fool me twice...

Auto MPG: The Economics of CAFE, Part One

CAFE makes older cars more desirable. Look at the prices of vintage autos: the cars built before CAFE existed are in much higher demand.

The pre-CAFE 1970 Camaro had a 370 hp V8, but the post-CAFE 1980 Camaro had a 170 hp V8. These cars have the same bodystyle and the newer model includes some better technology and better fuel economy, but today a 1970 Camaro is worth 5 to 10 times as much as a 1980 Camaro.

This "improvement" to CAFE will have the perverse effect of persuading drivers to keep their old, polluting, capable cars rather than pay a lot more for a newer, cleaner, less-capable car.

With or without CAFE, the only thing that will EVER have an impact on gasoline consumption is the price of gasoline.

Do You Believe Borrowing Leads to Prosperity? (Part 2)

I hate Nickelback.

Problems That Detroit Bailout I Doesn't Address

"No matter how much money Washington sends to Detroit, it won't give consumers a reason to buy cars."

That sums it up. This entire Detroit debate only addresses a symptom of the recession. Better to fix the economy and cure the disease.

How to Save the U.S. Economy

I don't know why I bother following links to Seeking Alpha articles. This fluff stinks. Importing palladium from Africa will not fix the US economy, genius.

However, BobMichigan1251 explained it nicely: US economic policy has pushed every US manufacturing sector out of business. The US government's record debt will continue to grow under the "service economy" model. Service industries only move money around until it leaves the country to the places that actually make things. Fix the US economy with policies that encourage US manufacturing.

Why Auto Stocks Are an Easy Short

Hey, Andy, the world is bigger than Orange County! This article just repeats common prejudices about foreign vs. domestic cars. Look at the big picture and use facts when you analyze stocks.

Maybe better stock advice would be to look at how ridiculously cheap GM and F stocks are today! GM's market cap is only about $10B, but annual revenue is close to $200B.

Sure, the US auto market is weak now, but GM and Ford are global companies. GM and Ford are leading growth in new markets around the world like South America, Eastern Europe, Russia, and China. GM's highest annual sales ever was not back in the 50's, but in 2007! That came despite softening demand for trucks in the US.

The US manufacturers are also correcting from mistakes of the past. Last year the UAW agreed to let GM and Ford switch retiree heathcare from defined-benefit to fixed-cost, taking billions of future obligations off the books. Now Ford beats Toyota in quality surveys. GM's new Chevy Malibu was voted 2008 car of the year over Honda's new Accord, and the other nominee on the ballot was the Cadillac CTS.

Short the auto stocks? Put that excellent advice in the time machine and send it back to 1999!