

The confusion in the party’s top ranks has left Republicans divided about whether to keep up the anti-Trump offensive at all, or line up behind him.

Again, there are no “right” answers and every political party faces existential threats at one time or another. But the Trump “problem” is particularly vexing for the GOP. 

Perhaps the best move for Republicans would be to embrace the candidate American voters have chosen for the nomination and watch gleefully as a GOP “problem” quickly becomes a “problem” for Hillary Clinton and the Democrats in the national election. Something tells us the polls which show Trump faring worse than any other Republican candidate against the former Secretary of State might be just turn out to be wrong come November.

via Zero Hedge http://ift.tt/1SZnNgf Tyler Durden

Submitted by Simon Black via SovereignMan.com,

If you haven’t seen the 2015 Best Picture nominee, The Big Short, I strongly recommend it.

The Big Short is based on Michael Lewis’ book which examines how such an extraordinary financial crisis gripped the world in 2008, and the handful of people who saw it coming.

The movie opens asking a very simple question about the global financial meltdown:

Wall Street missed it; the Federal Reserve missed it; the government missed it; every major financial institution missed it; the homebuilders missed it.

So how is it that a handful of people were able to see it coming? How could they see what nobody else saw?

Easy. They looked.

For anyone who actually looked, it was obvious that the banking and housing boom in the early 2000s was built on a house of cards. The data was all there.

Given the financial establishment’s astonishingly short-term memory and capacity to make even bigger mistakes than ever before, we now find ourselves in a very similar position today.

Once again, the financial system is in desperate condition. And the data is all there for anyone who cares to look.

Let’s look at a few of the numbers together.

Back in 2008, much of the calamity was caused by an implosion of “subprime loans” in the housing market.

These were frequently no-money down loans at teaser interest rates made to people with poor credit and limited income.

Banks made these toxic loans with your money.

The best example of this was probably Johnny Moon, a homeless man with no income or employment history who was able to borrow more than $600,000 to speculate in real estate.

The total value of these subprime loans was a whopping $1.3 trillion.

Not much has changed.

In 2016, instead of loaning money to subprime home buyers, the financial system is now loaning money to bankrupt governments.

They’ve even managed to go beyond “no-money down”, and are actually paying governments to borrow money at negative interest rates.

Japan is as great example.

Even though Japan’s national debt exceeds 200% of GDP, and it takes over 25% of tax revenue just to pay interest on the debt, the Japanese government is able to borrow money for ten years at negative interest.

This means that investors are GUARANTEED to lose money. It’s worse than no money down. And it’s total madness.

The bigger issue is that the size of this bubble is an astounding $7 trillion, far bigger than the subprime bubble in 2008. And it grows larger by the day.

To expect that this will turn out any differently is foolish.

Back in 2008, US government debt was “only” $9.5 trillion. The Federal Reserve’s balance sheet was $850 billion. Interest rates were over 4%.

So at least they had some capacity to slash interest rates and fight the crisis using traditional policy tools.

Today, US government debt exceeds $19 trillion, well in excess of 100% of GDP.

They have to borrow money just to pay interest, and they have entire pension funds that are on the brink of bankruptcy.

The Federal Reserve’s balance sheet has exploded to $4.5 trillion, and interest rates are barely above zero.

The government has no means to bail anyone out, including itself. And the Fed has no capacity to print more money and expand its balance sheet without causing a major currency crisis.

Simply put, the bubble is just as insane as in 2008, but much bigger. And the financial establishment has no ammunition to fight it.

If you want a more detailed comparison of the 9 most ominous similarities between 2008 and 2016 click here to watch today’s video podcast.

I’ll even tell you about the Danish sex therapist who was actually paid interest to borrow money.

 

via Zero Hedge http://ift.tt/1R49aqD Tyler Durden

Whenever Marc Faber appears in the financial media, in this case Bloomberg TV, one can expect the usual fire and brimstone sermon of how micromanagement of the global economy by central bankers will lead to disastrous results, something which we agree with wholeheartedly and as of two months ago, so did virtually every billionaire at Davos. Recall that just at the end of January, the WSJ when reporting from Davos said that “The world’s central banks can’t save us anymore. That was the message from some of the world’s most prominent investors at the World Economic Forum in Davos, Switzerland, on Friday. Their mood here was irritated, bordering on affronted, with what they say has been central-bank intervention that has gone on too long.”

Somehow we doubt these same billionaires are quite as irritated, or quite as negative on central bank intervention two months later when thanks to, drumroll, central bank intervention, the Dow Jones has staged the biggest quarterly rebound from its lows since 1933.

Anyway, back to Faber, who – sure enough – ponders the idiocy of the IMF’s counterfactual statement today, when Lagarde said the world economy would be worse off without negative interest rates:

… they will always say, if we hadn’t done this and hadn’t done that, it would be much worse.  They have no proof for this assertion.  In my view, it would have been better to let the crisis, already the first one in 2000, run its course and prevent the colossal credit bubble that was built up that then led to an even bigger crisis, and now they’re doing the same mistake.

He then goes on to slam NIRP and the upcoming helicopter money:

… the magicians at central banks, they always come out with a new trick and these negative interest rates that we have today, this is for the first time in recorded human history from the times of Babylon up to today that we have negative interest rates, and it’s not going to end well.  That, I can tell you.  But the sequence of how it will not end well, I’m not so sure.  But they still have a lot of ammunition.  What they can do is helicopter money.  In other words, they can send you and Mr. Bloomberg and me and everybody, say a check for $10,000, and that is like throwing gasoline into a fire…. will it help the economy?  That is the question.  It won’t help in the long run.  You cannot grow an economy by just throwing money at people.

On what policies he would prefer instead:

… the less policies, the better it would be.  We all learned at school that the free market and the capitalistic system is the best allocator of resources, and now what we have is the worst allocation of resources because it’s the government that tells you how these resources are allocated and they continuously expand their interventions, and I can tell you, I started to work in 1970.  In the 70’s and early 1980’s, central banks actually never came up in discussions.  They have now become like the messiah, and everybody watches what the central banks do and in the end, in my view, they will have, from a long term perspective, no impact whatsoever.  Now can they move markets short term?  Yes, but maybe not in the direction they want to.

None of these are necessarily new as Faber’s position on these topics has been well known in advance. However, what surprised us was how clear Faber’s political outlook is.

This is what he said:

You can buy the Singapore stock market with a four percent dividend yield. Well, Singapore is a relatively sound economy.  It’s diversified and it’s well run, unlike the U.S., unless, of course, the U.S. is run by Mr. Trump.  Then the U.S. will improve.

 

HYDE:  But Mr. Faber, I mean, we’re seeing from Donald Trump’s potential policies that he wants to slow international trade between the United States and other countries.  Surely that’s going to be a block upon free markets.

 

FABER:  Well, I agree that it is negative if you have restrictions on a free market.  That, I agree entirely.  But you have to equally see that the U.S. has essentially given in on a lot of things that benefit other countries.  If you look at, say, the growth, 2000 to today, which countries have done relatively well?  The emerging markets have done fantastically well.  Their GDP has gone up substantially.  The standards of living have gone up substantially.  They have accumulated large reserves, and so forth.  The U.S. and Europe and Japan, relatively speaking, have been declining, and that, the statistics are visible from industrial production in emerging economies.  It’s doubled in the last 12 years.  Global trade, you look at the share of emerging markets, it’s gone up.  The developed world, the U.S., Europe, Japan, it’s gone down and so forth.  So I think that maybe we have to find a way to have a more balanced approach to global trade.  I’m not saying protectionism, but the more balanced approach that is fair to the developed world.

 

BARTON:  Are you really a fan of Mr. Trump, Marc?  Do you really believe…?

 

FABER:  It is all relative.  Given the alternatives, I would vote for Mr. Trump, because he may only destroy the U.S. economy, but Hillary Clinton will destroy the whole world. Look at her nation building in the Middle East, how successful that has been. 

He is right.

(If the video below does not work, click here)

via Zero Hedge http://ift.tt/1WwT88R Tyler Durden

On Thursday night, we brought you a first-hand account of what’s really going on in subprime auto.

According to a reader who works in the industry, the securitization machine may be grinding to a halt for deals that are stuffed with loans to borrowers with low (or no) FICOs. Here’s an excerpt:

“I work for a smaller but fast growing auto finance company [and] we grew from opening the doors in 2013 to having a $250 million portfolio as of today. Things for the last 3 years have been booming and it seemed like there would be no end to our growth. We were rated by S&P in January and were ready to start securitizing our portfolio.

 

On March 1st I came into the office to find out that they had started layoffs. These people were fairly new and were in departments that the executive staff has now deemed unnecessary.

 

I had a meeting with my boss who told me my job is safe but due to us not being able to securitize we were freezing hiring going forward but we were hopefully done with layoffs.”

So why would a company not be able to securitize the loans on its book? Well presumably because someone, somewhere gets the feeling that demand for auto-backed ABS is going to dry up in the months ahead.

There’s evidence from both Experian and the NY Fed (see here) to suggest that the market is getting riskier. More auto loan originations are going to borrowers with shoddy credit and loan terms are looking more and more stretched by the quarter. Investors may fear that the credit cycle is about to turn and when it does, you don’t want to be anywhere near the double B tranches in subprime auto – even if you can get 9%.

With all of the above in mind, we bring you the following chart from Deutsche Bank which shows that 60+ day delinquencies for subprime auto ABS have now risen above crisis levels to 5.16% – levels we haven’t seen since 1996.

But don’t worry, even though Deutsche Bank does admit that it “raises eyebrows” when delinquencies for subprime are at their highest levels in two decades even as unemployment has plunged (so maybe those “jobs” people are getting aren’t that great after all), you shouldn’t worry, because it’s all about overcollateralization these days:

While it does raise eyebrows to see delinquencies exceed levels seen during the financial crisis at a time when unemployment is below 5%, we think subprime auto ABS structures remain well protected due to robust levels of hard credit enhancement, and structural features that increase credit enhancement as the transactions pay down.

For reference, 2015 saw about $25 billion in subprime auto ABS supply.

via Zero Hedge http://ift.tt/1pRmIMb Tyler Durden