Tag: autos

Automotive Pre-Emption

Guest Post by Eric Peters

New cars do lots of things cars didn’t do in the past – which isn’t necessarily a bad thing. Convenience has its merits.

But what about pre-emption?

Cars once did as they were told by their owners – and no more. If you didn’t want the doors to lock or the lights to come on they didn’t – until you locked them or turned them on. You could spin the tires – and lock up the brakes – as you liked.

New cars take those choices away from you – like a parent schooling a child.

It is about to get much worse.

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Despite their Worst Intentions

Guest Post by Eric Peters

Cars are so much better than the government had intended that one can only imagine how good they might have been had the government not been involved at all.

In the first  place, the government meant for most of us (but not them) to be driving small cars with not much power. This was the purpose of Corporate Average Fuel Economy requirements, which first went into effect back in the 1970s.

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ARE RETAIL SALES REALLY RECOVERING?

The government reported retail sales for May this morning and the MSM immediately hyperventilated with unrestrained joy about the rejuvenated consumer. We’re back baby!!! There was no mention of the extremely early Memorial Day, which pushed sales from June into May.

Then you get into the actual numbers. Total retail sales went up by $5.3 billion over April. You will be thrilled to know that 25% of the increase in retail sales was for purchases of gasoline, which has gone up in price by 35% since February. The consumer was surely rejuvenated by spending $1.3 billion more for gas.

Another 36% of the increase was for auto sales. This $1.9 billion increase was generated through subprime loans and 7 year 0% financing. It’s a real stretch calling that a retail sale. Retail rental is more like it.

Discretionary spending at furniture stores, electronics stores, and restaurants were flat with the prior month. This is surely a sign the consumer is back.

The monthly deviations are nothing but noise. The rubber meets the road when looking at the year over year numbers. And they absolutely suck. They reveal an economy in recession. Here are a few juicy nuggets:

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DECEMBER RETAIL SALES – UNEQUIVOCAL DISASTER

In case you hadn’t noticed, the MSM storyline was obliterated this morning with the December retail sales report. There is absolutely no way for the shysters and charlatans in the media, Wall Street or government to spin this data in a positive manner. The shit is hitting the fan. A recession for the average American is confirmed. Plunging gas prices haven’t done shit to motivate people to spend money they don’t have.

And guess what you won’t hear from CNBC or any of the corporate media?

POLAR VORTEX

 

You see, that was the storyline last year to explain the terrible December and January retail sales. So let me get this straight. Last December the country was buried under snow in sub-zero temperatures versus a tranquil, calm, non-snowy December this year. Not a peep from The MSM about last December’s Polar vortex

Shouldn’t this great weather, “fabulous” plunge in the unemployment rate, and billions of dollars put back into pockets by collapsing gas prices, have spurred an awesome retail sales surge this year? The Wall Street shysters drove the stock market to record highs in December based on this false storyline. The decline in real wages in November revealed the falsehood of the jobs recovery. Any savings from lower gas prices is being used to pay down credit card debt and pay for the dramatically higher healthcare costs caused by Obamacare.

This economy is in the tank and headed lower. The GDP numbers are a sham. The employment numbers are a sham. You know it. I know it. And now the sheep are waking up and realize they have been lied to. Stock market records are meaningless to people trying to get by on a daily basis.

After perusing the data on the Census Bureau website, here are my observations:

  • Year over year retail sales only rose 3.2% in December. That is before inflation, which the BLS says was 1.7% and I say is above 4%. Either way, real sales sucked. Then take into consideration there were 3 million less employed people and a polar vortex last December.
  • The MSM said consumers had a windfall from the $6.5 billion decrease in gasoline sales. We were all supposed to buy a new HDTV or iGadget with our newly found riches. Oops. Electronics and appliance sales FELL in December versus November.
  • Retail sales simply don’t fall in December versus November unless you are in recession or headed into recession.
  • It seems even the subprime auto loan scheme is petering out. Auto sales (7 year rentals) declined in December. Maybe the fact that auto loan debt delinquencies are approaching 2008 levels is giving them pause in selling autos to people without the means or inclination to make the payments.
  • Anyone looking for a JC Penney, Sears, Macy’s led department store revival is sad. Clothing store sales dropped. Department store sales dropped. Sporting goods store sales dropped.
  • And drum roll please. On-line store sales DROPPED. The Amazon revolution is dead.

It seems the markets don’t like it. The pain has just begun. A global recession is underway. It’s a deflationary unwinding of debt and mal-investment. There is no cure except for collapse. Central bankers have shot their load. Their credibility is shot. No one believes more debt will cure a debt problem – except for a few Ivy League educated economists. A shitstorm is a brewing. Get ready.