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 “Repo” men are busy these days. The National Automotive Finance Association and Manheim Consulting reports a 5% increase in repossessions in 2006. Plus, a 15% hike for owners with less-than-perfect credit. The subprime auto loan business looks as ripe for a meltdown as the subprime mortgage market:
In 2006, more than half of subprime auto loans were made to buyers of “super high” credit risk -- those with FICO scores less than 549. That figure is up from a little over one-third in 2005
Long-term loans accounted for 80% of subprime auto loans in 2006, up from 67% in 2005
Even for prime lenders, 17% of new auto loans exceed 72 months, nearly double that of 2005. Prime lenders also doubled loans made to bad-credit customers in 2006.
Banking is a risky business. To make money these days, bankers must extend ever more credit to their worst customers… and go out on a limb just to find them. Bon chance, mes amis.
 The euro hit an all-time high versus the dollar this morning. At a breath below $1.37, the euro looks as though its climb is just beginning. The European Central Bank is expected to raise rates at least once, probably twice, by the year’s end, making the euro even more attractive to speculators.
The pound also crept higher overnight, to $2.01 and change.
 Ben Bernanke is speaking today before the National Bureau of Economic Research -- the quants who officially declare the nation in recession, when the time warrants. Bernanke is expected to confuse them over “inflation targeting” and explain away the nation’s housing woes… look for both the pound and the euro to rally.
 Gold investors across the globe are steadily taking back losses incurred since May. The yellow metal’s price is up today to $663. Since last Tuesday, gold is up about $10 per ounce and about $25 per ounce from the recent low.
 Home Depot announced this morning they expect earnings per share to fall by 15-18% this year on a 1-2% drop in sales. "While we expect the housing market to remain challenging for the rest of 2007 and into 2008,” said CFO Carol Tome, “we plan to continue our reinvestment plans for the long-term health of our business, understanding that it will put short-term pressure on earnings.”
Our own Mike "Mish" Shedlock suspects the housing bust will stretch out far more than just 2008. He recently prepared a report that shows how your home could lose 43% of its value in the next four years. Click here to learn more and subscribe to: The Survival Report
 “Electricity rates nationwide, long considered a bargain, are going to increase substantially in the years ahead,” reports Barron’s.
“Someone has to pay for the massive upgrade in America’s power grid,” explains Chris Mayer. “As residents of major East Coast cities already know, the power grid is old and susceptible to blackouts. Long under heavy government regulation — even in the wake of so-called deregulation, which was nothing more than re-regulation — the nation’s power grid is under incredible strains.”
Here’s what to do when your bill goes up: “Buy the makers of those critical power grid components. It’s one of those inevitable things. Either we invest in the grid or we face more routine and bigger blackouts — and all the losses associated with them. I'm betting the smaller pain — putting up the billions to fix the grid — will prevail.”
“The makeover facing the electricity industry is by far the most extensive in its history,” concludes Barron’s. Mayer’s Capital & Crisis readers are up 40% in their electricity play this year alone.
 Gazprom, Russia’s state-owned oil and gas company, announced  yesterday that it needs help developing the world’s largest offshore natural gas field.It is reputedly close to finalizing a deal that would bring Norwegian, French and American companies in to help drill the Shtokman field — a 540-square-mile field with up to 3.2 trillion cubic meters of gas off the Kola Peninsula.
Just last October, Gazprom said it is unwilling to share the field. But then the bill arrived. Recent forecasts suggest it will cost $30 billion to drill the site. The company apparently lacks the wherewithal to pull it off. ConocoPhillips, Chevron, Total, Statoil and Norsk Hydro are all rumored to be a part of the new arrangement.
 The Hague, Netherlands, announced recently that 4,000 homes within its city limits will be heated in the 2008/09 winter by the power of a 170 F well found 7,200 feet below the city. If effective, the city will have the largest geothermal heating system in the country, and one of the cheapest for its end-users.
Geothermal, our guess, will be gaining steam in the 21st century as a significant energy source, with relatively low environmental footprint. Our Greg "Gunner" Guenthner has a geothermal pick lined up for the launch of his new service this Saturday. The small Bulletin Board company has significant access to geo hot spots in Northern California, where recent legislation practically forces traditional energy companies to buy out small green producers.
 “The current regime in Venezuela is not in place due to a fair and square election,” responds one reader to yesterday’s comments from a Chavez fan. “He did win his first term, for sure... But it's been proven beyond doubt that there has been massive fraud ever since in all elections — including a referendum to oust him.
“Chavez ‘enjoys’ less than a 30% approval, and everything you see on TV — rallies, primarily — is staged by paying a month's worth of minimum wage for a single day of showing up with a flag and a T-shirt. Oh, and the ‘supporters’ are bused into the cities.
“The opposition rallies have gone unnoticed by the world media because they are peaceful. Yet they have been MASSIVE. The government prohibits helicopter and airplane flights during these rallies.
”It's not just nationalization of industries. The TV station that had its license revoked also had all its assets confiscated (minor unreported detail, don't you think?). Eni's, an Italian oil company, operation was taken over by soldiers with machine guns, because it hadn't reached an agreement with the government. Thousands of acres have been confiscated by the government. What is planted in private lands is now regulated by the government. Nowadays, you have to give your name, Social Security number and address even for simple cash transactions — like buying a Coke.”
 “I know a thing or two about Dubai,” writes another reader, “having grown up in Abu Dhabi, the capital city of the UAE, which is an hour's drive away. The popular American argument, that Dubai is a city 'on crack,' is nonsense. In fact, when you consider how much money the Gulf Cooperation Council has, and look at its current state of 'underdevelopment', the real outrage is that there hasn't been enough development in the region.
“It's a cliché to Arabs that there is more Arab money outside the Arab world than inside the Arab world. What we are seeing now is a new generation of secure, educated and risk-seeking Arabs who are bringing that money back and choosing to build with it. Granted, it's a risky strategy, very risky in fact, but this new breed of Arab understands the risk he is taking, and so far, it's paying off. The best way to think of what is logistically happening in Dubai is trying to squeeze a 30-year development plan into 10 years. Yes, it's urgent, and yes, it's intense, but it's not stupid at all.
”It's so hypocritical of Americans to gawk in awe at the numbers of dollars that are being spent in foreign countries. It's almost as if Americans are simply amazed when they learn that people outside their borders have money, and lots of it to boot. It doesn't jive well for Americans, who want nothing more than to hear about how great their country is and how badly people want to immigrate to it.”
We’re excited by the development in Dubai. Not sure where all this angst is coming from.
“Oh, and by the way,” the reader continues, “The Hydropolis Underwater Hotel in Dubai was canceled last year! You'd know that if you were really keeping up with the times.”
Darn, we were hoping to stay there in October. Just goes to show, you should never trust anything you read on the Internet.
 “Thanks for setting it straight for once regarding the presidents’ roles in screwing up the economy,” responds yet another reader. “Bring back Andrew Jackson (the people's president) or get us Ron Paul!”
Amen. Think any of the current candidates for president -- with the possible exception of Ron Paul -- share this view?:
“I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt." — Thomas Jefferson, 1816
Best regards,
Addison Wiggin
The 5 Min. Forecast
P.S. His options service is not for the faint of heart, but this year, 38% of Steve Sarnoff’s recommendations have doubled in value after the triggering price was reached. And every single recommendation has shown readers the chance to grab a profit of some sort.
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