Investment Markets Overview — W/E 13th November 2015

The “catalyst” that set-off the 2007 financial crisis was the realisation of just how bad the “sub-prime” mortgage market was, where $US Trillions were lent to not only borrowers’ of iffy credit history but effectively to anyone with a pulse. Predictability, the regulators and their political masters said “never again and that lessons must be learned,” only then to preside over a period of unsustainable credit growth, particularly within the sub-prime area. Fast-forward to today and the potential “catalyst” to another shake-out, aside of the bloated stock, bond and real-estate markets, are auto loans. Easy credit since the financial crisis has witnessed a global supply glut of cars, based mainly on buyers who cannot afford them. Nearly a third of all US auto sales are now by lease, with the total debt having ballooned by a third since 2007 to north of $1trillion now, with sub-prime now representing a fast growing share of all auto loans. As with the mortgage market these loans have been securitised and sold to “investors seeking yield,” just in time for default rates moving ever higher as the glut ensures lower resale values.

13 Nov 2015

 

Subscribe to the Full Investment Markets Overview Newsletter which contains the following:-

Additional Commentaries:
•US economic data . . .
•Euro-Zone . . .
•The UK . . .
•Out East . . .
•The $US index . . .
•Within the commodities complex . . .
•Economic data due next week includes . . .

 The other rapid growth area of US household debt since 2007 has been student loans, now put at $1.3 trillion ……

Charts:
1.  Indices Weekly
2. US Retail Sales V US CPI
3. UK Unemployment Claims
4. China Exports V  Global Shipping Rates
5. Commodity YTD  Moves

Table:

13 Indices, 11 columns of detailed information, for accurate analysis

“Never again reads more like here we go again.

Click Here to view Details of the full version of this Newsletter which includes full text and detailed

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