The era of near-zero interest rates has given rise to a series of what many may consider absurd business ventures, including the likes of “buy now, pay later,” car vending machines, extravagant digital art sales, algorithmic home buying, and virtual metaverse offices. During such times of readily available capital, even seemingly weak ideas manage to secure substantial funding, highlighting the impact of ultra-low Fed Fund rates.
Ridiculous businesses that zero interest rates created:
– Buy now, pay later
– Vending machines for cars
– $2MM JPEG of rocks
– Algorithms for buying homes
– Metaverse officesWhen capital is cheap, weak ideas can raise billions.
Nothing good happens below 1% Fed Fund rate.…
— Genevieve Roch-Decter, CFA (@GRDecter) October 26, 2023
Car Market Update:
1. Average new car payment at a record $730/month
2. Average new car loan rate at a record 9.9%
3. Average used car loan rate at a record 13.9%
4. Average new car price at a record $49,000
5. Auto loan delinquency rate at a record 6.1%
How can this…
— The Kobeissi Letter (@KobeissiLetter) October 25, 2023
TREASURY SECRETARY JANET YELLEN SAID THAT THE SURGE IN LONGER-TERM BOND YIELDS IN RECENT MONTHS IS A REFLECTION OF A STRONG US ECONOMY
That and… the stupidity of the Fed for keeping rates at zero and doing QE while inflation was heating up.
That and… the government…
— Michael Lebowitz, CFA (@michaellebowitz) October 26, 2023
If you want to understand how we can be on the cusp of such an enormous economic and financial crisis, yet the mainstream financial media and Wall Street heavyweights be complete oblivious to its onset, just go back and watch the coverage and forecasts during the summer of 2008.
— Peter Schiff (@PeterSchiff) October 26, 2023
"give car back" searches hit all time high
How are those 84mo loans working out? pic.twitter.com/UHS2bGvJnh
— Darth Powell (@VladTheInflator) October 26, 2023