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Auto-Industry Over-Production Sends US Inventory-To-Sales To Post-2009 Highs
The 'field-of-dreams' recovery is dismally missing in action. This morning's inventory-to-sales data shows the US total at 1.32x - its highest since the financial crisis and highest in a decade aside from that. The worst sector - or more over-produced or mal-invested - drum roll please... Autos. As the following stunning chart shows, over the last 22 years, the auto-industry has only had a higher inventory-to-sales in the midst of the crisis. If we build it, they might not come... (and aparently they didn't).
Total inventory-to-sales back near ex-crisis highs...
led by a total mess in Autos - which aside from the middle of the biggest financial crisis in 100 years, has never been higher...
We assume this is great for parking lot sellers and that we will soon see 30-year auto loans to ensure this excess inventory is sold to the lowest common denominator... A Maserati in every garage - remember
Charts: Bloomberg
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good... I cannot wait to screw over the dealers on a new truck at end-of-month / end-of-quarter... that should get the price down to where it should have been to begin with... $30-50k for half ton pickup trucks, getouttaheah...
$89 per month leases with $0 down regardless of credit on no income stated loan docs, bitchez ...
... That ought to move some metal in New Normal 'Murica.
Drive out to your local area mass volume auto dealerships to get some real time intelligence on the dealer lots that have only begun to overflow-eth.
I'll bet a dollar to anyone's ten that it will be MOAR overflow-eth next year, same month (regardless of weather).
Bernanke-nomics for the HISTORICAL FAIL.
Fucken A. Here's your recovery:
It has a cheap-ass fucking payment, no money down so no skin in the game, and no credit denied despite a string of defaults longer than a train of tar sand extracts from Alberta. The only thing missing is automatic monthly payments via EBT.
The best opportunity for groath would be to open dealerships at airports. Why go through the hassle of renting a car when you can lease one so cheaply? Just drop it off at the airport (or wherever you want) before you fly home. When you return from your trip, lease one from the airport to drive home. Everyone qualifies. Think how much frequent flyers would save on airport parking.
If the government would just enact the ObamaCar Act, which would consist of having the government borrow trillions more from the Fed in order to allow every American to lease any car they wished from GM, Ford or Chrysler (ie. More direct subsidization of the auto industry) for any period of time (by the day, even) for $1 a day, fuel included - EVEN ALLOWING HOLDERS OF EBT/SNAP Cards to use them to pay the $1 per day, auto sales would ROAR MOAR.
naw, just send out the brownshirts to put sugar in every american's gas tank, and Voila, we'd all have to buy new vehicles. Shazzam. problem fixed.
It looks like it's time to extend loans out to ten year. Problem solved. Paying $50,000 for an over priced $30,000 car is a good deal right?
Why not 20 or 30 years? The automakers and the banksters would love having a steadily increasing perpetual auto loans. Where Americans are all debt slaves.
Take out the loan, default after five years.
Slave problem solved.
How is this fucking market holding up?!
DavidC
I know this one
Greed
Manipulation pure and simple,the Feds will not let it collapse.
@DavidC
Tactically, HFT is the glue at the moment. Strategically, it's a "seller's strike" because the generals can't find any slaves to offload their shit bucket of equities.
Mark it as sold as soon as you manufacture it and send it to the dealers. What could possibly go wrong?
Now that Barry successfully removed the debt limit he can blow money on Cash-For-Clunkers #2.
Car go beep beep!
They have 7 year car loans down here in Colombia....at a high interest rate too...
As usual, the solution is simply to dig much, much deeeeeper down into the subprime rathole.
In 2003 I bought a F-150 supercrew for $42k (stupid move I know I know) today that same truck is $28k.
28k for a used pickup.... and $50k for the new version. the dealers can keep them until the new ones cost $28k, and the used ones cost half that.
I've never owned a brand new car I'm proud to say.
Pride is one of the seven deadly sins!
I refuse to spend nearly a year's salary for an asset that depreciates the second I drive it off the lot. WAY too much money for means of getting to work. The retarded auto producers keep loading these things up with wifi, phones, talking GPS, autobrake, autopark, backup cameras, etc... and the retarded gadget collectors keep taking out 7 yar loans to buy them. No thanks, except the government destroyed all the used vehicles, so there's no alternative. FU OBAMAO, clunkertard.
Auto industry over-production is part of the classical model of the business cycle. Keynesian policies would normally "get right on it." What makes the current inventory build-up so dangerous this time is that QE and Keynesianism has pretty much shot its wad. No bullets left in the arsenal except more of the same printing.
Combine a normal cyclical downturn with this phase of the overall monetary/financial problems--and we may have another critical downturn phase in this ongoing mess.
Maybe they should fix the pot holes first?
how can this be??? don't car buyers know that "Detroit is alive and Al Queda is on the run" and that the economic recovery is real.
Yea, all you gotta do is ask the arrogant, narcisstic, pathological lying illegal kenyan muslim sociopath in chief. Wutz not to believe from that thing?
Meanwhile, Tesla is worth 80% of GM.
LOL, the people in this country are being led like lambs to the fucking slaughter. And they don't care, because they can watch the new Beyonce video on their iPhone 9SC, which T Mobile sold to them on credit.
It'd be depressing if it weren't so utterly hilarious.
Younce has got a new vid???? Like, so totally kewl!
Much need autos to drive onto the 'bridge to nowhere!'
30 year sub sub prime , with a 99 % end of loan ballon payment, ZIRP interest and rolled into a synthetic CDO and sold to the Fed.
Special offer limited only to 17 to 30 year olds with no assets living in a basement and unlimited access to dope.
Minimum loans start at $100,000 and backed by GS
Free macdo and a gallon of booze for all takers
roll up roll up
Problem solved and all the malls can stay open late again
"Special offer limited only to 17 to 30 year olds with no assets living in a basement"
Hmmm, if the dealers take BitCoin, I think I know someone who instantly qualifies!
Any guesses as to whom?
And the good news is.......we ain't seen nothing yet compared to what's coming.
A rich guy once told me that poor people are the only ones who can 'afford' a new car.
Every year or two he pays a wholesaler a percentage cut to go with him to use his license at dealer auctions to buy a year old or less repo and then retail his existing ride for more than he paid for it.
Cars, boats, motorhomes, bikes and ATV's. He's got em all and in the end they don't cost him a dime as he rotates them out for newer, bigger, better models.
A benefit of having cash in a uber-financed debt world.
If 20 - 30 year auto loans were availble, sales would soar to the moon! The how-much-a-month crowd would be camping out on car lots to "buy" a new car/truck.
At one time in my life many,many years ago I thought most people had common sense. That is simply not the case, and it is getting much worse.
Roar on sheeple! Debt is freedom...Right?
Car go honk honk!
Govt Motors makes nothing I want to buy or drive... same goes for Chrysler.... Since Ford didn't take any govt dole, I drive a Ford truck...
Not to worry, they will just "sell their way out," right? Just today I heard a KIA commercial on the radio that guaranteed approval no matter what the credit score. Not just for one car, but for two cars! The actual slogan was, "Why buy one when you could buy TWO!!"
But this time it's different.