A used auto dealer and lender named Trialor suddenly filed for bankruptcy in September after alleged fraud was flagged in their books. >> You're looking at hundreds of millions of losses across the industry. >> When Trialor started to go down, it set off a wave of fear on Wall Street.Everybody was wondering what's the next shoe to drop. >> The credit market has stopped buying some of these subprime auto loans and investors have started pulling away from more risky borrowings. Tricolor was a car dealer and a ...

Economic Pressure on Lower-Income Americans - Lower-income Americans are under significant pressure, and a halt in their spending could negatively impact the overall economy [1][2] - The economy is becoming increasingly bifurcated, with higher-income consumers continuing to spend while lower-income households are forced to pull back [2] Job Market and Layoffs - Private-sector data indicates weakness in the job market, with layoffs reaching the highest level for October in over 20 years, totaling over 150,000 jobs, a 183% increase from September [2][4] - ADP's report shows that businesses added 42,000 private-sector jobs last month, contrasting with a loss of 29,000 in September [2] Debt and Financial Stability - Lower-income consumers are nearing recession, facing high inflation at 3%, rising layoffs, and maxed-out credit cards [2] - Concerns are raised about delinquencies on subprime auto loans leading to losses for banks, indicating potential larger credit issues [4] Economic Outlook - El-Erian suggests that while there may be isolated economic accidents, systemic shocks are not anticipated, as the financial system is not fundamentally compromised [5] - The analogy of "cockroaches" in the credit system suggests that while there are issues, they may not indicate a broader systemic failure [5]

The portion of subprime auto loans that are 60 days or more overdue on their payments hit a record of more than 6% this year, according to Fitch Ratings https://t.co/6WX0yfmDvI ...