The used-car market’s hot streak may be ending as borrowers struggle to make payments and regulators say some auto lenders are “setting up consumers to fail.”
  • megopie@beehaw.org
    19·
    1 year ago

    Do they not realize how absurd it is to be relying on … used car loans as a back up investment? Like, used cars are a diminishing asset, prone to destruction in accidents, picked up by low income consumers.

    Like, the only thing that holds up that market is the fact that modern infrastructure and suburban layout basically requires ownership of a car.

    Why are these people allowed to be investing money? Why the hell are they in charge of anything if they are dumb enough to think used fucking car loans are a good and stable long term investment?!

    It’s one thing to be malicious, predatory and smart, to have malicious, predatory and stupid people running things is just a sign of a failing system.

    • ninjan@lemmy.mildgrim.com
      19·
      1 year ago

      At first the system (here I mean the financial system of banks, investments and stocks) was something you were taught in school. Everyone handling these matters had a ridgid education and very homogeneous mental model of how all this worked. They trusted what they had been taught and operated within that knowledge. The best performers were those that were sensible, cautious and followed the economic rules closely.

      Then, somewhere around the 50-60s came the smart guys that realized that a lot of potential was left on the table as too risky that wasn’t really that risky just poorly understood or novel. They found the gaps in the system and became rich filling them. They were still educated but dared challenge convention. The smartest were the best performers.

      Then that image of the genius investor making millions attracted profit chasers around the 80s, they found the potential in unethical bets, of obscuring risk and repackaging of using the now enormous scale of the system to hide their dirt. The best performers no longer gave a damn about economic theory and were those that were willing to take risks and get their hands dirty.

      Now, since the 00s or so, no one trusts the theory because it only ever worked when people trusted the theory, and those days are gone. No one understands how the system really works and none can predict what will happen, this means risky or not risky is virtually meaningless and the best performers are those that manipulate the odds in their favor, that play with more information, that control the market.