Uh, not so sure this is worth the read. They published the 12.5 mil figure ago as an estimate during the first half of the month. In this article, they say the second half improved, and with GMs desperate dumpoff incentive on SUVs, they surely picked up some suckers, so that might be part of it. SO, if the second half IS better, Id think we'd go with maybe 13.5 or 14, right? Why no pick-up if it's better? Oh wait, I just answered my question : no pickups. Bwahahahaha.
Reuters reports a "recession in syndicated lending" as the value tapped for things like leveraged buyouts dropped to just $230B in Q2 from Q2 07's $582B. "While the economy technically might not be in a recession, syndicated lending certainly was in one during the second quarter of 2008."
This shows that we need to take capacity out of the market. Gm could theoretically leave the US market and we would still have too many cars and trucks at this sales rate.
Just at Costco getting new tires with an 80K mile warranty on my car with 120K miles already on it.
No car maker will be seeing me on the lot for a few years and when they do it will probably be Toyota again.
i'm still looking for investors to purchase scrub land(NM) to store the excess 2mm vehicles that will be produced this year.
I'm sure I can sucker cerberus to pay hefty storage fees, cause they believe the market will come back for the suv , supa-truck market.
us$10mm sought
general partner will only take a us$9mm pay package
Thank goodness Cerberus got into the auto biz just at the right time and managed to scoop up Nardelli to run the enterprise just as he became "between jobs".
Russell 2000 got it's end of day pump again (with respect to SPX). This keeps happening over and over. I think maybe hedgies are having to narrow their focus as conditions deteriorate. Maybe the S&P is too big of a fish to fry now and they have create smaller and more targeted bubbles. Anybody have a better idea?
The problem with the new car market is the used car market. In fact I know where you can pick up a slightly used 2008 Wright Model "B" real cheap. According to the current owner it has never broken down.
Yeah, well, our local Volvo/Plymouth/VW dealer closed up shop this year; didn't even try to sell the business, just sold off the inventory and went bye-bye. Big empty car lot and buildings sitting there in the middle of town.
I wonder if he saw this coming and just decided it wasn't worth it anymore.
Part of what is wrong with the domestic auto is how they respond to customers.
I bought a 1982 Ford Fairmont new and after 33,000 highway miles it leaked oil and was getting water under into the trunk.. I paid 8200 for it and when I took it back they would not fix the leaks and gave me 3300 on it.. needless to say I was underwater...this was in 1984.
In 1994 I was again able to buy a new vehicle and bought a 1994 Tercel for 8600 frn and I still drive it back and forth to work. It has 215,000 miles on it and I paid it off in 1997. 12 years later I can say I am much better off having bought the Toyota...
This for me in a nutshell is why the domestic auto industry is toast... the Tercel gets 38 mpg... has never left me stranded and I have put about $600 worth of parts on because I raised 5 kids who drove it... they did not regularly change oil and air filter..
As a consumer I would love to keep my money here in the USA but I am sorry to say the way Ford treated me I could not...
ps , the excess production is already baked in the cake...
don't let a few plant shutdowns fool you...
and remember, the forecasters of 12.5mm saar are as rosy tinted as the housing prognositcators
Elvis writes:
I think the way to get yourself out of this problem, US automakers, is to sell more cars at better profit margins. C'mon, show some spunk.
Elvis | 06.27.08 - 3:57 pm | #
I'd take fewer cars at better margins - that would be a 'victory' of sorts... now its fewer cars at low margins or more cars at even lower margins. I think they are all on the wrong side of the supply demand intersection.
Thanks!! A most enjoyable read. I actually took your warning yesterday and bought some $20 Puts after some due diligence of my own. If you're right on this one I'm gonna owe you a beer.
I have a co-worker who bought a Toyota Sequoia back in 2007 when gas prices were at $2.45/gal. He just traded that vehicle yesterday for a smaller car, and told us that he got low-balled in the trade-in.
Some people just deserve to have a circle painted on their forehead, with alternate black-yellow in each quadrant. What a dummy...
Auto quality is so much better than 25 years ago whether it's made in Japan, Detroit or Stuttgart. The usual problem now is too clever by half electronics.
Anonymous, bank failures are usually announced on Friday after the local branches close (usually 5 PM local time, but sometimes 6 PM).
As an example, IndyMac is a west coast bank and their branches close at 6 PM on Fridays - so if the FDIC closed the bank, it would probably be announced after 9 PM ET on a Friday. Not saying IndyMac will be closed - just using them as an example.
Drops in autos sales foretell a drop in stock market because autos drop when consumers have blown their wad -- and what follows is a significant market slide. This is especially true when auto sales drop in combination with a decline in foreign stock markets -- so watch out. Also, when the housing market takes a tumble during the down side of the stock markets Long cycle (which we are currently in)-- you can expect a giant drop in home prices, not just a correction. Read "The Wall Street Waltz" by Kenneth Fisher.
News from Honda indicates that their "global small hybrid" coming out next year will be about $18K, get around 55mpg, and be slightly larger than the Honda Fit (which can seat 5 ... much more comfortably than you would imagine given its exterior size).
That's how you get folks to buy new cars in 2008/2009.
Maybe that is the explanation, ac, shift in focus from Dow/S&P to Russell.
I was confused five minutes ago: finally tally showed that futures purchases were higher yesterday than today. It seems dumb, to me, to allow the Dow to close down 100 after yesterday's ugly day, and important-month-end-close on Monday.
Yes, maybe they are shifting focus to Russell 2000. Watch out, rich!
Alec many more Fords and Chevy's were sold.. just an antidote...
In town a dealer goes to the Auction... F-150 supercrew 4x4 2007 with 12000 miles listed MSRP 34595 would sell it to me for 19000 frn... nice vehicle no dents scratches nothing....
I had a fellow employee who had a 2005 Tacoma 4x4 listed 28500 who traded it in on a Prius.. paid invoice on it they gave him 1500 more than Trade in of 19500 and sold it the same day in larger town in my state...
This from the same dealer..if you trade in a 1 year old Chevy Tahoe..no matter what the Trade in value says he wont budge off of about 10000 below that.. says he can't sell it and may have to auction...
Just one reason consumers are hurting..imagine you paying big bucks for the Tahoe in 2007 early and now you are sitting on a big note and cannot get out from under it....
my problem with toyota and honda is that they dont reprice their cars according to the currency valuations, even if these valuations reach 10s of %.
my currency appreciated against yen during past 2 years 31%. have they lowered their prices? ofcourse they have not.
i mean since we are so rich here in eastern europe our cars cost 50-60% more than in us and the gas is twice the price in us.
funny thing tough, suzuki, mitsubishi, hyundai, kia and even volkswagen and audi have dropped the prices just toyota and honda have not, so guess if i have audi a6 for the same price as honda accord what am i supposed to buy?
ou well i will take the all new mitsubishi lancer 1.5 103hp.
sorry toyota & honda
you are too expensive
sincerelly
revro
Hey, kids! GM's head honchos are going to be looking for work soon. How about we appoint them as ambassadors to Iran, Libya, etc., and let them build the SUV market-er, I mean, trade relations- there? Last I heard, the price of regular in Iran was 25 liters for a buck.
Alec being a buyer and seller of fresh produce I more than understand supply and demand... but the issue is one of perceived quality and what your pledging is your future earnings...
Do you think the average person does not perceive Japan as making better cars and trucks now?
As the average J6p pledges his earnings through debt aquiring he suffers when those perceived assets do not return back to him what he puts out in earnings...regardless if it is higher repair bills or perceived quality differences... he is still underwater to the tune of billions on domestic cars....
Just like the asset prices going down on his "home" the average person is clueless to how he has become a debt-slave to owners of resources...
Does not the average J6p not know what mortgage means? Death grip...
Same with debt... does he/she not know it means slavery...
Just because our schools have dumbed down most people as to the true meaning of words does not mean reality does not exist...
I built a house in OK in 1982 for 69000frn and sold it in 1989 for 57000 frn... I had to come up with the difference... oil boom turned to bust btw..
I learned a valuable lesson..if you owe more than a asset is worth you are a slave to your job and your circumstance if you have no way of getting out of it... I moved off and took a job only because that new employer gave me 15000frn to move...
Millions and millions of consumers are now in that same situation and think by walking away and jingle mail they are off the hook.. wrong wrong wrong...
No way jose..the world will turn again and you will need to have "credit" to survive unless you have "paid assets".
The following paste is not about drugs or beverages and may or may not be OT. That said, I had this weird feeling in my gut today that cost of living and inflation values are sometimes hinted at by increases in postage stamps. Hence is it possible for a stamp to predict the inflation rate, as in 4.2%? Ok, it was a bad idea, but nonetheless:
... an upsurge in energy prices in November drove the December-to-December rise in CPI-U to an unsettling 4.1 percent. This left the COLA unaffected, since it was based only on the price changes occurring through September.
Anyone wanna help me calculate CPI-U with $150 oil?
Consumer Price Index Summary Consumer Price Index Summary
Re: The May level
of 216.632 (1982-84=100) was 4.2 percent higher than in May 2007.
Many of you are probably saying to yourselves, oh shit, what about that fucking oil price increase -- how the fuck does that impact CPI-U?
Good fucking question, dumbass! Perhaps this type of thought could be put on hold, while we take a large drink of some hard liquor and then sit back and ponder the value of the dollar as a starting point. For the time being, let's allow our TeleHomeOwners to go get that drink and then come back to this:
How do you deflate a future dollar value into present-day dollars?
To deflate a future dollar value into present day dollars, multiply the future dollar value by the ratio of the current year CPI index to the future year CPI index.
As an confused person can tell you, the dollar is used to exchange goods and possibly store value, thus let's pretend that a dollar is something that can be traded or exchanged:
Woohoo, gotta civic hybrid two years ago. Passin SUVs over there in the slow lane like they was standin still. Not only that, but I gotta pass into the HOV lane.
Bring on that $5.00 gas, I'm lovin it.
Gee, ya think the S&P might need some more price declines to get that PE down to a "normal" ratio of about 16-17??? It sure won't get there via earnings growth in this climate!
The index measures price change from a designed reference date. For
the CPI-U and the CPI-W the reference base is 1982-84 equals 100.0. The
reference base for the C-CPI-U is December 1999 equals 100.
An increase of 16.5 percent from the reference base, for example, is shown
as 116.5. This change can also be expressed in dollars as follows: the
price of a base period market basket of goods and services in the CPI has
risen from $10 in 1982-84 to $11.65.
For further details visit the CPI home page on the Internet at
If all the sharpees at GM, Ford, and Cerberus (evil 3 headed dogs that they are) didn't see this disaster approaching their business model, why do we expect Mr. and Mrs. Subprime to see the error in their investments?
... an upsurge in energy prices in November drove the December-to-December rise in CPI-U to an unsettling 4.1 percent. This left the COLA unaffected, since it was based only on the price changes occurring through September.
Sometimes, people don't get simple concepts. The Social Security COLA exacty mirrors CPI-U inflation over any multi-year period. The fact that the COLA is only calculated once per year (at the end of September) is pretty meaningless for purposes of measuring seniors' incomes over time.
While the CPI-U definitely understates real inflation, the COLA is a huge boost for seniors. Who else gets an income stream automatically indexed every year? And with higher inflation, the COLA is a huge cost drain for the U.S. Treasury.
You do know that the Social Security system and the U.S. Treasury are the same, right? Social Security's vast deficit and the Treasury's vast deficit sorta blend together.
Yeah I rofl'd hard. Bears are everywhere these days. I personally liked:
"Egan hit the bear and ended up skidding across the road.
"This bear looked at me with a look of terror on his face and sort of made a noise," said Egan. "I looked at him with a look of terror and we went, 'aaaahhhhh.'"
The May level
of 216.632 (1982-84=100) was 4.2 percent higher than in May 2007.
The index measures changes in price relative to a specified reference date, defining the CPI to be equal to 100 in a reference base period. Currently, the reference base period is 1982-84. For example, the CPI-U in May 2006 was 202.5, meaning that prices have increased 102.5 percent since the reference base period. The CPI is also used to determine the inflation rate, or the change in the price level from one year to the next. To calculate the inflation rate, the prior years index is subtracted from the current years index, then divided by the prior years index, and this number is multiplied by 100 togenerate a percentage. For example, the CPI-U in May 2005 was 194.4. Using this information and the May 2006 index, the inflation rate for this period can be calculated as (202.5 − 194.4) ÷ 194.4 × 100 = 4.17%.
Here's what the US auto industry needs to do to survive. A modest proposal:
They need to go to Toyota, with hat in hand, and pay whatever cash they have on hand to license production of the last-generation Toyota Tercel.
Then, revise the sheetmetal a little bit and design a 4-door wagon to go along with the coupe and the sedan and perhaps an AWD version for snowy parts of the country.
And then they need to do whatever they have to do to get the MSRP down to $10K or less.
The way the dollar is going they can't help but win, especially when new Toyotas start costing $40K.
Yah, did I say that wrong? The point was to show the decline in dollar value in the year period for the reference base (and you have to use a currency to get a comparative value).
The last post does have me confused as how they compare the base reference in terms of dollar value year over year. It seems they keep the value rate flat for the baseline? I need some sun; I'll check in later. Tear apart this CPI Beast, because I think inflation is highly under-reported and distorted. We all know they factor out oil, food, housing, but how can they report inflation values using a dollar worth a dollar?
Still think that the US is somehow playing games with the cars/SUV's. Bought a new Suzuki a couple of months ago, 4 door, air, and gets 60 mpg. The full price was 7,500 USD. That included import tax, licenses, registration and dealer mark up. This car cannot be bought n the US or Europe, yet meets safety standards? The most expensive cars here are Toyotoa- the models here are not available in the states, but OK in Europe. There are no 'hy breeds' (sp) here because the cars off the lot get better milage. Also have a 9 passanger Hyundai deasel 4wd that is necessary to go into the interior, it gets 30 mpg on the road and 24 in town with air, power, air bags, etc, etc. and costs around 17K usd new. Not available in the US. Nobody here dirves a Ford or Chevy- we can buy the 40K usd crew cab 4wd chevy pickups 3 years old/ v8 here for about 3500 usd and nobody wants one because they eat gas. The technology to cut your gas bills by 1/2 is on the showroom floor here, why not in the US? Oh, well, probably don't meet some rule or other.
you are making a good point here. GM and Ford both have the technology available to sell cars with excellent gas mileage. Subcompacts like the Opel Corsa and Ford Fiesta which are the same size as a Toyota Yaris both deliver more than 50mpg. However, they are priced at around 12,000 Euros here in Germany so that would be nearly 20,000 USD which US customers probably wouldn´t be willing to pay for such a small car. But then, things might change once drivers realize it makes financial sense to spend more money on a car that simply does use less gas.
What, no Friday bank failure announcements? Since next week is a 3-day weekend maybe they are saving them, especially IMB, since I'm sure palming that POS off won't be easy, and will take more than 3 days to cobble together. I mean, even with some guarantees it's going to take some pretty deep pockets to take that heap of a steaming pile of dung over.
GM and Ford both have the technology available to sell cars with excellent gas mileage. Subcompacts like the Opel Corsa and Ford Fiesta which are the same size as a Toyota Yaris both deliver more than 50mpg. However, they are priced at around 12,000 Euros here in Germany so that would be nearly 20,000 USD which US customers probably wouldn´t be willing to pay for such a small car.
At 50 mpg - they'd sell like hotcakes (idiom for 'sell well', ATB). $20K isn't that much these days big or small for a vehicle that delivers what is promised (in this case fuel efficiency).
Likewise - if Ford & GM just bought VW diesel engine technology & plopped it in some of their cars (and bumped mileage 20-30%) that too would be a quick fix. Not a cure but a start.
Knuckle heads don't want to make cars anymore - all they want to make are 'deals' they should have been I bankers and never went into automotive.
Can't decide if buying a new GM car would help the economy more than the damage I would cause SunTrust by withdrawing $30-35,000 to pay for it.
Anythoughts on this dilemma?
"Weekly update on the PE ratios (trailing twelve month earnings) from the WSJ$$ Market Data Center:
Dow = 76.91
Nasdaq = 28.60
Russel 2K = 73.97
S&P 500 = 21.24"
My latest post at NR:
Despite the 3% decline in equity markets yesterday, I still don't see fear/panic on holding equities at these valuations. It looks like there still are lot's of "macho" bulls out there. I am waiting patiently for el dia de yerra.
The day cattle ranchers in Argentina gather the herd to burn the cattle mark into the newborn and CASTRATE the baby bulls. A couple of years later when the novillos (castrated bulls) are slaughtered, they make some of the finest beef in the world
[Can't decide if buying a new GM car would help the economy more than the damage I would cause SunTrust by withdrawing $30-35,000 to pay for it.
Anythoughts on this dilemma?]
Trade in your present car if it still has remaining debt, roll it into a new loan and then default, like everyone else. Make sure you borrow from COF or WB.
It looks like there still are lot's of "macho" bulls out there.
Unfortunately, many of those "bulls" are hard working people who have been told that the best investment is to get an S&P 500 indexed fund. IIRC, those are the most popular offerings for 401(k)s and IRAs.
45 mph on a bicycle is scary fast! 40 is the fastest I've ever done on a bike and I felt barely in control
40+ maybe more,..drafting a car down North Torrey Pines,...that's when I was immortal, invincible, and had nothing to lose. Big wide lanes, clean road, long downhill, and what's to control? Just stay up.
Were you on a racing bike?
"that's when I was immortal, invincible, and had nothing to lose."
Me too. I did so many stupid things, I can't even remember them all. With all the accidents I had I only have like 3 or 4 scars, and a broken right hand.
"Cars and trucks need to become simpler and economical again, gas economy aside."
That's quite brilliant. I could rebuild an old Chevy 350 with a 6 beer buzz. Now I need a $30000 computer diagnostic system and special tools to do anything outside of an oil change or spark plug or various filter change. Don't do much on my own anymore.
I took my wife's car in for repair and asked the youngish mechanic to file the points, put in a new rotor and adjust the carbs. He thought I was from Mars. I was just kidding him.
"Was a time when cars were financed 3 yrs, then 4yrs, then 5yrs, now you can get 7 yr financing on a car."
The reason cars were financed 3 yrs back then was because they only lasted for 2 years on average (even German ones)...
Now they last longer and it does make some sense to get 7yr finance. Problem is that folks WANT to buy new cars ever so often, mostly when they realize their neighbor/colleague/brother-in-law just got a new one. (This seems to be the same worldwide.) It´s more a psychological problem than a financial one.
A little freakish humor from CNN...a story titled: "Homeowner offers house and her 'love' for sale".
Excerpt: "I'm struggling. ... I don't want to lose my house, and I want to find somebody," said Trabosh, who changed her name in the ad to Traboscia to keep people from finding her in the Florida phone book. "So I came up with this dream plan, because I've always dreamed about being a fairy-tale princess."
"I took my wife's car in for repair and asked the youngish mechanic to file the points, put in a new rotor and adjust the carbs. He thought I was from Mars."
I heard at my bank they are re-adjusting all the construction loans and the construction boys will have to have better bids and hit targets versus just walking in with a smile and a sketch and getting an open checkbook. This was a meeting I over heard where the concept of overage/surplus over-runs in the budget are not gonna fly and they better back up what they ask for with proof. I liked that, because as a customer, I don't want my bank lending to retards that are full of crap. I hope they crack down on the construction bullshit and stop speculation from being thought about!
"The reason cars were financed 3 yrs back then was because they only lasted for 2 years on average"
Hmmm...in 1973, my parents owned a 1962 VW bug, a 1968 VW van, and my dad's 1973 Audi Fox.
In 1982, my first car was a 1972 Chevy Blazer. I rebuilt the 350, and turbo charged it...with my Dad's help of course. Ran like a dream and fast as hell.
Not sure what vehicles back then fell apart in 3 or 2 years.
Financing has gotten longer because Americans in particular, are conditioned to buy on monthly payments and not total cost. The conditioning is intentional.
Further, many simply roll the remaining balance on the old loan into the new loan. Stupid!
Finally, cars depreciate so quickly, a 7 year loan is simply the height of stupidity. You're making payments (if you keep it till the loan is paid) during the period when maintence costs are rising. I keep them longer than 7 years, but I pay them off in 3. So rising maint. doesn't kill me.
COLA, "Elder Inflation," and Health Costs: In a Nutshell
Again, I don't consider this inflation if the higher costs are cause by more demand (more older health care consumers) and supply that's not keeping up (health care workers).
Also the quality and expectations for health care have risen dramatically. Then you have to factor in the massive legal costs involved. I had a friend with a small one person practice and her malpractice insurance costs were $13,000/mo. She said after paying those costs it just wasn't worth it to continue practicing so she stopped (admittedly here husband was a surgeon so she could afford to).
None of this is inflation as I see it. Just stuff getting more expensive. If you want to see real inflation look at those middle eastern countries that are still pegged to the dollar where a week's wage buys nothing because the currency it's paid in has lost so much value.
On the other hand, if a bad growing season sends the price of oranges spiraling upwards is that inflation?
happy to hear you had that much luck with your cars.
I remember very well my fathers 1970s VW Passat (sold as Dasher in the US I think) to fail the technical inspection (which is compulsory by law over here) after 2 years because of body rot under the drivers seat... Don´t think that would happen today.
Actually, I am sure that cars lasting longer nowadays is a huge problem for the car industry in Germany. Cars registered in Germany are 8 years old on average now, a number never seen before (yes we do have statistics for everything ).
I wonder if that is at least a small part of the problem for the big 3 in the US.
The Japanese government is wiser on this part. As far as I know, they have a system that makes car owners pay a tax of 100 USD/year for a one year old car, 1000 USD/year for a two year old car, 5000 USD/year for a three year old car...
I have made up the numbers because I don´t know them exactly, but you understand the system - forces folks to buy new cars all the time...
Germanguy,
Dear old Dad was an over the road flooring salesman. He did at least 60,000 miles a year and regularly put 250,000 on a Buick before he traded. He was VERY picky about alignment, oil, tire pressure etc. He retired and gave my brother his last Buick with 180,000 on her. It is still knocking around somewhere in OK city with over 350,000.
Maintainence seems to be the key.
Driving the autobahn I notice most are tached out. High speed wears down a car faster than anything. (Except my turbo Porsche
Yeah, I don't see this as inflation either. We have both shifting (in the wrong direction for affordablity) supply and demand curves, and a commodity bubble if food and oil.
And I agree, the lawsuit crazy legal guild makes practicing medicine insane. This has been building for years. I'm amazed the Doctors' guild cannot take on the Trial Lawyers' guild in buying congang votes. Apparently the Dr's are more interested in patients than the lawyers are.
"Homeowner offers her house and her 'love' for sale."
This stupid real estate agent thinks she's worth 500k? To top it off, her house is probably upside-down 150k.
So, to enjoy the pleasures of a 42-year-old single mother one must go into the hole for 650k?
Out here in Mexico, she's worth about 50 bucks an hour. Figuring that I'll pobably get sick of her and her whining and bickering in about 20 hours, I would save myself around 649k give or take a few pesos.
Gary writes:
And while you're at it, check the wiring on the 8-track . . . the sound is all garbled.
Gary | 06.27.08 - 8:17 pm | #
Last time I heard anything on an 8 Track was 'Riding The Storm Out' - as far as I could tell it sounded mighty fine. Of course I was feeling mighty fine... not even sure what state I was in, Iowa, Minnesota... whatever state it was 'altered'... so maybe that had something to do with it.
I think that was why 8 Tracks stayed around so long...
My friend, your viewpoint on inflation is biased to negate the actuality that inflation can be thought of as a decrease in the value of the unit of currency.
You seem to be breaking out health care as a separate component of an economy as a whole. Thus, IMHO, when a person is thinking of inflation, these thoughts need to be thought of in terms of a basket or portfolio that are composed of various goods and services as they relate to a single currency valuation.
What makes this difficult is to isolate single components and to keep the currency in question as a fixed rate. The key here is to compare apples to apples and not the value of an orange in London that is exchanged for pounds that were exchanged for Yen and converted back to devalued dollars.
Suggesting that health care costs are not related to inflation is like saying that chimps in a circus are not related to the cost of oil.
"I remember very well my fathers 1970s VW Passat (sold as Dasher in the US I think) to fail the technical inspection (which is compulsory by law over here) after 2 years because of body rot under the drivers seat..."
Ah, I found your problem then..gov't. My grandfather, in the 70's, had a 66 Chevy Imapala with salt rot (snow abatement on roads) that had actual holes in it. We called it the Fred Flintstone mobile. I think he got rid of it in 1980. To cold to drive in Buffalo NY winters. What with all the holes.
"The Japanese government is wiser on this part. As far as I know, they have a system that makes car owners pay a tax of 100 USD/year for a one year old car, 1000 USD/year for a two year old car, 5000 USD/year for a three year old car..."
I did not know that. And no that doesn't make them smart it makes them stupid. See broken window theory:
That´s definitely true. And, to finally say one good thing about California in this blog, there is no salt on the road in the winter.
Must be hard though to own a turbo Porsche in the US if speed is limited to 55mph? Even my crappy spanish SEAT does 120mph every other week, fully legal...
Dear old Dad was an over the road flooring salesman. He did at least 60,000 miles a year and regularly put 250,000 on a Buick before he traded. He was VERY picky about alignment, oil, tire pressure etc. He retired and gave my brother his last Buick with 180,000 on her. It is still knocking around somewhere in OK city with over 350,000.
Same here almost exactly the same but my father sold industrial goods like me (he taught me - regrettably).
Anyway - he had Buicks too, drove them about 200K then turned them over to us kids. I have fond memories of a trip to Florida I did w/ another guy and we slept in the car... seats were so big one could stretch out in front & the other in back & pass contraband back and forth.
We sent our friends back home post cards - 'Wish you were here, staying at the Hotel Electra, Rm 225'...
"My friend, your viewpoint on inflation is biased to negate the actuality that inflation can be thought of as a decrease in the value of the unit of currency."
No inflation is an increase in the supply of money chasing the same number of goods. It's a description of counterfiting.
Currencies can rise and fall against each other for many reasons.
Country A has just invented X which allows them to to increase manufacture in industry Y and lower cost of product Z. Country B has been a leading exporter of product Z from industry Y. Country A external trade increases while Country B trade decreases. Country A currency rises versus Country B.
Of course if we had a hard currency, a different result would occur. Prices in Country A would rise and prices in country B would fall, and balance would establish itself quickly.
Actually, this is such a complex discussion, it would take an uber-nerd post to even justify it for a discussion. I'm not in the mood for it.
Anyhow, currency value vs. other currencies does not cause inflation.
"Ah, I found your problem then..gov't. My grandfather, in the 70's, had a 66 Chevy Imapala with salt rot (snow abatement on roads) that had actual holes in it. We called it the Fred Flintstone mobile. I think he got rid of it in 1980. To cold to drive in Buffalo NY winters. What with all the holes."
hm... you got me thinking about emigrating to the US right now, depression or no depression
"I did not know that. And no that doesn't make them smart it makes them stupid."
Well at least it strengthened their car industry in some way - if Japanese drivers have to buy cars every two years, they have a guaranteed income that´ll help the manufacturers to focus on importing to other countries like the U.S. I guess (also, Japanese used cars are exported to the UK/Ireland and I think also to Australia when they are 2-3 years old, driving market share higher over there) - seems to work OK
Hey GermanGuy. Isn't it past your bedtime or are you slumming in the States?
Actually here in Texas we have a speed limit of 75 on some Interstates. We had a 55mph limit back in the 70's during the last oil event.
The trick is to get on the interstate around 10am on a Sunday Morning. The highway patrol and local police are gearing up to handle traffic around the churches. I try to stay under 175. My reflexes aren't what they used to be but the trac control on the newer twin turbos keep me out of trouble.
The height of American hubris is a housing development noy far from me that is built around a race course. I used to sneak into the neighborhood from time to time to test my skills. It was like a modified F1 curcuit.
A lot of homes in foreclosure. Access to too much money corrupts.
"Well at least it strengthened their car industry in some way "
Either:
You didn't read "Broken Window Theory"
You didn't understand.
I'll take 2...not to be mean, but to explain.
The broken window theory of Say states that while yes, window makers get an immediate benefit from having to repair broken windows, and, yes, that does spur some economic activity, it ignores the costs.
The owner of the broken window now cannot do other things.
The window would have lasted for years, thus the money is waisted.
Resources (both labor and material) are diverted away from other things toward window making.
That makes society poorer.
Why?
Because the original windows were meant to last far longer than they did.
Dryfly
The whole takeover/aborted takeover of FIAT by GM was about FIAT's diesel engines. It was part of what GM got to keep in the divorse.
Volkwagen diesel engines are not the best in the world but Renault, PSA and FIAT don't sell in the US so
yeah, it´s 3 a.m. now and I will be gone after this post... but good to hear that there is actually a practical benefit in so many Americans going to church on a Sunday.
Misean,
the thing does work out though if the cars are not scrapped after 2 or 3 years but exported to some other nations that drive on the wrong (left) side of the road - the Japanese get some money for those cars (which are cheaper priced than "normal" 2-3 year old cars) and the total market share of all cars in those countries moves in the Japanese direction.
"he thing does work out though if the cars are not scrapped after 2 or 3 years but exported to some other nations that drive on the wrong (left) side of the road - the Japanese get some money for those cars (which are cheaper priced than "normal" 2-3 year old cars) and the total market share of all cars in those countries moves in the Japanese direction."
Nope. Because the inputs to producing the new cars, adn the labor used could have been used to do more than the money brought in by exporting used cars. Cars depreciate faster than anything on the planet....
Well accept US and UK and Spanish housing currently.
1278.38 - 1226.49 = 51.89
(51.89 / 1226.49) * 100 = 4.230% cumulative (that's the total return excluding dividends) gain.
You might as well have put the $100 each week in... FINISH THIS SENTENCE
the important part of this lesson is, you'd still have your money....it would'nt purchase as much as ten years ago, but hedonically speaking, a 42inch lcd is better than a 27inch tube
If everyone took care of their cars the way aircraft owners are required to maintain their rides, we'd all be driving '57 Chevys.
this is the truth.
My dad understands cars very well (he worked in car-related businesses all his life) and he always fixed his car himself.
He bought that car in 1977 and he still drives it. Last time I visited him 2 years ago - that car now has patches all over its body, but it drives better than 6-year old cars of my friends. My father now says he will drive this car until he dies.
"Not sure that vehicles back then fell apart in 3 or 2 years."
In the 1960s the Ford C4 transmission always failed within 40,000 miles. At 50,000 miles you were typically on your third set of tires, second carburator, third set of brakes, second exhaust system, fifth front end alignment, etc., etc. Burning a quart of oil every 1,000 miles was considered normal per the owner's manual. So was 11 miles per gallon.
Odometers stopped at 99,9999 for a good reason: At 70,000 miles you sold the car to some kid for $100. The first Hondas came in 1971. They were more reliable, but the shitty recycled steel was so poor (and thin) they would rust away in 30 months.
Cars are much more reliable today, even if they are too damn complicated.
When I was a kid my dad had a 79 Celica. He got a muffler with a lifetime warranty on it, and that damn car refused to die. He went back for a new muffler like three times, and I can remember that the mechanics wanted to kill him. (Salt air)
The body on the damn thing rusted out, so he had a friend rivet on some sheet metal to pass inspection and went back for ONE LAST muffler. On the side in black magic marker he wrote "DeLorean".
The old man always had a great sense of humor . . . and thrift.
And we did have an 8 track player, but not in the DeLorean.
I wonder of Bernanke has read Mises's masterpiece on Money and Credit. Probably not, because Helicopter Ben doesn't seem to understand the difference between money and credit.
If our problem were a shortage of Money, then throwing it out of helicopters might help. But our real problem is a shortage of credit, and debasing the currency is drying up the supply of credit.
"Cars are much more reliable today, even if they are too damn complicated."
Agreed, but diagnostic tools are available, invariably computer stuff.
But if the problem is mechanical, such as a fuel pressure regulator on a Jeep Cherokee, you have to find a good mechanic instead of a computer specialist at the dealer, to find the problem. Ask me how I know. $700 dollars of "diagnosis" later, two shrugs of "ida-no", one trip to Auto Zone for a $4 part that I put in myself and the problem was fixed.
Read the GM Death Watch and Chrysler Suicide Watch strings in the editorial section. Lots of very informed (and funny) comments from industry and car types. Many of them know their economics too, which isn't what you'd expect at the typical car site.
Between CR, TTAC, and the OilDrum, things aren't sounding too good.
Bang the drum slowly....
I think the way to get yourself out of this problem, US automakers, is to sell more cars at better profit margins. C'mon, show some spunk.
Uh, not so sure this is worth the read. They published the 12.5 mil figure ago as an estimate during the first half of the month. In this article, they say the second half improved, and with GMs desperate dumpoff incentive on SUVs, they surely picked up some suckers, so that might be part of it. SO, if the second half IS better, Id think we'd go with maybe 13.5 or 14, right? Why no pick-up if it's better? Oh wait, I just answered my question : no pickups. Bwahahahaha.
OT?
Reuters reports a "recession in syndicated lending" as the value tapped for things like leveraged buyouts dropped to just $230B in Q2 from Q2 07's $582B. "While the economy technically might not be in a recession, syndicated lending certainly was in one during the second quarter of 2008."
Keep an eye on subprime auto loans from Goldman's sub; think the name is Triad or something fishy.
Sacrebleu! We need a car owner bail out that limits the auto industries losses to 10%.
Cheers,
This shows that we need to take capacity out of the market. Gm could theoretically leave the US market and we would still have too many cars and trucks at this sales rate.
Just at Costco getting new tires with an 80K mile warranty on my car with 120K miles already on it.
No car maker will be seeing me on the lot for a few years and when they do it will probably be Toyota again.
theoretically?
i'm still looking for investors to purchase scrub land(NM) to store the excess 2mm vehicles that will be produced this year.
I'm sure I can sucker cerberus to pay hefty storage fees, cause they believe the market will come back for the suv , supa-truck market.
us$10mm sought
general partner will only take a us$9mm pay package
I heard they are walking away from cars with no liquidity.
Well the one bright spot is the roaring bull market we currently have. I don't know why everyone's so glum when the markets are just on fire.
What would they have been if the automakers hadn't been slashing prices of big vehicles?
You all may be interested in my article about Redwood Trust (RWT), a REIT that invests in junior mortgage securities.
Redwood Trust: From $30 to $4 by Year-End? -- Seeking Alpha
BREAKING NEWS:
Dow slips into BEAR market before bouncing back.
Really, just heard it on CNBC!!
Morons
Thank goodness Cerberus got into the auto biz just at the right time and managed to scoop up Nardelli to run the enterprise just as he became "between jobs".
Genius!
Glad I got a subcompact car and not a subprime SUV
With all the credit destruction, shouldn't equities be heading towards 1998 levels(ie 7500 dow)?
Russell 2000 got it's end of day pump again (with respect to SPX). This keeps happening over and over. I think maybe hedgies are having to narrow their focus as conditions deteriorate. Maybe the S&P is too big of a fish to fry now and they have create smaller and more targeted bubbles. Anybody have a better idea?
Russell 2000 vs. S&P 500
The problem with the new car market is the used car market. In fact I know where you can pick up a slightly used 2008 Wright Model "B" real cheap. According to the current owner it has never broken down.
Nardelli
$210M severance package from HD right before it hit the crappers. Then Chrysler? Who does he have glossies of?
I was told there would be bank failures.
Yeah, well, our local Volvo/Plymouth/VW dealer closed up shop this year; didn't even try to sell the business, just sold off the inventory and went bye-bye. Big empty car lot and buildings sitting there in the middle of town.
I wonder if he saw this coming and just decided it wasn't worth it anymore.
Part of what is wrong with the domestic auto is how they respond to customers.
I bought a 1982 Ford Fairmont new and after 33,000 highway miles it leaked oil and was getting water under into the trunk.. I paid 8200 for it and when I took it back they would not fix the leaks and gave me 3300 on it.. needless to say I was underwater...this was in 1984.
In 1994 I was again able to buy a new vehicle and bought a 1994 Tercel for 8600 frn and I still drive it back and forth to work. It has 215,000 miles on it and I paid it off in 1997. 12 years later I can say I am much better off having bought the Toyota...
This for me in a nutshell is why the domestic auto industry is toast... the Tercel gets 38 mpg... has never left me stranded and I have put about $600 worth of parts on because I raised 5 kids who drove it... they did not regularly change oil and air filter..
As a consumer I would love to keep my money here in the USA but I am sorry to say the way Ford treated me I could not...
ps , the excess production is already baked in the cake...
don't let a few plant shutdowns fool you...
and remember, the forecasters of 12.5mm saar are as rosy tinted as the housing prognositcators
Gee you would think people would realize we have to keep borrowing our way to bankruptcy.. OOps! I meant prosperity.
Russell was changing some of the companies in the index, of course it was gonna bump up late.
Tis but a flesh wound.
With high gas prices and declining new car sales, the highways will once again be clear for lead footed Porsche drivers. Yee Haa!
"Drive 90 and freeze a Yankee in the dark."
Elvis writes:
I think the way to get yourself out of this problem, US automakers, is to sell more cars at better profit margins. C'mon, show some spunk.
Elvis | 06.27.08 - 3:57 pm | #
I'd take fewer cars at better margins - that would be a 'victory' of sorts... now its fewer cars at low margins or more cars at even lower margins. I think they are all on the wrong side of the supply demand intersection.
@Greg
Thanks!! A most enjoyable read. I actually took your warning yesterday and bought some $20 Puts after some due diligence of my own. If you're right on this one I'm gonna owe you a beer.
Tis but a flesh wound.
I agree. This is a Monty Python market.
Anecdotal:
I have a co-worker who bought a Toyota Sequoia back in 2007 when gas prices were at $2.45/gal. He just traded that vehicle yesterday for a smaller car, and told us that he got low-balled in the trade-in.
Some people just deserve to have a circle painted on their forehead, with alternate black-yellow in each quadrant. What a dummy...
Auto quality is so much better than 25 years ago whether it's made in Japan, Detroit or Stuttgart. The usual problem now is too clever by half electronics.
At $25K/car lost it's only a $1T hit to the eCONomy
Move along, nothing to see.
Kona-Triad is toast...
http://www.triadfinancial.com/dealers/notice.html
Alec if that is true go to any Truck repair site and see how many 1999 or 2000 Nissan and Toyota Tacoma are in the shop verse a Ford 150 or a Chevy...
Is cerebus looking to hire? I hear Carly Fiorina will be available on the 1st Wednesday in November.
Dow down 106 AH
Anonymous, bank failures are usually announced on Friday after the local branches close (usually 5 PM local time, but sometimes 6 PM).
As an example, IndyMac is a west coast bank and their branches close at 6 PM on Fridays - so if the FDIC closed the bank, it would probably be announced after 9 PM ET on a Friday. Not saying IndyMac will be closed - just using them as an example.
Best to all.
How many F series and Chavys get sold in any year vs Tacomas, did Nissan even make a full size at that point?
Drops in autos sales foretell a drop in stock market because autos drop when consumers have blown their wad -- and what follows is a significant market slide. This is especially true when auto sales drop in combination with a decline in foreign stock markets -- so watch out. Also, when the housing market takes a tumble during the down side of the stock markets Long cycle (which we are currently in)-- you can expect a giant drop in home prices, not just a correction. Read "The Wall Street Waltz" by Kenneth Fisher.
Calculated Risk says: Not saying IndyMac will be closed - just using them as an example.
They're going be made an example for the rest of the bunch.
You've picked a good example CR
News from Honda indicates that their "global small hybrid" coming out next year will be about $18K, get around 55mpg, and be slightly larger than the Honda Fit (which can seat 5 ... much more comfortably than you would imagine given its exterior size).
That's how you get folks to buy new cars in 2008/2009.
Maybe that is the explanation, ac, shift in focus from Dow/S&P to Russell.
I was confused five minutes ago: finally tally showed that futures purchases were higher yesterday than today. It seems dumb, to me, to allow the Dow to close down 100 after yesterday's ugly day, and important-month-end-close on Monday.
Yes, maybe they are shifting focus to Russell 2000. Watch out, rich!
Yeesh! Has someone been yelling BEAR MARKET in a crowded stock exchange? They shouldn't keep letting that guy in.
Cheers,
Quote of the day, from Hillary Clinton's Unity speech:
"In the end, Senator McCain and President Bush are like two sides of the same coin and it doesn't amount to a whole lot of change".
Hey buddy can you spare a dime
Was Bill chained to her waist?
Alec many more Fords and Chevy's were sold.. just an antidote...
In town a dealer goes to the Auction... F-150 supercrew 4x4 2007 with 12000 miles listed MSRP 34595 would sell it to me for 19000 frn... nice vehicle no dents scratches nothing....
I had a fellow employee who had a 2005 Tacoma 4x4 listed 28500 who traded it in on a Prius.. paid invoice on it they gave him 1500 more than Trade in of 19500 and sold it the same day in larger town in my state...
This from the same dealer..if you trade in a 1 year old Chevy Tahoe..no matter what the Trade in value says he wont budge off of about 10000 below that.. says he can't sell it and may have to auction...
Just one reason consumers are hurting..imagine you paying big bucks for the Tahoe in 2007 early and now you are sitting on a big note and cannot get out from under it....
Correction: Avoid Ken Fisher at all cost.
y, no doubt...avoid ken.
mr lever up himself
Son-of-Curtis,
Are you familiar with the concept of supply and demand?
It goes a long way to explain your anecdote.
OT, but interesting.
Office Rents in Manhattan Fall for First Time in 3 years...
Go SRS!
Manhattan Office Rents Fall, First Time in 3 Years (Update1) - Bloomberg.com
my problem with toyota and honda is that they dont reprice their cars according to the currency valuations, even if these valuations reach 10s of %.
my currency appreciated against yen during past 2 years 31%. have they lowered their prices? ofcourse they have not.
i mean since we are so rich here in eastern europe our cars cost 50-60% more than in us and the gas is twice the price in us.
funny thing tough, suzuki, mitsubishi, hyundai, kia and even volkswagen and audi have dropped the prices just toyota and honda have not, so guess if i have audi a6 for the same price as honda accord what am i supposed to buy?
ou well i will take the all new mitsubishi lancer 1.5 103hp.
sorry toyota & honda
you are too expensive
sincerelly
revro
Hey, kids! GM's head honchos are going to be looking for work soon. How about we appoint them as ambassadors to Iran, Libya, etc., and let them build the SUV market-er, I mean, trade relations- there? Last I heard, the price of regular in Iran was 25 liters for a buck.
OT -- Stockholm Syndrome, in reverse:
Yahoo! 404 - Page Not Found
Alec being a buyer and seller of fresh produce I more than understand supply and demand... but the issue is one of perceived quality and what your pledging is your future earnings...
Do you think the average person does not perceive Japan as making better cars and trucks now?
As the average J6p pledges his earnings through debt aquiring he suffers when those perceived assets do not return back to him what he puts out in earnings...regardless if it is higher repair bills or perceived quality differences... he is still underwater to the tune of billions on domestic cars....
Just like the asset prices going down on his "home" the average person is clueless to how he has become a debt-slave to owners of resources...
Does not the average J6p not know what mortgage means? Death grip...
Same with debt... does he/she not know it means slavery...
Just because our schools have dumbed down most people as to the true meaning of words does not mean reality does not exist...
I built a house in OK in 1982 for 69000frn and sold it in 1989 for 57000 frn... I had to come up with the difference... oil boom turned to bust btw..
I learned a valuable lesson..if you owe more than a asset is worth you are a slave to your job and your circumstance if you have no way of getting out of it... I moved off and took a job only because that new employer gave me 15000frn to move...
Millions and millions of consumers are now in that same situation and think by walking away and jingle mail they are off the hook.. wrong wrong wrong...
No way jose..the world will turn again and you will need to have "credit" to survive unless you have "paid assets".
The following paste is not about drugs or beverages and may or may not be OT. That said, I had this weird feeling in my gut today that cost of living and inflation values are sometimes hinted at by increases in postage stamps. Hence is it possible for a stamp to predict the inflation rate, as in 4.2%? Ok, it was a bad idea, but nonetheless:
COLA, "Elder Inflation," and Health Costs: In a Nutshell
AIER - COLA, "Elder Inflation," and Health Costs: In a Nutshell
... an upsurge in energy prices in November drove the December-to-December rise in CPI-U to an unsettling 4.1 percent. This left the COLA unaffected, since it was based only on the price changes occurring through September.
Anyone wanna help me calculate CPI-U with $150 oil?
ken fisher couldn't carry his father's jock strap.
How low does she have to go before uncertainty and risky start becoming buzz words again?
Consumer Price Index Summary
Consumer Price Index Summary
Re: The May level
of 216.632 (1982-84=100) was 4.2 percent higher than in May 2007.
Many of you are probably saying to yourselves, oh shit, what about that fucking oil price increase -- how the fuck does that impact CPI-U?
Good fucking question, dumbass! Perhaps this type of thought could be put on hold, while we take a large drink of some hard liquor and then sit back and ponder the value of the dollar as a starting point. For the time being, let's allow our TeleHomeOwners to go get that drink and then come back to this:
How do you deflate a future dollar value into present-day dollars?
To deflate a future dollar value into present day dollars, multiply the future dollar value by the ratio of the current year CPI index to the future year CPI index.
Here is your Friday downgrade. This could be serious trouble for next week.
Moody's warns it may downgrade Morgan Stanley - MarketWatch
The Big Picture
Thank God for that break!
As an confused person can tell you, the dollar is used to exchange goods and possibly store value, thus let's pretend that a dollar is something that can be traded or exchanged:
Foreign Exchange Rates Historical Search - Federal Reserve Bank of New York
Oh gads, Warsh must be blocking the terminal again ... shit!
Here is the problem with Indymac
The Brualdi Law Firm Announces Class Action Lawsuit Against IndyMac Bancorp, Inc
Woohoo, gotta civic hybrid two years ago. Passin SUVs over there in the slow lane like they was standin still. Not only that, but I gotta pass into the HOV lane.
Bring on that $5.00 gas, I'm lovin it.
Ok, I called up and gave them some shit:
On 5-01-2008\ta dollar could be exchanged for 1.5458 Euros
On 05-01-20 a dollar could be exchanged for 1.3600 Euros.
What the fuck ... that means my dollar is storing less value, oh my God, what a shock! Does Warsh or Bernanke know this?
Ok, that was fun, but now, what about CPI-U?
"Bicyclist going 45 mph hits bear"
Bwahahahhaahhhahah!
Bicyclist going 45 mph hits bear in Boulder County : Updates : The Rocky Mountain News
Cheers,
Kona Gold
Unfortunately, you raise CPI-U and you'll make the SS ATM close a little bit sooner. Which opens another can of worms.
Somewhat related to this thread re: declining earnings of automakers, etc...
Weekly update on the PE ratios (trailing twelve month earnings) from the WSJ$$ Market Data Center:
Dow = 76.91
Nasdaq = 28.60
Russel 2K = 73.97
S&P 500 = 21.24
Gee, ya think the S&P might need some more price declines to get that PE down to a "normal" ratio of about 16-17??? It sure won't get there via earnings growth in this climate!
Ok, I'm done, but here is another clue (reference base):
Consumer Price Index Summary
The index measures price change from a designed reference date. For
the CPI-U and the CPI-W the reference base is 1982-84 equals 100.0. The
reference base for the C-CPI-U is December 1999 equals 100.
An increase of 16.5 percent from the reference base, for example, is shown
as 116.5. This change can also be expressed in dollars as follows: the
price of a base period market basket of goods and services in the CPI has
risen from $10 in 1982-84 to $11.65.
For further details visit the CPI home page on the Internet at
Consumer Price Index (CPI) or contact our CPI Information and Analysis
Section on (202) 691-7000.
If all the sharpees at GM, Ford, and Cerberus (evil 3 headed dogs that they are) didn't see this disaster approaching their business model, why do we expect Mr. and Mrs. Subprime to see the error in their investments?
Sometimes, people don't get simple concepts. The Social Security COLA exacty mirrors CPI-U inflation over any multi-year period. The fact that the COLA is only calculated once per year (at the end of September) is pretty meaningless for purposes of measuring seniors' incomes over time.
While the CPI-U definitely understates real inflation, the COLA is a huge boost for seniors. Who else gets an income stream automatically indexed every year? And with higher inflation, the COLA is a huge cost drain for the U.S. Treasury.
You do know that the Social Security system and the U.S. Treasury are the same, right? Social Security's vast deficit and the Treasury's vast deficit sorta blend together.
Misean writes:
"Bicyclist going 45 mph hits bear"
Bwahahahhaahhhahah!
http://www.rockymountainnews.com...boulder-county/
Thank you, the story is a classic. SO many quotable quotes.
BB,
Yeah I rofl'd hard. Bears are everywhere these days. I personally liked:
"Egan hit the bear and ended up skidding across the road.
"This bear looked at me with a look of terror on his face and sort of made a noise," said Egan. "I looked at him with a look of terror and we went, 'aaaahhhhh.'"
Cheers,
CNBC says MBIA is selling "half a billion dollars in muni bonds" to raise capital.
I'm guessing they mis-spoke; MBIA insures muni bonds, they don't own them. Do they?
Story should be hitting the wires shortly.
Follow up:
The May level
of 216.632 (1982-84=100) was 4.2 percent higher than in May 2007.
The index measures changes in price relative to a specified reference date, defining the CPI to be equal to 100 in a reference base period. Currently, the reference base period is 1982-84. For example, the CPI-U in May 2006 was 202.5, meaning that prices have increased 102.5 percent since the reference base period. The CPI is also used to determine the inflation rate, or the change in the price level from one year to the next. To calculate the inflation rate, the prior years index is subtracted from the current years index, then divided by the prior years index, and this number is multiplied by 100 togenerate a percentage. For example, the CPI-U in May 2005 was 194.4. Using this information and the May 2006 index, the inflation rate for this period can be calculated as (202.5 − 194.4) ÷ 194.4 × 100 = 4.17%.
http://myweb.lmu.edu/jpate/cpioffenberg.pdf
Later man.... (great bear story)!!
OK, so I guess MBIA really is selling municipal bonds to raise cash following their downgrade.
I wonder if those muni bonds have credit enhancement...
Kona Gold,
I think you got it wrong
"On 5-01-2008 a dollar could be exchanged for 1.5458 Euros
On 05-01-20 a dollar could be exchanged for 1.3600 Euros"
If that was the case, your dollar would have been a good investment
Instead,
On 5-01-2008 a Euro could be exchanged for 1.5458 Dollars
On 05-01-20 a Euro could be exchanged for 1.3600 Dollars
ATB from Germany
Ok, one last note (really):
Re: Kona Gold | 06.27.08 - 5:54 pm
Thus: The 2008 May level of 216.632 (1982-84=100) was 4.2 percent higher than in May 2007.
Hence, in dollar terms, reference stuff has skyrocketed from $10.00 to $21.66... nah... do we have anyone with a degree in something?
Someone check that for me please.
Here's what the US auto industry needs to do to survive. A modest proposal:
They need to go to Toyota, with hat in hand, and pay whatever cash they have on hand to license production of the last-generation Toyota Tercel.
Then, revise the sheetmetal a little bit and design a 4-door wagon to go along with the coupe and the sedan and perhaps an AWD version for snowy parts of the country.
And then they need to do whatever they have to do to get the MSRP down to $10K or less.
The way the dollar is going they can't help but win, especially when new Toyotas start costing $40K.
GermanGuy,
Yah, did I say that wrong? The point was to show the decline in dollar value in the year period for the reference base (and you have to use a currency to get a comparative value).
The last post does have me confused as how they compare the base reference in terms of dollar value year over year. It seems they keep the value rate flat for the baseline? I need some sun; I'll check in later. Tear apart this CPI Beast, because I think inflation is highly under-reported and distorted. We all know they factor out oil, food, housing, but how can they report inflation values using a dollar worth a dollar?
Still think that the US is somehow playing games with the cars/SUV's. Bought a new Suzuki a couple of months ago, 4 door, air, and gets 60 mpg. The full price was 7,500 USD. That included import tax, licenses, registration and dealer mark up. This car cannot be bought n the US or Europe, yet meets safety standards? The most expensive cars here are Toyotoa- the models here are not available in the states, but OK in Europe. There are no 'hy breeds' (sp) here because the cars off the lot get better milage. Also have a 9 passanger Hyundai deasel 4wd that is necessary to go into the interior, it gets 30 mpg on the road and 24 in town with air, power, air bags, etc, etc. and costs around 17K usd new. Not available in the US. Nobody here dirves a Ford or Chevy- we can buy the 40K usd crew cab 4wd chevy pickups 3 years old/ v8 here for about 3500 usd and nobody wants one because they eat gas. The technology to cut your gas bills by 1/2 is on the showroom floor here, why not in the US? Oh, well, probably don't meet some rule or other.
Rich,
Most seniors are on fixed incomes so a lagging COLA is very hard on them when faced with rapidly rising cost increases primarily of food and drugs.
Im not sure most seniors would see the COLA as the blessing you described.
45 mph on a bicycle is scary fast! 40 is the fastest I've ever done on a bike and I felt barely in control.
Valro,
you are making a good point here. GM and Ford both have the technology available to sell cars with excellent gas mileage. Subcompacts like the Opel Corsa and Ford Fiesta which are the same size as a Toyota Yaris both deliver more than 50mpg. However, they are priced at around 12,000 Euros here in Germany so that would be nearly 20,000 USD which US customers probably wouldn´t be willing to pay for such a small car. But then, things might change once drivers realize it makes financial sense to spend more money on a car that simply does use less gas.
ATB from Germany
FOG writes:
45 mph on a bicycle is scary fast! 40 is the fastest I've ever done on a bike and I felt barely in control.
The bear was shocked, believe me.
Scared enough to do the following,
"The bear ran away after the accident when a deer appeared."
What, no Friday bank failure announcements? Since next week is a 3-day weekend maybe they are saving them, especially IMB, since I'm sure palming that POS off won't be easy, and will take more than 3 days to cobble together. I mean, even with some guarantees it's going to take some pretty deep pockets to take that heap of a steaming pile of dung over.
GM and Ford both have the technology available to sell cars with excellent gas mileage. Subcompacts like the Opel Corsa and Ford Fiesta which are the same size as a Toyota Yaris both deliver more than 50mpg. However, they are priced at around 12,000 Euros here in Germany so that would be nearly 20,000 USD which US customers probably wouldn´t be willing to pay for such a small car.
At 50 mpg - they'd sell like hotcakes (idiom for 'sell well', ATB). $20K isn't that much these days big or small for a vehicle that delivers what is promised (in this case fuel efficiency).
Likewise - if Ford & GM just bought VW diesel engine technology & plopped it in some of their cars (and bumped mileage 20-30%) that too would be a quick fix. Not a cure but a start.
Knuckle heads don't want to make cars anymore - all they want to make are 'deals' they should have been I bankers and never went into automotive.
What, no Friday bank failure announcements?
I know - what will the pizza places do now?
Can't decide if buying a new GM car would help the economy more than the damage I would cause SunTrust by withdrawing $30-35,000 to pay for it.
Anythoughts on this dilemma?
"Weekly update on the PE ratios (trailing twelve month earnings) from the WSJ$$ Market Data Center:
Dow = 76.91
Nasdaq = 28.60
Russel 2K = 73.97
S&P 500 = 21.24"
My latest post at NR:
Despite the 3% decline in equity markets yesterday, I still don't see fear/panic on holding equities at these valuations. It looks like there still are lot's of "macho" bulls out there. I am waiting patiently for el dia de yerra.
[Can't decide if buying a new GM car would help the economy more than the damage I would cause SunTrust by withdrawing $30-35,000 to pay for it.
Anythoughts on this dilemma?]
Trade in your present car if it still has remaining debt, roll it into a new loan and then default, like everyone else. Make sure you borrow from COF or WB.
OT: more questionable phrasing from the business press.
In an article about Bill Gates leaving Microsoft:
"Gates is expected to maintain the ears of Microsoft leaders."
What that man can do with a Q-tip...
Re: "Weekly update on the PE ratios (trailing twelve month earnings) from the WSJ$$ Market Data Center:
Dow = 76.91
Nasdaq = 28.60
Russel 2K = 73.97
S&P 500 = 21.24"
You do know you need to be looking at the inversion there right, e.g, E/P and then compare the index E/P to 10 yr yields for fair values?
It looks like there still are lot's of "macho" bulls out there.
Unfortunately, many of those "bulls" are hard working people who have been told that the best investment is to get an S&P 500 indexed fund. IIRC, those are the most popular offerings for 401(k)s and IRAs.
in an article about Bill Gates leaving Microsoft:
I wonder if he ever gets pissed at having to deal with Vista or Office 2007? I wonder what he actually uses.
I wonder if he ever gets pissed at having to deal with Vista or Office 2007?
The first time I used Office 2007 it took me about 30 minutes to print because of the stupid ass layout. I refuse to get near Vista.
In a weird way, his exit reminds of the Maestro's. MSFT is truly fu^%ed, and when the music stops, everyone will blame it on Ballmer.
"The bear ran away after the accident when a deer appeared."
I think it's entirely possible the cyclist hit his head during the fall.
Dryfly,
"Knuckle heads don't want to make cars anymore - all they want to make are 'deals' they should have been I bankers and never went into automotive."
If only someone would have told Mr. Schrempp before he started working for DaimlerBenz - Chrysler would be long gone...
All the best from Germany
45 mph on a bicycle is scary fast! 40 is the fastest I've ever done on a bike and I felt barely in control
56mph, somewhere between Julian and Ramona.... behind 5 other's no... time for fear
Every time SS payments are raised by COLA, the govt. raises the amount it deducts for Medicare. It all evens out.
45 mph on a bicycle is scary fast! 40 is the fastest I've ever done on a bike and I felt barely in control
40+ maybe more,..drafting a car down North Torrey Pines,...that's when I was immortal, invincible, and had nothing to lose. Big wide lanes, clean road, long downhill, and what's to control? Just stay up.
Were you on a racing bike?
Bob Dobbs,
"Gates is expected to maintain the ears of Microsoft leaders."
So "hasta la VISTA, baby" was his idea. Must be getting senile. Bye bye Billy boy. Thanks for f*cking computing for a generation.
Cheers,
stdfs,
"that's when I was immortal, invincible, and had nothing to lose."
Me too. I did so many stupid things, I can't even remember them all. With all the accidents I had I only have like 3 or 4 scars, and a broken right hand.
Cheers,
"i was told there would be bank failures."
funniest thing i've heard all day. seriously, i read all of these comments out loud so it sounds to me like all of you are talking to me.
these bear markets are making me thirsty.
Jack,
"i read all of these comments out loud so it sounds to me like all of you are talking to me."
OK, Jack, that's just creepy. You don't get out much do you?
Cheers,
Did it ever occur to these guys that cars are simply getting priced too high relative to incomes to afford every couple years?
Was a time when cars were financed 3 yrs, then 4yrs, then 5yrs, now you can get 7 yr financing on a car.
Just as in houses, it marked the top of the bubble, prices are too high and sales go to people who cant afford them.
Cars and trucks need to become simpler and economical again, gas economy aside.
MUDBUG,
"Cars and trucks need to become simpler and economical again, gas economy aside."
That's quite brilliant. I could rebuild an old Chevy 350 with a 6 beer buzz. Now I need a $30000 computer diagnostic system and special tools to do anything outside of an oil change or spark plug or various filter change. Don't do much on my own anymore.
Cheers,
Good article on major liquidity problems still to come.
"The Crack Up Boom, Part III" by Ty Andros, FSU Editorial 06/27/2008
@ Misean,
I took my wife's car in for repair and asked the youngish mechanic to file the points, put in a new rotor and adjust the carbs. He thought I was from Mars. I was just kidding him.
Mudbug,
"Was a time when cars were financed 3 yrs, then 4yrs, then 5yrs, now you can get 7 yr financing on a car."
The reason cars were financed 3 yrs back then was because they only lasted for 2 years on average (even German ones)...
Now they last longer and it does make some sense to get 7yr finance. Problem is that folks WANT to buy new cars ever so often, mostly when they realize their neighbor/colleague/brother-in-law just got a new one. (This seems to be the same worldwide.) It´s more a psychological problem than a financial one.
CNN.com - Page not found
A little freakish humor from CNN...a story titled: "Homeowner offers house and her 'love' for sale".
Excerpt:
"I'm struggling. ... I don't want to lose my house, and I want to find somebody," said Trabosh, who changed her name in the ad to Traboscia to keep people from finding her in the Florida phone book. "So I came up with this dream plan, because I've always dreamed about being a fairy-tale princess."
Thanks rc - Economist has a good article on 'Hot Money' into China too...
Here
Sort of background on the same topic - different angle. Blows my mind sometimes.
Ross,
"I took my wife's car in for repair and asked the youngish mechanic to file the points, put in a new rotor and adjust the carbs. He thought I was from Mars."
ROFL. Did he ask "WTF is a carburateur?"
Cheers,
Y2KX writes:
Re: "Weekly update on the PE ratios from the WSJ$$ Market Data Center:
S&P 500 = 21.24"
You do know you need to be looking at the inversion there right, e.g, E/P and then compare the index E/P to 10 yr yields for fair values?
Hmmmm. So which direction do you think 10-year yields are headed, and which way are earnings headed?
I heard at my bank they are re-adjusting all the construction loans and the construction boys will have to have better bids and hit targets versus just walking in with a smile and a sketch and getting an open checkbook. This was a meeting I over heard where the concept of overage/surplus over-runs in the budget are not gonna fly and they better back up what they ask for with proof. I liked that, because as a customer, I don't want my bank lending to retards that are full of crap. I hope they crack down on the construction bullshit and stop speculation from being thought about!
ROFL. Did he ask "WTF is a carburateur?"
He's probably heard of them - just forgot for a second... "Oh ya, weren't they around when there were those turntable things & vinyl?"
Was the bicyclist who hit the bear by any chance named either Lehman or Goldman ?
And while you're at it, check the wiring on the 8-track . . . the sound is all garbled.
Germanguy,
"The reason cars were financed 3 yrs back then was because they only lasted for 2 years on average"
Hmmm...in 1973, my parents owned a 1962 VW bug, a 1968 VW van, and my dad's 1973 Audi Fox.
In 1982, my first car was a 1972 Chevy Blazer. I rebuilt the 350, and turbo charged it...with my Dad's help of course. Ran like a dream and fast as hell.
Not sure what vehicles back then fell apart in 3 or 2 years.
Financing has gotten longer because Americans in particular, are conditioned to buy on monthly payments and not total cost. The conditioning is intentional.
Further, many simply roll the remaining balance on the old loan into the new loan. Stupid!
Finally, cars depreciate so quickly, a 7 year loan is simply the height of stupidity. You're making payments (if you keep it till the loan is paid) during the period when maintence costs are rising. I keep them longer than 7 years, but I pay them off in 3. So rising maint. doesn't kill me.
Cheers,
dryfly, Kid Clu, Gary,
OK, stop...my stomach hurts!
ROFLMAO!
Cheers,
Not sure what vehicles back then fell apart in 3 or 2 years.
chevy chevette
COLA, "Elder Inflation," and Health Costs: In a Nutshell
Again, I don't consider this inflation if the higher costs are cause by more demand (more older health care consumers) and supply that's not keeping up (health care workers).
Also the quality and expectations for health care have risen dramatically. Then you have to factor in the massive legal costs involved. I had a friend with a small one person practice and her malpractice insurance costs were $13,000/mo. She said after paying those costs it just wasn't worth it to continue practicing so she stopped (admittedly here husband was a surgeon so she could afford to).
None of this is inflation as I see it. Just stuff getting more expensive. If you want to see real inflation look at those middle eastern countries that are still pegged to the dollar where a week's wage buys nothing because the currency it's paid in has lost so much value.
On the other hand, if a bad growing season sends the price of oranges spiraling upwards is that inflation?
I say no.
There is a big parking lot for "previously flown" airplanes outside Mojave, California. I would imagine it is filling up at the moment.
The space between planes could be used for new or previously owned SUVs and trucks. That would be quite a sight.
Misean,
happy to hear you had that much luck with your cars.
I remember very well my fathers 1970s VW Passat (sold as Dasher in the US I think) to fail the technical inspection (which is compulsory by law over here) after 2 years because of body rot under the drivers seat... Don´t think that would happen today.
Actually, I am sure that cars lasting longer nowadays is a huge problem for the car industry in Germany. Cars registered in Germany are 8 years old on average now, a number never seen before (yes we do have statistics for everything
).
I wonder if that is at least a small part of the problem for the big 3 in the US.
The Japanese government is wiser on this part. As far as I know, they have a system that makes car owners pay a tax of 100 USD/year for a one year old car, 1000 USD/year for a two year old car, 5000 USD/year for a three year old car...
I have made up the numbers because I don´t know them exactly, but you understand the system - forces folks to buy new cars all the time...
Germanguy,
Dear old Dad was an over the road flooring salesman. He did at least 60,000 miles a year and regularly put 250,000 on a Buick before he traded. He was VERY picky about alignment, oil, tire pressure etc. He retired and gave my brother his last Buick with 180,000 on her. It is still knocking around somewhere in OK city with over 350,000.
Maintainence seems to be the key.
Driving the autobahn I notice most are tached out. High speed wears down a car faster than anything. (Except my turbo Porsche
OT - An update on the performance of the S&P500 using a widely touted dollar cost averaging method of investment:
Invest the same nominal amount (say $100) every week in an SPX fund. You can track your performance with a weekly moving average of the SPX.
This week, the 520 weekly (10 year) moving average of the SPX is 1226.49.
The SPX closed the week at 1278.38.
1278.38 - 1226.49 = 51.89
(51.89 / 1226.49) * 100 = 4.230% cumulative (that's the total return excluding dividends) gain.
You might as well have put the $100 each week in... FINISH THIS SENTENCE
ac,
Yeah, I don't see this as inflation either. We have both shifting (in the wrong direction for affordablity) supply and demand curves, and a commodity bubble if food and oil.
And I agree, the lawsuit crazy legal guild makes practicing medicine insane. This has been building for years. I'm amazed the Doctors' guild cannot take on the Trial Lawyers' guild in buying congang votes. Apparently the Dr's are more interested in patients than the lawyers are.
Cheers,
"Homeowner offers her house and her 'love' for sale."
This stupid real estate agent thinks she's worth 500k? To top it off, her house is probably upside-down 150k.
So, to enjoy the pleasures of a 42-year-old single mother one must go into the hole for 650k?
Out here in Mexico, she's worth about 50 bucks an hour. Figuring that I'll pobably get sick of her and her whining and bickering in about 20 hours, I would save myself around 649k give or take a few pesos.
Fuc_ing American women.
Gary writes:
And while you're at it, check the wiring on the 8-track . . . the sound is all garbled.
Gary | 06.27.08 - 8:17 pm | #
Last time I heard anything on an 8 Track was 'Riding The Storm Out' - as far as I could tell it sounded mighty fine. Of course I was feeling mighty fine... not even sure what state I was in, Iowa, Minnesota... whatever state it was 'altered'... so maybe that had something to do with it.
I think that was why 8 Tracks stayed around so long...
Anonymouse writes: You might as well have put the $100 each week in...
Quincy k writes: Fuc_ing American women.
See how fun this is!
ac,
My friend, your viewpoint on inflation is biased to negate the actuality that inflation can be thought of as a decrease in the value of the unit of currency.
You seem to be breaking out health care as a separate component of an economy as a whole. Thus, IMHO, when a person is thinking of inflation, these thoughts need to be thought of in terms of a basket or portfolio that are composed of various goods and services as they relate to a single currency valuation.
What makes this difficult is to isolate single components and to keep the currency in question as a fixed rate. The key here is to compare apples to apples and not the value of an orange in London that is exchanged for pounds that were exchanged for Yen and converted back to devalued dollars.
Suggesting that health care costs are not related to inflation is like saying that chimps in a circus are not related to the cost of oil.
Germanguy,
"I remember very well my fathers 1970s VW Passat (sold as Dasher in the US I think) to fail the technical inspection (which is compulsory by law over here) after 2 years because of body rot under the drivers seat..."
Ah, I found your problem then..gov't. My grandfather, in the 70's, had a 66 Chevy Imapala with salt rot (snow abatement on roads) that had actual holes in it. We called it the Fred Flintstone mobile. I think he got rid of it in 1980. To cold to drive in Buffalo NY winters. What with all the holes.
"The Japanese government is wiser on this part. As far as I know, they have a system that makes car owners pay a tax of 100 USD/year for a one year old car, 1000 USD/year for a two year old car, 5000 USD/year for a three year old car..."
I did not know that. And no that doesn't make them smart it makes them stupid. See broken window theory:
Parable of the broken window - Wikipedia, the free encyclopedia
Cheers,
Ross,
"Maintainence seems to be the key."
That´s definitely true. And, to finally say one good thing about California in this blog, there is no salt on the road in the winter.
Must be hard though to own a turbo Porsche in the US if speed is limited to 55mph? Even my crappy spanish SEAT does 120mph every other week, fully legal...
Dear old Dad was an over the road flooring salesman. He did at least 60,000 miles a year and regularly put 250,000 on a Buick before he traded. He was VERY picky about alignment, oil, tire pressure etc. He retired and gave my brother his last Buick with 180,000 on her. It is still knocking around somewhere in OK city with over 350,000.
Same here almost exactly the same but my father sold industrial goods like me (he taught me - regrettably).
Anyway - he had Buicks too, drove them about 200K then turned them over to us kids. I have fond memories of a trip to Florida I did w/ another guy and we slept in the car... seats were so big one could stretch out in front & the other in back & pass contraband back and forth.
We sent our friends back home post cards - 'Wish you were here, staying at the Hotel Electra, Rm 225'...
Didn't have an 8 Track though.
Hindu Gods Help Me,
"My friend, your viewpoint on inflation is biased to negate the actuality that inflation can be thought of as a decrease in the value of the unit of currency."
No inflation is an increase in the supply of money chasing the same number of goods. It's a description of counterfiting.
Currencies can rise and fall against each other for many reasons.
Country A has just invented X which allows them to to increase manufacture in industry Y and lower cost of product Z. Country B has been a leading exporter of product Z from industry Y. Country A external trade increases while Country B trade decreases. Country A currency rises versus Country B.
Of course if we had a hard currency, a different result would occur. Prices in Country A would rise and prices in country B would fall, and balance would establish itself quickly.
Actually, this is such a complex discussion, it would take an uber-nerd post to even justify it for a discussion. I'm not in the mood for it.
Anyhow, currency value vs. other currencies does not cause inflation.
Cheers,
Misean,
"Ah, I found your problem then..gov't. My grandfather, in the 70's, had a 66 Chevy Imapala with salt rot (snow abatement on roads) that had actual holes in it. We called it the Fred Flintstone mobile. I think he got rid of it in 1980. To cold to drive in Buffalo NY winters. What with all the holes."
hm... you got me thinking about emigrating to the US right now, depression or no depression
"I did not know that. And no that doesn't make them smart it makes them stupid."
Well at least it strengthened their car industry in some way - if Japanese drivers have to buy cars every two years, they have a guaranteed income that´ll help the manufacturers to focus on importing to other countries like the U.S. I guess (also, Japanese used cars are exported to the UK/Ireland and I think also to Australia when they are 2-3 years old, driving market share higher over there) - seems to work OK
Hey GermanGuy. Isn't it past your bedtime or are you slumming in the States?
Actually here in Texas we have a speed limit of 75 on some Interstates. We had a 55mph limit back in the 70's during the last oil event.
The trick is to get on the interstate around 10am on a Sunday Morning. The highway patrol and local police are gearing up to handle traffic around the churches. I try to stay under 175. My reflexes aren't what they used to be but the trac control on the newer twin turbos keep me out of trouble.
The height of American hubris is a housing development noy far from me that is built around a race course. I used to sneak into the neighborhood from time to time to test my skills. It was like a modified F1 curcuit.
A lot of homes in foreclosure. Access to too much money corrupts.
valro, what part of the world are you talking about, down under?
Germanguy,
"Well at least it strengthened their car industry in some way "
Either:
I'll take 2...not to be mean, but to explain.
The broken window theory of Say states that while yes, window makers get an immediate benefit from having to repair broken windows, and, yes, that does spur some economic activity, it ignores the costs.
Why?
On that last point insert Japanese cars.
Cheers,
Misean,
Says who!
"I hate Von Mises to pieces." That boy was a tough read. He lacked Goethean empathy and mysticism. Ent, ant whatever. Just jesting!!
Dryfly
The whole takeover/aborted takeover of FIAT by GM was about FIAT's diesel engines. It was part of what GM got to keep in the divorse.
Volkwagen diesel engines are not the best in the world but Renault, PSA and FIAT don't sell in the US so
Annonymouse,
I'll bite:
"You might as well have put the $100 each week in... FINISH THIS SENTENCE"
Trying to steal celebrity sex videos.
Mini-me!
BREAKING NEWS: Mini-Me Sues TMZ.com - Nik Richie + Dirty Army intel, opinions, gossip, satire, and celebrities
Cheers,
Ross,
yeah, it´s 3 a.m. now and I will be gone after this post... but good to hear that there is actually a practical benefit in so many Americans going to church on a Sunday.
Misean,
the thing does work out though if the cars are not scrapped after 2 or 3 years but exported to some other nations that drive on the wrong (left) side of the road - the Japanese get some money for those cars (which are cheaper priced than "normal" 2-3 year old cars) and the total market share of all cars in those countries moves in the Japanese direction.
Germanguy,
"he thing does work out though if the cars are not scrapped after 2 or 3 years but exported to some other nations that drive on the wrong (left) side of the road - the Japanese get some money for those cars (which are cheaper priced than "normal" 2-3 year old cars) and the total market share of all cars in those countries moves in the Japanese direction."
Nope. Because the inputs to producing the new cars, adn the labor used could have been used to do more than the money brought in by exporting used cars. Cars depreciate faster than anything on the planet....
Well accept US and UK and Spanish housing currently.
Cheers,
"Maintainence seems to be the key."
If everyone took care of their cars the way aircraft owners are required to maintain their rides, we'd all be driving '57 Chevys.
BOOYAH, maintenance!
BOOYAH, BMW!
BOOYAH, VW!
BOOYAH, St. Pauli Girl!
Spain is holding up beyond costa del shihole, going on Tuesday to Barceloa, Zaragoza, Pamplona, Vitoria, Bilbao & San Sebastian and will report.
1278.38 - 1226.49 = 51.89
(51.89 / 1226.49) * 100 = 4.230% cumulative (that's the total return excluding dividends) gain.
You might as well have put the $100 each week in... FINISH THIS SENTENCE
the important part of this lesson is, you'd still have your money....it would'nt purchase as much as ten years ago, but hedonically speaking, a 42inch lcd is better than a 27inch tube
If everyone took care of their cars the way aircraft owners are required to maintain their rides, we'd all be driving '57 Chevys.
this is the truth.
My dad understands cars very well (he worked in car-related businesses all his life) and he always fixed his car himself.
He bought that car in 1977 and he still drives it. Last time I visited him 2 years ago - that car now has patches all over its body, but it drives better than 6-year old cars of my friends. My father now says he will drive this car until he dies.
"Not sure that vehicles back then fell apart in 3 or 2 years."
In the 1960s the Ford C4 transmission always failed within 40,000 miles. At 50,000 miles you were typically on your third set of tires, second carburator, third set of brakes, second exhaust system, fifth front end alignment, etc., etc. Burning a quart of oil every 1,000 miles was considered normal per the owner's manual. So was 11 miles per gallon.
Odometers stopped at 99,9999 for a good reason: At 70,000 miles you sold the car to some kid for $100. The first Hondas came in 1971. They were more reliable, but the shitty recycled steel was so poor (and thin) they would rust away in 30 months.
Cars are much more reliable today, even if they are too damn complicated.
When I was a kid my dad had a 79 Celica. He got a muffler with a lifetime warranty on it, and that damn car refused to die. He went back for a new muffler like three times, and I can remember that the mechanics wanted to kill him. (Salt air)
The body on the damn thing rusted out, so he had a friend rivet on some sheet metal to pass inspection and went back for ONE LAST muffler. On the side in black magic marker he wrote "DeLorean".
The old man always had a great sense of humor . . . and thrift.
And we did have an 8 track player, but not in the DeLorean.
"- that car now has patches all over its body, but it drives better than 6-year old cars of my friends."
You have no idea how much I respect that. He must be a very self-reliant kind of guy.
"On the side in black magic marker he wrote "DeLorean"."
Priceless.
"Cars are much more reliable today, even if they are too damn complicated."
Agreed, but diagnostic tools are available, invariably computer stuff. Frankly, I don't trust any kid to work on my rides, neither does Son of mp.
Ross,
Von Mises was a tough read, but worth every hour.
I wonder of Bernanke has read Mises's masterpiece on Money and Credit. Probably not, because Helicopter Ben doesn't seem to understand the difference between money and credit.
If our problem were a shortage of Money, then throwing it out of helicopters might help. But our real problem is a shortage of credit, and debasing the currency is drying up the supply of credit.
"Cars are much more reliable today, even if they are too damn complicated."
Agreed, but diagnostic tools are available, invariably computer stuff.
But if the problem is mechanical, such as a fuel pressure regulator on a Jeep Cherokee, you have to find a good mechanic instead of a computer specialist at the dealer, to find the problem. Ask me how I know. $700 dollars of "diagnosis" later, two shrugs of "ida-no", one trip to Auto Zone for a $4 part that I put in myself and the problem was fixed.
Too bad the tree didn't care either.
Invaluable blog for the auto industry is at The Truth About Cars: New Car Reviews, Ratings & Pricing, Auto News for New Models
Read the GM Death Watch and Chrysler Suicide Watch strings in the editorial section. Lots of very informed (and funny) comments from industry and car types. Many of them know their economics too, which isn't what you'd expect at the typical car site.
Between CR, TTAC, and the OilDrum, things aren't sounding too good.