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Buying American Cars What Does It Mean?

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  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    Love it or hate it, the market has been performing rather astonishingly the past few months.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    The economy tends to ignore whoever is in the White House. I remember reading a poll of market analysts and academic economists and the overall opinion was that if the office of the President was legally abolished, the economy would behave exactly the same without it. There are just too many outside influences, global trends and unforeseen events to give much credence to the influence of the office of President on the economy.

    Some presidents get lucky while in office, and some unlucky, and get praise they don't deserve, or criticism they don't deserve.



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  • tlongtlong CaliforniaPosts: 5,164
    With car sales at an all time high as well as the market, there is bound to be a correction. The market is around triple what it was 9 years ago, I fully expect a significant correction in the next couple of years.
  • fintailfintail Posts: 45,148
    By looking at my 401K, the economy has been performing rather astonishingly for about 6-7 years. Which is worrisome, if one subscribes to "the bigger they are" school of thought. Gotta be careful too, a prior boom/bust caused political upheaval and "it's the economy, stupid" was behind it.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    edited February 2017
    I'm quite concerned that something like 1/3rd of all car loans are sub-prime. The car loan economy is HUGE.

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  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    I think any of us must admit that the increases since election day are not typical and in fact flew in the face of pundits. For purely selfish purposes, I've been happy with the increases although I am cautious about a correction. But I've felt that way for going on four months now.
  • fintailfintail Posts: 45,148
    Personal debt has also been approaching all-time highs, as wages continue to lag increases in the cost of living. Luckily cars are easier to manage than houses.
  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    Yes, easy-money mortgages are a big part of the problem in the past several years. I know someone who barely makes a living who has a mortgage four times what mine was. Admittedly, she lives in California, but even when I can afford something, there's something in me, some point, where I'm like, "I just can't justify that". I think that's not a problem for a lot of folks. Right now, I don't want to spend $700 on airfare to look at a Studebaker for sale that I want, LOL!
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    edited February 2017
    Disagree if the inference is that this is automatically a good sign. Just a cycle and not necessarily an auspicious one. A look back to 1928 at how the S&P 500 index SPX, +0.15% has performed between Election Day and Inauguration Day finds that the all-time champion is none other than Republican Herbert Hoover, who was elected to his first and only term on Nov. 6, 1928.

    There's a certain irony in today's stock market performance when comparing it to the market's 3-month plunge during Obama's first months in office, and then a strong recovery.

    So history has examples of a bad performing Nov-March turning quite good, and a good-performing Nov-March turning into a disaster, with the sitting president not much involved in events either way.

    If you want to see the power behind the throne, look to the Federal Reserve---they can really affect the economy almost immediately.

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  • fintailfintail Posts: 45,148
    Post-election day is effectively the same as pre-election day. Any doubts about instability from new leadership are canceled out with the hope/promise of a more "business friendly" climate. But the best business climate is one where consumers have the ability to spend.

    There are quite a few housing bubble markets out there right now (I'm deep in the heart of one, it is insane here). How those play out will be just as interesting as the stock market or American car sales.
  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    S&P, but not Dow Jones. I cannot personally remember consistent gains in the Dow Jones in such a short period of time as the past three months.

    Know also, that inauguration day back in Hoover's day was March 4, not January 20.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    edited February 2017
    Clinton was president under the largest surge in the Dow in modern history (by far) starting 1/20/1993, but the all time record holder is Calvin Coolidge--which I suspect neither you nor I would remember!

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  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    I actually am somewhat of a fan of Harding, who was succeeded by Coolidge. The guy is the Rodney Dangerfield of presidents. I remember seeing a pic of him on a cereal box when I was a kid and I'd heard of presidents around him, but never heard of him. He had the shortest presidency in the twentieth century, even shorter than Ford, and actually accomplished a lot of what he promised, but is remembered mostly for Teapot Dome, of which there is no evidence he knew anything about it and which didn't come out about his Secretary of the Interior's nefarious oil dealings until after Harding died, Harding's rep also took a dive for the book "The President's Daughter", written a few years after his and his wife's deaths, stating he had an illegitimate daughter. This story was confirmed by DNA testing in 2015. Honestly, I hadn't believed the story until then. Absolutely amazingly to me, Harding died in 1923 but his mistress died in Oregon in 1991 and his daughter died there in 2005. (Harding and his wife had no children of their own.)

    Most historians thought his wife burned all his presidential papers, but they were stored in Ohio and not available to study until the mid-'60's. Historians who've read his papers have come away with an improved opinion of him.

    To me, interesting overview of Harding's presidency, from a latter-day standpoint:

    https://fee.org/articles/the-strange-presidency-of-warren-g-harding/

    20th Century U.S. history class over, sorry! LOL
  • berriberri Posts: 8,639
    edited February 2017
    Oh I recall Coolidge, Harding and Hoover - the big market build up, huge discrepancies between the 1% and everyone else, isolationist policies and trade wars. Next up was the big Depression. Not forecasting, just noting the irony right now.

    Perhaps the next comparison is Nixon and the war on the press.
  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    There was what some call a depression in 1920. Apparently the post-WWI economy wasn't what the post-WWII economy was relatively quickly. Under Harding, employment improved significantly. I don't believe what happened in 1929 would happen again, though...many more checks-and-balances now. Of course, who knows. As stated, I am sheepish about a correction. In fact, I had something akin to a bonus in early December I wasn't expecting. I could take it in Dec. or Jan. I had already maxed out what I wanted to put in my 401-K for last year which would automatically start over again in Jan. I decided to take it in Dec.'s pay without any 401-K coming out of it, thinking 'cash is king'. We'll see how smart or not smart that was, LOL.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    Just remember the old adage: "In a bull market, everyone is a genius".

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  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    I think we are diverging too much into "specific" politics and current names and we should probably stay on course with American economics in a very general sense. References to history seem harmless enough, and references to the history of the auto industry are particularly welcome.



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  • berriberri Posts: 8,639
    OK - tariffs on Mexican cars and parts will hit D3 hardest and like the transplants decades ago, Japan Inc. will overall benefit from it in the auto sector.
  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    Shifty, WTH happened? Can you delete all but one of my posts above? Thanks!
  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    I ask because I don't know, but are there any Japanese nameplates assembled in Mexico, or minimally, utilize significant Mexican parts in cars, wherever they may have final assembly?
  • tlongtlong CaliforniaPosts: 5,164
    I've always said that trade protectionism would backfire. It looks like we may be able to see that experiment play out assuming some of the stated policies are actually put into effect.

    My prediction is that a) It won't help any jobs in the US; and b) It will backfire and hurt our economy big time.
  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    Ohio and Michigan autoworkers already seem to have benefitted from some cancellation of plans to invest in Mexico by the D3. Investments are being made in U.S. plants instead. There's no bad in that.

    Of course, tarriffs haven't happened yet.

    A level playing field helps, of course.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964

    Ohio and Michigan autoworkers already seem to have benefitted from some cancellation of plans to invest in Mexico by the D3. Investments are being made in U.S. plants instead. There's no bad in that.

    Of course, tarriffs haven't happened yet.

    A level playing field helps, of course.

    I haven't seen any evidence of that. From what I've read, cancellation plans were already in effect in 2016 so that Ford could build EVs. Perhaps what you mean is that some existing jobs will be retained as a result, and that may be.

    Corporations do whatever they want. They don't listen to presidents They do what's best for them and their stockholders--one way or the other they'll look out for #1, you can be sure.



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  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    Jeep is investing in Toledo and Michigan plants; press release in January.

    http://www.freep.com/story/money/cars/detroit-auto-show/2017/01/08/fca-invest-1b-michigan-ohio-plants-confirms-jeep-pickup-grand-wagoneer-wagoneer/96319702/

    Not specifically auto-related, but steel plant in Steubenville, OH reopened a month or so ago and is producing steel, first time since 2009. That's all good for that area of the state.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    edited February 2017
    Those are all tax-incentive deals. Basically, the taxpayer funds the corporation. Also the "new" jobs are based on a two-tier salary system, so yeah, there may be 2000 new jobs in 2020, but they'll pay a lot less than the old ones.

    Anytime I hear about going back "to the good old days" I'm suspicious of a shell game going on. I think to enter the future, the auto industry needs to think about the future---and obviously that means higher fuel efficiency, more EVs, more hydrogen cars, more efficient plant operations.

    Poor Steubenville.... if ever there was a victim of corporate plundering, that town was it.



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  • uplanderguyuplanderguy Kent, OHPosts: 10,372
    edited February 2017
    I'd say Youngstown much-more than Steubenville--Steubenville is smaller but being a river town was hurt by the end of steel. Even small gains are good, I mean--these are all things that weren't happening here a year, two, three ago. There's no bad in any of that.
  • Mr_ShiftrightMr_Shiftright Sonoma, CaliforniaPosts: 60,964
    edited February 2017
    Hard to say. Giving people unrealistic expectations is sometimes more cruel. No one's going to build new coal plants or steel plants or 1965 Mustangs anymore. Robots, electric cars, increased plant efficiency, clean energy---this is the real world right now. What people in those depressed areas need to do is move, however they can. I'd rather see giving them assistance to do that, or even public works, than these last couple of decades of empty political theater. Go where the jobs are, not where they were.

    I mean, even in your optimism, will Detroit ever be Motor City again? Pretty unlikely. But one day it could be something else.

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  • fintailfintail Posts: 45,148
    I'd like to see some gains in other places too. For two reasons: prosperity is as concentrated today as wealth, and we're pretty much full out here now B)
  • MichaellMichaell ColoradoPosts: 80,249

    I mean, even in your optimism, will Detroit ever be Motor City again? Pretty unlikely. But one day it could be something else.

    I read a great story about a new company in Detroit called Shinola. They manufacture personal goods (watches and leather goods, mostly), and are proud to be based in Detroit, using local labor (imported Swiss watch parts, however).

    Fairly expensive, but I like the story the website tells about the city and the company.

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  • tlongtlong CaliforniaPosts: 5,164
    Pittsburgh was a filthy nasty steel town and yet seems to have rebounded to a very nice and new-tech city. No reason why with a little time it couldn't happen to Detroit.
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