Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Auto Industry

Trump Didn’t Cause Stock Market Decline

This article appeared online at TheNewAmerican.com on Thursday, May 18, 2017:  

According to nearly every major news outlet, Wednesday’s 372-point decline in the Dow Jones Industrial Average was Trump’s fault. CNN Money said “Trump drama rattles market” while CNBC blamed the selloff “on Trump fears.” NPR said the decline was because “Trump remains embroiled in controversy” with CBC News saying it was due to “uncertainty around Trump.”

Precious few deviated from their mission to blame everything on Trump to look at the real reason behind Wednesday’s modest selloff:

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Stock Market’s Complacency Index Highest in 24 Years

This article appeared online at TheNewAmerican.com on Monday, May 8, 2017:  

Wall Street’s “complacency index” — a measure of confidence that stock prices will continue to rise — hit the highest level since 1993 on Monday. Alternatively called the VIX (for volatility index), it is often referred to as Wall Street’s “investor fear gauge.”

Translation: Investors presently appear to have no fear. The index compares investors betting, through their purchases of options, that the market will go up, to those betting to the contrary. When investor fear is high, the VIX will move above 30 or even higher. When fear declines, the VIX trades below 20. During the day on Monday the VIX touched 9.72, a level not seen in 24 years.

So complacent have investors become that the VIX has dropped by 45 percent just since April 13. By comparison,

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Trump’s Regulatory Executive Order: One In, Two Out

This article appeared online at TheNewAmerican.com on Monday, January 30, 2017:

Official Portrait of President Ronald Reagan

White House officials described President Donald Trump’s Executive Order for “Reducing Government Regulations and Controlling Regulatory Cost” as Trump’s “one in, two out” plan: For every regulation promulgated by a federal agency, that agency must “identify” two existing regulations to be targeted for extinction.

The order also sets a cap of $0 for the cost of new regulations, with the only exceptions being military and national security regulations. The president said when signing the order,

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GM Bailout Cost Taxpayers far more than just $11 Billion

General Motors HydroGen4

General Motors HydroGen4 (Photo credit: Wikipedia)

The Detroit Free Press’ announcement on Wednesday that taxpayers lost more on the General Motors bailout in 2009 than originally thought was brief, to the point, and missed most of the real story behind the GM bailout. Taxpayers lost $11.2 billion following the government’s sale of the last of the stock it held in GM following the company’s government-assisted bankruptcy and restructuring, according to the announcement.

The key quote from a Treasury spokesman, however, was revealing. Said Adam Hodge:

The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful.

Not if one was a bondholder in GM. Not if one believed that

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Age and Acrimony End Dingell Dynasty in the House

Born in Colorado Springs in 1926, John Dingell (D-Mich.) took over from his father as a Representative from Michigan in 1955 and has never stopped promoting his father’s progressive agenda. On Monday, February 24th, Dingell announced that he would not seek a 30th term partly due to

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Monumental Hubris in Claim of Taxpayer Victory in GM Bailout

 

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, December 11th, 2013:

In Treasury Secretary Jacob Lew’s fawning, obsequious, genuflecting announcement that the president had singlehandedly saved western civilization from a cataclysmic economic disaster, he said that by taking a loss, taxpayers actually scored a victory:

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US Treasury sells the rest of its GM shares at a loss, claims taxpayer victory

Treasury Secretary Jacob Lew announced on Monday afternoon that his department had sold the remaining shares of GM that it acquired following the forced bankruptcy of the auto giant in 2009, and made the $10.5 billion loss sound like it was a victory:

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President’s Speeches on the Economy Draw Attention Away from His Scandals and Falling Poll Numbers

From the New York Times to Politico.com the president’s speech to students at Knox College in Galesburg, Illinois on Wednesday was headline news. More than an hour long, it contained enough platitudes, sound bites and falsehoods to keep pundits busy and away from more about the Benghazi, IRS, NSA surveillance scandals and Obamacare fallout which have caused the president’s poll numbers to plummet. It was time to get out of Dodge and take

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Presidential Debate Questions from Michelle Malkin

God bless Michelle Malkin. I toyed with a few hard-ball questions for the Presidential Debate in a previous post. The temptation to do the same by Malkin was just too much. I don’t think the media, or Jim Lehrer (the moderator), will be calling either of us very soon.

American writer and blogger Michelle Malkin.

American writer and blogger Michelle Malkin. (Photo credit: Wikipedia)

Here’s Malkin:

We know the liberal media bias drill: Make the Republican candidate look like a scary extremist on social issues and a greedy capitalist pig on economic issues. Avoid the Democratic incumbent’s record of failure. Run out the clock. Thank you and good night.

Malkin wants them to talk about Fast and Furious, in light of Tuesday’s murder of another border patrol agent at the same spot where Brian Terry was shot two years ago. She gets a running start by reviewing the Fast and Furious scandal, and then quotes Homeland Security’s Inspector General which found that “violence has significantly increased against Border Patrol agents. Since 2007, assaults on agents have risen more than 35 percent, including 13 deaths.”

Here are her questions (edited slightly):

Why has the Terry family been forced to file a federal lawsuit to obtain justice?

Why does Attorney General Eric Holder still have a job?

What exactly are you doing (or will you do) to ensure that Border Patrol agents are adequately armed and supported in their mission to defend American sovereignty?

Then Malkin takes on “transparency”:

[Mr. Obama, as President] you famously declared, “A democracy requires accountability, and accountability requires transparency.” Yet, the very first act of your administration was to violate your transparency pledge to allow full, public viewing of all legislation five days before you signed it…

You failed to televise health care negotiations as promised. You cut endless backroom deals protected from public scrutiny. In addition, your administration has routinely evaded disclosure law by meeting with lobbyists off the books at D.C.-area coffee houses and private townhouses, where Secret Service background checks and login routines are abandoned…

How, exactly, can you claim to have run the most transparent administration ever based on your actual record?

Next up: the auto bailout:

[Mr. Obama] your campaign touts the “success” of the government takeover of the auto industry as one of your proudest accomplishments. In 2010, you bragged that “American taxpayers are now positioned to recover more than my administration invested in GM, and that’s a good thing.”

Yet, your Treasury Department won’t take up GM’s recent offer to repurchase 200 million of the roughly 500 million shares the U.S. holds — because it would incur a $15 billion loss to taxpayers right before the election. GM still owes nearly $30 billion of the $50 billion it received, and its lending arm still owes nearly $15 billion of the more than $17 billion it received. Foreign workers and overseas plants have soaked up billions of American bailout tax dollars. But some 20,000 Delphi non-union workers saw their pensions eroded and health benefits disappear as part of the deal you cut with United Auto Workers.

How are Delphi workers, bondholders, car dealers and taxpayers better off now than they were before the Government Motors bailout given the actual record? If this is your proudest accomplishment, why on earth would reality-based voters want you back in the driver’s seat?

These are great questions. It’s too bad they’ll never be asked in public, especially by Lehrer who owes his career to the establishment mainstream media.

Obama Administration Pokes China in the Eye

NYT – U.S. to File W.T.O. Case Against China Over Cars

The Obama administration plans to file a broad trade case at the World Trade Organization in Geneva on Monday accusing China of unfairly subsidizing its exports of autos and auto parts, a senior administration official said late Sunday, in a move with clear political implications for the presidential elections less than two months away.

English: Obama in Beijing Imperial Palace

English: Obama in Beijing Imperial Palace (Photo credit: Wikipedia)

Why would Obama do that? The US government owes China more than $1.2 trillion and one would think we should treat them nicely. But no. Instead, Obama is filing suit against them for “unfair” trade practices.

And what exactly are those “unfair” trade practices: subsidizing their exporters who make auto parts cheaper than they can be made here. By subsidizing them to the tune of $1 billion, the Chinese government has reduced the cost of those auto parts to American manufacturers by $1 billion. But instead of saying “Thanks a lot, guys. We’re really appreciate that!” the White House wants to sue them to keep them from continuing to make those gifts to American manufacturers and, indirectly, to American consumers!

This is a political move, apparently, as Romney has gotten some traction in calling out the Obama administration for not doing enough to thwart those subsidies! Here is the Times:

Mitt Romney, the Republican presidential nominee, has repeatedly accused the Obama administration of not doing enough to challenge China on trade and currency policies.

This is political pandering to the ignorant. The ignorant are those who are persuaded that subsidies don’t offer benefits, only costs. Here’s how the Times explains the fallacy:

Auto parts employment in the United States has dropped by about one-half from 2001 to 2010, as imports from China grew nearly sevenfold over the same period, according to data provided by the senior official [in the Obama administration]…

But auto industry experts debate the extent to which those imports have been directly responsible for the closing of factories and for cutbacks at other plants, as ever-increasing automation has also played some role. The slowing of the American auto market since 2008 has had an effect as well…

When questioned about the motivation behind such a stupid move, an Obama administration official said:

President Obama has prioritized enforcement of Americans’ rights in the global trading system from day one, and this administration has a consistent record of action to support American jobs.

Yup. It’s all about saving American jobs even if someone somewhere else can do the same job cheaper.

New Fuel Economy Standards Imposed: Separating Hype From Reality

Chevy Volt

Chevy Volt (Photo credit: cseeman)

The hyperbole surrounding the White House’s announcement that vehicles must get 54.5 miles per gallon by the year 2025 or else their manufacturers face fines and other sanctions was nearly suffocating. The National Highway Traffic Safety Administration (NHTSA) said:

When combined with previous standards set by this Administration, this move will nearly double the fuel efficiency of those vehicles compared to new vehicles current on our roads.

In total, the Administration’s national program to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.

President Obama was equally ebullient:

These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil. This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption.

By the middle of the next decade our cars will get nearly 55 miles per gallon, almost double what they get today. It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last.

Department of Transportation (DOT) Secretary Ray LaHood added:

Simply put, this groundbreaking program will result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before — all while protecting the air we breathe and giving automakers the regulatory certainty to build the cars of the future here in America. Today, automakers are seeing their more fuel-efficient vehicles climb in sales, while families already saving money under the Administration’s first fuel economy efforts will save even more in the future, making this announcement a victory for everyone.

It seemed, briefly, as if all the unintended consequences of government intervention into the marketplace had either been

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GM: Trying to Please Too Many Masters

Michael Barone: GM Goes From Bad to Worse Despite Obama Bailout

Obama talks about the auto bailout frequently, since it’s one of the few things in his record that gets positive responses in the polls. But he’s probably wise to avoid probing questions, since the GM bailout is not at all the success he claims.

The New GM (Government Motors) Proudly Introdu...

The New GM (Government Motors) Proudly Introduces the 2011 Obummer (Photo credit: wstera2)

Aptly (and properly, in my opinion) called Government Motors, the old GM is still on life support, but of a different kind: trying to please too many masters is keeping the company from being as competitive as it might be, and will cost taxpayers—you and me—more and more money to keep it going.

Obama thinks otherwise, and why shouldn’t he? He is enamored with government and thinks everything should be run or controlled by government czars. After all, that’s what collectivists do: they collect!

His recent speech in Colorado illustrates this well:

When the American auto industry was on the brink of collapse, I said, let’s bet on America’s workers. And we got management and workers to come together, making cars better than ever, and now GM is No. 1 again and the American auto industry has come roaring back.

Of course he and his auto czars had to stiff bondholders by skirting, illegally, the usual bankruptcy process, but, hey, this is socialism: we can’t let niceties like contracts and the rule of law get in the way! And if you were a GM dealer who wasn’t connected to the Obama administration, well, sorry about that, you’ll have to go.

And how’s GM doing? Well, profits just dropped 41 percent, and its stock is at $21, down from $40 when it went public following the bailout. Government still owns some 500 million shares, which translates into a loss to taxpayers approaching $25 billion.

And according to Louis Woodhill, an auto analyst at Forbes, GM is likely headed for bankruptcy once again.

Government Motors indeed.

Economy Tipping Over Into Recession, Again

English: Yellow hard hat. Studio photography.

When shipping and supply managers were quizzed about their current outlooks by two separate reporting agencies, their answers were the same: Orders are slowing and so is production of manufactured goods. The Purchasing Managers’ Index (PMI), released in late June, and the Report on Business of the Institute of Supply Management (ISM), which was released on Monday, each showed significant slowing. The PMI’s manufacturing index came in at its lowest level since last July, while new orders for durable goods (autos and appliances) fell sharply in June, continuing a trend downward since early spring. It also showed a decline in the backlog of orders, the first since last September.

According to the ISM, its index fell below 50 for the first time since July 2009, indicating continuing contraction in the manufacturing sector of the economy and echoing the PMI’s report. What was startling in the ISM’s report was the decline in new orders: down by an astonishing 12.3 percentage points in the month of June. ISM’s production index also declined severely, by 4.6 percent, and was down by 10 percent since the end of March.

Retailers’ inventories are climbing as well, indicating lack of demand by consumers. More troubling was

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The Oil Bubble is Good for U.S. Manufacturing

A bubble.

The rising oil production from North Dakota’s Bakken Formation now equals that of Alaska’s Prudhoe Bay for the first time, according to the Wall Street Journal, due to technological breakthroughs such as fracking.

The recent surge in oil prices from under $80 a barrel last summer to over $110 per barrel in February has prompted a flurry of activity by oil producers to get in on the action. The price of leasing properties thought to hold millions of barrels of reserves has exploded, in some cases tenfold, in Pennyslvania, Texas and elsewhere. These are prices not seen since before the onset of the Great Recession in 2007, with Chinese, French and Japanese explorers committing $8 billion just in the last two weeks to secure oil leases.

Marubeni Corporation, a Japanese commodity trader, agreed to pay $25,000 an acre for a piece of Hunt Oil Company’s Eagle Ford shale property in Texas, while Marathon Oil closed on a lease nearby at $21,000 an acre. Leases in Utica shale in Ohio and Pennsylvania jumped ten-fold in just five weeks to $15,000 an acre.

Others, such as Exxon Mobil and Royal Dutch Shell are reconsidering deep-water discoveries in West Africa and in the Gulf of Mexico now that

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The Story Behind the Best- and Worst-Run States

Seal of Wyoming

In its second annual survey of the best- and worst-run states, 24/7 Wall St. noted some significant changes but the same message: “States can do a great deal to control their fate.”

The report noted:

Well-run states have a great deal in common with well-run corporations. Books are kept balanced. Investment is prudent. Debt is sustainable. Innovation is prized. Workers are well-chosen and well-trained. Executives, including elected and appointed officials, are retained based on merit and not politics.

Based on data collected from numerous sources such as Standard & Poor’s, the Bureau of Labor Statistics, the U.S. Census Bureau, and the Tax Foundation24/7 Wall St. then ranked each state on its performance in 10 categories. The study concluded that the best-run state was

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Two-Tier Wage Pacts Bringing Jobs Back to Detroit

English: 2011 New York Auto Show - Chrysler 30...

Last week’s announcement that the auto industry could add as many as 167,000 jobs by 2015 merely confirmed what some economists were saying: that lower wages allow car manufacturers to hire more people more profitably. As part of the agreement between the federal government and the unions in 2007, a lower tier of wages was created in order to halt the hemorrhaging of cash the carmakers were experiencing that led to the bailouts. The unions reluctantly agreed to accept the two-tier system, concluding that a lower-paying job was better than none at all.

Before the agreement, auto workers were making about $29 an hour, plus benefits (health insurance and a pension plan), which brought the total to $50 an hour or more. The onset of the recession pricked that “high wage bubble” which had been hidden prior to the recession. Under the 2007 agreement, entry-level workers were paid $14 to $16 an hour, plus benefits, bringing their total compensation to about $25 an hour. Although those wages affect only about one in every six workers, it was enough to allow Chrysler to turn a profit last quarter of $212 million, potentially setting the stage for its first profitable year since 2005.

At present it takes between 20 and 30 man-hours to produce a new vehicle. Chrysler’s costs are the lowest of the big three automakers, averaging about

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Some Unintended Consequences of Raising CAFE Again

New fuel economy label in 2008 shows estimated...

Image via Wikipedia

With the President’s announcement of higher mileage requirements—to 54.5 mpg on new cars and trucks sold in the United States by the year 2025—came the usual promises of less dependence upon foreign oil and reduced “greenhouse gas” emissions. Said the White House blog, “Taken together, the standards established under this Administration span Model Years 2011-2015. They will save consumers money, reduce our

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Evidence for Double Dip is Growing

Recession

Image by Anders V via Flickr

Establishment economists and other economic cheerleaders were disappointed to learn that, despite the government’s best efforts to revive the economy through Keynesian interventions and stimuli, the GDP (Gross Domestic Product) for the first quarter of 2011 was half the rate of growth in the last quarter of 2010.

As noted by the Wall Street Journal,

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States’ Pension Woes Worsening

Massachusetts AFL-CIO

Image via Wikipedia

The latest study by The Pew Center on the States shows not only that states have not funded the promises they made to their employees when they retire, but that the gap between those promises and the states’ contributions to pay for those promises is widening.

According to Pew, the shortfall is at least $1.26 trillion (with a t), but could approach $5 trillion depending upon rate of return assumptions. Because of the precipitous decline in revenues in 2009, states were able to pay only

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Government to Sell GM Stock Before It Declines Further

2011 Chevrolet Volt exhibited at the 2010 Wash...

Image via Wikipedia

When the federal government took over General Motors in July of 2009, it was “the only way to avoid an economic calamity,” according to President Obama.

Stuffed full of $50 billion of taxpayers’ money, GM began to revive, a little. It had lost an amazing $103 billion over the previous five years, partly by acceding to union demands for generous compensation packages (including payments to workers even when the plants where they worked weren’t even running!), and partly by

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.