Last week, we reported that it looks like the air is coming out of housing bubble 2.0. Now it appears the auto bubble may have also popped.
Yesterday, GM announced plant closures and layoffs due to sluggish sales. The big automaker said it plans to shutter five North American factories and slash around 14,000 jobs.
Can the auto industry survive in a high interest rate environment? We’re about to find out.
Earlier this month, we reported that the air has started to come out of the subprime auto bubble. Nevertheless, Americans are still buying cars. Last week, we got a Commerce Department report that consumer spending was up thanks in large part to the strongest auto sales in six months. But there is a dark lining in this silver cloud and the long-term prospects for the auto industry could be dimming.
It looks like the subprime auto loan bubble has popped.
Last year, we reported that the auto industry’s check engine light was on. Now it looks like the thing is totally breaking down. Small subprime auto lenders are starting to go belly-up due to increasing losses and defaults. As ZeroHedge noted, “we all know what comes next: the larger companies go bust, inciting real capitulation.”
Palladium probably isn’t something you think about when you consider investing in precious metals.
Maybe you should.
Palladium broke through the $1,000 mark on Monday. The price of the metal has spiked nearly 50% in 2017 and is at its highest level in 16 years.