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Tag Archives: everything bubble

“Speculative Energy in the Market is Incredibly out of Control”

“It is a mind-numbing exercise for investors who see the cognitive dissonance”: CIO at Guggenheim Partners. By Wolf Richter for WOLF STREET. This market has been an astounding experience for people who’ve traded through the prior stock market bubbles and the last three crashes, who’ve seen a national and several regional housing bubbles form and implode, who’ve seen the subprime-auto-loan Asset Backed Securities bubble blow up in the mid-1990s and again during the Financial Crisis, and...

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Credit-Card Interest Rates Soar to Record High, Bond Yields Drop to Record Low: What Gives?

My “Credit-Card Spread Index” blows out. Heck if I knew what that means, but it doesn’t mean anything good. By Wolf Richter for WOLF STREET. The average yield of investment-grade bonds (as per ICE BofAML US Corporate Yield index) dropped to a record low of 2.62% this week. This comes after the Fed cut its policy rates three times last year, from already low levels, to even lower levels, and after it bailed out the repo-market with over $400 billion over a period of just three months....

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Subprime Auto Loans Explode, “Serious Delinquencies” Spike to Record. But There’s No Jobs Crisis, These Are the Good Times

Nearly a quarter of all subprime auto loans are 90+ days delinquent. Why? By Wolf Richter for WOLF STREET. Auto loan and lease balances have surged to a new record of $1.33 trillion. Delinquencies of auto loans to borrowers with prime credit rates hover near historic lows. But subprime loans (borrowers with a credit score below 620) are exploding at a breath-taking rate, and they’re driving up the overall delinquency rates to Financial Crisis levels. Yet, these are the good times, and...

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Shares of Bedding Unicorn Casper Collapsed by 72% from Magical Pre-IPO Valuation

Another overvalued money-losing unicorn in a lo-tech ho-hum business wobbled out the IPO window and crashed. By Wolf Richter for WOLF STREET. Casper Sleep Inc., a money-losing cash-burning retailer of foam-mattresses, duvets, sheets, and other bedding items, had dressed itself up as some sort of magical tech company to obtain its former hyper-inflated unicorn status with a fantastical “valuation” of $1.1 billion during its last round of funding on March 27, 2019. But it has been one...

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HELOC Balances Plunge to 15-Year Low. What’s Going on Here?

Banks are trying, but demand just isn’t there. By Wolf Richter for WOLF STREET. At the end of January, outstanding balances of home equity lines of credit (HELOC) at all commercial banks in the US – not including nonbanks, or “shadow banks,” we’ll get to those in a moment – fell to $317 billion, according to the data released on Friday by the Federal Reserve Board of Governors. They’ve plunged 48% from the peak in April 2009 and are now back where they’d been in April 2004. These are...

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The State of the American Debt Slaves, Q4 2019

Consumer credit rose to 19.3% of GDP, the highest ever. By Wolf Richter for WOLF STREET. Consumer debt – student loans, auto loans, and revolving credit such as credit cards and personal loans but excluding housing-related debts such as mortgages and HELOCs – jumped by $187 billion in the fourth quarter 2019, compared to a year earlier, or by 4.7%, to a record $4.2 trillion, according to Federal Reserve data released Friday afternoon: How much did all this borrow-and-spend contribute...

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I’m in Awe of How Tesla is Now a Supernatural Phenomenon

The WTF stock chart of the year. And another WTF chart of just how tiny Tesla is compared to the top 10 automakers. By Wolf Richter for WOLF STREET. Tesla’s shares spiked another 20% this morning, or by $160, to $940 a share. Every time I write a few words, I have to go back and change the number again, because the price just keeps shooting higher. So far this year, TSLA has shot up 120%. It could very well be that by this evening, shares are down by $300 or whatever, or that they’re...

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US GDP Rose by $850 Billion in 2019 as US National Debt Surged by $1.2 Trillion. Debt-to-GDP Ratio Hit 108%

Dream of 3% economic growth remained a dream despite surge in government borrowing and spending. By Wolf Richter for WOLF STREET. The dreams of 3%-plus economic growth in the US remained dreams in 2019, despite tax cuts and ballooning federal government spending, which are a stimulus. But the resulting budget deficit caused the gross national debt to balloon far faster than GDP grew. In the fourth quarter, the economy as measured by inflation-adjusted “real” GDP grew at an annual rate...

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Tesla’s Revenues +2%, Auto Revenue +0.7%. Net Income Plunges 25%. Without “Regulatory Credits,” it Would Have Lost $28 Million. Annual Loss Hits $862 million. Shares Spike 12%

OK, let’s look at the Tesla magic briefly. By Wolf Richter for WOLF STREET. Tesla’s profit was all about Tesla’s pollution credits, or “regulatory credits,” as it calls them. These are tax credits that Tesla gets from governments and sells to other companies. There is no cost associated with them; they’re booked as revenues and flow through to profit. Tesla reported this evening that these regulatory credits jumped 40% in Q4 compared to the same period a year earlier, to $133 million....

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What Happens When Investors Stop Fueling Cash-Burn Machines: At MoviePass Parent, Everything Goes to Zero

Shares, which at peak-hype spiked 1,200% in a month, go to zero. Board of Directors goes to zero. Executives go to zero. Sales already zero. By Wolf Richter for WOLF STREET. Investors have been eager to plow vast sums of money into companies that offer products and services at an investor-subsidized price, the so-called cash-burn machines. They elbow into all kinds of markets and “disrupt” things. They include Uber and Lyft, WeWork, electric-scooter-rental outfits, such as Lime and...

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