My Friend the Car Dealer Says...

the entire auto industry is in distress, your friend should try and keep his lot with as low inventory as possible, as to not get raped by inventory taxes, and try to keep as solvent as possible for as long as possible. it's a crisis, it's about weathering the storm, these types of fluctuations are normal in the economic cycle. the markets will bounce back, it will just take time, whoever has the management fizzzazz to make it through the storm will enjoy very good prosperity when this recession ends.

redivider said:

the entire auto industry is in distress, your friend should try and keep his lot with as low inventory as possible, as to not get raped by inventory taxes, and try to keep as solvent as possible for as long as possible. it's a crisis, it's about weathering the storm, these types of fluctuations are normal in the economic cycle. the markets will bounce back, it will just take time, whoever has the management fizzzazz to make it through the storm will enjoy very good prosperity when this recession ends.

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So when do you suppose this recession will end? are you a optimistic "Green Shoots"fella or a doom and gloom type?

i cannot give you a precise time frame, because that type of forecast involves computations that may take both of our computers 2 weeks to complete, even then it may not be accurate.

it will recover, because the curve of economic development resembles the y = sin (X) graph , only not following the x axis, it slowly rises, with repeating periods of expansion and contraction.... the cycles of expansion and contraction have historically been around 10-12 years long... with 3-4 years of expansion, 1-3 years plateau, and 2-3 years contraction, 1-2 years of bottoming out and so on ...

i believe the economy will slowly fix itself, it's a matter of overall supply vs. demand curves balancing themselves out... a time frame is hard to fathom at the moment, i haven't been looking at international economic indicators recently, i've been more concerned with the numbers on the bills that come in at the end of the month....

but i'm not a doomsday, apocalyptic type of thinker... not yet anyways... knock on wood....

redivider said:

i cannot give you a precise time frame, because that type of forecast involves computations that may take both of our computers 2 weeks to complete, even then it may not be accurate.

it will recover, because the curve of economic development resembles the y = sin (X) graph , only not following the x axis, it slowly rises, with repeating periods of expansion and contraction.... the cycles of expansion and contraction have historically been around 10-12 years long... with 3-4 years of expansion, 1-3 years plateau, and 2-3 years contraction, 1-2 years of bottoming out and so on ...

i believe the economy will slowly fix itself, it's a matter of overall supply vs. demand curves balancing themselves out... a time frame is hard to fathom at the moment, i haven't been looking at international economic indicators recently, i've been more concerned with the numbers on the bills that come in at the end of the month....

but i'm not a doomsday, apocalyptic type of thinker... not yet anyways... knock on wood....

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WOW safest answer that could be given, you work in government don't you? Perhaps academia?

The sole purpose for the cash for clunkers program was payback to the UAW for help getting Obama elected.
We won't get into the SEIU ACCORN APOLLO and GE. And he spoke of ending special interest groups. What a hoot.

And as for Reddivider making a reference about drinking Republician Koolaid, My friend it sounds like you have bought the Marxist agenda hook, line and sinker.
Although I am socially liberal I am a fiscal conservative and a modern federalist.

2 schools of thought here. Smaller federal government, lower taxes and let capitalism thrive or Big Government, higher Taxes and stifle business and growth to pay for government sponsored social programs. mmm I'll take the Capitalism over the Marxism. And if you don't think Obama is a Marxist all you have to do is look at the people he has surrounded himself with nearly his entire career. Radical activists, revolutionaries and die hard socialists.

Hey don't get me wrong, I have plenty of beefs with the Republicans as well. But I will take imperfect Capitalism over perfect Socialism anyday.
No lets smoke a fatty together and chill

redivider said:

i believe the economy will slowly fix itself, it's a matter of overall supply vs. demand curves balancing themselves out... a time frame is hard to fathom at the moment, i haven't been looking at international economic indicators recently, i've been more concerned with the numbers on the bills that come in at the end of the month

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As long as the Government interferes you cannot have a free market supply and demand economy. Their partisan bandaid economics don't work.

no i don't work for the government, i am not a member of academia, yet...

as for the whole UAW and all that nonsense, leave the conspiracy theories at home, let's talk facts...

And if you don't think Obama is a Marxist all you have to do is look at the people he has surrounded himself with nearly his entire career. Radical activists, revolutionaries and die hard socialists.

not too long ago there was a lil guy called McArthy, that started calling everyone communists because of the people they hung out with, even if none of those people had any sort of connection to communism, it was just fear-mongering... this mentality has already proved to to be not only flawed, but extremely ignorant. be careful what you say, you don't want to seem ignorant, do you?

as for free markets and supply-demand economics, don't forget that there has always been government investment in private industry to spur economy, from WWII, to the NEW DEAL, government investment in private industry helps the economy, this is not something that was found out recently.

so stop with the socialist manifesto, marxist agenda, and communist take-over mentality. it's antiquated and erroneous.

Little equations that exclude millions of factors are all well and good, but it is pretty obvious why cash for clunkers is a failure. First of all, many of the people who traded in cars, probably would have bought a car in the near future anyway. We just sort of condensed the window...like Vi stated, sales now are flatter than a pancake. And people might be less motivated to buy a car now without some sort of handout on the table.

Second, Foreign auto makers got most of the cash for clunkers sales, further contributing to the trade deficit, and our public debt.

And then the obvious stupidity of incentivizing people to destroy perfectly good vehicles, That were paid off.... so they can take on further obligations, in a time of economic uncertainty. People taking on debt they could not afford is what got us into this mess.

Since Redivideridierider was dead wrong about the dealerships................ yawn.

hom36rown said:

Little equations that exclude millions of factors are all well and good, but it is pretty obvious why cash for clunkers is a failure. First of all, many of the people who traded in cars, probably would have bought a car in the near future anyway. We just sort of condensed the window...like Vi stated, sales now are flatter than a pancake. And people might be less motivated to buy a car now without some sort of handout on the table.

Second, Foreign auto makers got most of the cash for clunkers sales, further contributing to the trade deficit, and our public debt.

And then the obvious stupidity of incentivizing people to destroy perfectly good vehicles, That were paid off.... so they can take on further obligations, in a time of economic uncertainty. People taking on debt they could not afford is what got us into this mess.

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those little equations are used by some of the most successful investors in the world. they are common practice in every business, from manufacturing, to investment banking. it's called PORTFOLIO ANALYSIS. they are made to ignore all other factors that one cannot control, because of that very same reason. every mathematical model ignores, or assumes as constant, factors that cannot be calculated or accurately estimated. uncontrolled factors such as so many people were going to buy cars anyway, is a baseless assertion, and anyways is not the focus of the time value money analysis i completed.


it is not the government's fault that domestic auto makers were making cars that americans don't want to buy anymore. how many times do we need to go through this. THEY WERE MANAGING THEMSELVES INTO THE GROUND. if you cannot see the mentality of these CEO's and what not: they each flew a different private jet into the capital to ask the government for money because they were broke. maybe if they were more focused on the market, and on american consumer trends instead of living the good life in lala land they would be doing as good as foreign automakers....


"and now people will be less motivated to buy a car without some sort of handout on the table"

actually, people are less motivated to buy a car because we are in a recession. everyone is wary that they might be the next one laid off. to blame poor car sales on the government not giving a handout is good old fashioned bullshit. blame the poor economic climate. blame the layoffs, blame outsourcing, the blame game is pointless, until the recession ends sales in general are going to be poor. sales are not gonna be poor because the government isn't giving a hand-out. stop spreading this misleading information, it is just not true, if you choose to believe it i have no problem, but that you blatantly spread it is an insult to intelligence.

give the government praise because it saved many MANY dealerships from closing, gave people a chance to buy new, more efficient vehicles, put money in their pockets, and scrapped all those innefficient, old, antiquated cars off the street. the government actually doing something that's not meant for the corporate swine, doing something that worked, doing something to help people weather this storm and you go around spreading nonsense propaganda...

here you are blaming people for taking on loans they cannot afford....

if you did not know it is up to banks and finance institutions to manage their own risk. , the bank doesn't have to automatically sign off on a loan and approve it. and Allowance for Doubtful accounts is a real accounting term, and estimated with accuracy, and it is up to the banks to decide who affords what. it is not the other way around.

the fact that they (the banks) hide the REAL amount of risk they are carrying in the name of good unrealized profit numbers deep deep in their financial statements is a matter of poor regulation and disclosure.


it is also a matter of allowing creative accounting to put numbers that look great, then hiding the truth behind those numbers with complicated calculations and paragraph behind paragraph of horrendously difficult to understand wording. no wonder investors never saw this coming.

And yet the data says otherwise..... cash for clunkers was a failure and the dealerships don't ever want to do it again.

what data? the data in your mind i believe...

cash for clunkers was a success. and i gave actual evidence, not biased information, actual numbers that you yourself can calculate if you wish. anyway you look at it the program will generate more cash flow than it's original investment, in business we call that success.

if you think dealers don't want another program to increase sales in this economic climate you are delusional. that assertion in flat-out wrong. they might complain that it wasn't as smooth as it could've been. but if another program like this started, i'm sure automakers and dealers would pounce on the opportunity.

any business that doesn't take advantage of a program that increases sales is destined for failure.

You obviously haven't read the cash for clunkers by the senior fellow economist.

I'm sure he understands what happened.

He calls it correctly as do most of the economists. It was a failure. It did not do what was intended. It merely compressed sales and buried the dealerships with paperwork and the govt got to siphon a goodly portion of the Billions for themselves. That's not success..... unless ur the govt.

here we go,

at first it was that we spent 3 billion to save 733 million, i proved that wrong,

then it was that domestic car makers didn't sell as much as foreign because the government took over and production stopped, that was wrong

then it was that people are taking on loans they cannot afford, that's wrong too

then it's people won't buy cars because they won't get a hand out, wrong

then it's that dealers wont ever do it again, yeah right.

there's 10 pages of me giving you the same 6 answers to your 100000 wrong assumptions.

think what you want, spin it as you want. there is no winning with you.

You proved nothing. Nothing at all.... it's all convoluted supposition.

This thread is a failure.

It should have lasted all of three posts. The consensus by SERIOUS economists is already in........ failure.

i cannot keep quiet, this misinformation is just too great...

the CARS program will not fix the overall slump in demand, it is not designed for that. the only thing that will increase overall demand is for the economy to bounce.

it just created a hike in demand, it compressed it, you are completely right. what those "economists" fail to acknowledge is the fact that the hike in demand gives car makers and dealers an ability to manage the recession.

it gives them the necessary cash to make decisions regarding the next few months. that was not possible before. what was possible before was the closing of hundreds, perhaps thousands of dealers, there were little options because cash was scarce. what is possible now is that these dealers and automakers make cost cutting decisions more wisely and soundly. it is possible to face extended periods of very low to zero demand without closing shop. it just takes wise management, sound business practice, and the necessary cash. the fact that dealers will face a drop in demand because more cars were bought during CARS does not mean automatic failure.

economists are not business people, a good economist does not mean a good businessman. economy is a social science that studies supply/demand relationships, business is the study of selling a product or service for profit.

CrackerJax said:

You obviously haven't read the cash for clunkers by the senior fellow economist.

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"the senior fellow economist" of WHAT, exactly? You say this like there's only one senior fellow in the whole world writing about this.

Who is this economist you speak of, and who pays his salary?

The Hudson Institute of Economic Studies.... it's right there in PLAIN English at the bottom of my post... U obviously didn't read what you are now commenting on....

CrackerJax said:

The Hudson Institute of Economic Studies.... it's right there in PLAIN English at the bottom of my post... U obviously didn't read what you are now commenting on....

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Oh, I read it. I just wanted to be sure that you knew where it came from and could recognize it as being from a right-leaning source. Of course, when all your info is from the right - I guess the right becomes the middle, doesn't it?

If you aren't bright enough to connect the dots, I see no reason to continue engaging you. It's not as fun for me.

Numbers are not right or left when in the proper context.... those were.

You continually stay off target and cannot seem to actually come up with any evidence of ur own.....


FDD pegged u on the other thread.