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Cash For Clunkers
The big story today was how the O-Team decided to unleash another 2 billion for the Cash for Clunkers program after the first round ran out in a matter of days.
Never bet against the U.S. Consumer, seems as if they are hard wired for buying toys, drugs, booze, botox, hookers, new cars, etc. no matter how dire their financial condition.
Looks like anything and everything automotive-related was screaming today. Who would have known to buy these stocks in the midst of "the worst economy in 75 years".
Meanwhile, High Frequency Robot Gamers who dare to trade their entire account with a single stock are getting killed.
Seems that some of these portfolio managers always seem to fall in love with the IBD Top 100 screamers, and chase the momentum and buy all dips.
But with so many managers hiding in these stocks, and the HTF gamers gunning the trendline using the "Channelingstocks.com" method, its no wonder you see these spectacular blowups:
Today, it was SYNA:
Other assorted garbage like Las Vegas Sands and Pier 1 Imports were waylayed today after brief runs. Amazing how these guys like to chase these ugly ducklings.
No different than a guy going into a bar to pick up a chick, and instead of working the top quality talent first, he immediately makes a beeline to the low-end, overweight slutty types, wearing spandex and overprocessed hair, thinking that the sexual experience with these losers is bound to have more "upside".
Seems to be a fascination with red blouses these days with the top anchorettes on Bloomberg, FBN, and CNBC. Tried looking for some recent ones on Google, but no luck.
Instead, I found this picture of Mark Haines inebriated with Wild Turkey trying to cop a view down Erin Burnett's blouse when she wasn't looking.
Hilarious!!
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Moment of Truth on the financials:
Its this guy's opinion the next move is up...big. High yield spreads have come in to levels that match the highs of the past few recessions. If the "recovery" meme gains the slightest traction from here it will be grounds for HY to come in even more.
That and the fact that its harder to game numbers that come from two human beings effecting transactions (since companies that rely on sales actually have to move product)...so much easier to inflate the marks on toxic garbage.
"meme" is a nonsensical word. Could you re-write this sentence using a real word because what you wrote is meaningless.
"If the "recovery" meme gains the slightest traction from here it will be grounds for HY to come in even more."
If the [idea or value or pattern of behaviors ensuing from this concept of] "recovery" gains the slightest traction from here it will be grounds for HY to come in even more.
:-P just trying to use my vocab word of the day...but nonethess, HY can tighten from here and I expect it to.
Another red blouse.
Moment of Truth for Liz Claman
Nothing wrong with that
Nice guns , what can u say.
I wonder if it is red all over.
you should concentrate more on the bottoms now
the top has been made on the stock market
Harder to find pictures of their bottoms to post.
Always enjoy reading your insights... very funny...
RobotTrader
You wear it well.
And you're funny.
A rare combination, in my small town.
Amazing in a world of, inter alia, $185 billion to AIG, $45 billion plus $118 billion in backstops to BAC,a Fed buying an assorted few hundred billion of Commercial Paper and upwards of $1,000,000,000,000 of MBS, etc., everyone gets so jacked about the $1 billion Cash for Clunkers Scam. Seems the public and the market think every zero after nine is a rounding error or something, or that this marginal one billion is what pops the GDP back into positive territory. Equally amazing is the fact that folks, forced by penury to drive a 1982 Cadilac Eldorado valued at five hundred dollars, suddenly become a good credit risk if the taxpayer gives them $4500 to buy a car they still cannot afford. I'll venture a guess that the repossession rate on Cash for Clunkers will prove to be above 50%.
your gov't in action.
Moving down the food chain to used
car salesman. With a repo/wrecker
bizness on the side.
The pathetic thing is that that guy in the '82 Eldorado cannot trade it in in this program (too old). And because they are destroying all the "clunkers", he cannot evenmove up to a better used car.
Amazing the solution is to waste resources. I understand this clunker deal is supposed to be an environmental game. So we dig up another 10,000 acres so they can get a little smog out of the air and $100 million out of a few outfits for the next election. One of these days the states will insist the Federal Government return to its pre-war and emergency power days so the country can survive. It would take $25 billion to get sales back to where they were. That is a good comment about the repo rate BTW.
Somewhere along the way we decided that everyone should own a home. Look where that got us.
Now we have determined that everyone should own a new car.
Do we ever learn anything?
Cars being sold under C4C will probably be bought by folks who can pay cash or have reasonably high to very high credit capacity - for the very reason that they held on to their fully paid for Chrysler minivan for 176,000 miles which had much less that $4,500 in market value but lots of intrinsic "get the kids to soccer" value left. This is merely inciting purchases that would have been made 1.) EARLIER - these smart folks have been HOLDING OFF making their buys in anticipation of the C4C or 2.) LATER as they were running the mileage up to the stratosphere and would later have purchased a used car.
What we are REALLY seeing is price deflation in action. The true current market clearing price for cars is at least 40% below sticker price.
As an aside, I have a car that qualifies for C4C, and went through all the scenarios and *still* couldn't justify the buy since I already have 3 cars and telecommute to work. What many don't realize is that ultimately, the internet is the ultimate competitor to the automobile - at the margin where most of the important action occurs, people are organically needing fewer and fewer cars which themselves are lasting longer and longer.
great job robo.
i have read several stories about cash for clunkers with the universal summary that the gubbermint processing is completely phucked up, as to be expected from where i sit.
i can't wait for the future displays of efficiency we will see as the us gov't intervenes in GM, Citi, the gse's, health care, and the equity market via ppt action, etcetera.
Incredible how Ford is now at a 52-week high.
Toyota and Honda also looking strong.
Some hedge fund manager who bought at the lows "made their year", and is now knee deep in booze and hookers out at the Hamptons this weekend.
Meanwhile, laid off Joe Six is luxuriating in his new Ford F-150 pickup truck, trying to figure out how to parlay his unemployment check into a zero down, 0% for five years for a new set of custom rims and tires.
Here in L.A., there is a chain of rim and tire stores called "Rims for Rent" where they install custom bling, and you pay them by the week by bringing them your unemployment check where they will cash it for you.
robo...so glad that you can add pics now...more great zh content!
Robot, love your commentary - hilarious yet sad what are nation has evolved to.
Keep up the great writing and analysis.
Who's gonna come out with the first "cash for clunkers" IPO ? Congress has attached themselves to this new gimmick like flies on a steaming heap.
They threw a billion at it to see if it would stick and now dealers and consumers are gaming the system so they lobbed another 2 billion at it. Before you know it we'll have a car destruction fetish the same way people lined up to get into Carlton Sheets seminars to learn how to flip houses with no money down.
http://www.youtube.com/watch?v=waj2KrKYTZo
And dont forget who owns GM now.
that video is sickening. Perfectly good car ruined.
Now, it's off to fill up some landfill or supposedly recycled. Yea. Where's the cost/benefit to that?
You can say one thing for the government...they're consistent. They can f@#$ up anything.
Correction--part of the C4C program is that ALL powertrain is destroyed (or recycled as scrap), so the junkyards that actually receive these POS' will only be able to sell ancillary parts on u-pull-it yards.
Talk about a waste of resources.
wndy - keep it up man! Missed your posts for a while there...
Hey Windy...err.....RobotTrader....glad to see that Tyler has given you keys to the "house" for your great posts. I missed these terribly once you left "our former hang." Anyway, looking forward to your illustrated posts from this day forward. I plan on posting here more often once some recently imposed restraints are eased by my "Sith Lord." Until then I will be dropping off hints and tips here and there.....as well as some of my acerbic commentary directed at the douchebags on CNBC in addition to assorted financial hacks and misinformation provided by "The Street."
Also, for what's its worth I don't see what all the whining is about w.r.t. Cash for Clunkers (CFC). The government gives away the taxpayers money on numerous programs....EUC (extended unemp comp) being just one. So why not dump some $ on a program where there is at least some incremental economic benefit....even if it for just a segment of the eCONomy? Given all the garbage govi programs out there this one rates as "a good solid" IMO. Again, on a comparative basis that is. Anywho, my prediction is that $5 billion will be allocated to this initiative.....as anything above that or approaching $10B won't pass the smell test.
Plus, the $3B (currently) is deminimis in terms of $'s when compared the the stacks of "long green" being tossed here or there. Hell, GoldenSlacks walked away with $13B in AIG passthroughs -- so more than 4X the current CFC allotment to just one group of greedy douchebags.
Which get's me thinking.....how about CFF.....Cash For Foreclosures...$45,000 if you demolish your old house and buy a new one....SWEET!!!
I am so damn tired of hearing people try to justify the C4C fucking taxpayer rip off because Washington may have done it before on a larger scale for even less deserving scum than the UAW.
Ummmmm, hey did you forget conveniently that GM and Chrysler stole about $100 billion dollars from the taxpayer in the last year, AND blew off all their legitimate bondholders as well as disbanding every dealership that did not bribe the democrats beforehand in the form of campaign pork.
Interesting article from Seeking Alpha on CFC
http://seekingalpha.com/article/152909-cash-for-clunkers-may-cost-up-to-45-354-per-vehicle?source=email
The 1950's style misogyny is ugly and detracts from your style. Get some help.
A bit more 1950's style misogyny is exactly what this country needs.
Had to look that one up,currently we {they} are in a state of misology,hatred of reason, argument or enlightenment.
Thank you for all you do! Frank
Oh my God! Just the sound of the word misogyny makes me extremely libidinous. WOW!!!
Personally, you could have just stuck with the blouse pictures...they worked. As for whatever else we went out to say...yes, the booze and the hookers in the Hamptons sounds about par for the course as well.
Here's the nut: we gotta find a way to make people spend and somehow manage to increase their credit scores at the same time. So why not incent the hell out of them to buy a car with a government rebate and a government backed loan from a government owned company? Dumb and Bradstreet won't know the difference, they'll just see the steady stream of unemployment checks and can/bottle redemptions turned into a good credit scores.
Who am I kidding? We are really in a hole and I sleep with a plutonium hand grenade around my neck. I'd leave this country, but everyone else is worse off.
Not the Canadians :)
Haines: "Dow 13500 ! Time to pay up Erin, let's see 'em"
this idiocy is just distorting the demand for cars.
short the automakers.
I believe that next week some of the big London banks start reporting.
I like to keep an eye on the "worst of the worst" in Europe, especially the Irish banks to give me clues on where the XLF is likely to trade next.
Here are some "clunkers":
HSBC:
Barclay's:
Allied Irish Bank:
Govenor Bank of Ireland:
Depending on what happens to this group, the Riverboaters may decide to start gunning Citigroup, Region's Financial, etc..
And here is a character from the "Night of the Living Dead".
The 15-minute chart on Corus Bank. Wonder how many Hail Mary passes are going to be thrown on this play?
Citibank must be a favorite of the HTF gamers. Its traded over a billion shares a day the last 4 days. Somebody really punched it at the bell on Friday:
in addition to RF, they seem to be gunning KEY lately...
Investor's Business Daily touting RV stocks this weekend:
Not sure how unemployed Joe Six is going to afford a new RV. Last I heard, he was still trying to sell his toyhauler, jet skis, ATV's etc.....
Thor Industries:
Drew Industries:
"Drew Industries (DW 19.19, +3.80, +24.69%) shares rose 25% after the supplier of recreational-vehicle and manufactured-home parts reported second-quarter net income of $2.6 million, or 12 cents a share, compared with $9.2 million, or 42 cents, in the year-earlier period. Sales decreased $50 million to $101 million due to drops in industry wide wholesale shipments of travel trailers and manufactured homes."
I think others may think along my line. If I can move {live} in an r.v. I can avoid propery taxes which at some time must go up. I can also move to a new location easily with everything I own, I can actually leave town in 45 minutes with everthing I own an travel to another location with better possibility's of work. No hassle with landlords or banks when I jump, park at wallmart, pet friendly, smoking allowed. View property all the time, no deposit no return. National,state parks, cheap living after initial investment. It has a lot of plusses, but who wants to be trailer trash? Frank
SAN FRANCISCO (MarketWatch) -- Ford Motor Co. (F 8.00, +0.61, +8.25%) is poised to report its first monthly sales gain in nearly two years because of the federal government's "Cash for Clunkers" program, according to a media report Sunday. Ford sales analyst George Pipas said he wasn't sure if the sales bump would have occurred without the program, which offers incentives to buy new vehicles, that went into effect July 24, The Wall Street Journal reported in its online edition. The Journal said Pipas declined to provide specific sales figures, which are scheduled for release Monday.
This is a test to see if this chart updates during market hours:
Solid, RT, solid.
I'm delighted to see that the US Senate, lead by McCain, is going to put up some serious resistance to the cash for clunkers program..... I read that there is at least one Dem defector, the gal from Mizzouri....that could be a fun battle to watch.
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keep it coming