"Too many people are buying cars" simply
Too many people are buying cars using financial products they do not understand
251–260 of 330 posts
Re: Too many people are buying cars using financial products they do not understand
#252Earlier quoted context omitted.
> At what point do you expect legally competent adults to pay attention to and take responsibility for what they're doing? At no point. I don't even consider it a matter of "responsibility". You can only take responsibility when things are clearly laid out. But what about the even more important responsibility to CLEARLY lay things out that should fall into businesses? What I do expect and find important, and should…
> What I do expect and find important, and should be legally binding, is that no business should be allowed to hide the actual impact of purchases behind legalese and long-winded "financial product" descriptions, and then put the blame on the customer for not "reading through it". And in general, as I pointed out here, such contracts tend to be invalid in court. However, signing a piece of paper in plain english cert…
>However, signing a piece of paper in plain english certifying saying "I read it" when one did not ought to mean something.
If that was the case, EULA also should "mean something".
Re: Too many people are buying cars using financial products they do not understand
#253Isn't the European version of the APR exactly designed to overcome that problem? (It's mandatory for every loan in the European Union)
https://en.m.wikipedia.org/wiki/Annual_percentage_rate
Re: Too many people are buying cars using financial products they do not understand
#254Earlier quoted context omitted.
> At what point do you expect legally competent adults to pay attention to and take responsibility for what they're doing? At no point. I don't even consider it a matter of "responsibility". You can only take responsibility when things are clearly laid out. But what about the even more important responsibility to CLEARLY lay things out that should fall into businesses? What I do expect and find important, and should…
But ought personal responsibility matter? People willingly sign this stuff.
Personal responsibility is not a binary.
And in any transaction I put the first blame in the person which had the more information in advance. It's their duty to inform the other, especially if they are the one's receiving the money.
Taleb has written something close to that recently:
I worked once for a classic U.S. investment bank of the prestigious variety, called “white shoe” because the partners were members of hard-to-join golf clubs where they played the game wearing white footwear. As with all such firms, an image of ethics and professionalism was cultivated. But the job of the salespeople (actually, salesmen) on days when they wore black shoes was to “unload” inventory with which traders were “stuffed”, that is, securities they had in plethora in their books and needed to get rid of them to lower their risk. (...) Salesmen hawked how a given security will be perfect for the client’s portfolio, how they were certain it would rise in price and how the client would suffer great regret if he missed “such an opportunity”, that type of discourse. Salespeople were experts in the art of psychological manipulation, making the client trade, often against his own interest, while being happy about it and loving them and their company. One of the top salesman of the firm, a man of huge charisma who came to work in a chauffeured Rolls Royce, was once asked whether customers didn’t get upset when they got the short end of the stick. “A customer is born every day” was his answer.
Which brings us to the notion of asymmetry, the core concept behind skin in the game. The question becomes: to what extent can people in a transaction have an informational differential between them? The ancient Mediterranean and, to some extent the modern world, seems to be converging to Antipater’s position. While we have “buyer beware” (caveat emptor) in the Anglo-Saxon West, the idea is rather new, and never general, often mitigated by lemon laws. So to the question voiced by Cicero of a debate between the two ancient stoics, “If a man knowingly offers for sale wine that is spoiling, ought he to tell his customers?” , the world is getting closer to Diogenes position of transparency, not necessarily via regulations as much as thanks to tort laws, one’s ability to sue for harm in the event the seller deceived him.
Re: Too many people are buying cars using financial products they do not understand
#255So I guess the whole car thing is probably going to be this cycle's mortgage bubble? Considering car sales are falling off a cliff I guess we're in 2007 right now.
They should loose and government should not help. So that this culture of recklessness die. No "too big to fail" BS
Re: Too many people are buying cars using financial products they do not understand
#256Earlier quoted context omitted.
The US industry has always been on the forefront of trying to convince people that they can afford stuff they actually can't and came up with a lot of creative ways to do this. The best example of course is the recent housing crisis. I'd say europeans in general are more debt and risk averse, this even shows in the lack of credit card adoption in places like germany.
> I'd say europeans in general are more debt and risk averse, this even shows in the lack of credit card adoption in places like germany. Anecdotally, it's also much harder to get approved for credit in Germany. While in Canada, I had banks offering me credit cards with insane limits ($5,000+ for someone in their 20's who finished university but without a job). In Germany, it was difficult to even get a credit card,…
While i agree, not sure about 1) Germans use debit cards everywhere, it's just that credit cards are used very rarely but also accepted very rarely which is probably due to some fees that make it not worthwhile, while in the US you cna pay für $3 coffee with a credit card.
Re: Too many people are buying cars using financial products they do not understand
#257Isn't the European version of the APR exactly designed to overcome that problem? (It's mandatory for every loan in the European Union) https://en.m.wikipedia.org/wiki/Annual_percentage_rate
It's very good for the loan part of the equation, but it's still often hard to compare lease plans when the depreciation etc is factored in. After all, some kind of unknown valuation of the condition of the car will happen after N years and it's nearly impossible to know beforehand what cost that will incur.
Re: Too many people are buying cars using financial products they do not understand
#258Earlier quoted context omitted.
Car companies often have a bancing licence on their own. So they pay some interest but can create more money with these deposits. So it's cheap money for them. https://en.m.wikipedia.org/wiki/Fractional-reserve_banking
Virtually every car dealer partners with real banks to handle loans. They certify your car as collateral, and essentially apply on your behalf, and you walk out the door with a loan from JP Morgan, Chase, or whereevs.
My experince in Europe was different. I actually looked into Wikipedia for a Honda bank, and it exists. I also know Volkswagen bank.
Re: Too many people are buying cars using financial products they do not understand
#259Earlier quoted context omitted.
Car companies often have a bancing licence on their own. So they pay some interest but can create more money with these deposits. So it's cheap money for them. https://en.m.wikipedia.org/wiki/Fractional-reserve_banking
Virtually every car dealer partners with real banks to handle loans. They certify your car as collateral, and essentially apply on your behalf, and you walk out the door with a loan from JP Morgan, Chase, or whereevs.
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Re: Too many people are buying cars using financial products they do not understand
#260Earlier quoted context omitted.
Car companies often have a bancing licence on their own. So they pay some interest but can create more money with these deposits. So it's cheap money for them. https://en.m.wikipedia.org/wiki/Fractional-reserve_banking
That's not how fractional reserve banking works..
Bank are paying for deposits, and create money wjile the deposits are the security. Simplified.