Thursday, January 17, 2008

fantastic theory #731: how the subprime crisis may be the reason we save the environment

This is my theory of the day. I thought of it while riding the escalator up from the subway. Here we go, this is my 13 step theory:

1) the sub-prime crisis is built upon people who shouldn't be able to get big loans getting them

people use these loans to not only buy big homes but use the money to buy other things like big cars and SUV's

sub-prime borrowers crash because they can no longer make their home payments and they can't sell their homes for a profit because home prices decline

crash of the sub-prime world affects borrowers and the mortgage companies

borrowers no longer can spend as much money and become conscious of their budgets

those employed by mortgages companies also lose their jobs and are put on tighter budgets

a large portion of the borrowers and lenders are based in California

Californians are the largest auto buyers and hence their preferences shape the cars that Detroit offers; it was the Cali love for SUV's in the 1990s which caused that car class to boom

with less money and higher gas prices Californians are looking for more economical cars

as Californians want more fuel efficient cars and hybrids, Detroit and Japan make more and more models available

the more accepting Californians are of cars with higher fuel standards, the more they will push car companies to offer that with legislation

Californian environmental legislation on car efficiency will ultimately determine US policy


So under my theory, the most important fact is that borrowers and lenders hardest hit by sub-prime live in the state which happens s most important to influencing the auto market. If the borrowers and lenders had been from Montana there would be no real auto and environmental impact.

Top that theory.


camellia said...

ok i am hooked on facebook, the last ting i need is to be hooked to this blog...its too funny..ur the idian seinfeild...i bet i spelled that wrong... too funny...

Shakes said...

aww thank you very much! that's really sweet of you to say