That is weak. If you want to quote an article that fits in with what you are saying then do so. The fact is that banks did not fail because of car loans. Also, You didn't answer my direct question asking if mortgage loans were part of the house of cards that caused banks to fail. I get it that you are against cash-for-clunkers for ideological reasons and you can provide your abstract opinion but you still have not shown how the cash-for-clunkers is bad for the economy at this particular time. Seems like you have some pre-loaded responses to the strawman but let's try to have a real discussion instead.

you saidperhaps you were wrong.

They failed because their risk models required 4% growth YOY.
The consumer ran out of ability to service their debt, hence their inability to assume the new debt required for such growth. Couple this with mortgages starting to fail, as a direct result of the inability to roll over debt, and banking margin calls soon followed.


they were part of the whole picture, as was all consumer debt.


perhaps you need to refresh yourself on the geometric growth of debt servicing costs.

__________________
"At the moment that the whole world has accepted that government will centrally plan all of the economy, take care of its citizens from cradle to grave, and rule a worldwide military empire –all with money that comes from nowhere - at that very moment the age of government will end. "

You are either in over your head or playing games. Do you not realize that "derivatives" are "derived" from something else? I simply said that car loans are not what caused the banks to fail. Car finance companies charged enough interest that a 15% increase in repos (from your link) isn't going to put them out of business. You can talk about derivatives or whatever else you want but the fact is that car loans are not a big factor in the bank failures/bailouts. I specifically said that home mortages were. If you want to disagree then do so and say that home loans were not a much bigger factor than car loans. Either that or concede. No more BS please.

Lets keep in mind how much it costs to finance a car. Cars being built thesedays will last 5 years. If someone gets the $4500 government credit and takes out a $15000 to $20,000 loan to purchase a new vehicle then the payment at 8% interest would be $300 to $400. Are you saying that the average working person can not "bear" to pay a car payment? The banks look at employment and earnings history. This is a bogus argument. If someone who commutes trades in a gas guzzler and buys a newer more fuel eficient vehicle, thier cost of operation will go way down. They will have a factory warranty as well as new tires, new belts, new hoses, etc. When gas prices get back up to $4 a gallon, they will have made a sensible investment.

inability to incur new debt was the reason for the collapse.
It prevented new spending/debt based growth and the rollling over of existing debt.

__________________
"At the moment that the whole world has accepted that government will centrally plan all of the economy, take care of its citizens from cradle to grave, and rule a worldwide military empire –all with money that comes from nowhere - at that very moment the age of government will end. "

You didn't address what I said. The collapse was specifically related to mortgage loans. Car loans weren't a big part of it. The American banks used bad mortgage loan practices.

http://www.cbsnews.com/stories/2009/...n4954231.shtml

"One reason: Take those infamous subprime mortgages given to risky homebuyers. They crippled banks in the U.S., where at peak, 25 percent of loans were subprime. In Canada? Three percent."

Bottom line, you are both wrong and off topic and refuse to admit it.

tell me albert, what percentage of subprime mortgages defaulted and what was their total dollar value ?

__________________
"At the moment that the whole world has accepted that government will centrally plan all of the economy, take care of its citizens from cradle to grave, and rule a worldwide military empire –all with money that comes from nowhere - at that very moment the age of government will end. "

NO. If you don't have a rebuttal it is because you simply don't have a rebuttal. I am not going to play word games while you make claims and then refuse to address direct questions or address what I am actually saying. I don't care to deal in abstracts. This thread is about cash for clunkers and your point has been addressed yet you keep comng back with cryptic no-content responses. Come on. Just shoot from the hip and quit worrying so much that you might get exposed. Who cares?

real number values are abstract ?
According to you, these loans "collapsed" the banking industry.
You should be able to ascribe a number value to them.

The OTC derivative products in the COC web page, for US banks, are given a notional value of 204 trillion. What was the sum total of defaulted mortgages . What percentage of the banks' "derivatives" positions is this?

you seem like a smart guy.
Why don't you examine the numbers and come up with some observations.
Here, I'll help you get started.
http://seekingalpha.com/article/7350...-as-advertised
http://whiskeyandgunpowder.com/math-...tgage-default/
http://mjperry.blogspot.com/2008/08/...age-stats.html

"Subprime" was a nice sound bite, and boy did you bite.
The banking industry collapsed when debt based consumerism slowed.

__________________
"At the moment that the whole world has accepted that government will centrally plan all of the economy, take care of its citizens from cradle to grave, and rule a worldwide military empire –all with money that comes from nowhere - at that very moment the age of government will end. "

If you want to respond to something I actually said then please use the quote feature. I am not going to allow you to speak for me and then debate the strawman.