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"I Had To Find Out If This Was True..."
by Tyler Durden
Monday, Apr 24, 2023 - 01:05 PM
Authored by Michael Snyder via The Economic Collapse blog,
It appears that the crisis facing auto dealerships is far more dire than any of us thought.
Financial institutions are starting to get extremely tight with their money, and that is putting extreme stress on dealers all over the nation. Many of us expected that this would happen, but it seems that things are moving much faster than anyone would have anticipated.
Last week, I came across a tweet that absolutely floored me.
It was posted by a highly respected account known as “CarDealershipGuy”, and it contained some rather ominous news…
Past 10 days have been wild:
— Capital One shut off all dealer floorplans (aka inventory lines of credit)
— USA Auto Sales shut down 39 dealerships after losing its Ally floor plan
— Wells fargo laid-off all its junior Auto loan underwriters and capped future loans
Insanity.
Is all of this true?
I had to find out.
So I started digging around, and I discovered that Capital One has indeed decided to completely get out of the “floor plan financing” business…
It’s been a weird few years for the car market, and things could get weirder still. As first reported by Twitter user CarDealershipGuy and now confirmed by Automotive News reports, Capital One is out of the dealer “floor plan financing” business, and while I realize this may not sound like the sexiest of topics, it could have some interesting effects on the car market. In case you think of homes when you think of the term “floor plan,” allow me to introduce the way dealers are able to hold massive inventory.
Here’s a little secret: Dealerships usually don’t pay for every car on their lots, just like how consumers don’t usually buy cars outright. Instead, they take advantage of a form of financing called floor plan financing. Companies that offer this sort of financing give dealers lines of credit to buy vehicles with an interest-free period. If a car on floor plan financing sells within that period, the dealer takes the customer’s money or the customer’s lender’s money and uses some of it to pay off the line of credit. If a car doesn’t sell within that period, the dealership gets charged what has usually been a small fee since credit was nearly free for a decade. This allows a dealership to have very little money tied up in inventory despite amassing a huge selection of cars.
This is a really big deal.
A lot of dealers will simply not be able to operate without such financing.
Which brings us to the second point in the tweet. According to the official website of U.S. Auto Sales, they have “temporarily closed” all 39 of their dealerships…
Attention U.S. Auto Customers. We have temporarily closed our dealerships and are working on a solution to re-open them as soon as possible. But don’t worry, we aren’t going anywhere! U.S. Auto’s affiliated loan servicing company (USASF Servicing LLC) is still open to accept your payments and assist in servicing your account. Please continue to make your payments as scheduled and reach out to us with any account questions.
Hopefully U.S. Auto Sales will be able to secure another source of floor plan financing, but that may not be easy in this environment.
Another major chain, American Car Center, suddenly shut down more than 40 dealerships in February and has now filed for Chapter 7 bankruptcy…
American Car Center, the Memphis-based used car dealer which suddenly closed all locations in February, has officially filed for bankruptcy in a Delaware court.
According to federal court records, the company, also known as RAC Dealership, LLC, filed for Chapter 7 bankruptcy in the Delaware Bankruptcy Court on March 14.
Sadly, this is probably just the beginning.
A lot more dealerships are likely to go belly up as we get deeper into this economic downturn.
And as economic conditions deteriorate, financial institutions are likely to get even tighter with their money.
Which brings us to Wells Fargo. Apparently the bank really is giving the axe to all junior auto underwriting staff…
Wells Fargo laying off all junior Auto underwriting staff.
As of 4/27 any auto loans greater than 110% loan-to-value and 15% payment-to-income will be declined.
For more than a decade, the U.S. economy operated in an environment in which money was flowing like wine and it was really easy for everybody to get credit.
But now even officials at the biggest banks in America are openly admitting that a “credit crunch” has begun…
The credit crunch stemming from the fallout of Silicon Valley Bank has begun, with data showing clear tightening of lending standards by banks, according to Morgan Stanley’s top stock strategist Mike Wilson.
In a note on Sunday, the Morgan Stanley CIO said that the last two weeks have shown the steepest decline in lending on record as banks scramble to offset the breakneck pace of deposit flight, which has accelerated in the month since SVB failed.
“The data suggest a credit crunch has started,” Wilson said in the note, adding that $1 trillion in deposits has been withdrawn from US banks since the Federal Reserve began raising rates a year ago.
There is no possible way to spin “the steepest decline in lending on record” to make it sound good.
Our economy runs on mortgages, auto loans and credit cards, and so a dramatic reduction in lending will inevitably lead to a dramatic reduction in economic activity.
A lot of people are comparing this new crisis to what we went through in 2008 and 2009, because that is the only downturn in recent memory that is comparable.
Unfortunately, I am entirely convinced that this new crisis will eventually greatly surpass what we experienced during the Great Recession.
So I would encourage you to do whatever you need to do to get ready for harsh economic times, because what is ahead is not going to be pleasant for any of us.
https://www.zerohedge.com/personal-finance/i-had-find-out-if-was-true
CO Democrats are trying to pass a law that makes it illegal
to discharge a firearm on your OWN PRIVATE PROPERTY...
so people with acreage like myself....it would be illegal...
and I have a cliff as a back stop........
so yep, I absolutely despise Democrats from now and ever more.......
they can do all the good they want.........
but will NEVER EVER TRUST ONE EVER AGAIN...........
RFK jr...nope..........not one of them, not ANY OF THEM............EVER
if that's the only choice on a ballot
leave it blank....
actually that's what I did last time
LOL!!!! had a plan to plant them later on in May
asked to have them put in an extra fridge
instead they've been left to just rot
fuck it
I have enough to do
my legs are so dang worn out and tired from mud
I ain't walking them down below to that fridge.....
they didn't get et cuz I love taters!
and didn't have the energy to cook 'em
no house plants here....all my plants are outside!
well except for some potatoes growing in a box............LOL!
that could be June here.....
here we don't say the last freeze.....
we say the next freeze......
just enough with the white pooh already!
looking like another only 7-8 dz day
can't blame 'em......the chickens.......they're sick of it too
but for you........I'm cheering for ya for it to be the last one for a long while
Shares of Fox Plunge After Company Announces Tucker Carlson Departure
https://www.breitbart.com/economy/2023/04/24/shares-of-fox-plunge-4-after-company-announces-tucker-carlson-departure/
Shares of Fox Plunge After Company Announces Tucker Carlson Departure
https://www.breitbart.com/economy/2023/04/24/shares-of-fox-plunge-4-after-company-announces-tucker-carlson-departure/
Baby Mama Petitions Arkansas Court to Jail Hunter Biden Until He Conveys Financial Records in Paternity Case
https://www.breitbart.com/politics/2023/04/24/arkansas-court-petitioned-jail-hunter-biden-until-conveys-financial-records-paternity-case/
Exclusive — Ronna McDaniel: Every Republican Debate Will Have a ‘Conservative Partner’
Every Republican debate will have a “conservative partner” associated, Republican National Committee (RNC) chairwoman Ronna McDaniel said during an interview on Breitbart News Daily.
When asked if the mainstream media will be part of any Republican debate, McDaniel admitted it will be difficult to do otherwise, as there are not enough conservative networks to work with.
“You’ve seen that the first one we have Fox and Rumble, which is the first time the RNC has ever done that,” she explained. “We’re gonna livestream on Rumble, which is a conservative streaming platform on the RNC channel, and then Young America’s Foundation.”
Indeed, McDaniel announced plans for the very first Republican debate this month, noting that the GOP is focusing on getting away from Big Tech.
“We’re getting away from Big Tech. YouTube’s owned by Google,” she said during an appearance on Fox & Friends. “We’re going to have an RNC channel on Rumble. And then the Young America’s Foundation, which is run by Scott Walker, to really reach out to young voters. They’re based in Wisconsin, so they’re going to be a partner as well.”
Ultimately, McDaniel told Breitbart News Daily that there will, in the very least, be a “conservative element” to every single GOP debate.
“You’re gonna have a conservative element of every single debate. But the reality is, you know, there’s not enough conservative networks. We can’t do all the debates on Fox,” McDaniel explained.
“So that’s an issue we’re going to be facing and dealing with as we go forward, but there will be a conservative partner with every single debate,” she added.
https://www.breitbart.com/politics/2023/04/24/exclusive-ronna-mcdaniel-every-republican-debate-will-have-conservative-partner/
Exclusive — Billy Graham’s 1991 Letter to Trump: ‘Am Absolutely Amazed at Your Career’
https://www.breitbart.com/politics/2023/04/24/billy-graham-letter-to-trump-amazed-at-your-career/
Exclusive — Billy Graham’s 1991 Letter to Trump: ‘Am Absolutely Amazed at Your Career’
https://www.breitbart.com/politics/2023/04/24/billy-graham-letter-to-trump-amazed-at-your-career/
Alleged Pentagon Leaks Say ISIS Regrouping in Afghanistan, Angering Taliban
with US weapons, no doubt...........t
https://www.breitbart.com/asia/2023/04/24/alleged-pentagon-leaks-say-isis-regrouping-in-afghanistan-angering-taliban/
Alabama Governor Ousts Education Official for Promoting ‘Woke’ Pre-K Materials
https://www.breitbart.com/politics/2023/04/23/alabama-governor-ousts-education-official-for-promoting-woke-pre-k-materials/
Trump: ‘I Don’t Call It World War III – I Call It the End of the World’
https://www.breitbart.com/clips/2023/04/24/trump-i-dont-call-it-world-war-iii-i-call-it-the-end-of-the-world/
Republicans Advance Bill Requiring Texas Public Schools to Display Ten Commandments
https://www.breitbart.com/pre-viral/2023/04/23/tx-gop-advances-bill-requiring-schools-ten-commandments/
Republicans Advance Bill Requiring Texas Public Schools to Display Ten Commandments
https://www.breitbart.com/pre-viral/2023/04/23/tx-gop-advances-bill-requiring-schools-ten-commandments/
Trump: ‘I Don’t Call It World War III – I Call It the End of the World’
https://www.breitbart.com/clips/2023/04/24/trump-i-dont-call-it-world-war-iii-i-call-it-the-end-of-the-world/
yeppers! and nice to have some good news
had the white pooh falling on me at 9:15 a.m. PTUI !!!
woo hoo.............new cash paying egg customer
30 dz a week....at $7 a dz......and I'm still cheaper than the store
just saw on the boobtube on Bloomberg while eating brunch
losing Tucker has cost them $690 Billion so far......
that's nothing to sneeze at.....
LOL!!! yep.....that's pretty funny
cool....thanks......
haven't even set up my sound system yet
but know it doesn't have any HDMI ports
it's older and powerful.....
What's needed is a 3rd alternative to Dish and Directv
imo
how do you get streaming onto a tv?
Direct TV has the Genie thing for over the internet tv
and you get some channels you don't with a dish.....
Dish gave me back TWC so can see my local stuff
and Directv won't give me GRIT unless I pay for a more $ pkg
FMC....old movies....fun
GRIT with old westerns like The Texan....enjoy those...
not watching much of anything new anymore........
watched a John Wayne from 1946 that was pretty good
I like Randolf Scott.....pretty much everything he did
DeSantis has done a terrific Job in FL
imo, if he left to be Potus.....FL would go back to the Dems........
would hate to see that happen
and you're right about Trump......
well since he was exposing Jan 6....
and have to admit.....from posts have seen
Tucker has evolved a bit
so maybe they wanted to remove his audience
so
mebbe Fox goes woke and goes Broke.......
I hope OANN gets him....and they get put back on the air
but even at Newsmax he'd be a good addition
Directv showed they have Newsmax the other day when I looked them over
pretty much it
hopefully OANN will snag Tucker
good.........think McDonald's will hire him?
probably that outfit Chris Cuomo is with will......
that's something a LOT of us have been wondering....
kinda says maybe they were as fake as BLM imo
Where have all the women's rights groups gone, maybe they're hiding under the same rocks as the pussy hat brigade?!
wow, you're the 2nd person to tell me that
good for Tucker.
btw
it started snowing at 9:15 when I was feeding
agree with you there....100%
Trump is our choice for President.
LOL! Uncle Fester needs weed to control his depression
since he don't have a clue what being a senator means
some of these jokers put in positions of power
just makes the world believe the USA is a joke
good riddance............
have to wonder how much worse the replacement will be
they should all step down and beg Trump to come in an clean up their mess
Elderly Woman Convicted for Spitting at Black Lives Matter Activist During Violent ‘Summer of Love’ — Could Serve 90 Days in Prison
by Cassandra MacDonald Apr. 23, 2023 8:00 am
https://www.thegatewaypundit.com/2023/04/elderly-woman-convicted-for-spitting-at-black-lives-matter-activist-during-violent-summer-of-love-could-serve-90-days-in-prison/
Georgia Democrat Activist Who Ran for State House of Representatives Arrested for Kidnapping and Third-Degree Cruelty to Children
by Cassandra MacDonald Apr. 23, 2023 3:40 pm
https://www.thegatewaypundit.com/2023/04/georgia-democrat-who-ran-for-state-house-of-representatives-arrested-for-kidnapping-and-aggravated-assault/
CREEPY: Texas Investigating Deaths of Six Cattle Found With Their Tounges Removed With No Blood Spilled
by Mike LaChance Apr. 23, 2023 12:40 pm
https://www.thegatewaypundit.com/2023/04/creepy-texas-investigating-deaths-of-six-cattle-found-with-their-tounges-removed-with-no-blood-spilled/
WAYNE ROOT: It’s Time For a National Trump Strike
by Assistant Editor Apr. 23, 2023 12:20 pm
Damn Skippy!!!...............t
https://www.thegatewaypundit.com/2023/04/wayne-root-its-time-for-a-national-trump-strike/
After Disastrous Debates in 2020, Democrats Have Decided to Not Hold Presidential Debates in 2024
by Joe Hoft Apr. 23, 2023 11:20 am
https://www.thegatewaypundit.com/2023/04/after-disastrous-debates-in-2020-democrats-have-decided-to-not-hold-presidential-debates-in-2024/
Lawsuit Filed Against DOJ For Records on Appointees Installed in the Department to Advance Biden’s Radical Agenda
by Cassandra MacDonald Apr. 23, 2023 9:00 am
https://www.thegatewaypundit.com/2023/04/lawsuit-filed-against-doj-for-records-on-appointees-installed-in-the-department-to-advance-bidens-radical-agenda/