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Toyota’s Back, Baby

New Project

Happy Friday, and welcome back to The Morning News Roundup Whose Official Name Remains Under Discussion, Mostly Because We’re All Busy With Other Stuff And Will Figure It Out Eventually. (See, now that one’s too long.)

To close out this glorious week, we have news about Toyota’s manufacturing headaches possibly being over; some stuff about Elon Musk maybe drawing the ire of the Securities and Exchange Commission, again; an investigation into predatory title loans; and guess who’s buying up all the EV charging stations?

Clear eyes, full hearts, can’t lose.

Happy Days Are Here Again (Sorta)

Prius Top

It takes a lot to disrupt Toyota’s mighty carmaking machine. But even (arguably) the greatest manufacturing operation on the planet couldn’t withstand the COVID-19 pandemic and its unprecedented after-effects, like supply chain woes, semiconductor shortages and labor issues. Like nearly every other automaker, Toyota struggled with full-blast production in 2021 and 2022 to the tune of millions of cars.

But now, Toyota’s back, baby. “Back with a vengeance!”, declares Automotive News. Holy shit. Everything—yes, even the Prius—has a 2JZ now. Two dozen FJ Cruiser variants will be on the road by 2025. Akio Toyoda is going to light a gigantic, 200-foot-wide Toyota logo ablaze on a building facing the Volkswagen Group’s headquarters.

Okay, it’s not quite that awesome. But the Japanese automaker did advise its suppliers that it should be able to get worldwide car production past 10.6 million vehicles this year. That’s a big jump from the old pre-pandemic record of 9.05 million cars in 2019:

“The worst time is behind us,” declared Kazunari Kumakura, chief officer of the purchasing group.

Toyota has gradually bolstered production plans by wrangling alternative semiconductor sourcing, building direct ties to chip makers and communicating more closely with suppliers.

The company churned out 8.58 million vehicles globally in 2021.

Results for all of 2022 will be released Jan. 30. But through November, worldwide output for the Toyota and Lexus brands was up 7 percent, to 8.33 million vehicles.

It’s been a terrible couple of years! But now Toyota’s back, and right in time for (checks notes) rising interest rates, an uncertain economy, and sky-high new-car prices.

Realistically, nobody knows what’s going to happen with the new car market—or the wider economy—in 2023, but pretty much everyone agrees things are “weird” and “less than good, probably.”

Anyway, go get ’em, Toyota!

Elon Does Thing That May Make Feds Mad, Again

0x0 Model3 01
Photo credit: Courtesy of Tesla, Inc.

Being the richest man in the world means never having to say you’re sorry. And nobody has a way of skating consequences like Musk, the CEO of Tesla, until maybe last year at least when he became the first human ever to personally lose $200 billion. That probably doesn’t feel great. I get pissed when I misplace a $20 bill.

Anyway, the latest thing facing Musk is, did he sell a bunch of $TSLA stock late last year when said stock started tanking over global demand concerns? Here’s the Wall Street Journal to explain:

On Jan. 2, Tesla announced fourth-quarter vehicle deliveries that were significantly below the company’s most recent forecast to investors. The news sent Tesla’s stock price plunging when markets opened the next day.

The timing of the stock sales raises a crucial question: Did Mr. Musk know that business had slowed when he sold his shares? Tesla hadn’t updated investors on its outlook in nearly two months.

“This should be of great interest to the SEC,” says James Cox, a securities-law professor at Duke University who has testified before Congress about insider trading. “The issue here is, what did he know and what was the market anticipating when he sold? That’s a critical moment.”

[…] Mr. Musk sold nearly 22 million shares Dec. 12 -14 at an average price of about $163 a share, according to a regulatory filing. When the stock closed on Jan. 3 at just over $108, the shares Mr. Musk sold the prior month had declined in value by $1.2 billion. The stock has since rebounded to about $127.

In general, the SEC’s rules prohibit corporate insiders from trading their companies’ securities while aware of material nonpublic information. Exceptions abound.

Exceptions do abound, such as when officers buy or sell under a preset trading schedule, which Musk has done before. The story’s worth a read in full if you’re into that sort of thing, but based on historical precedent, I think the outcome here will be somewhere between “nothing” and “Musk gets a minor slap on the wrist from the SEC and pays a fine, or chooses not to pay it.”

I doubt he’s losing sleep over this. Or he’ll just tweet through it.

Shell Grabs Volta Charging

Volta Lifestyle A Copy
Photo: Volta

I can’t say I’ve encountered chargers from California-based Volta in my travels, but apparently they offer free charging at malls and shopping centers backed up by big media display screens for advertising. Advertisers pay for the billboard, you get electrons for your car in exchange.

Volta went public via a SPAC in 2021, back when that sort of thing was fashionable. But now it has a new owner: Shell, which picked it up for just $169 million—an amount I assume equals a rounding error for the oil giant. This comes after Shell posted record profits when gas prices shot up last year. Love that for them!

Anyway, here’s a relevant article that ChargedEVs (where I first spotted this news) published in December that explains why oil companies are getting big into EV charging. The answers are fairly obvious: like hell are they gonna give up their energy monopolies even if society transitions off gasoline for passenger cars.

Why is Big Oil going big on charging? The optimist sees the obvious motivation—these companies want to do the right thing for the planet and for themselves, transitioning to a new and cleaner technology. The skeptic suspects that their real aim is to cripple that new technology, if not by shutting down innovators in the field, then by controlling the market, and making sure that public EV charging is at least as expensive as pumping gas, and less convenient. “Public chargers, some of which are operated by oil companies, always seem to be out of order. Coincidence?”

Arcady Sosinov, the founder and CEO of FreeWire Technologies, is in as good a position as anyone to understand the relationship between oil and charging—his company is working with several major oil retailers, including ChevronPhillips 66 and service station chain Parkland, to help them deploy fast charging at their gas stations.

“Chevron and Exxon alone printed $200 billion in EBITDA [earnings] in the last three quarters,” says Sosinov. “These are record margins, record profits, but guess what? They’re not spending money building new oil rigs or drilling new wells. And that’s a self-fulfilling prophecy—if they’re not drilling new wells, it’s going to keep the price of oil high for an extended period of time…so they’re going to see these profit margins for years to come. Where are they going to spend all that cash?”

You know, I’m gonna print this article out and mail it to the next person who says I’m “on the take for Big Oil” just because I said Elon seems like a bad boss.

TitleMax Told Employees Not To Explain How Interest Rates Work: Report

Car Dealership
Photo credit: “Row of Cars at a Car Dealership” by everycar_listed_photos is marked with CC BY-SA 2.0.

Finally, I’ll close us out by recommending this story from ProPublica, the investigative public-interest nonprofit. It dives into title loans—which, if you don’t know, is a loan offered at extremely high interest rates using people’s cars as collateral—and how lending giant TitleMax trains its employees to help hide the true costs of these loans.

It’s pretty infuriating:

TitleMax’s top executives have been clear publicly that the company’s business model depends on repeated monthly interest payments by its 293,000 customers nationwide. Brown, who worked as a store manager at TitleMax for almost seven years, and former Savannah store manager Ted Welsh Lupica both said that the company’s business model was drilled into them in training, and that they faced repercussions for telling customers how to pay off their debt quickly or in full.

Welsh Lupica, a military veteran, said his supervisors told him to stop being transparent with customers about the true costs of borrowing.

Still, Welsh Lupica kept providing this information to his customers. “I would be explicit. I would tell them, ‘Look, you make $2,000 a month and you want a $2,000 loan.’ I’d tell them, ‘Even if you pay us $200 a month, you are going to be doing that for the rest of your life because that’s not going to pay down the loan’” with the triple-digit interest rate, said Welsh Lupica, who worked with Brown for a few months at a store on Savannah’s east side.

The story says employees were often reprimanded or even fired for explaining how this actually works to customers. (I’ll say it again: the fact that so many Americans don’t know how interest rates work is a feature of our system, not a bug.)

Clearly, this is the kind of lender to stay away from. But TitleMax preys on people who often face emergencies and have no other options, with stores frequently found in lower-income areas in towns and cities. I don’t judge anyone who uses these services; I’ll save my ire for TitleMax itself and its business model.

The Flush

Do you think 2023 be a good year for new car sales now that production is normalizing? Or are high prices and interest rates going to deter a proper auto industry comeback?

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60 Responses

  1. ‘Even if you pay us $200 a month, you are going to be doing that for the rest of your life because that’s not going to pay down the loan’” with the triple-digit interest rate.

    Triple digit? Are you serious?

    In November, a review of more than two dozen Georgia title pawn contracts conducted by The Current and ProPublica found that annual interest rates in typical TitleMax contracts ranged from 119% to 179%.

    Yes they are! Holy crap!

    Really makes you question whether usury laws have any teeth at all.

    1. Usury laws are taken very seriously and enforced. But these types of loans in simple terms have the Title Loan company like TitleMax acting as a broker to a loan, which will have an appropriate interest rate like 10% or 20% or whatever.

      This type of brokerage relationship is more or less unregulated, so they can pretty much do what they want. And they add straight fees for their brokerage services, which is what hikes the “interest rate”. It’s actually “interest plus fee” in most cases, but the effect is the same, and an APR of three-figures is an easy thing to figure out and in reality what’s being charged.

      It’s complex (of course), predatory, sketchy as hell, but sadly, also legal.

      1. So this is how they do it:

        The Georgia Department of Banking and Finance regulates and licenses other subprime lenders that offer loans to customers considered high risk. For instance, the 166 installment lenders working in the state are subject to Georgia’s usury cap of 60% annually, including interest and fees.

        Yet lawmakers in Atlanta also passed a law that allowed the burgeoning title-lending industry to operate outside these regulations. Since then, TitleMax and at least 90 other title-lending companies in Georgia have operated under state pawn shop statutes, rather than financial or banking laws.

        The bar to open a title-lending business in Georgia is low. A company must apply for a pawn shop license for their employees from the local government in the city or county where they work. With that in place, “title pawn” stores can offer customers a 30-day contract at an interest rate up to 25%. State law allows these contracts to be renewed for an additional two months at that same monthly interest rate. After that, additional renewals have a lower interest cap of 12.5% per month, but that combined rate — up to 187.5% annually — is still far above the usury caps for other types of lenders in Georgia. Title lenders have no obligation to assess customers’ credit or their ability to repay what they borrow or to report the number of title pawns issued to state regulators.

        So the MONTHLY interest rate is 25% for 3 months then 12.5% per month after that.

        Criminy!

  2. Toyota: they’ll build as many cars as they can. With a new Toyotathon every month — they’re given different names for the TV commercials — they can fob ’em off at a discount. A GR Corolla might — might — interest me (at MSRP), but I see nothing else that makes me want to rush right down to the nearest dealer.

    Tesla: A billion here, a billion there, and pretty soon you’re talking real money! Other than that, my feeling is that Musk can get away with damn near anything he wants. The ‘Stans will back him to the bitter end.

    Volta: maybe the Big Oil Companies are buying in to charging networks because they see a profit source? That makes more sense to me than imputing sinister motives because the Ghost of John D. Rockefeller walks in the night.

    TitleMax: exactly what is the rate of vig these people are charging? The “ProPublica” article doesn’t say. In any case, some banks offer “refinancing” for car loans, and — just guessing here — the people who go to TitleMax either don’t qualify for them or don’t bother to look for other options.

    With the economy on shaky ground right now and purchase prices high, it’s hard to imagine that anyone would opt for a new car unless they were VERY certain of the own financial status.

    1. I’m very certain of my financial status–paid off house and cars, decent salary. But new car prices are flat out insane. I have a Volvo wagon and a BMW 128i, both bought used, both now with over 100k miles, and laugh out loud when people say they are expensive to maintain. After a quick glance at what it would cost to replace either ($55k minimum for the Volvo, $45k for the cheapest 2-series any BMW lot has), I pay happily for whatever preventive maintenance or repairs they need.

        1. Unless I am blind, Otter said clearly at the beginning he is quite happy with his financial status. Sounds like he has some reasonable cars he bought used, takes care of and is not worried about having the reliability of an Accord or Camry “Cheap Bastard.”

          Full disclaimer, I drive an Accord.

    2. Titlemax: one of the ex-workers in the article mentioned triple digit rates. These aren’t refinancing loans. You add titlemax as a lienholder and they loan you cash at insane rates. You either pay or give up your car

  3. The Title Max thing is a tough one.

    Obviously deliberately misleading or lying to people (You’ll pay this loan off in 12 months if you make the minimum payments) is not good. But at what point does it become unethical or even illegal to commit a crime of omission (I’m simply not going to tell you this loan is a bad idea) against a consenting adult? If we infantilize the people taking out these loans, is that better for them?

    It makes us as responsible financial consumers feel good to say, “Ban shady loan companies or practices!” because it doesn’t hurt us. But doing so isn’t likely to help these people. Mainstream banks aren’t going to jump into the void and start offering affordable loans to people with 500 credit scores. If they could make a profitable business out of it, they’d have done so already. So if the options are between a shady loan company and no loans at all, which is least bad?

    1. Honestly, no loans at all is probably least bad. With that, entire swaths of commerce are going to collapse. It would be bad in the immediate, but afterwards it would have to rebuild into something that was actually sustainable.

      In saying the above, I feel I need to point out that the housing market crash of ’08 was caused by shady loan companies. The impending housing market crash of ’23 or ’24 is going to be caused by similar shadiness.

      1. The structural demand for housing in this country is far too high for a true crash in prices IMO. We’ve been underbuilding for well over a decade now and the population has only grown in that time. There’s a robust floor under demand, and while the 2020-21 runup may not be sustainable in the short term, I just can’t see a nationwide collapse like 2008 again.

    2. But there are more than two options. You can apply regulations. At a minimum, requiring that a minimum payment actually make progress toward the principal would prevent them from offering loans that will last forever even if people make their payments on time. Could also require the contract last the life of the loan, rather than the company changing the terms each month. When they offer a $2000 loan and $200 payment, that is not realistically a one-month loan. You can also require they offer the full contract to the customer up front, instead of getting their agreement and then having them sign the document they hadn’t yet seen.

      Those aren’t significant restrictions. More could be done in the name of consumer protection, but it wouldn’t take much to at least make the loans less blatantly predatory.

    3. The best thing to help out low income people with debt problems is definitely not to put them into an even deeper, inescapable debt. It is definitely unethical to have a business policy to NOT tell people about the downsides of taking your loans no matter what.

    4. “Mainstream banks aren’t going to jump into the void and start offering affordable loans to people with 500 credit scores.”

      Oh, but they do. Funding for Title Max et al comes from household names in US banking.

  4. Production normalizing. Interest rates heading back to (much) longer term averages. Sticker prices still high. Dealer markups coming down. Incentives from manufacturers creeping in. EV incentives from feds in flux. Loan terms at all time highs. Energy prices creeping up. Protectionist talk from several directions and countries.
    Yeah whoever says they can prognosticate in this environment is probably selling something.

      1. Ok, mad is ok. I get mad. I was a bit worried about you for a second there.

        Focus on the good, there’s good stories out there that haven’t been covered like:
        Samaritans pull lady from burning car on Long Island Expressway – That’s good, its a burning car but the lady was pulled from it! So that’s good car news, right?
        Authorities found Julian Sands’ car! He’s been missing for about a week now, but they found his car! That’s a good signal that they’ll find him happy and healthy, right? … right?
        A 13 year old girl led state troopers on a 100+MPH chase with an 11 year old boy in the passenger seat. Shows that the next generation is ready and raring to go in the car enthusiast world! Definitely doesn’t show anything else.

        See! Plenty of positive news out there!
        Now, if you’ll excuse me, I might need to go drink heavily for lunch.

  5. Is TitleMax a society remora? Yes.
    In the age where school is free, the world’s knowledge is in the palm of your hand, and advice is a single social media post away, is there any excuse to be ignorant? No.

    1. I feel you are vastly overestimating free school, the quality of social media’s advice, and the average consumer. Not even gonna mention how people that go to places like that typically have no other options.

    1. Late with the flush, but IDK, man, I just want enough money to get a Cayenne and for Cayenne prices to come back down to earth. Second-gen with a tow package. Mahogany Metallic. Owned by a sweet old couple who kept all the service records. That’s it. That’s the tow parsh holy grail.

      Everyone else, please stop wanting that.

  6. The flush: I think 2023 be a year where things get better for new car *buyers*. For sellers, it will get worse and worse as supply increases which will kill their ability to slap on those bullshit market adjustment fees.

    1. This is a good way to put it IMO. I think a lot more people that don’t normally follow the industry are in the know enough now, to know that it has not been a good time to buy except maybe under very specific circumstances.

      I’m not too worried about new car transaction prices having been high because it’s people that have higher incomes and can take the risk of the higher new car pricing. Meanwhile the average age of vehicles in the U.S. increased over the last couple years, and people drove less at the start of the pandemic. “Regular” folks have been holding out and may figure they can keep waiting it out – whether to not wait up to a year for a plain ol’ crossover, or to not spend thousands more than new for a used car. And smart dealers are already trying to right-size their inventory or right-side the pricing or both on the used side.

  7. Despite the crazy stuff I normally drive, I actually MIGHT have the new Prius (Prime when its out) on my shopping list for the future. In Supersonic Red of course, to not be monochrome.

    Going to do the smart thing and get one gingerly used off lease (so 2027ish) but…
    * It finally looks alright. Maybe even good. Nothing amazing, but definitely has no bad angle.
    * The Prime seats actually look VERY supportive and comfy. Couldn’t say that even 2 gens ago!
    * The interior seems entirely void of cheapness now. Yeah, price is way up, but no more cheap plastic.

    Add in a spacious hatch, hopefully what’ll be good IIHS crash test results, and that I’d likely be able to just run it on pure electric most of the time (a few tanks a year, with Sta-bil to keep it together) and it’s probably one of the better normal-mobiles to ride out the ICE->EV transition with. Yeah, infotainment will be meh, but there’s buttons for HVAC, and my expectations for Toyota infotainment is always low.

    Still will keep the angry flat-6 and the V12 manuals in the garage though!

  8. Car sales are going to be horrible in 2023. More people will default on their auto loans resulting in less loans being made to purchase expensive cars, everyone will flock to cheap fuel efficient vehicles (which are a minority nowadays) and so the lack of supply and the high demand will lead to large dealer markups and overall massive shortage of cars to meet demand. Since expensive fuel hogs make up the majority of automaker’s current catalogs they’ll have a massive surplus of expensive fuel hogs they can’t sell and for the few people who want to buy them and can afford them they’ll buy new, they won’t buy the used ones that were repossessed.

    Ford Stupidly thought that ~80% of all Maverick orders would be for the fuel hog (relatively) 2L Turbo Maverick and only ~20% of the orders would be for the “standard” hybrid drivetrain. Well the opposite proved to be true, and the only reason 2L Turbo orders have increased to 28% is because many people who have waited a year or more to get their Maverick Hybrid have given up and settled for a 2L Turbo that they can convert their hybrid orders to and get made to order in less than a month.

    I think the next few years will be really hard on automakers.

    1. When I was looking for a Maverick last year every time I came across a hybrid on a dealer’s website, the window sticker always pulled up with a green border. For Ford that means that it was customer ordered. You couldn’t find one for sale on a dealer lot unless it was customer ordered. There was demand out there that Ford didn’t see or just didn’t want to cater to in hopes of pocketing more $$ from the ecoboosts.

      1. I think Ford purposefully tilted the model mix more toward Ecoboosts. Keep more battery/hybrid components available for other models, especially if some of it is susceptible to shortages in the supply chain.

        I don’t doubt Ford would love to sell more hybrid Mavericks, but they’re not exactly suffering with the Ecoboosts that they have moved. Heck every crossover left and right is coming out with some kind of off-roady themed trim, arguably Ford was already set up for that with the FX4 package, now they added the Tremor package too.

      2. Yes because Hybrids were customer order only, none were available for dealer stock. I do think it was a case of Ford underestimaing the take rate for the Hybrid as the take rate in the US hasn’t been that high on the previous vehicles that were available as a Hybrid or a ICE version.

    2. It’s mind-boggling to me that they thought the no-cost hybrid that gets 40 MPG would be less popular than the EcoBoost that gets upper 20’s. The 40 MPG is the main selling point for the thing, with the other engine it’s yet another small truck that gets barely better mileage than a full-size.

      1. Not only that but Ford’s FWD hybrid drivetrains with the planetary e-CVT are arguably the most reliable, most durable, longest lasting drivetrains Ford makes today.

        So not only is it cheaper (msrp wise) and more fuel efficient, but it also should last much longer and cost much less in repairs and long term maintenance than the EcoBoost Mavericks.

  9. Please don’t change the name of this column!

    It’s one of several things I first noticed when you launched this site that made me say to myself “heh, that’s perfect”.

  10. It stings a bit to me that the Titlemax thing was going on in Savannah. It’s such a fun and interesting city which I have visited many times. However, the poverty there is real. Like, really real. In a way, it reminds me of Detroit. They have a bunch of industry there, from the Port all the way to fancy pants Gulfstream. They have colleges and of course, the whole tourism thing going on as well. So it should be (on paper) a pretty well-to-do place. But, it is far from it.

    The problem lies in the lower-level school systems. It’s embarrassingly atrocious.
    I would love to live there, but the place is in too much chaos with crime, and the aforementioned educational system, and the “we ARE right next to Florida” wackadoo shenanigans. With that said, it’s no surprise that those folks got swindled. It really is a shame.

  11. Shell bought Volta?
    NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

    The free charging better be here to stay, but they’ll probably stop that.

    Toyota needs to bring back the manual on the non-GR Corolla hatchback, and also offer a sunroof too.

  12. RE: Shell buying charging companies
    Doesn’t it make sense that, as EV adoption grows, gas stations begin to replace gas pumps with chargers? Say, once an area reaches 10% EV, I would think the gas stations would convert 10% of their pumps to chargers.
    Eventually, a gas station with a dozen pumps might have 11 chargers and one gas pump. 2050? 2060? Who the hell knows.

  13. “Okay, it’s not quite that awesome. But the Japanese automaker did advise its suppliers that it should be able to get worldwide car production past 10.6 million vehicles this year.”

    (Looks at current economic conditions.) (Looks at current political situation.) (Looks at terrorists holding the entire financial system hostage currently.) (Looks at the possibility of an extreme recession.)
    (Laughs long, loud, and hard.)
    Unless Toyota’s planning to start knocking thousands off sticker, well, at least they can enjoy 6 months of supply.

    “This should be of great interest to the SEC,” says James Cox, a securities-law professor at Duke University who has testified before Congress about insider trading.

    Which is exactly why absolutely nothing will be done, and there will be no consequences. Rules for thee, not for me, particularly when it comes to the SEC.

    “Shell, which picked it up for just $169 million—an amount I assume equals a rounding error for the oil giant. This comes after Shell posted record profits when gas prices shot up last year. Love that for them!”

    $169M isn’t even a rounding error for Shell. They literally don’t even blink if you quote them a system at $1.75M cash-up-front, they just want you as an approved vendor and a destination for the wire. That kind of a purchase doesn’t even need full vetting; they made over $11B in profit. In 12 months. This purchase represents about 3 days of those profits. With a fresh $4B+ stock buyback scam to keep that line going up, nobody gives a shit about this company. It’s not strategic, it’s just “make sure to use up your budget.”

    “But TitleMax preys on people who often face emergencies and have no other options, with stores frequently found in lower-income areas in towns and cities.”

    And charges outright illegal interest rates, knowing full well that it’s victims can’t afford attorneys. It’s a criminal enterprise – full stop. There is absolutely nothing legitimate about the company and never has been. It’s literally a textbook RICO loan sharking operation.
    And the fact that they haven’t so much as investigated tells you everything you need to know.

    “Do you think 2023 be a good year for new car sales now that production is normalizing? Or are high prices and interest rates going to deter a proper auto industry comeback?”

    Optimism is stupid at this point. We have a cadre of terrorists holding the entire financial system hostage. And the already concluded negotiations say they get to blow it all up, and if not, then they get to blow it all up. (This is why you do not negotiate with terrorists. Whether or not they claim to be legitimately elected.)
    You think interest rates are bad now? You have a Fed that is doing everything it can to crush your ability to get ahead financially, because otherwise, the banks don’t make as much money. You have a group of terrorists actively blowing up not only confidence, but the very foundations of the entire financial system. And you still have the car note time bomb of several trillion dollars from the past few years.
    Fucking $5+ for a dozen eggs so Tyson and Kraft – not some small struggling farmer – can post more record profits while people starve. And anybody thinks cars with $1000+ price increases that will have to be financed at 8%+ (and if the terrorists do blow shit up, 15-20% minimums for 750+) are going to sell?

    I am beyond sick and fucking tired of being forced to live through deliberately engineered ‘unprecedented economic conditions.’

    1. Fucking $5+ for a dozen eggs so Tyson and Kraft – not some small struggling farmer – can post more record profits while people starve.

      And here I was getting free eggs from Safeway just a couple of months ago 🙂

      No I didn’t steal them, nor do I have a chicken named Safeway – Between Halloween and Thanksgiving I was getting coupons for a free dozen eggs every week or so. The free egg ride has stopped for now but I do still get coupons for eggs that put the cost of a dozen inline with the pre-bird flu pandemic price. Check your flyers – you might be getting coupons too.

  14. Triple digit interest on a secured loan is… well, fuck. My credit union has rates for unsecured loans starting at 9.24%, and while I imagine many of the people going to title loan places wouldn’t qualify for a personal loan (most of the rest are presumably just too financially illiterate to realize that there are better options) anybody who can offer significant collateral, like a car, should be able to get a rate that is at least bearable, no matter how shitty their credit is.

    Not that this is news to me, or anything. I’ve known for years how bad these bottom-feeding loan sharks are, this article just reminded me how insane it all is. There’s absolutely no reason why it should have to be this bad. The whole using-your-car-as-collateral thing sucks bad enough already just due to the fact that if you can’t pay up you may lose the one thing that you need in order to hold down your job and thus avoid an inescapable spiral of deepening poverty, but the game doesn’t need to be rigged such that the people taking these loans end up in some fucked-up kind of open-ended indenture to their lenders even if they do keep up with the payments.

    There’s got to be a viable way of offering credit to people in rough financial situations that is at least somewhat more humane. These aren’t people who are trying to buy a bigger house than they actually need, these are people who are trying to make rent, feed their children, pay for medical bills, and keep the lights on. People who are living on the edge of financial ruin, who need a way to bridge the gap between this week’s paycheck and the next one so that terrible things don’t happen to them and their families. There’s got to be a way to offer a financial product that is both affordable for them, and financially sustainable for the lender.

  15. Yeahhhhhhh the market isn’t anywhere near going back to normal. Production might be ticking back up, inventory might be as well, and prices have shifted from “holy shit” to merely “bad” as of late, but the economy and car buying ecosystem are still deeply unhealthy at the moment.

    Interest rates are still nuts. The average price of a new car transaction is still nearly $50,000 in a country where the median household income is around $70,000. A lot of it is starting to look quite similar to what the housing market looked like in the lead up to 2008…lots of buyers are stretching themselves dangerously and are in a precarious position. When people start defaulting on their 8 year, 11% interest loans on their $40,000 SUVs it’s not going to be good.

    If you’re in a decent to good financial health and know what you’re doing you can buy a car right now and be just fine. But that’s only what…maybe the top 25% or so of earners in this country? As is always the case in the US of A, the less fortunate among us are going to wind up with the tab…and it’s going to be disastrous for everyone but the wealthy…which is also always the case in the US of A.

  16. FLUSH:

    NO. Everybody appears to be walking around with blinders and earmuffs on. This year is going to be the start of an epic era of human misery lasting a couple years. The current bubble we are in is completely unsustainable.

    Ex: my house tax assessment went from $140k to $270k, and I live in one of the poorest cities in CT. Nothing happening right now economically makes any sense to me other than the impending doom.

    1. Whenever I see one of these bogus tax assessments (you can’t spell assessment without “ass”) that municipal governments are so fond of, I feel compelled to respond to their update in my value. In your case:

      “Wow, that’s great news! $270K? I’ll tell you what, if you give me $250K today, it’s yours.”
      *crickets*

      Mmhmm, yep. It’s all value on paper. Or how a local government charged registration fees to a guy with a Corvette rolling chassis based on NADA values, so he paid $1K for it for parts, and is paying registration based on a $12K book value. These local governments are just trying to expand their smash and grab taxation tactics and are nothing better than sanctioned criminals.

      The most disappointing thing was that in North Dakota we had a chance to abolish property taxes back in…2016 or 2018, I think. The local governments ran or contributed to funds campaigning fear tactics about how we’d lose all local control if we passed the measure. They won. Everyone got scared and it lost by about ~5% of the vote. Guess what? Those same people are complaining about bogus assessments now and despite their promises soon after the failed measure, the government still hasn’t passed any meaningful tax relief bills. They’ve got a death grip on the fictitious money in our pockets and it enrages me to no end.

  17. “(I’ll say it again: the fact that so many Americans don’t know how interest rates work is a feature of our system, not a bug.)”
    This. Credit scores and interest rates, among other things, are set up to fuel the financial sector via consumer spending. If you don’t owe money to someone, you don’t build credit (yes, you can keep cards paid off to avoid interest, but the banks hope you’ll carry a balance, and they encourage it with 0% interest for the first X months or rewards for spending).

    But the TitleMax crap is especially problematic in that they semi-openly keep employees from properly educating customers. And offering loans on which you only ever pay the interest is just blatant exploitation. And offering interest rates at around 10% sounds better than most credit cards if you don’t realize you are comparing MONTHLY interest to ANNUAL. And that making your payments to TitleMax on time doesn’t stop them from charging fees and changing terms because you didn’t pay it off within the month.

  18. I predict that towards the end of 2023, most dealerships will be back to putting cash on the hoods on just about every model to get sales again.

    1. It’s happening already. I just (Dec 2022) bought a Hyundai at sticker price with a $500 rebate and 0% interest for 36 months. There will be plenty more as production ramps up to more than cover demand.

      The days of paying full MSRP or more for a car (with some exceptions) are drawing to a quick close.

      1. I bought my Kona N at sticker with a $500 rebate and 2.75% financing for 60 months back in June that I’m currently on schedule to pay off in less than 4 years. Granted…we both bought weird Hyundais (you have a Santa Cruz right?) so the results may vary, especially compared to volume sellers.

        And honestly I didn’t even get a great deal in retrospect. I thought the 2022 Elantra and Kona Ns were going to be hard to find for years but after people went nuts over the very first batch that hit lots they’re selling for sticker at most and even $1,000 or so off at best….and they’re not particularly scarce. It really isn’t wise to buy into the enthusiast hype machine. Fortune always favors the patient.

        Oh well. I wanted the car, it’s still well under my budget, and still love it. Plus in several years it’ll probably sneak into the realm of enthusiast curiosities…and as I only drive about 6-8,000 miles a year and am obsessive with preventative maintenance, someone will probably be willing to pay a small premium for a good example that hasn’t fallen into the hands of tuners.

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