Those who frequent these pages are well-versed in the ongoing auto ABS debate.
See the thing is, a whole lot of people are interested in shorting subprime auto paper. With the possible exception of CMBX 6, auto ABS is at the top of the list when it comes to “the next ‘Big Short’ candidates.”
One person who thinks subprime auto may be a problem is Steve Eisman who, you’ll recall, actually put on the original “big short.”
One person who doesn’t know how to spell Steve’s name is Citi’s Mary Kane, and like a lot of her compatriots on the Street, Mary thinks “it’s not wise to believe everything you see in a movie [because] hit films are not the best source for trade ideas.”
— Tracy Alloway (@tracyalloway) April 17, 2017
So you can read the (often hilarious) backstory on this in the linked posts above, but on Sunday, I wanted to show you one chart that certainly seems to suggest the risks are indeed rising in the auto loan space.
Ironically, this is from Citi’s Mary Kane…
[Aside: this is up to date as of four months ago]