Best of the Week
Sun 19th Nov 2017
Featured Articles:
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17 - Dan_Amerman
The One Chart All Investors Should See Before 2018 - 13th Nov 17 - Ian Jenkins
 
Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - 7th Nov 17 - Stewart_Dougherty
The Stock Market- From Here to Infinity? - 6th Nov 17 - Plunger
The US Dollar Reports of its death have been greatly exaggerated - 6th Nov 17 - Plunger
Markets At the Junction of Risk ‘On’ and Risk ‘Off’ - 4th Nov 17 - Gary_Tanashian
Gold Stocks Winter Rally - 3rd Nov 17 - Zeal_LLC
Government Finances and Gold - Cautionary Tale told in Four Charts - 2nd Nov 17 - Michael_J_Kosares
Fragile Stock Market Bull in a China Shop - 31st Oct 17 - James_Quinn
Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - 29th Oct 17 - Nadeem_Walayat
Fed/ECB Strangle Stocks Bull Market - 28th Oct 17 - Zeal_LLC
  Next-Generation Crazy: The Fed Plans For The Coming Recession - 19th Nov 17 - John_Rubino
Morrisons Christmas 2017 More Points Bonus Last Chance! - 19th Nov 17 - HGR
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17 - N_Walayat
  UK Financial Markets: Pros and Cons of Being a Private Investor - 18th Nov 17 - Dividend Investments
  SPX Cycle Concern - 18th Nov 17 - SurfCity
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17 - Gary_Tanashian
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17 - EWI
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17 - David_Morgan
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17 - Nadeem_Walayat
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17 - Zeal_LLC
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17 - Dan_Amerman
Bitcoin Invalidates Breakdown - 17th Nov 17 - Mike_McAra
  The Fed Isn’t “Confused” About Inflation… It WANTS You In the Dark! - 17th Nov 17 - Graham_Summers
Mystery of Inflation and Gold - 17th Nov 17 - Arkadiusz_Sieron
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17 - Enda_Glynn
  The New US-Chinese Globalization Opportunity - 17th Nov 17 - Dan_Steinbock
Crude Oil – Gold Link in November 2017 - 17th Nov 17 - Nadia_Simmons
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17 - David Morgan
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17 - Sol_Palha
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17 - GoldCore
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17 - EWI
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17 - David Morgan
  Stock Market Last Time This Happened - Consumers Are Both Confident And Broke - 16th Nov 17 - John_Rubino
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17 - Dan_Steinbock
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17 - JARED DILLIAN
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17 - John_Mauldin
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17 - MarketsToday
Gold’s Long-term Analogies - 16th Nov 17 - P_Radomski_CFA
Here’s Why You Shouldn’t Store Precious Metals Yourself (Hint: It’s More Than The Risk Of Theft) - 16th Nov 17 - Olivier Garret
Gold, Stocks Oil Forecasts
PetroYuan Can Accelerate the De-Dollarization - 15th Nov 17 - ElliottWave-Forecast
Bitcoin Rebounded Strongly From 5427 - 15th Nov 17 - Franco_Shao
  FTSE 100 Stocks Index Holds Support at 7140 - 15th Nov 17 - Dividend Investments
  The Battle And Future Of Bitcoin In Jeopardy - 15th Nov 17 - Jeff_Berwick
Did The Fed’s Alan Greenspan Admit Gold Is Being Manipulated? - 15th Nov 17 - Avi_Gilburt
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17 - N_Walayat
The Trump Administration’s IP Battle Against China - 15th Nov 17 - Dan_Steinbock
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17 - Boris_Dzhingarov
  What "Too Confident to Save" Means for Stocks - 15th Nov 17 - EWI
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17 - GoldSilver
NZDUSD Broke Below Trend Line Support On 4-Hour Chart - 15th Nov 17 - Franco_Shao
Most Popular Recent Articles:
Wed The Trump Administration’s IP Battle Against China - 15th Nov 17 - Dan_Steinbock
Tue Gold on the Ledge, Trend Forecast - 14th Nov 17 - Bob_Loukas
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Most Popular Authors Recent Articles:
1. Nadeem_Walayat Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
2. James_Quinn The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
3. Michael_Noonan Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
4. Jim_Willie_CB Finally, The Fall Of The House Of Saud - 12th Nov 17
5. Zeal_LLC Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
Most Popular of last 30 days:
1.North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - Nadeem_Walayat
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3.Buffett Sees Stock Market Crash Coming? His Cash Speaks Louder Than Words - Mark O’Byrne
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
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Most Popular All Time:
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3. UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth - Aug 2007 - Nadeem_Walayat (Reads 383,514)
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Recent Analysis:
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17 - GoldCore
Gold on the Ledge, Trend Forecast - 14th Nov 17 - Bob_Loukas
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Silver Sign’s Confirmation & More - 14th Nov 17 - P_Radomski_CFA
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Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17 - Harry_Dent
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The Bitcoin Bubble Explained in 4 Charts - 13th Nov 17 - JAKE WEBER
How the US Has Secretly Subsidized China to Produce Eco-Unfriendly Solar Panels - 13th Nov 17 - PATRICK WATSON
The Increasingly Unstable Middle East Must Be On Every Investor’s Radar - 13th Nov 17 - John_Mauldin
Stock Market Critical Supports are Being Challenged - 13th Nov 17 - Anthony_Cherniawski
The One Chart All Investors Should See Before 2018 - 13th Nov 17 - Ian Jenkins
Short-Term Stock Market Uncertainty Following Recent Rally, Will Stocks Continue Higher? - 13th Nov 17 - Paul_Rejczak
Is Hillary Just the “Fall Guy” for the Intel Agencies and their Moneybags Bosses? - 12th Nov 17 - Mike_Whitney
Stock Market Correction Phase - 12th Nov 17 - Andre_Gratian
Finally, The Fall Of The House Of Saud - 12th Nov 17 - Jim_Willie_CB
Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - 11th Nov 17 - Jeff_Berwick
E-franc, E-krona... E-volution? - 11th Nov 17 - Murray Gunn
Gold Investment Stalled - 11th Nov 17 - Zeal
Smart Ways to Get Loans Online - 11th Nov 17 - Boris_Dzhingarov
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Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - 2nd Nov 17 - Nadeem_Walayat
Who Will Be the Next Fed Chief - And Why It Matters - 2nd Nov 17 - Dan_Steinbock
Government Finances and Gold - Cautionary Tale told in Four Charts - 2nd Nov 17 - Michael_J_Kosares
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More Trade Barriers Are Coming—Make Sure You’re On The Right Side - 2nd Nov 17 - PATRICK WATSON
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Invest In Gold To Defend Against Bail-ins - 2nd Nov 17 - GoldCore
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If You Are Long Broad ETFs Like VT, You Have Given Up - 1st Nov 17 - JARED DILLIAN
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AUD/USD – Currency Bears Meet Important Supports - 1st Nov 17 - Nadia_Simmons
Is a Year End Rally in Risk Markets Coming ? - 1st Nov 17 - Forexabr
A guide to select the most trusted brokerage firm - 1st Nov 17 - Kavinesh_A

Market Oracle FREE Newsletter

Forex Trading Free Week

Car Sales About To Go Over The Cliff

Companies / Auto Sector Jun 22, 2017 - 02:49 PM GMT

By: Harry_Dent

Companies The Retail Apocalypse.

Carmageddon.


Same story.

Different industry.

And we called both decades ago!

Autos are the last splurge for aging Baby Boomers. Their kids leave the nest and finally the parents can buy the car they wanted, not that damned minivan to taxi kids around.


But as we age, we don’t drive nearly as much and those luxury or mid-life-crisis sports cars last a long time.

So, even though Baby Boomers followed the pattern and bought better cars, they rebuy as often, which causes a decline in auto spending, especially after age 48.

At least, that’s what our research has shown us for years…

We just recently got updated data from the Consumer Expenditures Survey. This allows us to predict not only the broader economy in human life cycle spending, but every consumer sector as well.

Our previous data suggested that new car sales would peak around age 53 to 54.

The new data, from 1996 – 2015 (blue line in the chart), and more recently from 2006 – 2015 (red line) says that auto sales peak closer to age 48 – earlier than we previously thought – and then continue sideways before surging one last time around age 62. Then it’s straight downhill from there.

Notably, car sales first collapse between age 51 and 60.

Guess where the bulk of the Baby Boomers are heading!

Let’s walk through the predictable car buying cycle…

Auto sales first surge into around age 32, along with first-home buying. They peak around age 41, again, along with trade-up home buying. Then they have another surge into around age 48, as their kids leave the nest and they buy the luxury Lexus or sports car that they really wanted (as I said earlier).

But then they don’t drive it nearly as much as they previously spent their time driving around their kids from school to soccer practice to “ecstasy” parties… or whatever.

So that “best car” lasts for 10 or more years instead of four years for the typical soccer mom.

Now the new data shows there’s a final surge into the early 60s, before people retire.

The truth is that car sales tend to plateau between 32 and 62 and lean towards the higher-end sectors, with the sharpest decline between age 51 and 56.

What has kept car sales going after they should have peaked around 2012?

The same thing keeping our economy going: QE or near-free money and lower interest rates.

But that seems to have run its course because the auto industry has only kept its growth going through more liberal lending policies based on lower interest rates and an accommodative Fed…

Did they learn nothing from the last subprime crisis?

Of course not!

Look at this chart…

Total loans for autos are much higher than they were into 2007, and growing exponentially.

Subprime loans, at the lowest credit ratings, are now at $280 billion and rising. In 2007, they reached only $205 billion. When you add in the next red zone of near-subprime borrowers, it’s $405 billion!

Can anyone else smell that?

, it’s the stink of defaults and a worsening downturn in auto sales coming!

Car inventories are piling up on the borders of Mexico. Manufacturers are trying to hide their growing inventories.

GM plans to extend its typical summer shutdown at certain U.S. factories to deal with slumping sales and its bloated inventory.

In fact, car sales were down 0.5% in May, part of a five-month decline. The experts keep guessing things will improve and have been wrong.

They don’t understand that demographic trends are going against this last durable goods market to peak after housing and furniture. And they don’t understand how much this sector has been hyped up by liberal lending, like housing was into early 2006.

This is another sign of the beginning of the end, like plummeting retail sales and big brand failures in department stores and apparel…

Two very smart investors, Buffett and Soros, invested in major retail auto chains in the last few years… we could have told them not to bother.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2017 Harry Dent- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harry Dent Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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