TMR: Auto Industry Juicing Sales With Subprime Auto Loans, Jindal Suing Feds Over Common Core, Ron Paul Starts Campaign To #Declassify 9/11 Documents
There is nothing quite as sweet as the Friday before a three day weekend. I hope everyone enjoys the long weekend and the Friday edition of The Morning Roar!Auto Industry Juicing Sales With Subprime Auto LoansRemember the loose lending standards that led up to the collapse of the housing market in 2008? After the crash, pundits cast blame on the bankers, politicians, and the Federal Reserve. The lending environment leading up to the housing collapse was downright insane. The powers that be had created an environment where the only requirements to obtain a mortgage was a pulse and a willingness to go into mountains of debt.After the house of cards came crashing down, all parties agreed that we should never allow that to happen again.Turn the page to 2014 and the bankers, politicians, and the Federal Reserve are up to their same old tricks. Except this time, the subprime loans are being issued on automobiles, rather than homes.Business Insider reports on the fiscal déjà vu that is occurring with auto loans:
In Thursday's note, Jonas relays a recent conversation with his uncle "Chuck," a Chevy dealer in Canton, Ohio, which shows that this trend toward ever-lengthening hasn't slowed but accelerated through the summer.Here's what "Chuck" had to say:Jonas: How are August sales going so far?Chuck: We’re holding our own. Nothing earth-shattering. We’re pushing hard for a big, strong Labor Day weekend finish. The month hasn’t been as good as we hoped, but it could have been worse.Jonas: How’s the incentive environment?Chuck: GM brought back 0% for 72 on the trucks and selected models, so that was a Godsend to us. It’s not uncommon anymore to do 75- to 78-month loans. It used to be that 60 months was the norm. Then it went to 66, and now it’s over 70.Jonas: Are you saying >72-month loans are normal?Chuck: Absolutely. People don’t seem to care anymore. It’s all about the monthly payment. Folks just want a car, have a monthly budget and they say: "Just tell me how I can fit this into my monthly budget." They don’t care as much if they still have half the loan balance left after five years. Now we do get people who we put into 75-month loans from four or five years ago that are coming back today asking us: 'How can I get out of this loan?' ... but that’s a different story.This trend toward longer loans isn't limited to new cars, but also leases, as the "subprime lease" category has emerged as a more popular type of auto loan.Jonas: How’s the leasing business?Chuck: We’re witnessing a drastic increase in our lease business. The latest flavor is the 'Subprime Lease.' A lot of banks are doing internal scoring now to help consumers with a bad score but a good history to get into a new car. So once we verify employment and income we can run them on a lease with a 2.5 factor instead of a 0.001 factor. It may increase the monthly payment by 40 to 60 bucks, but you can get them into a new car they can afford. Subprime leases have been around for a while but have clearly become more prominent lately. For example, you’ll see it with more young adults, only six months on payroll and getting credit scores established.
The price of automobiles has drastically increased in the last eight years. I don’t need to cite data in order to prove this point. Just take a trip down to your local dealership or surf around the interwebs. My personal search informed me that in order for me to buy a similar SUV to the one I bought eight years ago, I would need to pay around 50% more.The reasons behind these price increases can be traced to government intervention. Programs like “Cash For Clunkers” destroyed a large amount of perfectly drivable used vehicles from the marketplace, thus driving up the price used vehicles. New regulations have forced car manufacturers to abandon old proven models and invest in manufacturing more expensive “green” options.It is not a question of if the automobile bubble will burst, rather when will the bubble will burst? And when it does will the government allow bad debt to be liquidated or will busybodies in Washington attempt to prop up the manipulated market?Jindal Suing Feds Over Common CoreLouisiana Gov. Bobby Jindal is suing the federal government for the third time in the last two months. All three lawsuits revolve around disagreements on federal involvement with Common Core.Common Core is a set of standards in math and English that was created collaboratively by several state governors. Ironically, Jindal was one of the governors involved with the creation.In Jindal’s latest suit he claims that the government has illegally infringed upon states’ sovereignty by using federal education grants to coerce encourage states to adopt Common Core standards.From Libertarian Republic:
“The proponents of Common Core will tell you that it’s simply about one test and about standards, but that’s a ruse. Common Core is about controlling curriculum,” Jindal said in a press release announcing the lawsuit. “These are big government elitists that believe they know better than parents and local school boards.”The lawsuit, the third to involve Jindal and Common Core in the last two months, is directed against the Department of Education as well as Secretary of Education Arne Duncan…… However, after their creation, the federal government incentivized Common Core’s adoption in several ways. First, stimulus funds were offered to states through the Race to the Top program which awarded monetary prizes to states that were the most aggressive in reforming their school systems.One way a school could increase its chances of winning money was by adopting Common Core. In addition, the government provided funding to two consortia, PARCC and Smarter Balanced, that are creating common standardized tests to be used by multiple states that have adopted Common Core.That federal involvement, Jindal claims, is illegal, contradicting “50 years of Congressional policy forbidding federal direction or control of curriculum, the cornerstone of education policy.” Jindal’s lawsuit seeks to strike Common Core-related components from Race to the Top.
Jindal cites a violation of state sovereignty, but the real issue with Common Core, and with the entire public education system, is a violation of individual sovereignty. Parents have basically given up their right to control the schooling their children receive. They have handed the reigns of their children’s education to local, state, and federal bureaucrats.It really doesn’t matter if Common Core is adopted or not. Until parents step up to the plate and take ownership of their child’s education, there will always be centralized standards or curriculum waiting in the wings to be forced on students, regardless of aptitude or abilities of the individual student.Ron Paul Starts Campaign To #Declassify 9/11 DocumentsFormer Texas Republican Congressman and Presidential Candidate Dr. Ron Paul announced a campaign to raise support for House Resolution 428. The resolution, introduced by Congressman Walter Jones (R-NC) and Congressman Stephen Lynch (D-Mass), seeks to get the administration to reveal the redacted information from the 9/11 report.Last month in The Morning Roar, we covered Rep. Thomas Massie’s reaction to reading the twenty-eight classified pages of the 9/11 report. Massie said after reading the classified report, “I had to stop every two or three pages and rearrange my perception of history.”The American people deserve to know what is on those pages that could cause Americans to change their views of the Middle East. Please watch the below video and share with family and friends in order to #declassify the twenty-eight redacted pages of the 9/11 report.Read The Morning Roar every weekday Monday-Friday!The Lions of Liberty are on Twitter, Facebook & Google+Receive access to ALL of our EXCLUSIVE bonus audio content – including “Conspiracy Corner”, “Degenerate Gamblers” and the “League of Liberty Podcast” by joining the Lions of Liberty Pride and supporting us on Patreon!
