Episode Details

Consumer delinquency rates are soaring to crisis-level highs—but don’t panic yet. While headline numbers look grim, Goldman Sachs says they’re skewed by old, uncollectable debts. Focus instead on “transition rates,” which track newly delinquent loans: they’re stable and far below crisis levels. The real red flag? Subprime auto borrowers with credit scores under 620 are defaulting at crisis-era rates—this is a concentrated, not systemic, problem. Higher loan-to-value ratios, ballooning payments, and costly repairs are crushing these already stretched consumers. Goldman Sachs warns investors to steer clear of subprime auto securities—they’re likely to underperform as this specific segment continues to slide.

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