Hey, everybody, I can. I’m a ninja here. I hope you’re doing great. We’re going to talk about a story out of Wall street. It’s about auto loan delinquencies, subprime delinquencies, and income. It’s important to go over this because as you see the charts, I’m going to show you one in a second. They just keep going up. Delinquencies, subprime loan delinquencies. We are seeing people get into more and more debt.

There’s credit card loans out there. We’re not going to talk about those just yet. Those are going up even more. People do not have enough money to survive. It says right here. The balance of auto loans and leases rose by 0. 8% in quarter four, from quarter three, and by 3. 5% year over year to 1. 61 trillion. According to data from the New York Fed’s household debt and credit report.

This was a small year over year increase in loans and leases, given that the new vehicle unit sales jumped by 12% in 2023 year over year, while used vehicle sales were roughly flat and while disposable income jumped by 7%. We’ve went from seeing 2030, $50,000 over MSRP to now MSRP or lower than MSRP. If you’re seeing something different. I am not. I just went around to a handful of dealers and they were showing those, let’s see what car was.

It was the Yukon Denali. We went to four dealerships looking at those, and they all had a dealer markup except for one place. It was straight MSRP. Every single place had the dealer markup of $5,000. Said they would take it off in a second if we wanted to buy it. Of course, we didn’t buy it. But the point being is that they’re still trying to get more money.

They’re telling you, hey, they’re super rare. It’s super hard to get them. We’re like, well, there’s one right down the road. And they go, okay, we’ll take it off. So it’s like a bluff that they’re playing. Fact of the matter is, I do not see people just racing. I don’t see a ton of salespeople. Everywhere we went, those four places we went and looked at, there was one salesman and it was a sales manager.

There was one place that had an extra salesperson. But the point is, the days of having ten or even five salespeople on the floor ready to assist you, they’re just not there. And so things are changing pretty fast. But it’s still crazy how people keep getting into more and more debt, pushing into this and the jobs aren’t there to cover this. So we are seeing the job industry fall.

We are seeing more part time jobs, not full time being made. We are seeing layoffs happening. Those are picking up and we’re not seeing a ton of raises. We’re seeing raises, but they’re not enough to keep up with the inflation. So here’s a chart of the auto loans and leases right here. And this chart goes back to 2003. And you can see where it peaked in 2005, right there.

It peaked in 2005 and then obviously dropped off. And what’s interesting, please note too, 2008 was right here, right there. And you’ll see that it took some time for it to fall down and come down that didn’t drop and bottom until 2011. Okay? So please understand that the time it takes for credit to slow down and people to stop borrowing so much, it happens well after a crash.

So even though you see a chart like this where it’s just going up, up and beyond, right, it’s like the buzz lightyear of charts. Please understand that it takes some time after a crash for this start to mellow out. Spiking prices caused loan balances to jump. In 2020 to 2022, used vehicle retail prices spiked by 55%. We all know that. And new vehicle retail prices spiked by 20% during the pandemic.

And so the amount financed surged even as unit sales plunged in 22,021 due to the shortages. Starting in mid 22 through 23, new vehicle prices began to level out, rising just a little while. Used prices entered into a historic tailspin that has now knocked out one third of the pandemic spike. Hey, if you guys are looking to buy a new car, used car or you’re looking to sell your car, I’ll put a link down below to the auto trader pro course that I built.

After buying and selling vehicles for a long time and making good money, I’ll give you all my tips and tricks for everyone that owns it. I put like six new lessons out in the month of December. So make sure you go look at, there’s not an email notification showing those are on there. So those are all on there right now. I’ll put a link down below. Combined, the new and used vehicle CPI spiked by 31% from January 2020 of 2022.

We all know this. The amount financed is dominated by new vehicles because 80% of new vehicles buyers finance or lease a new vehicle. But only 39% of used vehicle buyers finance or lease. The rest pay cash. It’s hard to believe that many people have cash. The combined new and used vehicle CPI is also dominated by new vehicles because new vehicles cost more than used vehicles and way more in on the CPI basket.

The auto debt burden dipped, rising disposable incomes have more than kept up with rising auto loan balances. Total auto loans and leases outstanding dipped to 7. 8% of total disposable income, lower than during the years before the pandemic. Something else I want to bring up. That chart that I showed earlier that showed 2008. Here, I’ll scroll back to it. Where, when you see the peak, when you see 2008 was right here, and then it took some time to go down.

This is why by the time Lehman Brothers was in crisis and closed their doors, other companies credit started to shrink. Okay, banks were in trouble. Like we’re seeing right now, banks are in trouble. It’s not made the news headlines yet. It’s going to get a lot bigger. However, this time, the FDIC’s already went already. They’re like, crap, we’re out of money. This was last July. Right. So what’s happening is you’re witnessing a crash that is being papered over by the government and the Fed.

As a matter of fact, even now, the Federal Reserve, the repo window, the repurchase window has been open for quite some time. Bailing out banks right now, keeping them liquid to keep this going. Whereas during Lehman Brothers, they didn’t start doing that until five months after Lehman Brothers had collapsed. Okay, well, when you see loans come down, it’s because banks were not lending back then, they’re still lending right now.

They’re not lending as much as they were about a year ago, but they’re lending less. So this has already started. And you’ve already seen the government try and throw a bunch of stuff at this fire, right? Trying to put it out or trying to keep it small. So that means the worst is actually still ahead of us. And then a few years later, you’ll see all that data where the loans shrank and all that kind of stuff.

So that’s why you want to be prepared with knowledge. Getting ready for a real estate crash, getting ready for this auto crisis. And I’ve been saving up because I have a collection of cars that I am going to have myself. Hey, real quick note, too, there’s comments down below. Don’t ever give any money to someone saying they’re me. I will never ask you for money. I don’t even ask you for donations in the comment section, like other financial youtubers that I guess can’t figure out their own finances.

So my point being is that there is a time delay when it comes to all of this stuff happening. Okay? Now, subprime is called subprime for a reason. It’s not income. They say selling and lending to customers with subprime credit rating is high risk, high profit, specialized activity. I remember telling a story about an f 150. Somebody bought an f 150 for $50,000, and it was like, a 2019 f 150.

This was a year ago. I got a hold of the loan papers, and the interest was at 30. No, sorry, it was at 48 or 49%, because the legal limit was 49. 9%, I believe, in that state. And it showed this f 150, this 2019 f 150 that he’d purchased for 49 or $50,000 at the end of the loan, if he made all the payments, the loan total came to about 98 or $97,000.

It was absolutely insane. Well, that was somebody with some prime credit. And so there’s high risk, high reward, because they know if that person does make the payments, they’re going to make a killing on the interest. But the fact of the matter is, a lot of those people are in that position because they don’t make their payment right. It says it has attracted specialized lenders and dealers, often backed by PE firms.

The system hinges on being able to securitize the subprime auto loans and asset backed securities and sell the investment grade tranches to those abs to pension funds. See where I keep telling you where your pension funds are buying? Total crap. Total garbage. And that’s why we find the teachers pension fund in California having to take a $20 billion loan because they’re commercial mortgage backed securities. Those derivatives are imploding right now, and it’s not good.

And so this is where you have to protect your own retirement and start saying, look, yeah, I’m putting money into my retirement. I’m getting a tax break, and they’re giving me matching funds. But you need to be also, not just diving into that and looking for alternative retirement systems. Take me, for example. I never took my pension serious, and now, look, I’ve left and abandoned it with only two years left.

And the reason why is because I know that there are so many more opportunities coming in the next couple of years that I’ll be way too busy to even hold down a full time job, because I’ll be full time investing. And I’ve been preparing for this for so long, for over 23 years. And I’ve saved all my money. I haven’t lived like a rich person. Even though when I was in my mid twenty s I became a millionaire, I never lived like it.

I never looked like it. I went and bought, shoot, I got them on right now. Ninja is not very flexible. Oh gosh, they’re $20 shoes from big five. I’ve been mocked for it before, but I’ve been preparing for these times. So point being is this, if you live like nobody today, meaning that you save your money, you live meekly, you’re going to live like nobody tomorrow. Quite frankly, even well before I started a YouTube channel, I could do things that most people couldn’t with finance because I had invested and saved.

Most people just blow their money because they want to impress other people that they don’t necessarily even respect. But the fact of the matter is, if you take that different approach and you live meekly or humbly, and to be honest with you, I have a hard time with humility all the time. I deal with this all the time. I was dealing with it last night, praying about this, asking for forgiveness.

But if you will choose that road and you find other good human beings that have chosen that road too, you will live like nobody. Tomorrow. When this crash happens, there’s going to be a lot of people butthurt with the ninja because they’re like, it’s not cool. You’re filming you buying houses and cars and boats. And I’m like, this is the time we do it because it’s on sale.

Why would I buy it with the masses on debt when they’re high prices and they’re asking for all these prices over MSRP? So anyway, if you guys want that course down below, it’s there. It’s still the pre filming discount because I’ve got two videos I want to do, but I’m trying to bring on an expert, another expert to finish it. But there’s, I don’t even remember how many, at least 20 videos out there.

And you’ll save five to ten times that much buying your next car, going through all those lessons. So if you want it, cool. If not, no worries. Thank you to everybody to hit the bell icon too today just to make sure you’re getting the notifications. So I want to thank you all. I’m going to go over the real estate engine now and do some really cool videos on real estate.

Hope you have a great day. Oh, hey, another thing too, real quick. I did a video yesterday, one on each channel negotiations and one on business cycles. It got like zero views. I don’t know what’s going on there because it’s got some really important free information on how to negotiate the price on anything and get a smoking deal using my experiences and go check it out. It was done yesterday.

It’s on how to negotiate anything for a lower price, I think is the title. But anyway, it’s under my lives. I do everything live because I don’t want to be a fake pose. Sure. Although I do edit on that other channel. This will make you rich because I guess at some point I got to look smart. I don’t know what to tell you. Just a ninja. All right.

With that being said, the economic ninja is out. Have a great day, everyone. .

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