By on November 14, 2009


Ford analyst George Pipas reckons the recession is over; the U.S. economy is on its way to recovery. New car sales will, uh, stay the same. “I think that we won’t fall backward from October. How much November might advance from the October level it is too early to say . . . The fourth quarter will be stronger from an auto sales standpoint than a pre-clunkers level.” Translation: the U.S. new car market is bumping along at the bottom. Lest we forget, Pipas’ “pre-clunkers level” promised land was already significantly down from pre-crash volumes. Anyway, Pipas admits that Ford 2010 sales gains will be “modest” thanks to . . . wait for it . . . the perception gap. “[Unemployment] is a drag on consumer psychology. The recession may be over and the recovery may have begun, but for many, many consumers it may not feel like it’s over even 12 months from now.” The Detroit News reports that Pipas also predicts $4 a gallon gas by next summer, cementing the consumer shift towards smaller vehicles. What’s more, “Consumers in the future will be more careful about living within their means.” And if not, even better.

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9 Comments on “Ford: The Worst is Over...”

  • avatar
    John Horner

    “[Unemployment] is a drag on consumer psychology. The recession may be over and the recovery may have begun, but for many, many consumers it may not feel like it’s over even 12 months from now.”
    He is right. Even people who have jobs often remain leery of making big ticket purchases when they are worried about loosing those jobs and know that finding a replacement job will be very tough if they do loose theirs.

  • avatar
    Telegraph Road

    It’s nice to see a RF TTAC post on Ford not titled “Ford Death Watch”.  Perhaps the worst really is over.

  • avatar

    I’m old enough to know that’s a pic of Richard Basheart in ‘Voyage to the Bottom of the Sea.”  Apparently Ford feels it is rising from a sea of red.

  • avatar

    The only place the recession is over is in the breathless propaganda of the bought-and-paid-for economics profession and its political patrons.

    From the moribund domestic automakers to the fraudulent balance sheets of of the global financial industry, our vast, worthless debt and overcapacity have only begun to unwind. Unrealistically cheap money and government profligacy in all the industrialized nations are responsible for the illusion of recovery. (In Canada, for instance, the taxpayers are propping up a frothy real estate market by guaranteeing nearly every new mortgage.) It would be wrong to label the historic transition the world has entered as “wealth destruction”, because the wealth never existed in the first place.

    • 0 avatar

      Canadian taxpayers are guaranteeing nearly every new mortgage?  Balls.  The Canadian Mortgage and Housing Corporation (CMHC) provides insurance on “high ratio” mortgages (over 75% of the assessed property value) that protects the lending institution in the event of default.  As a borrower, you are required to pay a premium for this insurance.
      CMHC is a profitable, fully funded organization that has been around for 60 years.  One thing you’ll never find them doing is guaranteeing ridiculously high mortgages on over-valued properties to people who have no reasonable prospect of paying it back.
      Perhaps a similar voice of reason in America would have helped to prevent the cataclysmic implosion of your real estate market and the subsequent failure of some 100 banks.  For the record, the number of bank failures in Canada is zero.
      Your other arguments aside, take a moment to learn about our banking and mortgage systems before you accuse Canada of financial malfeasance … America wrote the book on that one.

      • 0 avatar

        CdnCarGuy, I think you have some reading to do. You might want to start here:

        The CHMC profits you cite are trivial in comparison to the dollar value of the risk exposure. Like AIG earning a profit, it will mean nothing if the Canadian housing market collapses.

  • avatar
    Mike Kelley

    I wonder how high gas prices will go when Israel bombs the hell out of Iran’s nuclear facilities.  If Iran causes big trouble in the Hormuz Strait, it will be real ugly, real fast.

  • avatar

    I think american consumers are finally waking up to the fact that there are few guarantees in life unless you work for the feds. I also think it will be years before we turn this economy around. There is just way too much debt and too many overpriced assets out there that need to be written off. Look at japan if you want to see where this train wreck is headed.

  • avatar
    obbop says SAVE!!!!
    Others demand we save for retirement.
    Consumers spending less and will continue to do so.
    Constant lambasting about those buying buying buying.
    Yet, I continue to read and hear that around 75 percent of the USA economy depends upon consumer spending.
    The constantly rising productivity graph runs alongside the rising income of the upper classes while the commoner’s income line falls.
    For many the recession has been ongoing from 1973 on.
    Is the precipice ahead of us?
    Is an oligarchy awaiting?
    Many revere Warren Buffet lauding him with constant praise.
    Are the many brainwashed Americans just ignoring one of his beliefs?
    “There’s class warfare, all right,” Mr. (Warren) Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

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