Comments on: The Impending Auto Bubble http://www.mcdonaldland.info/2008/11/19/the-impending-auto-bubble/ A magical discussion of software, economics, and other assorted theories. Mon, 07 Jun 2010 20:13:12 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Jason McDonald http://www.mcdonaldland.info/2008/11/19/the-impending-auto-bubble/comment-page-1/#comment-4345 Jason McDonald Mon, 08 Dec 2008 13:25:05 +0000 http://www.mcdonaldland.info/2008/11/19/the-impending-auto-bubble/#comment-4345 It is unlikely that my scenario would ever happen. The main reason for this is because even if the big three were to be left to collapse you would see Toyota, Honda, and other step in and buy portions of them up. I made an assumption, for illustrative purposes, that this wouldn't happen. I don't really get why the housing bubble would have a direct effect on car purchases though. If you use the equity in your home to buy a car you still have to make payments - just like taking out a car loan. So now that the equity is gone, why can people not get traditional car loans? It is unlikely that my scenario would ever happen. The main reason for this is because even if the big three were to be left to collapse you would see Toyota, Honda, and other step in and buy portions of them up. I made an assumption, for illustrative purposes, that this wouldn’t happen.

I don’t really get why the housing bubble would have a direct effect on car purchases though. If you use the equity in your home to buy a car you still have to make payments – just like taking out a car loan. So now that the equity is gone, why can people not get traditional car loans?

]]> By: wolf http://www.mcdonaldland.info/2008/11/19/the-impending-auto-bubble/comment-page-1/#comment-4324 wolf Sun, 07 Dec 2008 22:11:14 +0000 http://www.mcdonaldland.info/2008/11/19/the-impending-auto-bubble/#comment-4324 Sorry to inform you, but the auto bubble has already popped. It was fueled by the ability of people to use their houses as atm's to buy cars they didn't need. that's why car sales have dropped by 40%. The big three can cease production and demand/supply will barely be affected. Or they can stay on lifesupport and inventories will skyrocket. It's dire time for autos. Sorry to inform you, but the auto bubble has already popped. It was fueled by the ability of people to use their houses as atm’s to buy cars they didn’t need. that’s why car sales have dropped by 40%. The big three can cease production and demand/supply will barely be affected. Or they can stay on lifesupport and inventories will skyrocket. It’s dire time for autos.

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