Auto Sales

Tyler Durden's picture

Excessive Channel Stuffing Forces GM To Halt Chevy Volt Production, Fire 1,300





On Thursday, we were the first to expose GM's latest strong car sales data as nothing more than the latest in a long series of accounting gimmicks known as 'channel stuffing' when excess inventory is offloaded to a vendor channel, in this case GM dealers, while allowing the company to book revenue, and, of course, profits (most likely on a FIFO basis thus further making numbers a complete myth in a time of once again surging input costs). The problem with channel stuffing is it can only go on for so long before the intermediary collapses under its own weight due to so much excess inventory the only next possible step is wholesale dumpin, in the process destroying the brand. Sure enough, it took about 24 hours for this latest speculation to be proven right as GM announce it was "temporarily" halting production of its Volt electric car. Per The Hill: "We needed to maintain proper inventory and make sure that we continued to meet market demand," GM spokesman Chris Lee said in a telephone interview." Translated into English, this means that GM has flooded dealer floors with so many of the spontaneously combusting cars that it has managed to bring demand to zero.

 
Tyler Durden's picture

Bank Of America Joins Goldman In Cutting Its Q1 GDP Forecast





Yesterday, when we reported about Goldman not one, but two GDP Q1 forecast cuts in one day, we said to "watch for the Wall Street lemming brigade to quickly follow in Goldman's footsteps." Sure enough, here is Bank of America, rushing first into the bandwagon, trimming its Q1 forecast from 2.2% to 1.8%. This is perfectly expected: recall that from day 1 of 2012, most banks had been pushing for QE3, ignorant of the massive liquidity tsunami that was going on behind the scenes. Well, the impact of that has now come and gone, with no more easing from the ECB on the horizon for a long time. Which means that the focus can again shift to how "bad" the US economy is in preparation for the inevitable Bernanke gambit. Needless to say this will make the pre-election economy appear like a total farce in the months before the re-election: soaring employment and plunging everything else. Good luck explaining that away. Incidentally explains why the EURUSD has resumed its slide: the market is now pushing Bernanke to halt the appreciation of the USD against the EUR, and thus the implicit benefit of German's economy over that of the US, which can only happen with further promises of easing. That said, we can't wait for the statement as the vaudeville Trio of Bianco, Chadha and of course LaVorgna to follow suit and slash their now comically hyperbolic expectations.

 
Tyler Durden's picture

Frontrunning: March 2





  • Brazil declares new ‘currency war’ (FT)
  • Postal Cuts Are Dead Letter in Congress (WSJ)
  • China state banks to boost selected property loans (Reuters)
  • ECB Says Overnight Deposits Surge to Record (Bloomberg)
  • Van Rompuy confirmed for 2nd term as EU Council president (Reuters) - you mean dictator
  • BOJ Shirakawa: Japan consumer prices to gradually rise (Reuters)
  • IMF Says Threat of Sharp Global Slowdown Eased (Reuters)
  • Eurozone delays half of Greece’s funds (FT)
  • BOJ Openings Can Shape Monetary Policy (Bloomberg)
 
Tyler Durden's picture

David Rosenberg: "It's A Gas, Gas, Gas!"





"It Is completely ironic that we would be experiencing one of the most powerful cyclical upswings in the stock market since the recession ended at a time when we are clearly coming off the poorest quarter for earnings... There is this pervasive view that the U.S. economy is in better shape because a 2.2% sliver of GDP called the housing market is showing nascent signs of recovery. What about the 70% called the consumer?...Let's keep in mind that the jump in crude prices has occurred even with the Saudis producing at its fastest clip in 30 years - underscoring how tight the backdrop is... Throw in rising gasoline prices and real incomes are in a squeeze, and there is precious little room for the personal savings rate to decline from current low levels." - David Rosenberg

 
Tyler Durden's picture

David Rosenberg - "Let's Get Real - Risks Are Looming Big Time"





Earlier, you heard it from Jeff Gundlach, whom one can not accuse (at least not yet) of sleeping on his laurels and/or being a broken watch, who told his listeners to "reduce risk right now" especially in the frenzied momo stocks. Now, it is David Rosenberg's turn who tries to refute the presiding transitory dogma that 'things are ok" and that a Greek default will be contained (no, it won't be, and if nobody remembers what happened in 2008, here is a reminder of everything one needs to know ahead of the "controlled", whatever that is, Greek default). Alas, it will be to no avail, as one of the dominant features of the lemming herd is that it will gladly believe the grandest of delusions well past the ledge. On the other hand, they don't call it the pain trade for nothing.

 
Tyler Durden's picture

Is It The Weather, Stupid? David Rosenberg On What "April In January" Means For Seasonal Adjustments





Remember last year when the tiniest snowfall was reason for everyone and their grandmother to miss every possible estimate, always blaming it on the weather? Or rainfall in the spring? Or warm weather during the summer? Oddly enough one never hears about the opposite: the beneficial, and one-time, impact to trendline due to countertrend weather, such as the fact that we just had April weather in January. Granted, nobody in the programmed MSM will touch this topic, which is why we go to the most trustworthy filter of real economic data - David Rosenberg. "...Be careful in assessing the seasonally adjusted data when January weather feels like April. It was four to five degrees warmer than usual and the third fewest snowflakes to hit the ground in the past 50 years. On top of that, let's not lose sight of what real GDP did in Q4 — considerably below consensus view from last summer and sub-1% at an annual rate once inventories are stripped out. The only variable preventing real GDP from stagnating completely was the fact the price deflator collapsed to just 0.4% at an annual rate. If it had averaged to what it was in the previous three quarters, real GDP growth would have come in close to a 0.7% annual rate. Strip out the inventory build-up and real sales would have contracted at a 1.3% annual rate and recession would be dripping off everybody's tongue right now."

 
Tyler Durden's picture

Deja View, And The Weather





It seems like last Friday we were waiting for details of the latest Greek plan – PSI and Troika.  We are still waiting.  Details are starting to come out.  We should know what the bonds investors are expected to exchange into will look like.  The ECB sounds like it may use the interest they have earned on SMP to reduce the amount Greece has to pay back.  The Jobs data gives us an additional twist to today’s Euro watching.  How many of the courier jobs will disappear?  My guess is the data will be okay, but nothing special, just like the rest of the data.  The courier jobs are interesting, not just from what happens this month, but will they come back next year?  Amazon has been beaten up over the Kindle, but one of the benefits of the Kindle is that Amazon doesn’t have to deliver e-books.  I think we will all forget that by next December when everyone’s payroll estimate will include a bump for couriers, but maybe we won’t.

 
Tyler Durden's picture

Frontrunning: February 2





  • Merkel Seeks to Reassure China (FT)
  • German-IMF Rift Stalls Greece Deal (WSJ)
  • Survey of Banks Shows a Sharp Cut in Lending in Europe (NYT)
  • Bernanke to testify on economy and deficit (AP)
  • House votes to freeze congressional, federal pay (WaPo)
 
Tyler Durden's picture

Today's Events: ADP, ISM And Auto Sales





Following the Chicago PMI miss, will today's important ISM, which is forecast to grow substantially, be the next disappointment as the "economy" aligns even further with the chairman's vision of more easing, which however has to be justified by the "data"? Find out at 10am. Elsewhere, the ADP will continue to be its utterly worthless indicator self.

 
testosteronepit's picture

Germany’s Export Debacle





The economic superstar, with unemployment at a 20-year low and exports at an all-time high, produces 34% of the Eurozone’s GDP—and it smacked into a wall.

 
Tyler Durden's picture

Guest Post: 2012 - The Year Of Living Dangerously





We have now entered the fifth year of this Fourth Turning Crisis. George Washington and his troops were barely holding on at Valley Forge during the fifth year of the American Revolution Fourth Turning. By year five of the Civil War Fourth Turning 700,000 Americans were dead, the South left in ruins, a President assassinated and a military victory attained that felt like defeat. By the fifth year of the Great Depression/World War II Fourth Turning, FDR’s New Deal was in place and Adolf Hitler had been democratically elected and was formulating big plans for his Third Reich. The insight from prior Fourth Turnings that applies to 2012 is that things will not improve. They call it a Crisis because the risk of calamity is constant. There is zero percent chance that 2012 will result in a recovery and return to normalcy. Not one of the issues that caused our economic collapse has been solved. The “solutions” implemented since 2008 have exacerbated the problems of debt, civic decay and global disorder. The choices we make as a nation in 2012 will determine the future course of this Fourth Turning. If we fail in our duty, this Fourth Turning could go catastrophically wrong. I pray we choose wisely. Have a great 2012.

 
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