The signs of an impending auto loan debt crisis are becoming increasingly apparent, as noted by AutoMoBlog. Wall Street’s lucrative practice of selling car loans to individuals with limited capacity to repay is fueling concerns, mirroring practices reminiscent of the 2008 financial crisis. Simultaneously, the rapid increase in defaults on Commercial Mortgage-Backed Securities (CMBS) is contributing to a broader economic unease. The warning from Germany of further challenges in the commercial real estate sector amplifies these concerns. The convergence of these factors raises alarms about the potential ripple effects on both the automotive and real estate markets, indicating a storm on the financial horizon.
Auto loan delinquencies among subprime borrowers reached a nearly-30-year high in September of 6.1% – the highest rate since 1994.
Read more: t.co/OEzqKZ5B8h
— unusual_whales (@unusual_whales) November 14, 2023
Wall Street is making millions selling car loans to customers who can’t pay them off. pic.twitter.com/AiMShkjEff
— Win Smart, CFA (@WinfieldSmart) November 14, 2023
How Wall Street Makes Millions Selling Car Loans Customers Can’t Repay
Lenders profit while borrowers buckle under debt charging as much as 29.99% interest. The industry says it’s throwing a lifeline to customers with bad credit who need transportation.
🇩🇪 #Germany Warns More Commercial Real Estate Pain Ahead – Bloombergt.co/x3J2BFNpYQ
— Christophe Barraud🛢🐳 (@C_Barraud) November 14, 2023
Germany Warns More Commercial Real Estate Pain Ahead – Bloomberg
German’s top bank watchdog warned that lenders with large exposures to commercial real estate are in store for more pain as valuations for such assets are set to tumble further.
The current troubles of real estate investors and developers mean they will seek to sell more properties, extending the slump in the asset class, Mark Branson, the president of BaFin, said at a conference in Frankfurt on Monday.
“This market, especially in office and retail, will remain under a lot of pressure and result in losses for banks,” Branson said.
German banks have already started to set aside money for losses on commercial real estate loans as real estate companies such as Adler Group SA struggle under a debt load built up when benchmark interest rates were still negative. Bloomberg reported earlier this month that European bank regulators are monitoring the difficulties besetting the empire of Austrian mogul Rene Benko, which includes prime commercial real estate from Hamburg to Berlin and Munich, as they eye theoretical ripple effects across commercial real estate markets.
Simultaneously, Commercial Mortgage-Backed Securities (CMBS) defaults are rising rapidly pic.twitter.com/pnmVz2q9dD
— Game of Trades (@GameofTrades_) November 14, 2023
This is yet another sign of the bear market in commercial real estate.
Office building prices are down 30% in a year and vacancies are a major issue.
The CRE crisis has already started and is getting worse.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) November 7, 2023
U.S. Bank Lending declined for the first time in 13 years according to data from Societe Generale pic.twitter.com/2ae8qeDWNV
— Barchart (@Barchart) November 14, 2023