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The Channel-Stuffed GDP Report

Tyler Durden's picture


Via Jeff Snider of Alhambra Investment Partners,

I don't think there was much in the GDP report that wasn't expected, except durable goods.  The decline in durable goods was comparable to Q2 2011, right down to the primary driver of that weakness - motor vehicles.  However, there was no earthquake in Japan this year to disrupt supply chains, production schedules and brand availability.  Just like last year, marginal economic growth overall seems to be backfilled with a tide of inventory.  The trouble with inventory at the margins of growth is that it is essentially a build-up of forward demand, and therefore susceptible to reversal should overdone production move out of alignment with final demand.  Both monetary and fiscal policies actively seek to pull forward demand, meaning this inventory-driven activity conforms to policy goals.  This is true in perhaps more ways than expected since the heavy arm of fiscal activism is readily apparent in an important sector of the marginal manufacturing economy.

That brings up a bit of a curiosity since durable goods "sales" of motor vehicles should be largely in sync with durable goods "output" of motor vehicles:

"Sales of MV", contributions to GDP past 5 quarters       -.53  .05  .63  .31 -.29 

"Output of MV", contributions to GDP past 5 quarters      .05  .03  .55  .72  .13

That's a pretty big deviation in the past two quarters.  The “sales” figures include the sales of motor vehicle parts, while the output figures do not, but I highly doubt the marginal difference is solely a collapse in parts purchases.  It might be a statistical anomaly that gets revised away but it might also explain some of the recent weakness of the regional Fed surveys and the ISM manufacturing survey. 

Clearly weakness in Q2 2012 PCE is attributed to the change in the direction of durable goods (from +13.9% and +11.5% in the preceding quarters to -1% in Q2 2012); durable goods added .85 to GDP in Q1, but subtracted .08 in Q2.  It is also pretty clear that durable goods weakness itself can be mostly attributed to weak motor vehicle sales (and parts).  Spending on nondurable goods was largely unchanged from the preceding quarter, while spending on personal services was slightly higher (due largely to the economically “beneficial” pickup in spending on “housing and utilities”). 

MV sales are highly correlated to income growth, but there is also a credit availability component.  I haven’t seen anything recently in the consumer credit numbers that suggests there are any financing-related issues.  Is this perhaps a price issue?  Both sales and inventory figures in the GDP release are reported in dollar terms, so it is possible this is a function of price markdowns after leaving the factory.  That still ends with the same result, however, slowing future production in response to an imbalance of supply and demand.

According to in February of this year, inventory levels are still below historical run rates for the domestic manufactures, though they have risen steadily at GM and Chrysler (as pointed out on ZeroHedge  Ford, on the other hand, has actually trimmed its inventory/sales ratio since 2009, perhaps suggesting that inventories are being more robustly managed to concur with a far different environment (and within the industry, inventories are obviously being managed quite differently with regard to government involvement).  Total car sales in the US peaked at over 17 million units, and even optimistic forecasts call for, at best, near 14 million units in 2012. 

This below peak buying rate has been used to build the optimistic case for auto demand since the overall age of the domestic car and truck fleet has increased from about 10.5 years in 2009 to about 11.5 years.  However, that trend toward “aging” vehicles has been in place for more than a decade – average fleet age in 2002 was 9 years.  If anything, the trend in the aging of the fleet has actually been relatively consistent since 2005 (with light trucks being held onto more than cars).  Since this trend pre-dates the Great Recession it should not be a surprise that turnover is reduced, meaning that sales growth marginally depends more on households buying additional units.  That’s an expensive proposition in the post-crisis period, especially in comparison to the housing bubble that preceded it.

In 2007, the number of motor vehicles per licensed driver, according to, was about 1.21.   That rate of usage has fallen off to about 1.17 since.  For a frame of reference, in 2003, just as the housing bubble was swinging into full gear, there were about 1.15 motor vehicles per licensed driver. 

Optimists see pent up demand in these numbers, but lack of per capita income growth may be keeping a lid on that potential demand.  In my opinion, it is likely that the amount of cars and trucks produced and sold in 2007 was another artifact of monetarism that cannot be repeated in the current environment.  After all, if there is so much pent up demand, then the contraction of motor vehicle sales in the GDP accounts is an empirical result that runs perfectly contrary to that optimistic expectation.  Given that there does not seem to be a contemporary problem with available financing (thanks in large part to Ally Financial, formerly GMAC and still sporting that hefty federal government investment) that may mean the industry as it existed pre-crisis is itself an anachronism, and perhaps much more sensitive to changes in real economic variables at the margins.  The big question for the economy is whether inventory and production levels are as sensitive.

Obviously, for the overall GDP accounts, the difference between sales and output is inventory.


Demand for durable goods and motor vehicles join a downward trend in the wider economy, showing up in gross domestic purchases and real final sales, and highlighting the disconnect with inventory:

A diverging trend between final sales and overall inventories, especially as they both intersect through the sensitive motor vehicle sector, is not an indication of future strength to me.  If the trend in the first chart is valid, we should ultimately expect the second chart to follow.  Maybe the economy is devolving faster than previously thought in the aftermath of financial dysfunction and the largely disabled/ineffective wealth effect.  We cannot ignore, however, that the intent behind increasing production may not simply be a function of pure market forces that will be solely respond to demand.  After all, GM proclaims it’s in a record-setting run despite the noticeable increase in inventory (in sharp contrast to Ford inventories), in what just might be a shadow stimulus.  How long can this trend continue before production overruns prove too costly?  Maybe GM’s stock price is an indication.

It's almost like the 1960's and 70's, with motor vehicles and government spending driving the marginal economy again.  All that’s missing is for Ralph Nader to show up and write about how cars are dangerous. 


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Fri, 07/27/2012 - 23:34 | 2658544 toady
toady's picture

Wait, a talking head said durable goods improved when the report came out...

I guess she didn't read it. Had to beat the competition to the mic...

Sat, 07/28/2012 - 00:41 | 2658606 markmotive
markmotive's picture

According to Peter Schiff the real crash has yet to come:

Sat, 07/28/2012 - 00:47 | 2658609 Unprepared
Unprepared's picture

According to me, the shuppets are (ch)anal-stuffed and ready for the oven. When is Saint Blankfein?

Sat, 07/28/2012 - 07:01 | 2658722 smlbizman
smlbizman's picture

in balt. county md....all the state trucks i have been seeing are brand new gm products,.... these replaced last years brand new products....

Sat, 07/28/2012 - 07:27 | 2658730 economics9698
economics9698's picture

Spending the taxpayers money to make the pres look good.  All these fools do not understand that for every $1 they spend the private sector loses $2.2.  So while they think they are stimulating the economy and increasing Obots chances of winning re-election they are actually sabotaging his re-election efforts.

Economic ignorance taught at the high school, college, media levels courtesy of central banks and bureaucrats everywhere.

Sat, 07/28/2012 - 09:00 | 2658787 El Oregonian
El Oregonian's picture

Stupid is what stupid does.

Sat, 07/28/2012 - 09:26 | 2658809 Sean7k
Sean7k's picture

This may not be stupidity.

What is the problem with a command economy? The production of goods without a price machanism to signal value. These cars are being produced to create jobs, but they are unable to sell because people do not want them at these price points. They are attempting to create demand through cheap credit options to sell products no one wants.

They are giving us a demand economy with an emphasis on psychological behavioral controls to create a demand that doesn't exist. 

They are attempting to sidestep the rules of capital and investment through the use of psychological controls administered through media, allowing debt to accumulate like an addict's first hit- free now, bankrupt you later. 

How much of our economy has fallen under the machinery of government? How much truly "private" production for real profit do we have? How much is it declining? How DEPENDENT are people becoming on a command economy structure? Enough to be willing to support it when it is exposed? 

Do the people end up choosing fascism because the alternative is so far out of reach, society would be devastated if it attempted to return to real economic production for profit? 

Seems pretty damn brilliant to me. 

Sat, 07/28/2012 - 10:53 | 2658922 RSloane
RSloane's picture

^^ I can attest this is absolutely true.

Sat, 07/28/2012 - 00:49 | 2658610 Richard Chesler
Richard Chesler's picture

There'll be no crash until bears capitulate.

Sat, 07/28/2012 - 02:49 | 2658662 1000pips
1000pips's picture

he's been sayin that for 10 years...

Sat, 07/28/2012 - 10:32 | 2658888 banksterhater
banksterhater's picture

Good job. With 5-7 yr subprime auto loans making up over 1/3 of sales, without that and forcing inventory on dealers, this is a conjob ready to plummet.

Fri, 07/27/2012 - 23:36 | 2658545 The Monkey
The Monkey's picture

These central banks are taking steps down the road of perdition. We've been in a period where the picture has been muddy. The picture is increasingly clear: there is no means of exit from experimental policy. Bernanke has decided to choose a different path from that which Japan suffered. The path is inflation.

Sat, 07/28/2012 - 07:27 | 2658731 economics9698
economics9698's picture

Hang the MF's.

Fri, 07/27/2012 - 23:41 | 2658555 kedi
kedi's picture

Channel stuffing is just making sure you get a well stuffed bonus this year, to hell with the future. Management doesn't give a sh*t about long term business stability, especially if it is a corporation. Even after looting it into the ground they get the golden parachute on top of the salaries and bonuses they basically stole when you look at the long term results of their greed.

Sat, 07/28/2012 - 03:54 | 2658684 Muppet of the U...
Muppet of the Universe's picture

so how is this going to affect quarterly reports from auto manufacturers?  No sales combo'd with increasing inventory prod., storage, and maintainence costs...  This has been going on for sooo long, and how long it will last?  Who knows.  Will the gov bail autos out so they can build giant parking lots of inventoried cars like china builds ghost cities?

All I know is, When the global slowdown increases, what kind of impact will decreasing production rates have on raw materials?  For cars, the catalytic converter is key, and platinum is so necessary for efficiency:    How will a fall in production and thus inventories impact the gold/platinum ratio?  Will we see the golden .7?  Will Gold be allowed to take off and leave plat in the dust? Or will CB / PDB intervention and gld suppression smash it down again?

Sat, 07/28/2012 - 09:54 | 2658838 jerry_theking_lawler
jerry_theking_lawler's picture

wrong....GM has 'revitalized' an old strategy....sell to subprime borrows.


haven't we heard this tune before? i'm sure all will END well this time....

Sat, 07/28/2012 - 10:35 | 2658896 banksterhater
banksterhater's picture

I'm sure I read subprime is 38% of sales, aren't they even "securitizing" them again? !

Sat, 07/28/2012 - 15:20 | 2659276 kedi
kedi's picture

Well there will be a ton of late model never driven cars for rental companies to buy cheap. Nobody can afford a new car so we can all rent. Or just remove and recycle the engines and park the shells all over the country for the homeless to live in. Use them to replace the trucking industry when the just in time inventory system only requires small car trunks to fulfill it's volume. Artificial corral reefs. Sell them as portable generators as the power grid continues to crumble.

Sat, 07/28/2012 - 11:04 | 2658932 Overfed
Overfed's picture

It makes one wonder WTF they've been teaching in business school over the last 30 years or so. Whatever it is, it sure as hell ain't workin'.

Fri, 07/27/2012 - 23:45 | 2658556 RobotTrader
RobotTrader's picture

The only thing that matters is that SPY and DIA are within a stone's throw of new 3-year highs, and millions of guys on the sidelines or short will have to reverse positions very soon.

The market is discounting a huge, epic boom in front of us after an extended period of economic weakness.

Aided and assisted by Central Banker "Gum Flapping", of course.....

Sat, 07/28/2012 - 00:08 | 2658569 Yen Cross
Yen Cross's picture

 ROBO. Jeesus. I have a Heart!  Don't you ever get tired of the " zero" sum game?

  Have you ever heard of charitible donations?

  That wasn't my junk ROBO.

Sat, 07/28/2012 - 07:31 | 2658734 economics9698
economics9698's picture

If we avoid war.

If we can eliminate central banks.

If we are not overrun by third world 93 IQ idiots.

If China adobts gold or silver.

A boom will replace this Yiddish created shit hole we are in.

Sat, 07/28/2012 - 00:20 | 2658592 IndicaTive
IndicaTive's picture

I see what ya did there.

Sat, 07/28/2012 - 00:29 | 2658601 sablya
sablya's picture

Epic boom?  Wow, I'd ease up on whatever it is you're smoking or whatever.  

Sat, 07/28/2012 - 07:02 | 2658723 disabledvet
disabledvet's picture

growth is slow...which has kept over all inflation contained. parts of the US economy are in total chaos...and have been for some time. stay long industrials as "operation flatten Atlanta" proceeds apace. not that insane wars abroad or "counterstrike by Syria" hurts this trade either.

Sat, 07/28/2012 - 12:30 | 2659032 DavidC
DavidC's picture

Honestly, I really can't tell if you're being sarcastic or not (I'm presuming, from your last line, that you are, in which case those negatives should be replaced with twice that number of positives, because your humour is on a level being missed by many).


Fri, 07/27/2012 - 23:48 | 2658559 Cornfedbloodstool
Cornfedbloodstool's picture

anybody watching this london BS?

Sat, 07/28/2012 - 00:00 | 2658572 Yen Cross
Yen Cross's picture

  I trade Fiat. Yes I'm watching the blips.

Sat, 07/28/2012 - 00:01 | 2658574 FieldingMellish
FieldingMellish's picture


Sat, 07/28/2012 - 09:06 | 2658791 El Oregonian
El Oregonian's picture

Why, what's happening in London?

Sat, 07/28/2012 - 00:01 | 2658575 slewie the pi-rat
slewie the pi-rat's picture

nader re today's edsel, tomorrow's pinto;  where will we ever put them all?

:> Prisons as Growth Industry <:

[& RIP alexCockburn]

Sat, 07/28/2012 - 00:05 | 2658580 Yen Cross
Yen Cross's picture

 I'm here Slewie.  Just absorbing that R.N. contribution.

Sat, 07/28/2012 - 00:03 | 2658577 Missiondweller
Missiondweller's picture

Thank god a new post. Watching Olympic opening ceremonies here in US and it boring as hell.

Sat, 07/28/2012 - 00:12 | 2658586 Atomizer
Atomizer's picture

You should of watched it this afternoon and freed up your evening as I did. Why wait around to watch a program for 3 minutes and be held hostage for 10 minutes of commercals. Winks

Sat, 07/28/2012 - 00:05 | 2658581 Atomizer
Atomizer's picture

Just watch the TV commercials. You can feel the tension. Rather than following GM's lead in returning your car to dealership if unsatisfied. Competing dealerships need to step up and offer more incentives to lure the broke ass consumer into a channel stuffed lot. How about, free test drives with a happy ending? Selling sex and automobile’s has been around for decades. LOL 

In other news today..

What a treat, Fair Isaac Corporation (FIC) rose to 10.21% today. Who would have thought a declining stock could make a sudden comeback over a Linkedin leak?

Rolls me eyes.

Sat, 07/28/2012 - 00:07 | 2658583 Demogorgon
Demogorgon's picture

Fuck 'em all. I recently hit 50k miles in my '07 S2000. I'll run it into the ground before I purchase another vehicle. And when I do it'll be a used one. Not because I can't afford a new car, I just refuse to feed the multi-headed snake.

Sat, 07/28/2012 - 07:08 | 2658724 disabledvet
disabledvet's picture

Honda two seat roadster. Nice car. Had one for a weekend..."watch out for that hind end." She can break free if you're a little heavy on the gas...

Sat, 07/28/2012 - 10:15 | 2658865 toady
toady's picture

Mine's a '97, and I agree!

Sat, 07/28/2012 - 00:10 | 2658584 Temporalist
Temporalist's picture
Douglas Keenan: My thwarted attempt to tell of LIBOR shenanigans

By Douglas Keenan
Financial Times, London
Thursday, July 26, 2012

Sat, 07/28/2012 - 00:12 | 2658588 Missiondweller
Missiondweller's picture

And speaking of auto sales.

GM Ramps Up Risky Subprime Auto Loans To Drive Sales


Sat, 07/28/2012 - 03:40 | 2658677 ebworthen
ebworthen's picture

I'm seeing adverts promoting Adjustable Rate Mortgages to "Make homeownership affordable" again.

That's it, grease the rails that carried the last train wreck.

The brain trust of Washington and Wall Street blowing another bubble.

Also today - a spate of reverse mortgage commercials starring Robert Wagner and Henry Winkler.

I suppose when the banks own the homes instead of the Baby Boomers kids the banks will rent them back to them expensive like, or to all the illegal immigrants that we allow to walk (run, bus, drive, boat, stroll) acroos the U.S. borders?

I'm wondering why I need money or a job if everything is printed, handed out, or stolen?

Sat, 07/28/2012 - 10:30 | 2658884 toady
toady's picture

I looked into those reverse mortgages and those people are simply insane.

They want YOU to pay interest on the home that you OWN! The fees on top of the interest were ridiculous too. They calculated my place @$700 a month for 20 years, way to low, then wanted $200 of that in interest and fees!

I kept insisting that they had to pay me interest because I own the asset, so it didn't work out.

Sat, 07/28/2012 - 07:49 | 2658746 Jlmadyson
Jlmadyson's picture

Yup, SUBPRIME game fully back on the table.

Sat, 07/28/2012 - 00:15 | 2658591 Yen Cross
Yen Cross's picture

 Chris and Pitts / without the/ char coal! Come on Fellas?

  Speak or Squeak<   

                Does any one think T10's will widen next week?

Sat, 07/28/2012 - 00:25 | 2658599 emersonreturn
emersonreturn's picture

the about a bank holiday.

Sat, 07/28/2012 - 01:14 | 2658618 Yen Cross
Yen Cross's picture

 If ever? The new 991 (911) HAS DOOR MOUNTED MIRRRORS.  Sweet.

   I'm going to sell my 599 scagletti.

   I love  those :  Phase-3 poly elipsoid /convex beams on the 991! I have owned (3 )928's.

  I see where Ferdinand' is going!

Sat, 07/28/2012 - 01:40 | 2658630 Yen Cross
Yen Cross's picture

    Girls love boys.  Women are beautiful

    I love GIRLS! They are so copacious.  Women are the, best of the best!



                        No Man was made / without a Beautiful indiginious (woman)

Sat, 07/28/2012 - 01:45 | 2658631 q99x2
q99x2's picture

How about we get the Chinese to buy them to fill the parking lots and streets of their empty cities that they built with the US tax dollars and US manufacturing jobs. The ones the banksters stole...Those M'fn, M'Fers.

Sat, 07/28/2012 - 01:57 | 2658639 Rentenmark
Rentenmark's picture

"No earthquake in Japan"  what about the drought across the states?  That has to be worth some kind of negative, right?  Plus, there must be anticipation of everyone watching the olympics.  Not to mention the worry of snow this winter. Nothing but one time events, nothing to see here thats the ticket!

Sat, 07/28/2012 - 02:08 | 2658645 AurorusBorealus
AurorusBorealus's picture

This report is largely background noise.  Not a significant contribution to ZH, except to attempt to make the case for channel stuffing at GM, a topic that ZH is overly enamored with.  The only relevant implication is to place GM in the sell category.

Sat, 07/28/2012 - 07:16 | 2658726 disabledvet
disabledvet's picture

the totality of the losses have come from Europe. bunch of Euro-fags here. GM is doing great in China. Not too bad in the USA either. Read this to understand just how massive the industrial collapse of the EZ in actuality is is:
the media...this site so euro-centric it can't see past the trillion dollar losses. not even the EZ pays attention to these clowns anymore. do agree "GM stock price is back down to its IPO price." (beats facebook, groupon, bulgaria, etc...) Must mean go long Volkswagon! NOT!

Sat, 07/28/2012 - 12:54 | 2659057 Temporalist
Temporalist's picture

Per your link:

"Ford Motor Co. said its European operations would lose up to $1 billion this year because of weakening demand in debt-saddled countries in western and southern Europe."

Sat, 07/28/2012 - 02:20 | 2658647 Yen Cross
Yen Cross's picture

 We all had a rough week.  My gal and I are lighting some candles.

    She is sweetnees.

Sat, 07/28/2012 - 02:33 | 2658653 Yen Cross
Yen Cross's picture

 You guys are a hoot.  Saturday is a chart study.  

              MONEY never Sleeps,.

                                                                Robotard Does. I have to give that guy some credit.

 ROBO is completely lacking, in compassion.

   ROBO is on a mission and starting realize his mortality?

Sat, 07/28/2012 - 03:45 | 2658680 ebworthen
ebworthen's picture

Yen is having a good night.

If your girl is with you and you are burning candles do not get on your computer for the next 12 hours and savor the wine of life.


Sat, 07/28/2012 - 02:33 | 2658655 caerus
caerus's picture

we are all stuffed

Sat, 07/28/2012 - 08:45 | 2658778 Debt-Is-Not-Money
Debt-Is-Not-Money's picture
We are the hollow men We are the stuffed men Leaning together Headpiece filled with straw. Alas! Our dried voices, when We whisper together Are quiet and meaningless As wind in dry grass Or rats’ feet over broken glass In our dry cellar Shape without form, shade without colour, Paralysed force, gesture without motion; Those who have crossed With direct eyes, to death’s other Kingdom Remember us—if at all—not as lost Violent souls, but only As the hollow men The stuffed men.

T.S. Eliot
Sat, 07/28/2012 - 04:50 | 2658694 angelinaS31
angelinaS31's picture

Car sales are been increasing day by day and every brand sales is been increasing very lot now days and the above given is been mentioned very clearly.

used trucks for sale

Sat, 07/28/2012 - 07:18 | 2658717 disabledvet
disabledvet's picture

Listened to Tom Keen before going to work Friday and he made easily the worst GDP call in market history and got his balls ripped off and shoved in his mouth because of it. Hopefully the rest of all of you were shorting with him "while going all in on Facebook" as well. The revisions were all higher...and but for the collapse of state and local government we'd be cruising along at plus 4 percent right now. Larry Kudlow has called it perfectly: "growth recession"...and fixing that problem will be the difference between voting for Mitt Romney and Barak Obama. Won't be easy given the massive corruption of the US political process. (Is anyone even going to vote to this year?) This drought is going to have a MASSIVE impact on the American particular in the South and Mid-west...price spikes for food and fuel will easily be the biggest in US history....good thing this is capitalistic country with a Continental size transportation system unlike any in human history and the "impoundments" to keep that water resource where it matters most: local. Should prevent actual starvation...we'll see about the food riots though. Has global implications. Given the massive amount of global capital sloshing around waiting to find a home still bullish on transportation and ag to take advantage of these enormous disruptions. Deere soared this Monsanto has been doing going into this massive global food crisis. Unlike the worthless phucks in government and the media it would appear "there really are people who are interested in not only solutions but executing on them." Nothing "cute puppies in pink sweaters" 24/7 365 on the television can't cure of course. Why bother with the internet and actual data, right? Do not short this equity space and go long the Imams as they've had enough of this euro-fag bullshit too.

Sat, 07/28/2012 - 06:49 | 2658718 Heroic Couplet
Heroic Couplet's picture

Until 27 trillion is confiscated from offshore accounts, no one on Main St gives a crap.

Sat, 07/28/2012 - 07:42 | 2658742 dizzyfingers
dizzyfingers's picture
Why You Pay Too Much In Taxes  ...and why Americans have less and less money in their pockets to buy anything at all... 
by Daily Digest

Tuesday, July 24, 2012, 5:19 pm "Corporate Socialism" alive and well in America - Fast Forward   among those who benefit are... This article is about the investment firm. For the management consulting company, see Bain & Company.Bain Capital is a Boston-headquartered alternative asset management and financial services company that specializes in private equity, venture capital, credit and public market investments. Bain invests across a broad range of industry sectors and geographic regions. As of early 2012, the firm managed approximately $66 billion of investor capital across its various investment platforms.The firm was founded in 1984 by partners from the consulting firm Bain & Company. Since inception it has invested in or acquired hundreds of companies including AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, DoubleClick, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel.As of the end of 2011, Bain Capital had approximately 400 professionals, most with previous experience in consulting, operations or finance.[2] Bain is headquartered at the John Hancock Tower in Boston, Massachusetts with additional offices in New York City, Chicago, Palo Alto, London, Luxembourg, Munich, Mumbai, Hong Kong, Shanghai and Tokyo.The company, and its actions during its first 15 years, have become the subject of political and media scrutiny as a result of co-founder Mitt Romney's later political career, especially his 2012 presidential campaign.[4]Mitt Romney and others at Bain Capital, gave the Church of Jesus Christ of Latter-day Saints millions’ worth of stock holdings obtained through Bain deals, according to Reuters.[5] and TPTB just keep scratching each other's backs...  While in London, the former Massachusetts Governor is scheduled to attend two campaign fundraisers for U.S. expats hosted by bankers and lobbyists embroiled in the LIBOR-gate scandal.
According to the Washington Post, Romney's London fundraisers will include a reception and a dinner. It costs $2,500 per person to attend the reception; dinner attendees paid between $25,000 and $75,000 a plate.

Sat, 07/28/2012 - 08:05 | 2658757 Son of Loki
Son of Loki's picture
Court lets Stockton, Calif. cut retiree health care

Sat, 07/28/2012 - 08:23 | 2658764 Hype Alert
Hype Alert's picture

When this becomes a trend, I might think we have a chance.  Companies that over promise generally go out of business being crushed under costs they cannot pay.  That is until the government gets involved and prints money out the ass keeping them artificially alive or with direct bailouts like GM or the banks.

Sat, 07/28/2012 - 08:17 | 2658761 Hype Alert
Hype Alert's picture



I expect Government Motors to continue channel stuffing until after the election to keep the shadow stimulus going as long as possible.  Ford seems to be more reasonable on the inventory build.  YMMV

Sat, 07/28/2012 - 08:49 | 2658782 FranSix
FranSix's picture

Dr. Marc Faber interview with Victor Adair:

Sat, 07/28/2012 - 11:31 | 2658970 Snakeeyes
Snakeeyes's picture

Gotta keep those GM employees on staggering wages and benefits on the taxpayer dime working!!!!!!1

Sat, 07/28/2012 - 11:39 | 2658982 Atlantis Consigliore
Atlantis Consigliore's picture

Capital On

I smell a collapse in retail sales/ here;  with the 3% surcharge on credit cards,

collapse in GM car sales subprime fraudie loans;

and general consumer strike to match the small business  Capital on strike

Sat, 07/28/2012 - 11:55 | 2658996 Snakeeyes
Snakeeyes's picture

I was on CNBC talking about SGS measures of GDP and Inflation and I received so much hate mail .... from economists. "How can you use SGS?"

But if you look at SGS estimates of GDP, they have a truer ring about them than the Commerce Departments. See the chart.

Sat, 07/28/2012 - 12:55 | 2659059 miker
miker's picture

1)  Only one of our many friends have bought a "new" car in the past 6 months.   That was slgihtly used BMW SUV to replace an older BMW wagon that was having major electrical problems.  They financed out 5 years (I think). 

2)  The auto shop where I take our cars is struggling.  I think they may go under.  Good bunch of guys but looks like business has fallen off and they have some overhead with big building, etc.  Don't know for sure but a hunch.

3)  I can't prove it, but it "feels" like things are slowing up at an accelerated pace.  This is based on lower week day traffic (mid day), lower weekend traffic and lower traffic in stores, etc.  Really, I don't know how some shops even make a go.  So much BS out there...maybe they are just hanging on.  But I do think that cannot go on forever.  Maybe the banks are being generous in their credit lines, but it can't go on indefinitely. 



Charlotte NC

Sat, 07/28/2012 - 12:58 | 2659065 miker
miker's picture

Also forgot to mention.......violent crime way up in recent weeks; mutliple murders.  Police and city have no explanation.

Could the end of unemployment benefits and other stimulus programs be kicking in??

Sat, 07/28/2012 - 14:13 | 2659157 JamesBond
JamesBond's picture

soooooo.... how are cars sales the past two quarers?



Sat, 07/28/2012 - 15:28 | 2659277 earleflorida
earleflorida's picture

It all begins here:   ExAnte [exPost]- **Double-Entry - *Single-Entry & EBITA [???#s]     Note: Keynes has a lot to say about nothing?    < Ps. short reads all >

Important: exAnti & exPost are grandiose accounting gimmicks based on the square root of a positive hopium exponential times infinity!

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