As Subprime Auto Loan Delinquencies Spike, Parallels And Differences With 2008 Housing Crisis Linger

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Mark Melin
Published on
Updated on

Auto loans have spiked in 2016, reaching their highest levels since 1999 and now reaching over $140 billion. The majority of the loans are performing well, but a notable dichotomy exists. Subprime auto loan delinquencies are significantly on the rise, a November 30 New York Federal Reserve blog post noted with alarm. While there are concerning similarities with the 2008 housing crisis, notable changes have been made since that make the impact of the subprime auto loan different — including government regulations that demand transparency into securitized investments and a lack of derivatives surrounding the sub-prime loans. Sub-Prime Auto Loans…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.