Anyone who keeps an eye on the US economy knows that the automotive business is going like gangbusters right now. In September US auto sales jumped to an annualized rate of 16.1 million, the best since December 2007.
How is this possible, given the relatively muted gains that US consumers have seen in their incomes?
Credit.
Take a look at this chart from Deutsche Bank, which shows the breakdown of issuance this year of different types of asset-backed securities (meaning bundled loans that lenders sell off to investors in the secondary market).