Posts Tagged ‘Automakers’

SIGTARP Calls Out Tim Geithner On Various Violations Including Data Manipulation, Lack Of Transparency, “Cruel” Cynicism, And Gross Incompetence

SIGTARP Calls Out Tim Geithner On Various Violations Including Data Manipulation, Lack Of Transparency, "Cruel" Cynicism, And Gross Incompetence

Neil BarofskyCourtesy of Tyler Durden

SigTarp Neil Barofsky has just released the most scathing critique of all the idiots in the administration, with a particular soft spot for Tim Geithner.

On the failure of TARP to increase lending:

As these quarterly reports to congress have well chronicled and as Treasury itself recently conceded in its acknowledgement that "banks continue to report falling loan balances," TARP has failed to "increase lending" with small businesses in particular unable to secured badly needed credit. Indeed, even now, overall lending continues to contract, despite the hundreds of billions of TARP dollars provided to banks with the express purpose to increase lending.

On TARP’s sole success of boosting Wall Street bonuses:

While large bonuses are returning to Wall Street, the nation’s poverty rate increased from 13.2% in 2008 to 14.3% in 2009, and for far too many, the recession has ended in name only.

On TARP’s failure in general:

Finally, the most specific of TARP’s Main Street goals, "preserving homeownership" has so far fallen woefully short, with TARP’s portion of the Administration’s mortgage modification program yielding only approximately 207,000 ongoing permanent modifications since TARP’s inception, a number that stands in stark contrast to the 5.5 million homes receiving foreclosure filings and more than 1.7 million homes that have been lost to foreclosure since January 2009.

On the Treasury’s scam in minimizing publicized AIG losses, and on Geithner as a Wall Street puppet whose actions are increasingly destroying public faith in the government:

While SIGTARP offers no opinion on the appropriateness or accuracy of the valuation contained in the Retrospective, we believe that the Retrospective fails to meet basic transparency standards by failing to disclose: (1) that the new lower estimate followed a change in the methodology that Treasury previously used to calculate expected losses on its AIG investment; and (2) that Treasury would be required by its auditors to use the older, and presumably less favorable, methodology in the official audited financials statements. To avoid potential confusion, Treasury should have disclosed that it had changed its valuation methodology and should have published a side-by-side comparison of its new numbers with what the projected losses would be under the auditor-approved methodology that Treasury had used previously and will


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Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade

Interesting video--argues for eventual hyperinflation in the US. – Ilene

Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade

Courtesy of Tyler Durden

Whether one believes in inflation or deflation, one thing is certain: in many ways the current US experience finds numerous parallels to what has been happening in Japan for not one but two decades. While major economic, sociological and financial differences do exist, the key issue remains each respective central bank’s failed attempts to reflate its economy. While long a mainstay of Japan, if the first failed version of our own QE, which pumped $1.7 trillion of new liquidity into the system, is any indication, future comparable efforts by our own Fed will be met with the same outcome (and hopefully with the same political result: the half life of an average Japanese prime minister is 6 months – if only our career politicos knew their tenure in office could be capped at half a year…).

There is of course the "tipping point" optionality discussed earlier by Ambrose Evans-Pritchard, when comparing the hyperinflationary timeline during the Weimar republic, which noted that it took just a few months for the economy to slide from a period of price stability to outright hyperinflation. Either way, for an ironic look at the Japanese deflation scenario, targeted more at novices although everyone will likely learning something from it, we present the following informative clip from, ironically, the National Inflation Association, which asks whether Japan is a blueprint for America’s imminent lost decade(s). 


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You Can’t Keep a Good Brand Down… But You Can Try

You Can’t Keep a Good Brand Down… But You Can Try

GM cars are displayed at GM global headquarters in Detroit, Michigan

Courtesy of Travis at Zero Hedge 

GM today reported that they will reinstate over half, 600 of the 1,100 dealership franchises they told to get lost last year- in an effort to keep the other some 5,000 dealerships "healthy and profitable."  The lucky 600 will be getting letters asking to stay with the automaker, that’s if they haven’t already closed their doors forever due to the fact that 1) car sales suck despite an upbeat report earlier in the week 2) some people would argue that GM cars suck and finally 3) the GM brand may be discontinued forever a la Pontiac, Saturn, and Hummer.

A consortion of dealerships have been fighting the Detroit giant, citing they’ve been treated unfairly and that GM was vague in their decisions and thoughts on what dealers are actually profitable, and which ones are not.

Chrysler too, which slashed almost 800 of it’s franchises is also reconsidering the cuts; according to the Associated Press "the decision was a compromise meant to avoid federal legislation that would require that the showrooms be kept open."

Under the revised cutting procedures, dealers would "get face-to-face reviews, binding arbitration and faster payments to help dealers slated for shutdown."

As published by the Associated Press on Yahoo!:

"Congress-brokered talks between dealer groups and the automakers began in September. But those talks stalled over disputes about the review process for targeted dealerships and other issues. Looming over the fight has been the threat of federal legislation to deal with the closures. Lawmakers warned that if a deal wasn’t reached, that legislation would move forward.

The White House has opposed the legislation over concerns that it could hurt GM’s and Chrysler’s efforts to rebound from their government-led bankruptcies."

I guess Congress figures, they’re not done launching torpedos at Toyota- better keep some of these domestic dealerships open to sop-up the overage from Toyota’s once ivory, and now bloodied domestic tower of safety and reliability. 


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How The Government Is Manipulating And Distorting Markets In Everything

Government manipulation--the slide show.  Is this the "change" we voted for? – Ilene

How The Government Is Manipulating And Distorting Markets In Everything

obama biden worried tbiCourtesy of Joe Weisenthal at Clusterstock

A recent CBO report estimated that the government spends about $300 billion to intervene in the housing market each year. That’s based on a range of activities, from direct subsidies to homebuyers, to the mortgage interest tax deduction, and the backstop of Fannie and Freddie.

And thus it’s no surprise that the housing market doesn’t work like other markets, and that we had a major bubble there. Even now, Goldman Sachs estimates, the government is adding at least 5% to the cost of each home, through its various "affordability" measures.

But it’s not just housing. Virtually every important sector of the economy is being manipulated in some way.

Check ‘em out >>

 


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August Car Sales Sucked!

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August Car Sales Sucked!

cash-for-clunkers-obama.jpgCourtesy of Joe Weisenthal at Clusterstock

Jeez. Here we were thinking that the auto companies would come out with good numbers today, but that they’d need a big asterisk due to Cash-for-Clunkers.

But nope. They were just bad. Ford (F) missed lofty expectations, and Chrysler’s monthly sales actually showed a dip, when analysts were expecting a gain.

Cash-for-Clunkers sure was a hit, but mainly for the foreign automakers it seems.

See Also: 

France Might Extend Cash For Clunkers Into 2010

 

 


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Used Cars and the Inflation / Deflation Tug of War

Used car prices are going up – is this a sign of recovery and inflation or a complicated symptom of a deflationary environment?  This debate illustrates, perhaps, why the same economic data can be interpreted in opposite manners by intelligent people. – Ilene

Used Cars and the Inflation / Deflation Tug of War

Courtesy of Jake at Econompic Data

Scott Grannis, of the blog California Beach Pundit, is quickly becoming my new favorite blogger to disagree with because he:

  • Provides intriguing data
  • Has a strong opinion
  • Supports his opinion well
  • These opinions run counter (in almost every case) to mine

In general he believes in the recovery and inflation, whereas I don’t and believe deflation is a real possibility.

One example was yesterday’s post regarding ISM Prices. In his view, the jump in ISM prices (by jump I mean they finally didn’t fall month over month) means deflation is no longer a threat. On the other hand, I believe that may be a result of the temporary jump we saw in commodities. He continues his ‘don’t worry about deflation’ message with yesterday’s post that (again) gave me the exact OPPOSITE initial reaction. Here goes:

According to Manheim Consulting, used vehicle prices jumped 16.4% in the first half of 2009 on a seasonally adjusted basis. Once more we are reminded that a weak economy and rising unemployment do not necessarily create deflationary conditions.

In other words, an increase in the price of used cars (off a large previous fall) proves that deflation is no longer an issue and we should (if anything) worry about inflation.

Manheim Used Vehicle Value Index

He adds:

I think the rise in prices also has something to do with the return of money velocity. Consumers retrenched violently in the fourth quarter of last year, hoarding cash and repaying debt in the face of tremendous uncertainty. Money velocity collapsed. Now that confidence is returning, money is getting spent again. The economy is recovering some of the ground it lost.

Using what I refer to as the logic test, this makes no sense. If people are trading down (i.e. increasing demand for a cheaper / used good) this has deflation written all over it (not necessarily for that good, but for the broader economy). My logic and posted in


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Toyota Set To Become Top Dog In The U.S.

Courtesy of Tom Lindmark, But Then What?

Toyota Set To Become Top Dog In The U.S.

Depending upon your philosophical bent, this is either good news or another sign that the Apocalypse is Top Dog, Toyotanear.

The WSJ is reporting that Toyota is slated to take over the title as the number 1 seller of light vehicles in the U.S.

The bankruptcies of General Motors and Chrysler are changing the landscape of the auto industry. The two U.S. companies are shuttering plants, shedding dealers and reducing their product lines.

As a result, Toyota Motor will become the largest seller of light vehicles in the U.S. It has held the top spot globally since last year.

The Japanese auto maker won’t be the only beneficiary of the two companies’ woes. But in terms of status, market clout and bragging rights, Toyota will be the No. 1 winner.

Its share of the North American light-truck and car market probably will rise to around 20% from 18.4%. GM will end up in second place with 13% to 16% — with Ford hot on its tail.

Although Toyota stock doesn’t change hands directly in the U.S., the company’s American depositary shares (TM), which represent them, are listed on the New York Stock Exchange.

And, at a recent price of around $76 — about $30 below their 52-week high — they’re a good bet for long-term investors.

The Journal suggests that the stock might be a good long-term buy. They point out that analysts suggest it could hit $115 and that it hit $137 a couple of years ago. Maybe, but just a caveat. Toyota and others now have the most fearsome of competitors  – government owned companies. In the long run that probably means success for the competitors as political decisions trump business common sense. In the short run it could be formidable as the government does whatever is necessary to prove it didn’t make the stupid decision that everyone acknowledges it did.

Buy the stock at your peril.


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Auto Companies Suppliers Next In Line For A Bailout

Courtesy of Tom Lindman of But Then What?

Auto Companies Suppliers Next In Line For A Bailout

The black hole that is the auto industry needs to suck in more cash. The parts suppliers are once again lining up for federal aid.

From the WSJ:

U.S. auto-parts companies plan to ask the Obama administration for as much as $10 billion in new aid as the General Motors Corp. and Chrysler LLC bankruptcies deepen the suppliers’ troubles.

Trade groups will meet Wednesday with President Barack Obama’s auto task force at the Treasury Department to warn that hundreds of parts companies could collapse without the aid. They are mainly requesting that the government guarantee $8 billion to $10 billion in loans so banks will lend to the suppliers.

The parts companies account for more than three-quarters of auto-sector employment in the U.S., according to a Chicago Federal Reserve study, with employment of about 600,000—roughly five times as many workers as are expected to be employed by GM and Chrysler’s domestic operations once their government-subsidized restructurings are done.

Stabilizing the supply base is critical to ensuring the long-term viability of GM and Chrysler, said Neil De Koker, president and chief executive of the Original Equipment Suppliers Association.

“We could end up having all that money go to waste because they won’t be able to start up without suppliers,” Mr. De Koker said, referring to the taxpayer-funded assistance. “If there’s just one key part missing on a car, you can’t build it.”

His group, along with the Motor and Equipment Manufacturers Association, has prepared a 71-page presentation arguing that as many as 500 parts suppliers could be forced to liquidate this year. They cite several independent studies.

Make no mistake, the aid will be forthcoming. Once the government chose to go all in with the auto companies they committed themselves to preservation of the entire chain. All that remains to be seen is whether any sort of rationalization of the suppliers will take place. With a downsized GM and Chrysler there is arguably too much capacity upstream. 

This is where the Obama commitment to a hands off approach to the industry will run founder. In order to rationally allocate assistance the auto task force will have to parse the vast list of suppliers, try and make some sense of what an efficient network would look like


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Zero Hedge

This "Stunning" Chart Shows How Quickly Europe's Refugee Crisis Is Accelerating

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Earlier today, we reported that European officials are considering a two year Schengen suspension to help stem the inexorable flow of Mid-East migrants into Western Europe.

Last year’s optimism regarding the bloc’s ability to take on asylum seekers quickly faded as eurocrats suddenly realized just how daunting a task they’re facing. Even if the integration effort were going smoothly, the task would be well nigh impossible. Germany, for instance, took in some 1.1 million refugees in 2015 - the country only has 82 million people....



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Chart School

Bears Win Day - Just...

Courtesy of Declan.

There wasn't a whole lot of change by the close of business, but intraday strength was clawed back in worrisome fashion. The end result was to leave spike highs in markets.

The S&P finished with a MACD 'sell' trigger, but on lower volume. The 'sell' trigger was below the bullish zero line, which makes it a strong signal.


The Nasdaq closed with a 'black' candlestick, which would be more bearish if it occurred at a swing high, but it's still a warning. Technicals are all in the bear camp.

...

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Phil's Favorites

"Buy High, Sell Low" - The Psychology Of Loss

Courtesy of Lance Roberts of Real Investment Advice

In this past weekend’s newsletter, I discussed the formation of a very important “head and shoulders” topping pattern in the market.

I know…I know. As soon as I wrote that I could almost hear the cries of the “perma-bull” crowd exclaiming “how many times have we heard that before.” 

They would be right. The problem with the majority of technical analysis, in my opinion, is that time frames are too short for most investors. When looking at technical price patterns using daily data, there have been numerous occasions where analysts have spotted “Head and Shoulder” patterns, “Hindenberg Omens,” and &ldqu...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

How Low Can Central Banks Go? JPMorgan Reckons Way, Way Lower (Bloomberg)

There are no limits to how far central banks can ease monetary policy.

Dollar languishes near three-and-a-half-month lows ahead of Yellen testimony (Business Insider)

The dollar nursed losses around three-and-a-half-month lows on Wednesday, pressured by fears of a global economic slowdown following recent falls in oil prices and growing concerns about the health of European banks.

...



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Kimble Charting Solutions

Transports working on breakout, after being hit very hard!

Courtesy of Chris Kimble.

When it comes to getting hit hard, the Dow Jones Transportation Index fits the bill over the past year. Few if any major indices have fallen harder, over the past 12-months.

Below looks at the DJ Transportation Index/S&P 500 ratio over the past decade. The ratio reflects that over the past year, the index has been much weaker than the broad markets.

CLICK ON CHART TO ENLARGE

The ratio hit channel resistance at (1) a year ago and decline almost as hard a...



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OpTrader

Swing trading portfolio - week of February 8th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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ValueWalk

Why Most Investors Fail in the Stock Market

 

Why Most Investors Fail in the Stock Market

Courtesy of ValueWalk, by  

Throughout the past 30 days of wild volatility, here’s what I didn’t do.

Panic. Worry. Sell.

In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our  mind and ignored it.

If you read Howard Marks latest memo, ...



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Digital Currencies

2016 Theme #3: The Rise Of Independent (Non-State) Crypto-Currencies

Courtesy of Charles Hugh-Smith at Of Two Minds

A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.

We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.

The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.

This doesn't just open t...



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Sabrient

Sector Detector: New Year brings new hope after bulls lose traction to close 2015

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Chart via Finviz

Courtesy of Sabrient Systems and Gradient Analytics

Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.

Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...



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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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