It's time for a "Deep Dive" with Danielle DiMartino Booth.
"The Consumer is Strong” needs to be in air quotes. The first inklings of just how bad the growing household default cycle would be came from (surprise) an auto expert — Lucky Lopez.
Las Vegas-based Lucky is a 20-year veteran who has run dealerships, car rental companies and built an expertise on the wholesale side of the used car business. The ‘repo madness’ he’s been seeing in the last six months is historic. Lucky's colleagues (who own repo car lots) are buying, instead of leasing, land for overage lot space.
Not only did stimulus help unqualified buyers finance more cars than they could afford, but the COVID-delayed forbearance pushed out the timeline over which delinquencies turn into repossessions. Lopez’s work is a warning shot not just for investors in the auto space but also for credit card companies and, in the not-too-distant future, the housing market itself.
This is a Hedgeye Guest Contributor webcast series hosted by Danielle DiMartino Booth, CEO & Chief Strategist at Quill Intelligence. Danielle is the author of "FED UP: An Insider’s Take on Why the Federal Reserve is Bad for America". Prior to Quill, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas where she served as Advisor to President Richard W. Fisher throughout the financial crisis. She holds an MBA in Finance and International Business from the University of Texas at Austin and an MS in Journalism from Columbia University. This webcast does not necessarily reflect the opinion of Hedgeye.