Small Business Rent- used car bubble and Auto Repossessions

I was reading an article last week about small businesses.  

Scary statistic here:

33% of all US small businesses could not pay May rent in full and on time, up from 28% in April.

Does that get you scared?  I was told by Janet Yellen that we did not have signs of a recession.

What are the signs of recession?  People making harder financial choices and businesses are getting squeezed

USED CARS-  We have all heard that used car prices are up, let's skip the statistics on this.  They aren't making enough new cars due to chip shortages, people stopped using public transportation due to fear of covid and remote work, all of which is putting pressure on used vehicles. 

The scary statistic here is subprime Auto loan repossessions are up 11% since 2020 and Prime borrower repossessions are up 2-4%.  

The story goes like this.  The government gave out a lot of money which created "temporary pockets of income" basically people thought they were richer than they were.  This caused them to overextend. 

Now that the government is raising rates and pulling back that support we are in for trouble.

As Warren Buffett says, "Only when the tide goes out do you discover who's been swimming naked."

Make sure you are prepared as the tide appears to be going out.