March 4, 2009

February Vehicle Sales: The Blowup of the Bailed-Out Continues

ThumbsDown.jpgFor the second month in a row, taxpayer-bailout beneficiary General Motors fared worse than every one of its non-bailed-out competitors.

The Associated Press’s Tom Krisher and Bree Fowler didn’t totally hide that fact, but it took them until the 22nd paragraph of their report, which was supposedly about the February performance of the entire auto industry (“Auto sales slump persists as consumers stay scared”), to mention the specifics of the sales declines at Toyota, Honda, and Nissan. Those declines “just happened” to be smaller than those at General Motors, fellow bailout bud Chrysler, and non-bailout recipient Ford. The AP pair stated in an early paragraph that “Japanese makers fared only slightly better.” Readers will, I believe, question Krisher’s/Fowler’s definition of “slightly.”

Also not emphasized, and illustrated in a chart below: The share of the US auto market held by Detroit’s so-called Big Three has fallen significantly since the government bailouts of GM and Chrysler in December.

Here are excerpts from the AP pair’s report yesterday:

Major automakers’ U.S. sales continued their deep slump in February, putting the industry on track for its worst sales month in more than 27 years as huge rebates and low-interest financing failed to spur fearful consumers to make a major purchase.

General Motors’ sales tumbled 53 percent from a year earlier, while Ford’s U.S. sales fell 48 percent and Chrysler’s fell 44 percent. The major Japanese automakers fared only slightly better.

The slide casts further doubt on the financial viability of GM and Chrysler, which need to sell cars and generate critical cash to supplement the $17.4 billion in government loans that are keeping them in business.

Automakers and analysts have been predicting sales will rebound in the second half of this year, but they are becoming less certain. Massive layoffs, the stock market decline and sliding home values are prompting people to hold on to their cars longer, while those who are buying are more often opting for a used car or truck.

….. (Paragraph 22) Toyota Motor Corp.’s U.S. sales plunged 40 percent, while Honda Motor Co.’s sales dropped 38 percent and Nissan Motor Co.’s fell 37 percent.

Sales of the Toyota Camry, the best selling car in the U.S., sank by 41 percent. Demand remained strong for Honda’s Fit subcompact, whose sales dropped 2 percent, but sales of its top-selling Accord sedan fell 42 percent.

Most other automakers posted significant declines, but Subaru of America Inc.’s U.S. sales edged up 1 percent in February as sales of its top-selling Forester model doubled. Motor Trend magazine named the Forester its sport utility vehicle of the year in the fall.

Kia Motors Corp.’s sales were about flat from a year earlier.

Here are the details I have on the past three months, followed by data showing how the Big 3′s share of Big Six sales has declined since December, the month of the Bush-approved and Obama-sanctioned bailouts began (sources: February 2009, January 2009, December 2008):


I contend that there is reason to believe that potential buyers — and it doesn’t take many to have an effect — are shunning GM and Chrysler because of their bailed-out status. Unfortunately, Ford seems to be suffering similar blowback, which I believe is at least partially because the press has all too often headlined the aid given to GM and Chrysler as “the Detroit bailout” or “the US auto industry bailout.”

The AP pair did not offer the very existence of the bailouts as a possible reason beyond the obvious ones relating to the ever-weakening Pelosi-Obama-Reid Economy aka The POR Economy. They should have, unless they have an answer to this question: What else, besides producing possibly lower-quality cars, explains the 50%-ish plunges in Detroit — much bigger than before the bailouts — and the more than “slightly” smaller drops elsewhere?

Cross-posted at

Trading Like It’s 1995: Press Ignoring Inflation’s Impact in Reporting Stock Market’s Dive

DownArrowThis report carried in the Washington Business Journal typified yesterday’s coverage of yet another decline in the stock market:

Dow declines further still

Wall Street’s major stock indexes followed Monday’s strong sell-off with a day of fluctuation, ending with more losses.

The Dow Jones Industrials Average gyrated between modest gains and losses throughout the trading day, ending the down 37 points, or 0.55 percent, to close at 6,726. Monday’s fall below 7,000 sent the Dow to its lowest level since April 1997.

The Standard & Poor’s 500 Index ended Tuesday trading down 4.49 to 696, it first close below the 700 level since October 1996. The Nasdaq Composite Index ended Tuesday’s session down 1.84 to 1321.

But after considering inflation, the markets are, in real terms, stuck at 1995 values, as shown in the following chart:


The gray areas show how the indices compare to prior year-end values. In nominal terms, the Dow and the NASDAQ are back to levels achieved during 1997, while the S&P 500 has already fallen back to where it was (as indicated above) in October 1996.

But in real terms, all three indices are back at levels achieved during 1995. The S&P 500 isn’t that far from falling back into 1994 (yesterday’s close of 696 vs. 12/31/1994 close of 650).

That is significant. 1995 was the beginning of the markets’ remarkable bull run, which was fueled primarily by the Gingrich Congress’s (relative) spending restraint, followed by the GOP-inspired welfare reform (which then pushed a half-million additional workers into employment per year from 1997-2000), followed by the 1997 capital-gains tax cut (which Treasury Secretary Bob Rubin, now nicknamed Bailout Bob, resisted).

The inflation adjustments reveal that the Obama Economy has taken us to a point where nearly all of the gains in value achieved from 1995-2007 have been virtually wiped out.

This narrative may explain why there’s not a lot of evidence that the press is interested in getting real, so to speak, when comparing historical stock values.

Cross-posted at

Rush on the POR (Pelosi-Obama-Reid) Economy: Obama Owns It

He focuses on Obama of course, but the points extend to Congress and the Senate (link will be subscriber-only in a week; additional paragraph breaks added by me):

This is Obama’s economy. They’re trying to slough this off on Bush. They’re trying to say all these deficits are Bush. They’re not going to get away with that. They’re not going to get away with that here. Nobody has spent like Obama, nobody has piled up debt like Obama. And it’s not over. This notion that I am for economic failure, or that anybody is for economic failure, is crazy. There’s one person who might be. Barack Obama. The one guy that could do something about this at least attitudinally is standing mute.

Who benefits from this plunging economy? Ask yourself. Who gets more power? Who gets more curiosity? Who gets more panic? Who gets more anxiety? Obama does. And what does the panic and anxiety mean? How does it manifest itself? It manifests itself thus: “President Obama, please do something, please do something, Mr. Obama, please do something.” He goes out and makes a speech for national health care, “Ah, I feel better, Obama is on the case.”

Meanwhile, the next day, zippo, another 200 points down. Ask yourself who benefits. It isn’t me. I’m not benefiting from what’s happening here. (cites people on his staff) Mr. Snerdley is not, Dawn’s not. Brian, you’re not. Who’s benefiting right now from what’s going on? None of us are. The banks aren’t benefiting, the automobile companies are not benefiting. Well, yeah, you could say people being allowed to stay in their homes and not having to pay for it, they may be benefiting, but how is that America? Ask yourself who’s benefiting.

Who said a crisis is a terrible thing to waste? That would be Rahm Emanuel. Who, again, orchestrates talking point phone calls with media members at ABC and CNN every morning? Does somebody have a problem with that, by the way?

Those of you who didn’t know about what is in the final bolded question: Yes, it’s true. So much for any credible claim for fairness or balance at those two networks.

Positivity: Toddler pulled from rushing stream

Filed under: Positivity — Tom @ 7:23 am

From Denver:

POSTED: 03/03/2009 11:41:04 AM MST
UPDATED: 03/03/2009 06:53:44 PM MST

A man walking along a stream acted fast when he saw a lifeless toddler bobbing in the rocky, fast-flowing water this morning.

The still unnamed hero plucked the boy from the snowmelt-driven current along West Belleview Avenue before noon. He ran to the clubhouse of a nearby apartment complex, where by chance there was a former paramedic, witnesses to the dramatic rescue said.

A West Metro fire department crew was nearby, near 8801 W. Belleview Ave., on other matters, and quickly joined the rescue within three minutes, resuscitating the child with CPR, witnesses said.

He was rushed to Swedish Medical Center in Englewood where he continues to recover.

The 2-year-old boy’s grandmother, Barbara Cossins, told 9News said he wandered off when she and the mother of the child, identified so far as only “Robbie,” were distracted.

They were unloading boxes at Chestnut Condos, about 100 yards north of the walkover bridge where he was found, she told the TV station. The child likely followed the walking trail along the creek until he decided to play in the gorged creek.

“The creek is empty a lot of times; it was empty yesterday,” said neighbor Mae Butts, who was not home when the child went missing. ….

Go here for the rest of the story.