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Edmunds.com predicts September car sales of just 8.8M/year, a 28-year low and a 38% plunge from...

Edmunds.com predicts September car sales of just 8.8M/year, a 28-year low and a 38% plunge from August's CARS-induced 14.1M blowout. "Cash for Clunkers was supposed to prime the pump," Edmunds' Jeremy Anwyl says, "but that is a physics concept, and economics is quite different. Demand has dropped off significantly since the program ended."
Comments (8)
  • Tom Au, CFA
    , contributor
    Comments (6774) | Send Message
     
    "Physics" doesn't always work in economics. That's one thing that the Nobel Prize winning theorists don't seem to understand.
    22 Sep 2009, 02:10 PM Reply Like
  • Windsun33
    , contributor
    Comments (4265) | Send Message
     
    I think almost anyone with even a vague notion of how economics works knew this, yet the politicians put it forth (and some still are) as "a great success".

     

    Might be a good time to sell all auto stocks short...
    22 Sep 2009, 02:12 PM Reply Like
  • vboring
    , contributor
    Comments (203) | Send Message
     
    What the bill didn't consider is that those of us without "clunkers" would never buy during the program,since it would just feel wrong being the one person there not getting free money.
    22 Sep 2009, 02:14 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3861) | Send Message
     
    Printing phoney money to induce demand fails everytime.

     

    Just watch the shenanighans at the FHA. Writinf more phoney mtg loans. Does this corruption ever end?
    Only a nationwide revolt will change this corruption.
    22 Sep 2009, 02:27 PM Reply Like
  • Michael Clark
    , contributor
    Comments (8517) | Send Message
     
    If I remember right, the 'cash for clunkers' was adopted from Europe, perhaps one of the Scandanavian countries in a recent recession. I don't think it was an original idea. And didn't the European countries fall for the same phallacy this time?
    22 Sep 2009, 02:42 PM Reply Like
  • Guitarnut
    , contributor
    Comments (4) | Send Message
     
    Additionally, the bill didn't consider the possibility that a majority of consumers could (i.e., most likely, will) become conditioned to stimulus programs and, likewise, postpone purchases until such programs return.

     

    On Sep 22 02:14 PM vboring wrote:

     

    > What the bill didn't consider is that those of us without "clunkers"
    > would never buy during the program,since it would just feel wrong
    > being the one person there not getting free money.
    22 Sep 2009, 02:56 PM Reply Like
  • Gary A
    , contributor
    Comments (3156) | Send Message
     
    Prime the pump won't work in almost all sectors. It won't work in housing. It won't work in autos, or any major purchases. Priming the pump is what China is doing, and it may not work there, although apparently young people like to spend there. But Americans, and mainly baby boomers, have been burned and they will not waste money when they need to save. No amount of priming will change the habits of the boomers, and that is a huge chunk of necessary spending for the banks and big industry to prosper.

     

    I am not optimistic.
    22 Sep 2009, 03:12 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
     
    I wonder if those who wrote the "cash for clunkers" really think they can write a health care for clunkers and carbon emission for clunkers plan that will work. Also, I wonder how many auto dealers got burned under the cash for clunkers program and had to eat the loss. Pretty hard to appeal a decision when you're playing against the umpire.
    22 Sep 2009, 10:08 PM Reply Like
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