Michael J. Golde

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

I am not sure I understand the math in the article, but I do think it is fair to say the some reasonable percentage of the people who will receive rebates would have otherwise bought a new car without the rebate. Therefore, the only real benefit of the program is the incremental number of cars sold than would have otherwise been sold without the rebates. Maybe, as another posted suggested, that is how the figure of 22,000 new cars was derived or $45K+ per those vehicles.

The program is also obviously speeding up temporarily the car buying cycle. The program is obviously intended to get people to buy new cars now as opposed to the future. But, what happens when the incentives are gone? Future months could easily show a decline in sales because some of the sales that are occurring now, will take away from sales in the future.

The danger of a program of this sort is that it doesn't really create a sustainable growth model. And the worst thing would be if the automakers ramped up for potential demand that doesn't materialize because the government "juiced' sales now.

No Signs of Economic Recovery in Sight

Thanks for the comment. Logic tells me that SKF and SRS should be good buys, but they have not responded well to all the negative financial/housing news. Then again, I think second quarter earnings are going to be questionable and gross margins will be down. So, a change in sentiment could occur at any moment if the government just stays out of the way and let the market correct itself.


On Jul 06 12:23 AM Grizzly-Redneck wrote:

> Great summation of the current state of affairs. Pretty much sums
> up everything I've been thinking the past couple of months. If we,
> the average investors can see this, why can't the Government see
> it? This won't be solved until we quit bailouts, quit deficit spending,
> quit adding new taxes in a time of Depression (cap-n-tax, health
> care). And that won't happen until we get a Government that is truly
> fiscally responsible and makes the hard, not popular choices. Well
> I guess it won't happen. Those inverse Bear ETFs are looking pretty
> good.

The 13 New Rules of Government Capitalism

Your comments regarding the intended role of the Federal Reserve are well taken. Thanks for your comments.


On Jun 14 09:56 PM Prudent Man CFA wrote:

> Capitalism and Socialism both despise competitive Free Enterprise
> as Karl Marx inferred when pejoratively coining capitalism as no
> different than socialism as statists rather than states monopolize
> the economy.
>
> Both socialism and capitalism are monopolistic and self-destructive.
> Both believe in central government and central banks, and both were
> wisely opposed by America's founders. The Federal Reserve was never
> intended to be a "Central" Bank but became one to serve government,
> monopolists and oligopolists as has the U.S. Congress.
>
> The smaller business and middle class, "The Forgotten Man" do not
> have an representation in the U.S. today. Hopefully, that will change
> for the better as all change, as we have belatedly learned, is not
> for the better.

The 13 New Rules of Government Capitalism

I appreciate the compliment. I try to spice things up with a bit of humor which isn't so easy these days.


On Jun 14 06:54 PM Midwest guy wrote:

> Very sad and very funny at the same time.
> You have to wonder ;just when did we hand over the keys to the insane.
>
> Well written,Mr Golde.

Unemployment as a Lagging Indicator: Not This Time

According to Dictionary.com, one definition of "Shibboleth" is "a common saying or belief with little current meaning or truth. dictionary.reference.c.... I used the word because I believe it accurately depicts my view that unemployment, in the current recession, is not a lagging indicator. It actually indicates we are long, long way from recovery.

Unlike other recession since the Great Depression, we are experiencing a fundamental shift in employment trends. Many jobs in the financial industry, the automobile industry and other sectors are not coming back regardless of the time period. This is different from prior recession where people would eventually find comparable jobs for comparable pay. I don't think that is true this time around.


On Jun 08 12:14 PM Fitz919 wrote:

> I noticed you used the word Shibboleth in your article. Most readers
> don't have a clue about the significance of the word Shibboleth.
> The word was used as a pronunciation test in the Old Testament.
> Those who couldn't say the word correctly were immediately executed
> for being spies. The test was performed in a mountain pass, and
> therefore became the first ever "password". See Judges 12: 4-6.
>
>
> Shibboleth also has two possible meanings: a flowing stream, or a
> head of grain. I also suspect that it was the name of a local town
> or village of that time.
>
> So to the author: What sortof usage did you intend for Shibboleth
> in this article? It seems very out of place.

The $700 Billion Disconnect: Lost in Translation

Incredibly well-written and informative. The best defense of the proposed use of $700 billion of taxpayer money I have read yet.