It’s not a great sign when the mainstream financial media starts to pick up on news items concerning lending fraud. It makes you wonder how deep the rot really is.
CEO Jamie Dimon offered a mea culpa and a warning Tuesday when discussing the losses his bank experienced from the downfall of subprime auto lender Tricolor Holdings, saying, “It is not our finest moment” and “when you see one cockroach, there’s probably more.”
But the fall of Tricolor and a larger bankruptcy of auto parts supplier First Brands have captured attention on Wall Street, and investors are looking for signs that credit among commercial customers is weakening.
hmmmm. insurmountable debt. was 2008 a ‘dry run’?
(reminder, oBOMBa *permanently* bailed out the banks)
How does the auto industry raise prices of automobiles and trucks well over $100k? Just make money available through loose lending to unqualified borrowers … and extend the loan term to 10 years. Voila! Super-Inflated-priced vehicles flew off the Dealers lots.
Obama did the same thing when he had the Federal Govt. seize control of the student loan industry. Colleges raised tuition into the stratosphere… because government flooded the college marketplace with unqualified students and borrowers. And like Section-8 housing … the money was guaranteed.
Yes, as anyone who understands capitalism knows … the ‘music’ of these games eventually stops … and many people lose their chairs … and more.
sub-prime auto loans, the same mechanism that created the 2007/08 housing crash. I was just thinking about this the other day, how that movie The Big Short laid it all out so even the Normies can understand it, but they’re still doing it in car loans.
Personally, I’m waiting for the chance to buy one of those $100,000++ dollar F-250s for $40K in the Big Fire Sale that’s coming.
Sidenote, $100K US only gets you the diesel engine, that’s not the top trim package for an F-250. Who do they think is going to buy those things? My first house was cheaper than that.
“It is not our finest moment”, says Jamie Dimon, but now about my big bonus.
More mansions in the Hamptons and a ski “cabin” in Vail … oh! And a summer “cabin” in Jackson Hole.
It might have been more informative if the article spent more time explaining that 70% of Tricolor’s high risk, high interest loans were to illegal immigrants (per 2023 statistics…and probably higher in 2024). Also, the way Tricolor was using the same vehicles as collateral with different lenders suggests a pretty fluid application of VIN #’s. So, I’d be willing to bet that if you went on any TriColor lot during their heyday, you’d find a lot of windshield VIN tags that didn’t match up with the ones on the engine bloc. IOW, stolen vehicles with VIN alterations to make them sellable. Just a guess, but an educated one. I think their loan fraud is just the tip of the iceberg which will be discovered as the inventory is pulled in to satisfy creditors.
In my local Home Depot parking lot … the newest, shiniest, most tricked-out pickup trucks are all driven by amigos who … don’t look native to the US.