The Last Time Automakers Channel-Stuffed This Much, Lehman and GM Went Bankrupt

Tyler Durden's picture

Don't show Phil LeBeau this chart!

While day after day we are told how fantastic auto sales are in America... and how the reported data from the automakers shows just how 'strong' the US consumer must be.. and therefore the US economy.

However, as the following chart shows - it's all false!!

Relative to apparently surging sales, inventories of (unsold) motor vehicles are at their highest since August 2008...

 

In other words, the channel-stuffed "see how well we are doing" smoke and mirrors of credit-fueled malinvestment has hit a wall and yet the automakers - afraid to signal any chink in that armor - kept producing... there is only one way this ends... badly!

Simply put - The last time automakers channel-stuffed this much, Lehman and GM went bankrupt shortly after.

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InnVestuhrr's picture

I just upgraded my commercial fleet with new high-end cargo vans, got a whopping $7K off the price for each from last year for the exact same vehicles - awesome !

Omega_Man's picture

you should have waited to get them for free, as soon you will have no business to pay the auto loans

NoDebt's picture

... something about Janet Yellen and channel stuffing... nausea ensues.

highandwired's picture

"Ms. Yellen will go into the Financial history books for having waited with Mr. Bernanke to increase interest rates...that will be the biggest joke and failure of monetary policies by the monetary authorities in recent history"  Marc Faber January 2016:  https://youtu.be/6Oq_Ze8LG-Q?t=4m6s

Save_America1st's picture

remember when CONgress forced the GM douchebags to drive to the District of Criminals to beg for billions of free tax payer dollars to bail them out and wouldn't allow them fly on their fancy jets.

yeah, that sure showed them who's boss.

pitz's picture

The jets still flew.  Full of employees to drive the vehicles back to Detroit while the planes picked up the execs.  The whole thing was a very sad publicity stunt.

glenlloyd's picture

It was sad, it was pathetic tbh

Dick Gazinia's picture

Hold the fuck on.  I saw on MSNBC this morning that 2015 was the best year ever for the auto industry.  Are they counting this inventory as "sold"?

noless's picture

Looked for a similar article to the one you read, packed with the word "deliveries" and "delivered", also right near 30% were bought on lease, so there's that.

MaxMax's picture

I believe so.  I think the way the accounting works is that as soon as the car is built, then the increase in value of the inventory is booked as a profit. 

ParkAveFlasher's picture

It's a damn good thing that oil is still north of $80/barrel, and all that government-induced capital investment in global supply chains for tooling up factories to produce components for autos with electric engines will payoff as consumers and industries and municipalities opt for cost-savings by going to fleets of electric vehicles, and, and , and oh wait

PTR's picture

... something about Janet Yellen and channel stuffing... nausea ensues.

 

Ben: "Can I wear the rubber helicopter glove this time?"

InnVestuhrr's picture

Is this the same collapse and apocalypse that you doom cult worshipers have been prophesizing for the last 40 years, or is it a new one ?

I enjoyed life and prospering financially during all the previous collapses and apocalypses that appeared only in your fantasies and self-delusions.

Stuck on Zero's picture

Do you work for the government?

noless's picture

He probably just doesn't realise it, whatever, those vans will probly work out just fine.

InnVestuhrr's picture

I am an entrepreneur with many different businesses.

One of my businesses that is BOOMING consists of rescuing useful and valuable things from people's trash pile before they get picked up by the garbage collectors and then selling them in my own outlets and on eBay.

I am ASTONISHED at the valuable and useful stuff that Americans just throw out instead of selling them or giving them to someone who can use them. I started doing this just to donate the stuff to my favorite charities, but I soon realized that I could collect a lot more valuable and useful stuff than my charities could use, so I started a business to collect and sell the stuff.

For example, I have picked up several very good expensive exercise machines, always lots of good fans at the end of summer, lots of luggage, tools, vacuum cleaners, all kinds of furniture, pool supplies and equipment, construction materials (eg a NEW UNOPENED 5gal can of white high-gloss interior latex paint, whole sheets of plywood, piles of 2x4's, boxes of ceramic tiles, etc), beautiful area rugs, etc etc etc.

Now it is a profitable growing business and I provide jobs to people who need them. :-))

 

codecode's picture

We had a portable fridge by our garbage you guys took during night - it doesn't get cold. Appreciate you taking it though, wasn't sure the garbage man would.

InnVestuhrr's picture

All that it required was a coolant charge, a simple problem far beyond your vestigial intelligence to diagnose or repair, but one of my intelligent, clever and skilled teenage workers fixed it less than 15 minutes and it is now for sale. Thank You !

Abbie Normal's picture

Congratulations on finding a niche business that is prospering during the dying days of the boom.  It's not so different than the repo-men that are doing brisk business now, but when those "rich Americans" have no more money to spend on frivolities, there won't be any nice junk left at the curb for your brand new foreign-built Ford vans either.

InnVestuhrr's picture

The Ford Transit is built in the USA.

Do you ever actually think rationally or do you run only on cult dogma ?

InnVestuhrr's picture

You have the perfect moniker that describes your intelligence and worth !

glenlloyd's picture

I love it when people start talking about HIGH END cargo vans. That's really an oxymoron tbh.

First, really too little info to make a judgement about whether you actually got a '(everything is) awesome' deal.

But, if I had to guess about whether you actually took business conditions as a whole into account when you bought the new vans I'd have to say you probably didn't. The only thing you saw was $7k off the (already overinflated) price. Did you finance these btw?

If you're trading vans every year (idiotic idea) then there's something really wrong with you bud. And since I doubt that you're actually that dim I'd have to say this post is really a fabrication.

InnVestuhrr's picture

You are both ignorant and arrogant.

Clearly you don't know about the Ford Transit 350, extra long wheelbase, stand-up interior height, dual-rear wheel, turbo-charged engine, 6-speed digital transmission, etc.

I took MY prospering business conditions into account when I bought the vans, not YOUR declining or non-existent business conditions.

The economy is the real-world where Darwinistic survival of the most capable plays out in real time. I am doing very well, obviously you are not. Hopefully for the human species you are NOT propagating your genes.

Fullthrottle's picture

Considering you bought a FORD tells me all i need to know about your level of knowldge. Not to bright. 

InnVestuhrr's picture

Do you actually own any vehicles or are you still depending upon your parents for rides ?

What is your cargo van preference, the old VW astro bus ?

 

InnVestuhrr's picture

By the way genius, the correct grammar and spelling is "Not too bright."

Easy to see why you are a lifelong failure. Are you planning to burden us for the rest of your worthless existence or will you act honorably and exit quickly ?

nofluer's picture

Is the "stand-up interior height" to allow the vans to carry more "immigrants" per load? (Likewise the dual-rear ends)?

83_vf_1100_c's picture

Trash picker/reseller. Fancy vans. I think Dave Hester from Storage Wars is trolling us.

BlindMonkey's picture

Everyone knows the credit lockup is coming.  The question is does the Fed have enough 'dry powder' to pull off another can-kicking save?  

Dr. Engali's picture

Sure they do. We still have NIRP and helicopter "money" to look forward to.

NoDebt's picture

I can hardly wait.  Very exciting stuff to look forward to.

Any time you see the 30 year north of 3% from here forward you buy the shit out of it.

tmosley's picture

With China starting to liquidate assets in defense of its currency, I'm not sure that even the current policy can be sustained without triggering hyperinflation, never mind the crazy stuff.

tarsubil's picture

Can't wait to buy a beater for $100K with a 30 year negative interest loan. Yes, shit can just keep getting crazier apparently.

_ConanTheLibertarian_'s picture

I channel stuffed some bitches.

yogibear's picture

Cash for clunkers #2 coming.

Rinse and repeat...

 

Socialize loses and privatize profits.

- The Banksters

Big Corked Boots's picture

I have a clunker-in-waiting, and dry powder.

Save_America1st's picture

don't forget that cash for clunkers for sheeple had tax ramifications.  They had to pay taxes on the subsidy they got.  The Fed just keeps on fuckin' even after you scream the safety word over and over again.

Osmium's picture

It's probably still worth it.  I have a 97 Saturn with 260k.  Could use an upgrade.

Abbie Normal's picture

Under the last program, your Saturn would not have qualified unless it got worse than 17mpg combined -- highly unlikely unless it had a hole in the tank.

MrSteve's picture

what is the correct or better "safety word" then?

Abbie Normal's picture

soylent green is made from people

BandGap's picture

Maybe a free car/truck instead of a tax return!

For the Social Security payouts I will never get I want some fucking tax free land, too.

More Ammo's picture

Not like they don't have plenty of land to be given back...

 

 

The federal government owns roughly 640 million acres, about 28% of the 2.27 billion acres of land in the United States.

http://bigthink.com/strange-maps/291-federal-lands-in-the-us

 

And they say the idiots in Malheur don't have a point...

http://www.oregonlive.com/pacific-northwest-news/index.ssf/2016/01/at_bu...

101 years and counting's picture

in other words, the last time we saw this, the US gov't handed out almost $1 Trillion to US TBTF criminal banks and US automakers. 

BULLISH!!!

GeezerGeek's picture

Look for a retraction of this article very soon. I just read about nearly 300K new jobs created, and I'm certain that all those people will be rushing out to car dealers this very weekend.

Unless, of course, the weather interferes.

venturen's picture

closer to $10 Trillion $4 Trillion straight up printing, then we have unlimited guaranteed loans, TARP, and who doesn't love borrowing at ZERO, etc

Tarjan's picture

Ah, just stff it!

o r c k's picture

Channel Stuffing.  They auto not do that.

cordial savage's picture

"They auto not do that."

You win.  Take the weekend off and enjoy the victory.

nofluer's picture

All your stuffing is belong to me!

J Yellun