"could mark the beginning of a frightening new phase in the economic downturn."

[RedEarth]

December 03, 2008
The auto downturn is very serious
I was running out of vocabulary last month to describe just how bad October was for the domestic automakers. But whatever you want to say about October, November was significantly worse.

When I first saw the figure for November sales of cars manufactured in North America-- 236,000 units-- I thought maybe somebody had mistyped the first digit. Even 336,000 would have been a very bad month. But 236,000 is 17% below the dreadful October figure and 40% below the number sold in November of 2007.

Remember that this volume decline is hitting an industry with huge fixed costs, and that these are decreases relative to 2007. GM, for example, reported a loss of $38.7 billion for 2007. That's billion, with a "b". Back when things were good.

I believe that lost income and jobs in the auto sector tipped the U.S. economy into recession this summer, and we may be on the cusp of much more dramatic adjustments in this sector than anything seen so far. The wrenching changes that might be immediately ahead could mark the beginning of a frightening new phase in the economic downturn.

http://www.econbrowser.com/archives/2008/12/the_auto_downtu.html

[daninthemoon]

1. someone on tv yesterday pointed out that a big part of the auto sales

problem is the credit lockdown. people can't buy a car except on credit, and the credit is not available. where did that bailout money end up? they said it was to open credit back up, but apparently it still is unavilable to consumers. i'm completely pessimistic at this point. things are going to shit and i don't think anyone can stop it. we're only at the beginning.

[dysfunctional press]

2. we had no problem getting credit to buy a car two weeks ago.

:shrug:

[barbtries]

3. my boss also bought a new car

in the midst of the meltdown, late Sep early Oct i believe.

[soleft]

4. I bought a used car last April on credit

Good thing I didn't wait because there's no way I'd be able to get one now.

[marketcrazy1]

5. if you have

good credit you can buy a car,if you have fair credit you can buy a car and even if you have poor credit you can STILL buy a car ( with a verifiable job and income ) the problem is people are so skittish about the state of our economy that they do not WANT to buy ANYTHING right now! the thinking is and what i am hearing from friends is WAIT for now and see how things are going to turn out, so unless they NEED a replacement vehicle they will hold off on making large credit commitments.. people are AFRAID to spend more that they need to....

[Hawkowl]

7. They don't want to stop it

After watching Paulson and Bush the past month, I think we can conclude that they don't want to stop the credit crisis, recession or economic meltdown. I think they are only concerned with delaying the worst, so Obama takes the blame.

This is the reason Bush/Cheney should've been impeached and removed from office. Pelosi and Reid share equal responsibility for this disaster.

[RedEarth]

6. Calculated risk blog's take on Hamilton's post on auto industry

Professor Hamilton is not prone to hyperbole, so when he writes about a "frightening new phase in the economic downturn", I pay close attention:

When I first saw the figure for November sales of cars manufactured in North America-- 236,000 units-- I thought maybe somebody had mistyped the first digit. Even 336,000 would have been a very bad month.
...
The wrenching changes that might be immediately ahead could mark the beginning of a frightening new phase in the economic downturn.

http://calculatedrisk.blogspot.com/2008/12/hamilton-on-auto-sales.html