Tangible evidence that billions of dollars of government aid to the financial sector is finally starting to lift the real economy emerged Thursday as Bank of Nova Scotia reported a jump in lending activity in the auto market, which is helping to turn things around for the ailing industry.
“Global auto sales have rebounded to the highest levels since August 2008,” said Scotia Capital’s Global Auto Report.
The reason is that the credit taps are finally opening up after being all but shut since the collapse last fall of Lehman Brothers and the failure of the shadow banking system which provided much of the financing for car loans worldwide.
New money is flowing back into the system courtesy of the U.S. government’s US$200-billion asset-backed securities program and a similar program from Ottawa which has just started to pump about $12-billion into securitized car loans.
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Quite a few folks I know are in a buying mood since the prices of cars have tumbled so much. Mind you, that’s the price for both new and used cars… most folks are opting to go new to take advantage of the new car guarantees. I only know one guy who bought a newer used car and he was disappointed by how little he got for his old car.
Mac, I have an old car (1994) and because it is still good I am having it repaired because on July 24th my fancy “new” Volvo is gone (leased). Because we don’t drive much this old car (bought and paid for) will be good for at least another two years and I really don’t care what the motoring public makes of my decision.
My money stays in the bank and in case you have missed the point pick up here.
I am not alone. Obama is in deep shit.
The folks I’m talking about are like me, Jack… still solidly earning so looking to take advantage of the current bargains.
Putting money away is never a bad thing… but the interest rates nowadays certainly don’t reward anyone who does so. Given the state of the stock markets, even blue chips aren’t safe investments. At least with the banks, your money doesn’t shrink… as long as your bank remains solvent.
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