Have We Hit Bottom In The Market?

January 5th, 2009 at 7:20pm

Yes, car sales look terrible for December. But that’s if you compare sales to the same month a year ago. The market has changed so much from then that I would argue you can’t get an accurate read on what’s going on right now, if you’re only measuring today’s sales against 12 months ago. A better gauge is a running average over the last 6 months. Car sales are in a terrible state, but the bottom may actually have been reached in November. In fact, sales were up by nearly 150,000 units or nearly 20% in December vs. November.

January could be better. GM and Chrysler received the first installments on their bridge loans, which instilled some level of confidence in the market. GMAC received TARP money which will help stabilize quite a number of dealers. GM immediately began offering low interest loans and resuming national television advertising.

That’s not to say the market is on a rebound. But it may well be that we hit the low point two months ago and are starting to inch up.

12 Comments to “Have We Hit Bottom In The Market?”

  1. John Says:

    John McElroy,

    I believe what we are seeing is the U.S. Consumer is on “strike” when it comes to economic inelastic big ticket purchases of durable goods, and autos are a perfect example.

    Since 1972 when Nixon stood on the Great Wall of China

    http://www.presidency.ucsb.edu/ws/index.php?pid=3749

    , the U.S. Middle Class Consumer (70% of the U.S. Economy that drives the world economy) has witnessed 26 years of expanding greed from Wall Street and corruption from K Street lobbys that have systematically destroyed the earning power of common U.S. citizens (consumers) trying to live the American Dream.

    This “strike” is not organized by a union, this “strike” is rooted in common sense and the survival mode human instinct in the gut of the U.S. Middle Class consumer that has witnessed the damage of unbridled greed from the elite few globalists that profit at the expense of the majority.

    The broken part of the greedy, corrupt globalist plan is they did not design a contingency plan in the event that their “decoupling” theory failed. It Has.

    http://www.reuters.com/article/reutersEdge/idUSN1259286920071012

    The globalists screwed up , their plan has failed.

    This “strike” can not be resolved with media propaganda, “hope”, “financial engineering”, or even 1.3 trillion taxpayer dollars of political economic stimulus.

    The U.S. Middle Class Consumer KNOWS that they have been sold out by their country and their elected officials with a lot of help from the “sock pupet” media, and they are on a steep decline of their standard of living.

    The only thing that will correctly solve this problem and end this “strike” is to RESTORE THE EARNING POWER OF LEGAL U.S. CITIZENS IN THE MIDDLE CLASS. Tangible results that common U.S. Consumers feel in their gut and see in their bank accounts. NOT, transparent political media feel good “hope” spin B.S. .

    Our “real problem” is that the greedy S.O.B.s on Wall Street and K Street will divert attention, cloud the issue, and use the media to manipulate and spin the “cause” of the current world recession/depression to fit their greedy agenda.

    The longer they do this, the deeper and worse the crisis will get.

    There lies the “rub”. (and the biggest part of our problem)

    You can not solve a problem until you CORRECTLY define the problem.

    Period. Does not matter if it is you car, or a skin rash.

    The average man on the street knows that globalization has destroyed the American Dream and the earning power of the Legal U.S. Middle Class. The problem is, the crooks in control of the U.S. Government and the media with their globalist agenda will never let the average man’s common sense prevail over their greed.

    Globalization is like a bell, you can’t “un-ring” it.

    What we can and must do is “CORRECTLY” define the current problem with an econometric model to see how the U.S. can CORRECTLY REVERSE the economic destruction of the EARNING Power of the Legal U.S. Middle Class consumer so that they feel in their gut that their standard of living is rising, not declining.

    RESTORE THE TANGIBLE EARNING POWER OF THE LEGAL U.S. MIDDLE CLASS CONSUMER. !

    Then, and ONLY then, the “Strike” will be resolved and U.S. Consumers will lead the world economy out of its current disaster.

    John McElroy, please forward this to Rep. Thaddeus McCotter, GOP House Policy Committee Chair.

    Thank you for your time,

    John

  2. John Says:

    John McElroy,

    I was watching Squawk Box on CNBC Friday and Dan Dimicco from Nucor, one of your sponsors via. The American Iron and Steel Institute, was interviewed and I believe he understands the root core cause of the U.S. Middle Class Earning Power Problem that prevents U.S. Consumers from buying big ticket durable goods like automobiles even with “engineered” attractive financing options.

    See:
    http://video.aol.com/partner/cnbc/obamas-infrastructure-plan/ntsSG3V36FcHgwnV0T9rHuEqL7dZcoYg/?icid=VIDURVBUS07

    Common sense is not so common with Wall Street or Lobbiest “K” Street greed brokers. The average common man on the Main Street understands their destroyed and declining standard of living from misguided globalism.

    Will you bring Dan Dimicco from NUCOR and Rep. Thaddeus McCotter together on Autoline to start a correct solution to RESTORE THE EARNING POWER OF LEGAL U.S.CONSUMERS that will drive the U.S. Economy and the world economy out of the ditch we are currently stuck in ?

    This is simple, fundamental, “joe six pack” common man logic. And, RESTORING THE EARNING POWER OF THE LEGAL U.S. CONSUMER is the ONLY answer to the current global recession soon to be depression we are faced with.

    Time is not on our side.

    How can so many high paid, high power “suits” be so blind to the only “life vest” in the boat.

    EMERGENCY! We need LEADERS, NOT MORONS.

    “If the shoe fits, wear it”.

    Definition of a “leadership”,–noun
    3. an act or instance of leading; guidance; direction: They prospered under his leadership.
    See:
    http://dictionary.reference.com/browse/leadership

    Definition of a “moron”, –noun
    1. a person who is notably stupid or lacking in good judgment.
    See:
    http://dictionary.reference.com/browse/moron

    ************************************************
    ************************************************

    American Iron and Steel Institute
    http://www.nucor.com/

    NUCOR Executive Management
    http://www.nucor.com/

    * Daniel R. DiMicco – Mr. DiMicco has been a director of Nucor since 2000 and was elected Chairman in May 2006. He previously served as Vice Chairman from June 2001 to May 2006. Mr. DiMicco has served as Nucor’s President and Chief Executive Officer since September 2000. He previously served as an Executive Vice President of Nucor from 1999 to 2000 and Vice President from 1992 to 1999.

  3. John Says:

    Sorry for the error.

    American Iron and Steel Institute
    http://www.steel.org/

  4. julius lambert Says:

    Follow the money.In the past the gov. could stimulate with laws and regulations,along with PRIVATE WEALTH.Now gov.is going it alone.If and when the WORLD ECONOMY does start to expand there will be so much MONIES of all denominations that big ticket commodities will again be in VOGUE,even for the MASSES.If you are looking for a cause of whats happening,wall street could not allow all the retiring BABY BOOMERS to SUCK off all of that wealth that they CONYROL.

  5. julius lambert Says:

    The main thing to watch is INFLATION,it will wipe out a recovery.

  6. older car engineer Says:

    No way has the sales dip bottomed out, it was propped up by the election and the holidays, the worst is yet to come – mark my words.

    At least 1 of the big 3 will fail in 2009 because of dangerously played, insular, corporate politics.

    Hard work has to be made smarter with zero political influence. One of the big 3, that shall remain nameless, demonstrated their loyalty to corporate ineptness when they took away a contract for critical durability testing and set up a duplicate lab “for tax reasons in Canada”. All well and good, but the exec who engineered that was promoted to a VP and the new lab never equaled the cost/per/test nor the productivity that the private firm achieved. But the exec played politics expertly and forced out all that opposed him.

    Nor did the company exec understand 1) what the small private firm did, 2) how they achieved it, and 3) why the small firm could do what the big company could not do – understand the needs of the exec`s own release group!

    He was more interested in playing corporate politics and being on your TV show.

    That was but one solitary example of the ineptness so aptly demonstrated in Detroit since the late 60′s – time after time. I’ve got many others, the Flint Truck Elpo fiasco, the 14 year history of big-block engine nylon toothed timing gear breakage just outside warranty, the testing problem with head gaskets, I could go on and on.

    Each problem was ignored by the big 3 execs as they were ‘outside warranty’. But the execs refused to understand that the foreign competition saw that and decided that would be their marketing niche = Quality.

    The American car buying public has been sold sizzle by the domestics while the foreign competition has been selling steak. Why have all the big 3 continued to lose market share?

    Both the union and the executives have to share the blame for taking their eyes off the ball playing politics.

  7. John Says:

    Thank You for your keen perspective.

    We need more of this type of discussion out in the public if we are ever going to solve this U.S. and Global Economic Disaster.

    U.S. “Jobless Recoveries” = Depression

    Time is Not on our side.

    It is time to help our “leaders” . (and ourselves)

    I encourage anyone else with “behind the scene” insight to the problem to share it with us so it can be addressed and fixed A.S.A.P. .

    “older car engineer”,
    Would you make a list for us of the 5 or 10 biggest “bang for the buck” technologies that the U.S. Auto Industry could focus on with government spending that is going to happen with this Economic Stimulus.

    —> 1.Increase U.S. battery research and speed the adoption of more fuel-efficient vehicles.
    see:
    http://www.detnews.com/apps/pbcs.dll/article?AID=/20090116/POLITICS/901160358/1148/rss25

    —> 2.

    —> 3. …

  8. John Says:

    litmus test

    2. Any test which produces a decisive result by measuring a single indicator.

    see:
    http://en.wiktionary.org/wiki/litmus_test

    This is the strategy needed for any economic stimulus spending done from 2009 forward.

    From detnews.com

    “General Motors Corp. spokesman Greg Martin praised the support for battery research.

    “It’s good to see the stimulus bill recognizes that to keep pace in the global technology race, the U.S. must make the capability to produce advance batteries a national, competitive priority,” Martin said. “Greater advance battery funding can help jumpstart a green manufacturing sector and get advanced vehicles like the Chevy Volt on the road at greater numbers.”

    The “litmus Test” question should be,

    Does the Economic Stimulus Spending create a Future foundation for good paying, stable, DOMESTIC, LEGAL, U.S. Middle Class Citizen consumers and promote future GROWTH in U.S. GDP?

    Wasted special interest “feel good” political reward spending that future generations will have to pay back will FAIL to revive the U.S. Economy, and Stimulate RAGE in the average U.S. population when the illusion of “hope” fades away.

  9. John Says:

    It should read.

    Does the Economic Stimulus Spending create a Future foundation for good paying, stable, DOMESTIC, LEGAL, U.S. Middle Class Citizen consumer JOBS, and promote future GROWTH in U.S. GDP?

  10. John Says:

    Comment Number 1. should read: “36 years” not “26 years”

    the U.S. Middle Class Consumer (70% of the U.S. Economy that drives the world economy) has witnessed 36 years of expanding greed from Wall Street and corruption from K Street lobbys that have systematically destroyed the earning power of common U.S. citizens (consumers) trying to live the American Dream.

  11. John Says:

    For what it is worth:

    http://community.nytimes.com/article/comments/2009/01/10/opinion/10herbert.html?permid=292#comment292

  12. Did New Cars Sales Bottom in November? Value Plays Says:

    [...] AutoLine Reports Yes, car sales look terrible for December. But that’s if you compare sales to the same month a year ago. The market has changed so much from then that I would argue you can’t get an accurate read on what’s going on right now, if you’re only measuring today’s sales against 12 months ago. A better gauge is a running average over the last 6 months. Car sales are in a terrible state, but the bottom may actually have been reached in November. In fact, sales were up by nearly 150,000 units or nearly 20% in December vs. November. [...]