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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Fri, 01/08/2016 - 10:32 | 7016936 InnVestuhrr
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 !

Fri, 01/08/2016 - 10:33 | 7016954 Omega_Man
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

Fri, 01/08/2016 - 10:35 | 7016967 NoDebt
NoDebt's picture

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

Fri, 01/08/2016 - 10:45 | 7017042 highandwired
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

Fri, 01/08/2016 - 11:14 | 7017216 Save_America1st
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.

Fri, 01/08/2016 - 11:15 | 7017227 pitz
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.

Fri, 01/08/2016 - 11:43 | 7017387 glenlloyd
glenlloyd's picture

It was sad, it was pathetic tbh

Fri, 01/08/2016 - 11:47 | 7017412 Dick Gazinia
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"?

Fri, 01/08/2016 - 12:02 | 7017499 noless
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.

Fri, 01/08/2016 - 12:02 | 7017500 MaxMax
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. 

Fri, 01/08/2016 - 10:46 | 7017049 ParkAveFlasher
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

Fri, 01/08/2016 - 13:43 | 7017974 PTR
PTR's picture

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

 

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

Fri, 01/08/2016 - 11:43 | 7017386 InnVestuhrr
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.

Fri, 01/08/2016 - 11:51 | 7017435 Stuck on Zero
Stuck on Zero's picture

Do you work for the government?

Fri, 01/08/2016 - 12:04 | 7017509 noless
noless's picture

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

Fri, 01/08/2016 - 12:17 | 7017561 InnVestuhrr
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. :-))

 

Fri, 01/08/2016 - 13:35 | 7017936 codecode
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.

Fri, 01/08/2016 - 14:22 | 7018158 InnVestuhrr
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 !

Fri, 01/08/2016 - 17:34 | 7019175 Abbie Normal
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.

Fri, 01/08/2016 - 17:40 | 7019199 InnVestuhrr
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 ?

Fri, 01/08/2016 - 17:42 | 7019205 InnVestuhrr
InnVestuhrr's picture

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

Fri, 01/08/2016 - 11:50 | 7017431 glenlloyd
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.

Fri, 01/08/2016 - 12:06 | 7017520 InnVestuhrr
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.

Fri, 01/08/2016 - 12:23 | 7017594 Fullthrottle
Fullthrottle's picture

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

Fri, 01/08/2016 - 12:49 | 7017728 InnVestuhrr
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 ?

 

Fri, 01/08/2016 - 17:45 | 7019222 InnVestuhrr
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 ?

Fri, 01/08/2016 - 12:42 | 7017678 nofluer
nofluer's picture

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

Fri, 01/08/2016 - 13:25 | 7017905 83_vf_1100_c
83_vf_1100_c's picture

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

Fri, 01/08/2016 - 10:33 | 7016944 BlindMonkey
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?  

Fri, 01/08/2016 - 10:36 | 7016976 Dr. Engali
Dr. Engali's picture

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

Fri, 01/08/2016 - 10:39 | 7016992 NoDebt
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.

Fri, 01/08/2016 - 10:55 | 7017122 tmosley
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.

Fri, 01/08/2016 - 11:09 | 7017195 tarsubil
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.

Fri, 01/08/2016 - 10:33 | 7016945 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I channel stuffed some bitches.

Fri, 01/08/2016 - 10:33 | 7016946 yogibear
yogibear's picture

Cash for clunkers #2 coming.

Rinse and repeat...

 

Socialize loses and privatize profits.

- The Banksters

Fri, 01/08/2016 - 10:51 | 7017088 Big Corked Boots
Big Corked Boots's picture

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

Fri, 01/08/2016 - 11:16 | 7017231 Save_America1st
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.

Fri, 01/08/2016 - 12:05 | 7017516 Osmium
Osmium's picture

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

Fri, 01/08/2016 - 17:37 | 7019191 Abbie Normal
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.

Fri, 01/08/2016 - 14:03 | 7018049 MrSteve
MrSteve's picture

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

Fri, 01/08/2016 - 17:55 | 7019255 Abbie Normal
Abbie Normal's picture

soylent green is made from people

Fri, 01/08/2016 - 11:01 | 7017157 BandGap
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.

Fri, 01/08/2016 - 11:43 | 7017388 More Ammo
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...

Fri, 01/08/2016 - 10:33 | 7016948 101 years and c...
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!!!

Fri, 01/08/2016 - 10:37 | 7016983 GeezerGeek
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.

Fri, 01/08/2016 - 11:16 | 7017234 venturen
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

Fri, 01/08/2016 - 10:33 | 7016952 Tarjan
Tarjan's picture

Ah, just stff it!

Fri, 01/08/2016 - 10:34 | 7016955 o r c k
o r c k's picture

Channel Stuffing.  They auto not do that.

Fri, 01/08/2016 - 10:35 | 7016974 cordial savage
cordial savage's picture

"They auto not do that."

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

Fri, 01/08/2016 - 12:39 | 7017667 nofluer
nofluer's picture

All your stuffing is belong to me!

J Yellun

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