I'm going to buy automakers when the market opens. Since sales are dropping so much, most will go out of business and the ones that remain will be able to charge whatever they want. That incredible level of profitability is not yet priced into the stocks, so it's once-in-a-lifetime opportunity.
I have a friend in the auto repair business, German and Japanese car, and his phone is ringing off the hook. They don't want to buy new ones, so they're fixing the old ones.
Good times at the garage -- always an indicator of a weak economy.
I despair for USA MSM... check the FT clip below - rational commentary AND a vocabulary - whoocoodanode? Caution as UBS deal gives boost to markets
By Chris Hughes in London and Michael Mackenzie in New York
Published: April 1 2008 20:51 | Last updated: April 1 2008 20:59
Leading bankers cautioned against calling a premature end to the credit crunch on Tuesday as markets rallied sharply after a new round of bank writedowns and capital-raising fostered hopes the crisis had reached its nadir.
I see what you're saying, but an April Fools' Joke of an April Fools' Joke seems unlikely. Kass' article is a legit April Fools' Joke, but I'm only trying to find out if it was reported and links were taken down...
The market soared today not because rolling metal is not selling, but because the smart money read Paulson's new plan. No guess where he grew up.
But as usual, they are short-sighted near-term oriented. Do they really believe any of the three probable nominees will allow this thing to pass? Poor GWB only has a few months and that isn't long enough to rescue his buddies.
For the first time since I voted for Hubert Humphrey when a socialist sophomore, I'm voting democrat this year, holding my nose, but voting.
"I apologize to my partners, and to my friends, and especially to the SEC, for whom I have the greatest possible respect. I never intended markets to be manipulated in this manner. I was only trying to make some traders, who have been having a tough year, break a smile...
Instead his was a ruse for inscrutible money coming in to support insupportable financial stocks so that you (investors) don't break a bank. And conversely, we break you.
Dropping car sales!
Dropping housing sales!
What next? Dropping retail in general?
There are whole segments of giant institutional owners of RMBS, CMO, CMBS, asset-backeds and auction-rate that have suffered huge losses but haven't yet become visible. They are opaque.
The include:
Defined benefit pensions
Life insurance companies
Hedge funds
Public non-retirement funds
All of these will slowly become visible over the next year, and this will create more big problems.
There will be runs on life insurance companies, especially their annuity books of business. Some won't have the cash ready to meet redemptions and will be forced into receivership. Another way people run on life insurance companies is to borrow out all their cash value. This also can put severe strains on liquidity.
The auto industry's problems -- not just terrible sales but also the current strike -- could put PBGC on the brink of insolvency within 2 years.
Fitch Ratings-London-01 April 2008: Fitch Ratings has today downgraded UBS AG's (UBS) and its wholly-owned subsidiary UBS Limited's Long-term Issuer Default ratings (IDRs) to 'AA-' (AA minus) from 'AA'. The Outlooks remain Negative. Fitch has affirmed both issuers' Short-term IDRs at 'F1+' and Support ratings at '1'. The agency has also affirmed UBS's Individual rating at 'B' and Support Rating Floor at 'A-' (A minus). Subordinated debt and hybrid debt issued by UBS and its group funding vehicles rated by Fitch have been downgraded to 'A+' from 'AA-' (AA minus).
UBS announced today that it will report losses and write-downs its US real estate positions of approximately a further USD19bn, the result of which will be an estimated net loss for Q108 of around CHF12bn (c.USD10bn). The scale of the Q108 net loss, together with still difficult market conditions, makes it a real possibility that the group may not report a full-year profit for the second consecutive year. Following the Q108 write-downs, the group's residual exposure to the US sub-prime sector will be around USD15bn, with a further residual USD16bn to the Alt-A sector. Compared to combined exposures of around USD73bn at end-September 2007, the residual books have been reduced very significantly through a combination of write-downs and asset sales. A relatively small additional provision was also booked against the group's leveraged finance portfolio. At end-December 2007, this portfolio stood at USD11.4bn, which is significantly less than some peers.
ah yes, its the unions' fault! Never mind American car makers have to have $3K per car more incentives to actually move the product. $3K times 2 Million cars is $6 Billion. Suddenly, with all those "union" expenses, American automakers would still be profitable.
The automakers and unions, along with lots of other struggling industries, will have even more incentive now to push the country towards a universal health care solution.
Combine that with the huge drops in car sales and I am getting quite concerned. Actually beyond concerned.
I am overwhelmed by a visceral dread.
This is starting to be beyond bad.
This is starting to confirm my thesis that the winner of the democratic contest will win in November and be plunged into a 100 days crisis. Folks, this is starting to resemble 1932, and the big drop is ahead.
Forget wall street. This drop is coming from main street.
This was perhaps the fiercest short covering rally yet... of the entire cycle. I am still scratching my head. It was like an engineered SHORT BUSTER RAID - totally lacking in any economic merit.
"Total February General Fund revenue
collections were $373.4 million, or (17.5)%
below February of last year. This amount was
$(29.9) million below the forecast based on
the revised JLBC Baseline revenue estimate."
Further:
"The decrease of (16.2)% in January reported in
last months highlights, along with the February
decrease of (17.5)%, represent the largest
percentage year over year declines since April
2002."
Game over.
These declines are spectacular without an exogenous shock event.
Dread. Unspeakable dread.
All of the attempts to prop us up are going to be futile in the face of a collapse spiral.
If this starts to go permeate the national numbers, we will face a crisis that has not been here since 1932-33.
Good luck folks,
gotta go find a new tinfoil hat, mine just shorted out.
If we break the UAW we can assure the end of the middle class as we know it in the USSA. Auto workers hourly don't make that much about 28.00 an hour. Its the companies stupidity on overtime that makes the workers have big salaries. My father worked at GM for 32 years as an electrician and I will say the most he ever made was 95000 a year or 31 an hour in 2005, and that was working 7 days a week 12 hours a day a big portion of the year. Any volunteers for that because it sucks and he had no life. Also my mother is getting a whopping 950 a month from his pension. Not so hot for 32 years as a skilled tradesman who could repair robots.
These are the problems faceing the big 3.
1)Global wage arbitrage Korea 5.00 an hour.
2)Most countries have national healthcare. Ours = 1500 a car.
3)Our cars are just as reliable but parts are cheap therefore mechanics screw you. Hard to charge for 3 parts instead of one when each one is 600 dollars instead of 150 dollars.
Keep bitchen and buying foreign crap though. I personally have no sympathy for somebody driving a foreign car who can't find a job.
Full disclosure I don't work for the UAW. However I hate idiots who would deny hard working individuals a living wage. While they themselves produce little or nothing of value. Maybe autoworkers should earn 6.00 an hour like WalMart greeters.
I bought a used 2002 Prius last year. It averages 48mpg for long commutes. It fits in most parking spots. It's a great car for Los Angeles' wretched traffic and scarce street parking.
I would have happily bought a hybrid Ford Focus if Ford made one. Ford offers a hybrid SUV, but no fuel-efficient hybrid small car.
I suspect bad planning did more damage to Ford than the UAW ever could. :^(
I will never understand the US reluctance to switch to small diesel engines. I bought a Jetta TDI in 06 that gets 51 mpg highway at 75+ mph and in the high 40's around town. Even with diesel at $4.00 a gallon, I'm way ahead on the cost/mile driven. The direct injection diesel has the zip of a gas engine without the low mileage penalty.
My Ford F-350 is my workhorse I use to pull 12K lb loaded trailers at 13 mpg. If is was a gas engine I would get 6 mpg.
Many of those $28 per hour auto jobs are being turned into $15 per hour jobs with the help of the UAW. The auto companies need the UAW to pull this off. Sorry to all the union haters out there, but big auto definitely does not want to "break the back" of the UAW.
AllanM, "... Folks, this is starting to resemble 1932, and the big drop is ahead. ..."
I posted a link to a study by the Bank of England yesterday late. I'll post it again:
Resolution of banking crises
OVER THE PAST QUARTER of a century, unlike the preceding 25 years, there have been many large bank failures around the world. Caprio and Klingebiel (2003), for example, document 117 episodes of systemic crises and 51 cases of borderline or non-systemic crises in developed and emerging market countries since the late 1970s. Moreover, cross-country estimates suggest that output losses during banking crises have been, on average, large over 10% of annual GDP and that bank lending and profitability have often remained subdued for years afterwards. This article reviews the merits of the various techniques used by authorities when resolving individual or widespread bank failures.
at least you can make vehicles, we import cars and gas and are at the whim of a very volatile currency. Would not take too long to change production, takes longer to convince the buying public.
I miss my Datsun 1200 coupe, must say the Honda does similar gas mileage.
don't mutual fund inflows , by charter , need to be invested at the start of the quarter...
are'nt there some market technicals that allow the smart money to rape the drip investors by marking the market all day long, forcing the elephant funds to play top tick all day.
"Everybody knows" that US autos would be X dollars more competitive if we socialized medicine. However, is that which everybody knows necessarily true?
The price set for union labor is the equilibrium set between the company's willingness to take a strike and the union's willingness to deliver one. As the living standard felt by an auto worker increases, the company becomes more willing to take a strike to avoid forking over even more money, and the union finds its membership more sated and less willing to vote for a strike.
So what happens when medicine is socialized and paid for by taxes? The taxes are paid for by a mix of taxes on the company's receipts and the workers' incomes. In fact, because the workers are well paid, considerably above average, it costs them more to get their health care than it did when the company contracted with insurance companies.
The workers will be willing to strike until the point where they enjoy the same living standard as they needed to cease being willing to strike the day before the single payer health care plan took effect. That will require giving them as much, or slightly more, money than was needed before the new health plan.
Retail was the last bastion.
Without retail we at the state level are quite simply dead meat.
I mean 10-15% tax increase level dead meat with the cocommitant political fallout.
The republicans around here will crap pointy square ones first. And that will be very very very hard.
It also means that a 20% drop across the board in incomes from business. That is a big big big difference from the eternal 7% gains.
You can't easily turn folks who have been growing consistently into savers without breaking a lot of eggs in the small business and large business areas. In other words, the end of an era that has gone on since 1994 here with just a small hiccop after 9/11.
The circumstances suggest that it will be the change in trend that devastates a lot of folks.
Cascade effects push virtual cycles into downward spirals that accelerate until we hit bottom. This was the turn, not the bottom.
Bush, Treasury, and Bennie and the Boys know the gig is up.
I am not sure that The Governator knows that the gig is up.
The continuous drip of terrible economic news -- Q1 earnings should do it? -- may soon turn the holdout mutual fund managers into seeing that the gig is up.
For all you "unions are victims" guys and gals out there. In the early 1980s, I had two things of note happen to me vis a vis the US auto industry and the UAW. My first experience was a trip to the local (RTP Area of NC) to look at and finally purchase a Cadillac. After being prepped and having some door moulding straightened, I drove it home where upon I noted that whenever I crossed some railroad tracks or hit some rough pavement there was one hell of a clatter in the passenger side door. I took it back to the dealership and a manager hoped in for a test ride with me. Yep, trouble in River City. They took off the door to find a coke bottle with a note in it. The note read: Well you rick s*n of a b**ch, I see you finally found it. The car went back to the dealer and I bought a Mazda. The second experience was with the near do well brother of a rather pretty nurse I was dating who had come down to Chapel Hill to see his sister. He had gotten out of a short prison term for auto theft, but he had something I didn't...a job with GM. He was making roughly twice what I was making as a cancer researcher here in the RTP and was bragging that he loved layoffs and down time because he got 95% of his take home pay whether he was working or not. You won't find any sympathy from me for american union guys. Killed the goose that laid the golden eggs! Tough!
Try getting a diesel mechanic. All the good ones work on trucks...
4runner | 04.01.08 - 7:11 pm | #
I have been turning wrenches for 20 years. Have fun finding diesel guys who actually are keeping up with the tech changes coming. Y'all thought cars/trucks are expensive now,wait till the latest generation starts needing repairs...
(2) Quincy k writes:
$28/hour an hour for an auto worker? Please.
Exactly what else are they qualified to do for that amount of money?
Lowe's and Home Depot associates make about $9.00/hour. That's where most of them end up.
Quincy k | 04.01.08 - 7:43 pm | #
Skilled trades in tool and die
Skilled trades in electrical
Skilled trades in metallurgy
Skilled trades in welding
Skilled trades in operating the robotics
Skilled trades in operating the heavy machinery
Not exactly walk in off the streets kind of work.
And your pampered backside couldnt take 2 hours in plant with the horrible din and noise and standing on your feet and lifting and moving heavy objects. The physical damage (joints, arthritis, back injuries, hearing) over the years takes a tremendous toll.
I was regularly in the auto plants when I practiced labor law. You couldnt have paid me enough to do that work.
People who did those jobs end up at Walmart because that is all there is LEFT (thanks to twits like you who think you actually do something useful and produce something when all you do is push some papers.)
Without a working class and middle class (median income is $48,200 and that is the true middle income and 80% of the US has incomes below $85,000 and that is typicallywtih 2 wage earners) that can actually afford to buy things, who is going to buy the junk distributed by such over-paid workers as yourself?
It only takes about 20hrs of labor to assemble a car. I think $1000 of the purchase price of a car for the assembly labor is eminently fair, considering the retail value of the product.
With the monkeying around with bonds, commodities, long&short equity, currency, & fixed income: do you think TPTB are trying to force the money on the sidelines into RE and thereby stabilizing what has to be the biggest crash ever?
Dick King wrote, So what happens when medicine is socialized and paid for by taxes? The taxes are paid for by a mix of taxes on the company's receipts and the workers' incomes. In fact, because the workers are well paid, considerably above average, it costs them more to get their health care than it did when the company contracted with insurance companies.
Except for the wee little fact that socialized medical systems are much, much more efficient than ours.
If Chevy had been willing to guarantee the truck for 100,000 miles I probably wouldn't have bought a Nissan. The dealership needed to charge me an additional $500. They should have put that in the price instead of asking me for it later. It made me think they had no confidence in their vehicle either. Every Datsun and Nissan I've encountered has gone over 100,000. I was trying to buy American,..oh well, the Nissan was made in Tennessee by American workers.
If you listen very closely you can barely hear it in the background. It is the world's smallest violin playing for you and your auto workers.
What do I say to a laid-off auto worker? Too fuc_ing bad and sh_t happens. If they were so valuable and in demand, they wouldn't need a union to hold there fu_king hand and take US companies hostage.
Now go do what you do best and find a company to sue for some labor violation so all our premiums and prices can go up.
I never cease to be amused by car buyers from those who adamantly refuse to buy American and wind up w/ a Honda from OH to the snobs that drive a Rover powered by an engine that began as a Buick design.
I will never understand the US reluctance to switch to small diesel engines. I bought a Jetta TDI in 06 that gets 51 mpg highway at 75+ mph and in the high 40's around town.
We got two of them - one for me, one for the wife. If I didn't have something like this I wouldn't be able to cover the territory I do (about a quarter of the lower 48 - central US).
I wonder how many of the US big 3 will wind up in Chapter 11 / bailed out by Santa Paulson by the end of the year. Toyota can maybe sustain a 10% drop year-on-year, but I don't see how the big 3 can.
Mine is a Y2000 Olds Intrigue with 138K miles... It's been pretty good but seems to go through wheel bearings kinda quick, like every 30,000 or so. It's got a powerful engine for passing, and comfortable seating for a tall person. I still like it.
Although I have a GM card I may just replace my car with a used Y2002 Intrigue. They were the best Oldsmobiles GM made in 20 years, and yet they went and shut down the division...
First? Way to go Detroit, the rest of the country will soon follow.
I'm going to buy automakers when the market opens. Since sales are dropping so much, most will go out of business and the ones that remain will be able to charge whatever they want. That incredible level of profitability is not yet priced into the stocks, so it's once-in-a-lifetime opportunity.
Uh, it is still April 1st, isn't it?
I have a friend in the auto repair business, German and Japanese car, and his phone is ringing off the hook. They don't want to buy new ones, so they're fixing the old ones.
Good times at the garage -- always an indicator of a weak economy.
Sorry to post this again from another thread but I'm wondering if anyone can validate this rumor...
Business News and Financial News - US News Business
The Big Picture
Internet Hoax Gooses Stock Market -- Seeking Alpha
Original article:
Kass: Time to Buy the Bull? | Financial Advisor Update | Financial Articles & Investing News | TheStreet.com
Wall Street lives in a parallel universe powered by Poulsan, but soon reality will bite again.
I can hardly wait for the next round of humiliate the "masters of the universe" on Wall Street.
Too bad so many Main Streeters have been drawn into the game, they will be ground up and spit out shortly.
Dropping car sales!
Dropping housing sales!
What next? Dropping retail in general?
Someday this war's gonna end...
freakdog,
PEBCAK
I despair for USA MSM... check the FT clip below - rational commentary AND a vocabulary - whoocoodanode?
Caution as UBS deal gives boost to markets
By Chris Hughes in London and Michael Mackenzie in New York
Published: April 1 2008 20:51 | Last updated: April 1 2008 20:59
Leading bankers cautioned against calling a premature end to the credit crunch on Tuesday as markets rallied sharply after a new round of bank writedowns and capital-raising fostered hopes the crisis had reached its nadir.
[snip]
freakdog,
If that turns out to be true, I will be freaking in the bunker until next year.
Cheers,
energyecon writes:
freakdog,
PEBCAK
I see what you're saying, but an April Fools' Joke of an April Fools' Joke seems unlikely. Kass' article is a legit April Fools' Joke, but I'm only trying to find out if it was reported and links were taken down...
The market soared today not because rolling metal is not selling, but because the smart money read Paulson's new plan. No guess where he grew up.
But as usual, they are short-sighted near-term oriented. Do they really believe any of the three probable nominees will allow this thing to pass? Poor GWB only has a few months and that isn't long enough to rescue his buddies.
For the first time since I voted for Hubert Humphrey when a socialist sophomore, I'm voting democrat this year, holding my nose, but voting.
"I apologize to my partners, and to my friends, and especially to the SEC, for whom I have the greatest possible respect. I never intended markets to be manipulated in this manner. I was only trying to make some traders, who have been having a tough year, break a smile...
Instead his was a ruse for inscrutible money coming in to support insupportable financial stocks so that you (investors) don't break a bank. And conversely, we break you.
Who's breaking a smile now?
DEFCON 5 FINANCIAL:
I haven't been able to source Kass' supposed apology except from the original articles talking about the hoax...
Hey CR --
You sure you wanted to title this post More Auto Sales?
There are whole segments of giant institutional owners of RMBS, CMO, CMBS, asset-backeds and auction-rate that have suffered huge losses but haven't yet become visible. They are opaque.
The include:
Defined benefit pensions
Life insurance companies
Hedge funds
Public non-retirement funds
All of these will slowly become visible over the next year, and this will create more big problems.
There will be runs on life insurance companies, especially their annuity books of business. Some won't have the cash ready to meet redemptions and will be forced into receivership. Another way people run on life insurance companies is to borrow out all their cash value. This also can put severe strains on liquidity.
The auto industry's problems -- not just terrible sales but also the current strike -- could put PBGC on the brink of insolvency within 2 years.
Hopefully this will break the back of the UAW.
More UBS... (if not a repeat)
Fitch Downgrades UBS to 'AA-'; Outlook Remains Negative
01 Apr 2008 12:41 PM (EDT)
Fitch Ratings-London-01 April 2008: Fitch Ratings has today downgraded UBS AG's (UBS) and its wholly-owned subsidiary UBS Limited's Long-term Issuer Default ratings (IDRs) to 'AA-' (AA minus) from 'AA'. The Outlooks remain Negative. Fitch has affirmed both issuers' Short-term IDRs at 'F1+' and Support ratings at '1'. The agency has also affirmed UBS's Individual rating at 'B' and Support Rating Floor at 'A-' (A minus). Subordinated debt and hybrid debt issued by UBS and its group funding vehicles rated by Fitch have been downgraded to 'A+' from 'AA-' (AA minus).
UBS announced today that it will report losses and write-downs its US real estate positions of approximately a further USD19bn, the result of which will be an estimated net loss for Q108 of around CHF12bn (c.USD10bn). The scale of the Q108 net loss, together with still difficult market conditions, makes it a real possibility that the group may not report a full-year profit for the second consecutive year. Following the Q108 write-downs, the group's residual exposure to the US sub-prime sector will be around USD15bn, with a further residual USD16bn to the Alt-A sector. Compared to combined exposures of around USD73bn at end-September 2007, the residual books have been reduced very significantly through a combination of write-downs and asset sales. A relatively small additional provision was also booked against the group's leveraged finance portfolio. At end-December 2007, this portfolio stood at USD11.4bn, which is significantly less than some peers.
[snip]
Honda's sales were down, so things were rough. Honda doesn't sell a car that doesn't at least get decent mileage.
ah yes, its the unions' fault! Never mind American car makers have to have $3K per car more incentives to actually move the product. $3K times 2 Million cars is $6 Billion. Suddenly, with all those "union" expenses, American automakers would still be profitable.
The automakers and unions, along with lots of other struggling industries, will have even more incentive now to push the country towards a universal health care solution.
Karl's getting pretty excited. He makes some good points though. Especially about Bill Gross's hypocrisy:
WE NO LONGER LIVE IN A CONSTITUTIONAL REPUBLIC (oh, and UBS)
Clearly, the Treasury must make up the profits. If the auto executives don't get a bonus immediately, your mother will have to eat her bichon.
And no one wants that.
@greenlander - UAW aren't the ones responsible for the terrible design of American cars.
400 point rally started by an April fool's joke?
This is not possible, is it?
But of course it is!
By the way, the original link in Marketwatch has been replaced by something else now. Big Picture seems to be still going with it, though.
question:
With such a large drop in sales, do the manufacturers have a massive inventory build up?
Or are the car yards filling up?
My thoughts are that new models will have to compete with inventory left over and drop prices on both to move stock.
cheers in advance.
I am struck by the huge drops depicted in this graph from the previous article two down about residential construction spending:
http://bp3.blogger.com/_pMscxxELHEg/R_KAkdDCImI/AAAAAAAABys/PdOvSTYWwkE/s1600-h/CSnormalized2.jpg
Combine that with the huge drops in car sales and I am getting quite concerned. Actually beyond concerned.
I am overwhelmed by a visceral dread.
This is starting to be beyond bad.
This is starting to confirm my thesis that the winner of the democratic contest will win in November and be plunged into a 100 days crisis. Folks, this is starting to resemble 1932, and the big drop is ahead.
Forget wall street. This drop is coming from main street.
And it is big.
Very big.
Someday this war's gonna end...
Maybe Toyota selling ford-sized pickups was not such a good idea after all?
None of the car makers sell a pickup as useful as my Dad's 1973 Datsun. Reliable, toted a good load and didn't take a HELOC to pay the fuel bill.
other jim
if it was the Datsun 1200 ute, they are still making that same model in South Africa.
Nissan Sunny - Wikipedia, the free encyclopedia
This was perhaps the fiercest short covering rally yet... of the entire cycle. I am still scratching my head. It was like an engineered SHORT BUSTER RAID - totally lacking in any economic merit.
Amazing.
Pay no attention to the repo man behind the curtain.
As for Seb- Arizona is in a recession
Joint Legislative Budget Committee - Monthly Fiscal Highlights
Open march.
"Total February General Fund revenue
collections were $373.4 million, or (17.5)%
below February of last year. This amount was
$(29.9) million below the forecast based on
the revised JLBC Baseline revenue estimate."
Further:
"The decrease of (16.2)% in January reported in
last months highlights, along with the February
decrease of (17.5)%, represent the largest
percentage year over year declines since April
2002."
Game over.
These declines are spectacular without an exogenous shock event.
Dread. Unspeakable dread.
All of the attempts to prop us up are going to be futile in the face of a collapse spiral.
If this starts to go permeate the national numbers, we will face a crisis that has not been here since 1932-33.
Good luck folks,
gotta go find a new tinfoil hat, mine just shorted out.
Someday this war's gonna end...
If we break the UAW we can assure the end of the middle class as we know it in the USSA. Auto workers hourly don't make that much about 28.00 an hour. Its the companies stupidity on overtime that makes the workers have big salaries. My father worked at GM for 32 years as an electrician and I will say the most he ever made was 95000 a year or 31 an hour in 2005, and that was working 7 days a week 12 hours a day a big portion of the year. Any volunteers for that because it sucks and he had no life. Also my mother is getting a whopping 950 a month from his pension. Not so hot for 32 years as a skilled tradesman who could repair robots.
These are the problems faceing the big 3.
1)Global wage arbitrage Korea 5.00 an hour.
2)Most countries have national healthcare. Ours = 1500 a car.
3)Our cars are just as reliable but parts are cheap therefore mechanics screw you. Hard to charge for 3 parts instead of one when each one is 600 dollars instead of 150 dollars.
Keep bitchen and buying foreign crap though. I personally have no sympathy for somebody driving a foreign car who can't find a job.
Full disclosure I don't work for the UAW. However I hate idiots who would deny hard working individuals a living wage. While they themselves produce little or nothing of value. Maybe autoworkers should earn 6.00 an hour like WalMart greeters.
I bought a used 2002 Prius last year. It averages 48mpg for long commutes. It fits in most parking spots. It's a great car for Los Angeles' wretched traffic and scarce street parking.
I would have happily bought a hybrid Ford Focus if Ford made one. Ford offers a hybrid SUV, but no fuel-efficient hybrid small car.
I suspect bad planning did more damage to Ford than the UAW ever could. :^(
I will never understand the US reluctance to switch to small diesel engines. I bought a Jetta TDI in 06 that gets 51 mpg highway at 75+ mph and in the high 40's around town. Even with diesel at $4.00 a gallon, I'm way ahead on the cost/mile driven. The direct injection diesel has the zip of a gas engine without the low mileage penalty.
My Ford F-350 is my workhorse I use to pull 12K lb loaded trailers at 13 mpg. If is was a gas engine I would get 6 mpg.
Many of those $28 per hour auto jobs are being turned into $15 per hour jobs with the help of the UAW. The auto companies need the UAW to pull this off. Sorry to all the union haters out there, but big auto definitely does not want to "break the back" of the UAW.
Revenues in our small ag. economy state have not dropped. Arizona is frightening but the revenue hit is not hitting everywhere, yet.
if it was the Datsun 1200 ute, they are still making that same model in South Africa.
Sadly, by the time one pays the import costs and costs to meet us standards, the vehicle is no longer anywhere near as attractive.
I wonder how long it takes to rework a pickup assembly line to produce the fuel efficient models they used to have?
AllenM writes:
As for Seb- Arizona is in a recession
Error monthl...yhighlights.htm
AllenM,
A 53% decrease in February individual tax revenues YoY!
Unbelievable.
Sorry, I meant individual INCOME tax revenues.
AllanM,
"... Folks, this is starting to resemble 1932, and the big drop is ahead. ..."
I posted a link to a study by the Bank of England yesterday late. I'll post it again:
Resolution of banking crises
OVER THE PAST QUARTER of a century, unlike the preceding 25 years, there have been many large bank failures around the world. Caprio and Klingebiel (2003), for example, document 117 episodes of systemic crises and 51 cases of borderline or non-systemic crises in developed and emerging market countries since the late 1970s. Moreover, cross-country estimates suggest that output losses during banking crises have been, on average, large over 10% of annual GDP and that bank lending and profitability have often remained subdued for years afterwards. This article reviews the merits of the various techniques used by authorities when resolving individual or widespread bank failures.
other jim
at least you can make vehicles, we import cars and gas and are at the whim of a very volatile currency. Would not take too long to change production, takes longer to convince the buying public.
I miss my Datsun 1200 coupe, must say the Honda does similar gas mileage.
I remember when GM had to write off $39 billion a few months ago and our friend "Banker" said it was a Nothingburger.
I'm sure all of this sales decline stuff is also just some raw meat waiting to get prepped for some juicy nothingburgers.
Sales are so 20th century.
AllenM,
could you extrapolate your fear, and why a less than 20% drop in tax revenues causes such a grave concern.
don't mutual fund inflows , by charter , need to be invested at the start of the quarter...
are'nt there some market technicals that allow the smart money to rape the drip investors by marking the market all day long, forcing the elephant funds to play top tick all day.
I will never understand the US reluctance to switch to small diesel engines.
Try getting a diesel mechanic. All the good ones work on trucks...
"Everybody knows" that US autos would be X dollars more competitive if we socialized medicine. However, is that which everybody knows necessarily true?
The price set for union labor is the equilibrium set between the company's willingness to take a strike and the union's willingness to deliver one. As the living standard felt by an auto worker increases, the company becomes more willing to take a strike to avoid forking over even more money, and the union finds its membership more sated and less willing to vote for a strike.
So what happens when medicine is socialized and paid for by taxes? The taxes are paid for by a mix of taxes on the company's receipts and the workers' incomes. In fact, because the workers are well paid, considerably above average, it costs them more to get their health care than it did when the company contracted with insurance companies.
The workers will be willing to strike until the point where they enjoy the same living standard as they needed to cease being willing to strike the day before the single payer health care plan took effect. That will require giving them as much, or slightly more, money than was needed before the new health plan.
-dk
wuuuu huuuuuuuuuu
Seriously,
Retail was the last bastion.
Without retail we at the state level are quite simply dead meat.
I mean 10-15% tax increase level dead meat with the cocommitant political fallout.
The republicans around here will crap pointy square ones first. And that will be very very very hard.
It also means that a 20% drop across the board in incomes from business. That is a big big big difference from the eternal 7% gains.
You can't easily turn folks who have been growing consistently into savers without breaking a lot of eggs in the small business and large business areas. In other words, the end of an era that has gone on since 1994 here with just a small hiccop after 9/11.
The circumstances suggest that it will be the change in trend that devastates a lot of folks.
Cascade effects push virtual cycles into downward spirals that accelerate until we hit bottom. This was the turn, not the bottom.
Someday this war's gonna end...
$28/hour an hour for an auto worker? Please.
Exactly what else are they qualified to do for that amount of money?
Lowe's and Home Depot associates make about $9.00/hour. That's where most of them end up.
AllenM, I agree with your read of the situation.
Bush, Treasury, and Bennie and the Boys know the gig is up.
I am not sure that The Governator knows that the gig is up.
The continuous drip of terrible economic news -- Q1 earnings should do it? -- may soon turn the holdout mutual fund managers into seeing that the gig is up.
We'll see.
Might they be exactly qualified to be stockholders?
Would anyone really want to buy a car that was made by US workers who were paid the same as Wal-Mart cashiers?
If auto makers quit spending a bloody fortune on national advertising, they could lower their prices & sell more cars.
19% skid in sale....great time to buy!! Buy now, buy as much as you can!!
For all you "unions are victims" guys and gals out there. In the early 1980s, I had two things of note happen to me vis a vis the US auto industry and the UAW. My first experience was a trip to the local (RTP Area of NC) to look at and finally purchase a Cadillac. After being prepped and having some door moulding straightened, I drove it home where upon I noted that whenever I crossed some railroad tracks or hit some rough pavement there was one hell of a clatter in the passenger side door. I took it back to the dealership and a manager hoped in for a test ride with me. Yep, trouble in River City. They took off the door to find a coke bottle with a note in it. The note read: Well you rick s*n of a b**ch, I see you finally found it. The car went back to the dealer and I bought a Mazda. The second experience was with the near do well brother of a rather pretty nurse I was dating who had come down to Chapel Hill to see his sister. He had gotten out of a short prison term for auto theft, but he had something I didn't...a job with GM. He was making roughly twice what I was making as a cancer researcher here in the RTP and was bragging that he loved layoffs and down time because he got 95% of his take home pay whether he was working or not. You won't find any sympathy from me for american union guys. Killed the goose that laid the golden eggs! Tough!
Try getting a diesel mechanic. All the good ones work on trucks...
4runner | 04.01.08 - 7:11 pm | #
I have been turning wrenches for 20 years. Have fun finding diesel guys who actually are keeping up with the tech changes coming. Y'all thought cars/trucks are expensive now,wait till the latest generation starts needing repairs...
Chris
"the credit crunch is making it more difficult for some to obtain a car loan"
And since the Big 3 are not exactly organized to operate as boutique companies, even a little off eliminates a lot of margin.
I'll buy when the prices of new cars and service drops.
(1) What next? Dropping retail in general?
Someday this war's gonna end...
AllenM |
Not next - it is already happening.
(2) Quincy k writes:
$28/hour an hour for an auto worker? Please.
Exactly what else are they qualified to do for that amount of money?
Lowe's and Home Depot associates make about $9.00/hour. That's where most of them end up.
Quincy k | 04.01.08 - 7:43 pm | #
Skilled trades in tool and die
Skilled trades in electrical
Skilled trades in metallurgy
Skilled trades in welding
Skilled trades in operating the robotics
Skilled trades in operating the heavy machinery
Not exactly walk in off the streets kind of work.
And your pampered backside couldnt take 2 hours in plant with the horrible din and noise and standing on your feet and lifting and moving heavy objects. The physical damage (joints, arthritis, back injuries, hearing) over the years takes a tremendous toll.
I was regularly in the auto plants when I practiced labor law. You couldnt have paid me enough to do that work.
People who did those jobs end up at Walmart because that is all there is LEFT (thanks to twits like you who think you actually do something useful and produce something when all you do is push some papers.)
Without a working class and middle class (median income is $48,200 and that is the true middle income and 80% of the US has incomes below $85,000 and that is typicallywtih 2 wage earners) that can actually afford to buy things, who is going to buy the junk distributed by such over-paid workers as yourself?
$28/hour an hour for an auto worker? Please.
It only takes about 20hrs of labor to assemble a car. I think $1000 of the purchase price of a car for the assembly labor is eminently fair, considering the retail value of the product.
With the monkeying around with bonds, commodities, long&short equity, currency, & fixed income: do you think TPTB are trying to force the money on the sidelines into RE and thereby stabilizing what has to be the biggest crash ever?
Dick King wrote, So what happens when medicine is socialized and paid for by taxes? The taxes are paid for by a mix of taxes on the company's receipts and the workers' incomes. In fact, because the workers are well paid, considerably above average, it costs them more to get their health care than it did when the company contracted with insurance companies.
Except for the wee little fact that socialized medical systems are much, much more efficient than ours.
If Chevy had been willing to guarantee the truck for 100,000 miles I probably wouldn't have bought a Nissan. The dealership needed to charge me an additional $500. They should have put that in the price instead of asking me for it later. It made me think they had no confidence in their vehicle either. Every Datsun and Nissan I've encountered has gone over 100,000. I was trying to buy American,..oh well, the Nissan was made in Tennessee by American workers.
AnnS-
If you listen very closely you can barely hear it in the background. It is the world's smallest violin playing for you and your auto workers.
What do I say to a laid-off auto worker? Too fuc_ing bad and sh_t happens. If they were so valuable and in demand, they wouldn't need a union to hold there fu_king hand and take US companies hostage.
Now go do what you do best and find a company to sue for some labor violation so all our premiums and prices can go up.
I never cease to be amused by car buyers from those who adamantly refuse to buy American and wind up w/ a Honda from OH to the snobs that drive a Rover powered by an engine that began as a Buick design.
I will never understand the US reluctance to switch to small diesel engines. I bought a Jetta TDI in 06 that gets 51 mpg highway at 75+ mph and in the high 40's around town.
We got two of them - one for me, one for the wife. If I didn't have something like this I wouldn't be able to cover the territory I do (about a quarter of the lower 48 - central US).
Try getting a diesel mechanic. All the good ones work on trucks...
4runner | 04.01.08 - 7:11 pm | #
I have no problems getting quality work done.
I bought a Jetta TDI in 06 that gets 51 mpg highway at 75+ mph and in the high 40's around town
'course, diesel is ~15-20% more due to the increased energy content.
If you want real savings, try natural gas (or PG&E's E-9 overnight rate to recharge batteries).
i am looking forward to buying a new car at 0% financing forever or a new used car inexpensively....maybe even a sports car!
I wonder how many of the US big 3 will wind up in Chapter 11 / bailed out by Santa Paulson by the end of the year. Toyota can maybe sustain a 10% drop year-on-year, but I don't see how the big 3 can.
Mine is a Y2000 Olds Intrigue with 138K miles... It's been pretty good but seems to go through wheel bearings kinda quick, like every 30,000 or so. It's got a powerful engine for passing, and comfortable seating for a tall person. I still like it.
Although I have a GM card I may just replace my car with a used Y2002 Intrigue. They were the best Oldsmobiles GM made in 20 years, and yet they went and shut down the division...