A $2 Billion Loss Spells Trouble in Dearborn

[NFG19]

IMO 2023 should be a tightening year. They finally stopped printing vast sums of money and there are some big layoffs. I would assume sales would be down and especially big, expensive vehicles would sell less.

That’s what I see as well! Also big tech layoffs. Those are good paying jobs. That’s taking a lot of money out of the market! It’s like all the ingredients are going into the pot. Only a matter of time before it’s done! I hope I’m wrong!

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[Inthehighdesert]

What’s been going on here for quite some time has nothing to do with economic principles. They pull that out of there …. after they’ve pulled some dumb …. . One thing that is consistent with all these “economists”, is they never stop talking, usually out both sides.

I unfortunately (for the world) don’t have a crystal ball. I just have a good memory and understand economics. Almost everyone in the mainstream is pushing this Goldilocks soft landing under control narrative. I don’t subscribe. It actually concerns me when everyone gets on the same page. I expect more inflation and high rates.

"We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system," Ben Bernanke 2007.

We want to see inflation move up to 2%. And we mean that on a
sustainable basis. We don’t mean just tap the brakes once. But then we’d also like to see it on track to move moderately above 2% for some time.

~ Jerome Powell, April 2021
21 month the ago.

 

[POJ 1]

and now Ford is going to get involved with f1?????
that will help in a big way . better to get involved in sea

 

[Bikeman315]

and now Ford is going to get involved with f1?????
that will help in a big way . better to get involved in sea

Ford reentering F1 in 2026 has been in the works for some time and has already been budgeted. Keep in mind that Ford is already involved in motor sport in a big way and has been for decades.

 

[Hack]

I don't see how higher interest rates could do anything except slow things down. I understand many businesses have a line of credit or cash on hand. For them the prevailing interest rates might not matter as much. But for someone taking out an 8 year loan on an $80,000 pickup the interest rate could be the difference between buying or not.

And yes the Fed is taking it very slow and easy raising the rates. But always in the past when a similar situation occurred there was a recession. I realize people might not say the word recession because it sounds bad, but all the things that happen such as big layoffs, etc. and a general slowing will occur.

 

[shogun32]

for someone taking out an 8 year loan on an $80,000 pickup the interest rate could be the difference between buying or not

And that is a Good Thing! It forces said buyer to evaluate the deal more carefully. Like as not it exposes the folly of their course of action.

The reason business interest is 4pct or more higher than consumer is because it focuses the mind of the owner whether the economic benefit of acquisition can and does pay for itself. If it can't then you don't buy and you grow your business some other way.

 

[BlackandBlue]

I don't see how higher interest rates could do anything except slow things down. I understand many businesses have a line of credit or cash on hand. For them the prevailing interest rates might not matter as much. But for someone taking out an 8 year loan on an $80,000 pickup the interest rate could be the difference between buying or not.

And yes the Fed is taking it very slow and easy raising the rates. But always in the past when a similar situation occurred there was a recession. I realize people might not say the word recession because it sounds bad, but all the things that happen such as big layoffs, etc. and a general slowing will occur.

2018 there wasn’t a recession and they stopped raising/cut rates. Granted they broke the system and had to start QE 4 in September 2019, but a recession wasn’t declared.

I see the difference this time being .Gov will never reign in spending. If a recession happens, the money spigot gets turned back on full blast because declining prices are 100x worse than inflation. A debt based system can not take asset deflation. It will destroy it. It’s the golden rule.

This process won’t be linear. It never is. Just like if you study the 70s it was anything but linear. Also inflation isn’t even. It’s millions of items all rising and falling on completely different demand profiles. A headline number tells us almost nothing about actual inflation. See Owners Equivalent Rents (OER) to understand the understating of inflation. This is a monetary problem. If you keep producing a product as demand falls the price of that product declines. This is what over production of money also does.

And yes Ford might lose a few 80k truck sales, But you can’t get a F250 work truck and most local governments have standing orders. Demand for certain vehicles is very strong and rising.

 

[Bulldog9]

I don't see how higher interest rates could do anything except slow things down. I understand many businesses have a line of credit or cash on hand. For them the prevailing interest rates might not matter as much. But for someone taking out an 8 year loan on an $80,000 pickup the interest rate could be the difference between buying or not.

And yes the Fed is taking it very slow and easy raising the rates. But always in the past when a similar situation occurred there was a recession. I realize people might not say the word recession because it sounds bad, but all the things that happen such as big layoffs, etc. and a general slowing will occur.

That's exactly what the Fed is doing. Amazes me that instead of increasing capacity to meet/catch up with demand, they try to slow down demand by increasing costs.

The lies irony duplicity contrasts and contradictions of the last 3 years are staggering...... And because people an attention span shorter than a hamster fart, they just believe what is said in the moment, take what is fast and easy and float along with the lemmings.

 

[Hack]

That's exactly what the Fed is doing. Amazes me that instead of increasing capacity to meet/catch up with demand, they try to slow down demand by increasing costs.

The lies irony duplicity contrasts and contradictions of the last 3 years are staggering...... And because people an attention span shorter than a hamster fart, they just believe what is said in the moment, take what is fast and easy and float along with the lemmings.

How is the Fed going to increase capacity? It's not that easy to do and certainly the Fed isn't going to help increase capacity. I suppose you could say that increasing interest rates slows down businesses that are trying to increase capacity, but IMO when you have too much price inflation you want both businesses and individuals to slow down their purchasing. Slowing demand is the easiest thing to do.

 

[Inthehighdesert]

The problem is artificially trying to slow demand. The continual rate hikes by the Fed have had zero effect on inflation in real terms. I think he was referring to increasing capacity in general, not necessarily the Fed doing that.

How is the Fed going to increase capacity? It's not that easy to do and certainly the Fed isn't going to help increase capacity. I suppose you could say that increasing interest rates slows down businesses that are trying to increase capacity, but IMO when you have too much price inflation you want both businesses and individuals to slow down their purchasing. Slowing demand is the easiest thing to do.

 

[NFG19]

Im not looking forward the coming recession! I’ve been seriously considering liquidating my accounts. Just hold onto my cash. Then short the market when it’s time.

 

[Inthehighdesert]

I just ignore the noise as much as possible. Its really easy to get sxcked in to all the negative …. Were constantly bombarded with.

Im not looking forward the coming recession! I’ve been seriously considering liquidating my accounts. Just hold onto my cash. Then short the market when it’s time.

 

[shogun32]

If your business has legit expansion needs you'll be able to afford and defend 15% interest in your loan.

When credit is cheap every bad idea gets money thrown at it. Business that should have been destroyed and wiped off the planet continue to exist.

It's time to take out the trash. And it's going to hurt real freaking bad.

What if the organic and healthy rate of vehicle production is only 10 million instead of 15 per year? Can and will Ford et al. Survive a 30pct haircut to their sales? How about all the downstream?

Ru ready for the second great bloodletting in housing prices?

 

[Hack]

The problem is artificially trying to slow demand. The continual rate hikes by the Fed have had zero effect on inflation in real terms. I think he was referring to increasing capacity in general, not necessarily the Fed doing that.

I agree it would be better if the source of the inflation wasn't present, but I think the rate hikes are having an impact. Inflation has come down slightly.

 

[shogun32]

I agree it would be better if the source of the inflation wasn't present, but I think the rate hikes are having an impact. Inflation has come down slightly.

Given how rediculously they game those numbers, it hasn't. And anyway it's a false lull. Interest rates need to be over 12. Nobody here remember the 70s?

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