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Guest Post: Cash For Clunkers Vs. The Big Three's 0% Financing In October 2001
Submitted by John Bougearel of Structural Logic
The June 1 ISM to June 5 NFP high to higher high was +10. The idea was that the Aug 3 ISM to Aug 7 NFP higher high would be roughly +10. If so, it would target 1013. That is precisely what has happened. Notably, the stock market sold off 32 points by the following Monday June 8 before setting a retrace high on Thursday June 11’s retail sales report that were goosed by automaker incentives of $6900 in rebates. Expecting July retail sales to be goosed by similar cash for clunker incentives, we expect the stock market to rally into Thursday’s Aug 13 retail sales report. In short, a rolling top similar to June’s is expected in the first half of August.
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You know, that Radio Zero graphic makes a lot more sense when the picture is bigger - I always thought the headset was one of the swan's big eyeballs.
Tyler,
Keep up the good work and keep the information coming. I must say though that, the more I read (here and other places) the more I want to vomit. I'm somewhat ashamed that I worked in the industry (albeit at very low levels) for such a long time.
What I don't understand is that the first cash for clunkers amount allowed buying for 45K cars correct? At 1B dollars, divided by $4500, that should be 222,000 cars. Moreover and to put this more in perspective, $3B allows a $10K discount for every single American's (300M) purchase of a car. Is the seemingly excess money syphoned off the top by bureaucrats running this program?
Try your math again: That's $10 per american
You're right. My bad. The first claim still makes sense.
Guess it's best to wait until Oct for a real downtrun, historically speaking.