I continue to maintain that we're on the edge of a very nasty financial cliff, and about to fall off it. There are plenty of folks who'll disagree with me; but the 'signs of the times' are clear to see. Here are two more, to add to the many I've already mentioned in these pages. In each case, bold, underlined text is my emphasis.
1. Subprime auto loan deficiencies are at their highest in 20 years.
The number of car borrowers who were more than 60 days late on their bills in February rose 11.6 percent from the same period a year ago, bringing the delinquency rate to 5.16 percent, Fitch wrote Monday in a report. During the financial crisis delinquencies peaked at 5.04 percent, Fitch wrote.
If the delinquency figure now is worse than it was during the 2007/08 financial crisis, what does that say about our economy overall?
2. Global Government Debt Is Actually Triple What We Thought, Thanks to Pensions.
“It is really a ticking time bomb,” said Charles Millard, Citi’s head of pension relations and former head of the Pension Benefit Guaranty Corporation, the U.S. safety net for private-sector pensions.
To put the unstated debt levels in perspective: The additional unstated $78 trillion in retirement-related debt is equivalent to a single year of global economic output.
Go read the whole article to understand the scale of the problem - or the full Citibank report, if you have the time (link is to an Adobe Acrobat document in .PDF format).
With numbers like those, how anyone can argue that our economy - and that of other First World powers - is stable and sound, is utterly beyond me. For all their protestations, our fiscal and political leaders are achieving nothing more than rearranging the deck chairs on the Titanic. As Stein's Law reminds us: "If something cannot go on forever, it will stop." That applies to our economy, too.