More car loans in default and credit card defaults

Apr.08, 2008 in Market Outlook

Friend ! The only way Americans could be tapped out would be they’ve lost all their credit and that’s not likely these days ie seven n eight yr Auto loans, fifty yr home loans, etc etc. If you want it - you pretty much can find someone to finance it no matter how bad your credit . America runs on credit - they for the most part - own nothing …
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The easy loans may be going away because much of it was based on rising home equity which if they got into a bind on the other debt, they would use to get back above water.

Now with more car loans in default and credit card defaults, and payday loans rising in popularity, more and more are getting to the point where interest is eating so much of the paycheck up, they are being force to cut back. But, here is what I seldom see mentioned. The reduced sales tax and other tax revenues are hitting cities and states and they are cutting spending and laying people off. That affects all companies earnings that depend on government spending.

The fed is saying no more stimulus packages until they see if this one works. Yet, the cities and states are saying they need help “NOW.” They want billions in each state for highway, water, sewer, bridge, etc. infrastructure systems that are falling apart. They want to hire all the people being displace from the housing collapse into high paying construction related jobs. I think that if government (even though it should) keeps cutting spending we will see more trouble in the economy.

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