He’s actually saying some of the stuff I’ve mentioned before, like temporaneous weak growth.

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If the gov’t was smart (an oxy-moron, emphasis on moron) they would create investment tax credits for target industries and temporarily protect American markets, to stimulate real capital investment, i.e., to give the wealthy something else to buy with their money other than oil futures…..but they won’t because damned liberals don’t really understand economics, and also don’t have a grasp on how tax policy and trade policy are necessary tools to stimulate the economy when necessary

You’re not quite getting how ranting works. You need to match policy to its actual supporters, not just tack the dumb “gov === bad, liberal === bad” rule to the end of some random statement. For example, if demonstrating that dumb rule is the goal, you need to make sure you’re not advocating the same thing the bad people are.

Your last statement needs to be directed at the morons who didn’t bother reading the econ 101 website much less the book, because there are sure a lot of them offering “free market” advice these days.

Ford will never be the king of trucks with that Neanderthal piece of work in showroom. The superiority (technical design, fit, finish, NVH, refinement and more) of the Toyota and Nissan is incredibly obvious to anyone comparing them.

Is the problem the F150 is sucking up every development truck buck they have?

“Lend into existence”? Heh.

Fractional reserve is what it sounds like – a bank is required to keep a certain portion of its customers’ deposits locked down, while they’re free to lend the rest. That’s the very basic way in which a bank makes money.

If they need more money than their bank has deposited with them, they have to borrow it from someone – other financial institutions, the Fed, their grandma, whatever – but they don’t “lend into existence.” It’s not magic.

The money isn’t just “out there” if someone defaults on a loan. The bank eats all that money. If they didn’t have to eat the money, then they wouldn’t need to have lending standards, now would they?

But how else is one to support out of control addictive behaviors when the cash and liquid assets run out? I mean a guy’s got to get his buzz on, y’know what I mean?

unlike GM, who seems to still be trying to sell cars off xenophobia, ford has made some wise decisions, revamped their lineup and now produces a great lineup of cars.

if anyone can do it, it will be ford.

Oh yes I do:

1. HE SAID that Volvo was not for sale. Oops.

2. He SAID their stake in Mazda was not for sale. Oops.

3. He said that Ford would turn a profit in 2009. Oops.

Not to mention all of the hot air the Ford PR machine can spew out:

1. The Flex will sell 100K units a year. Oops

2. Ecoboost will give you V8 power with V6 mileage. Oops.

GM’s recovery will begin when the Volt goes on salen’t in late 2010.

Maybe if Ford had a Volt clone (they could call it the “Faraday”), they could accelerate their recovery. Or demise.

The Fed has already indicated numerous times that as the economy recovers it will begin to reverse these open market operations and begin selling securities back into the market. When it sells securities it takes the cash from sales and, as you say, “deletes the entry”.

It has done this numerous times in the past as this is the essential nature of central bank operations.

Currency inflation is the only option unless we start to burn money or the government deletes it.

Sir, you are incorrect.

The Federal Reserve via its open market operations buys and sells treasury securities. When it buys treasuries from banks it injects (creates) money when it sells treasuries it withdraws (destroys) money. That is the role of all central banks the BOJ, ECB, BOE, the Fed, etc.

See: http://en.wikipedia.org/wiki/Open_market_operations

If the gov’t was smart (an oxy-moron, emphasis on moron) they would create investment tax credits for target industries and temporarily protect American markets, to stimulate real capital investment, i.e., to give the wealthy something else to buy with their money other than oil futures…..but they won’t because damned liberals don’t really understand economics, and also don’t have a grasp on how tax policy and trade policy are necessary tools to stimulate the economy when necessary, as in NOW. Libs think tax policy exists to provide them the means to spend their way into their view of utopia.

With respect to Mr. Mullaly…the dead cat bounce which will come later this year will help. Real recovery in this country won’t come until late 2011.

Mr. lw’s simplified explanation of money creation is brilliant.

Well, that is a simple one to answer – yes!
The Focus and Fusion are already at the top of their game – Fusion sales at all-time record levels with class-leading fuel economy and packaging, SYNC and even the Hybrid which blows everything else in the class away.
And we have not even started with the new Taurus and Fiesta as well as the new global Focus. Ford are miles ahead of the domestics (not hard) and by 2010, will be ahead of the imports as well. They are on a roll.
Consider this. In 2005, Ford’s retail car line up consisted of:
Old Focus, 500, Mustang, GT and Crown Vic – hardly a compelling line-up you would agree!
In 2010, their retail line-up will be: Fiesta, Focus, Fusion, Taurus and Mustang as well as the hybrid Fusion.
Pretty darn compelling! And not a government bail-out in sight!

Big Al’s probably got an entire building full of MBA-owning sales analysts

Oh, jeez. I hope for Big Al’s career that he does not have an entire building full of MBA graduates because they know even less about the car business than GM’s new chairman of the board. Worse, they fail to recognize their lack of knowledge.

As to the discussion of economic indicators, you guys kill me. Really funny stuff.

Barring a major hurricane in the Gulf of Mexico, or citizen unrest in Nigeria or Saudi Arabia, the price of oil should clear $100 a barrel by the end of the year. How are your car sales now?

We don’t have a credit problem in this country. We have a debt problem.

P71_CrownVic
Do you have examples of these? Looking forward to the list of things Mr Mulally has predicted which have turned out to be ‘hot air’.
After all, he is clearly useless based on being the only one to have foreseen what was required to turn Ford around and survive the most serious downturn in the global car industry in a century! As a result, you are not paying a cent to bail him out of the dog doo. I for one am rather happy about that and I assume you are too.

That’s not quite the full story. Banks are borrowing the amount the need as reserve. The balance they lend into existence.

By its nature, the practice of fractional reserve banking expands money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries are a multiple larger than the amount of base money created by the country’s central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

Oversupply in inventory kills, not to mention incentives to move it, and then the associated devaluing of previous customer’s purchases.

Shoot lower Ford and get the product house in order.

Indeed, and hopefully your friend will never take cash out by increasing the mortgage. People have pointed to the use of cash out refinancing as something which proper up the car market in the past, but over time those increased debt loads always have to be repaid (or written off by a lender, which is even worse).

Less debt load can in fact mean more cash available for ongoing spending. Credit used with care is a wonderful thing. Credit used to support out of control addictive behaviors is a bad thing. An economic reality which puts the condo flippers out of business is a good thing, because condo flippers didn’t actually do anything productive. Borrowing money to build rental housing in markets which have a need for more rental housing makes sense. Borrowing money to speculate on an un-built condo in hopes that it will sell for even more money when it is done doesn’t make sense.

Then explain the yield curve on Bunds and JGBs?

As for the auto recovery – I have a friend who just purchased his first house for 220k. At one time the house was sold for 370k. Going through life with a 220k mortgage vs. a 370k mortgage is going to leave a lot left over for cars, travel, savings, etc.

It will be fun coming back here in 3 years and rereading all this chicken littleism.

Is that part of the grand conspiracy as well?

With the amount of money being spent at the federal level (keep in mind this is BEFORE any healthcare plan is put in place), inflation and interest rates will follow… the only question is when.

How can one predict the end of something that never started?!? (There has been no sales recovery so how can it end?)

I stand by my prediction 9 months ago that 2009 would have 9.25M-9.35M sales. Remember at the time Red Ink was blowing smoke at the Foggy Bottom whistle stop of 12.5M sales.

http://www.usnews.com/articles/education/best-graduate-schools/2009/04/22/for-economists-a-moment-in-the-sun.html

The unemployment rate for economists is zero… and that’s because economic data is important.