Car Sales?

by Larry Levin

The first four HOURS of the day were a real snoozer - nothing happened. As I have said before, the market just doesn't want to sell off unless there is a surprise news event, or far - FAR - worse than expected economic data. Until then, data such as today's auto sales will have little impact on the market.

But the market did take flight after the newly appointed Treasury Secretary, and well-heeled tax cheat Timothy Geithner, said he would do whatever he could to put a knife in your children's backs via excessive spending on zombie institutions like; AIG, Chrysler, Government Motors (GM), BofA, and Shitibank to name a few. Said another way, he doesn't give a rat's @$$ if your children and grandchildren are saddled with debt that cannot ever be paid off without gut wrenching inflation. The CRAP plan (Cleverly Revalued Asset Purchases) will be announced next week.

Apparently Mr. Geithner said he had learned from policy mistakes in Japan that may have prolonged a recession there in 1990s. Hmm, arguably Japan is still in a recession - 19 YEARS later, but repeating what has proven to NOT work doesn't faze Mr. Geithner. He promised the U.S. would be very aggressive, which would somehow negate the negative affects of spending good money after bad. "Change?" I think not.

The news out of the auto industry is still awful with the following sales declines.


1) Chrysler, -55%

2) GM, -48.9%

3) Ford, -40.2%

4) Toyota, -31.7%

5) Nissan, -29.7%

6) Honda, -27.9%


These sales figures haven't been this bad since the 1980's. Moreover, GM sales analyst Mike DiGiovanni said in a conference call that the industry numbers are on track to mark the worst January since 1963 and, if the rate hits 9.8 million vehicles, would mark the first time ever that China has surpassed the U.S. in terms of monthly sales. "People are coming in, wanting to buy vehicles and they're being turned down, just that simple. We have to break and thaw the credit markets for consumers who want to buy automobiles. We're seeing some minor thawing occurring but not nearly enough."

Steve Landry, head of Chrysler sales and marketing agrees. He points to what he sees as a lack of consumer credit, not so much a waning demand for Chrysler vehicles. "We saw a negative trend in December, we're seeing it again this month and we could see it for the year," he said. "Many more consumers wanted to buy a vehicle than could qualify for financing under the current credit conditions."

OK, I can't stand it! Replace the word credit in the prior two paragraphs with the proper word, DEBT, and reread them. There is a lack of consumer credit? Or is there really a lack of desire for greater levels of DEBT?

"We have to break and thaw the credit markets for consumers who want to buy automobiles." Translation: Our sales numbers suck because we have to be responsible. Damn it - that sucks! We want to break the so-called lock in the DEBT market by returning to what caused this problem from day one: Ponzi financing of all aspects of the economy.

Awesome! Surely the auto company's will have a sympathetic ear in Treasury, the Federal Reserve, and Congress. Damn the torpedoes! Full speed ahead!

Previous Day's Trading Room Results:

Trade Date: 2/3/09

E-Mini S&P Trades*
(before fees and commissions):

1) B/away buy @ 8:30am at 827.75 = -2.50 (1 lot)

2) VA sell @ 9:30am at 823.00 = +2.00 (1 lot)

3) IDVA buy @ 10:10am at 826.75 = +1.25 (1 lot)

4) TP sell @ 11:40am at 824.75 = b/e (1 lot)

5) VA buy @ 11:50am at 823.00 = -1.00 (1 lot)

6) Engf sell @ 1:45pm at 833.00 = +1.00 (1 lot)

7) Algorithm positions (3)...combined SofT and Algo total...-0.25


Electronic (YM) Mini-Dow:


1) No trades today



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