Financial Trust

“So much of finance comes down to confidence and trust.  And that’s because finance is about promises.  Promises to pay or deliver something in the future in return for something now.  Think about it.  A stock is a piece of paper that’s nothing but a claim on a company’s future dividends and its value in a sale or a bankruptcy.  A bond is a claim to money from a creditor in the future… and maybe some interest payments.  Your bank account balance isn’t real cash.  It’s just a bank’s promise to give you that amount of cash the next time you ask for it.”  -Tom Dyson

New Car…Stink

“A recent report by consumer-credit-tracking firm Experian shows the average term for a new car loan is 67 months – a record.  And the average amount financed for a new vehicle is $28,711 – also a record.  The average monthly payment for a new vehicle is $488 – yet another record.  Bank of America predicts that new car-loan securitizations – the packaged sale of car loans – will reach $125 billion this year… Again, a record.  These loans will account for more than half of all consumer loan securitizations.  Keep in mind that roughly 30% of the loans in these securitized packages will be subprime. That’s why credit losses on these bonds are growing and beginning to reach levels last seen in 2008.” -Porter Stansberry

Inequal Knowledge

“Inequality of knowledge is the key to a sale.” – Deil Gustafson