Inflation -> recession

orbital

Flashlight Enthusiast
Joined
Feb 8, 2007
Messages
4,289
Location
WI
+

Cox Automotive figures Americans will buy 15 million new vehicles in 2023—800,000 more than it forecast in January.
Also, our GDP has grown more this year than expected.

Is J. Powell & Fed going to use more 'tools' in their arsenal to combat this?
 

idleprocess

Flashaholic
Joined
Feb 29, 2004
Messages
7,197
Location
decamped
Cox Automotive figures Americans will buy 15 million new vehicles in 2023—800,000 more than it forecast in January.
Return to office has me putting something close to normal annual mileage on the daily driver so its replacement in another ~5 years is something I'll have to ponder and holy smokes are new cars immensely more expensive than they should be. Automobile price inflation has steadily outpaced broader economic inflation for the last ~decade to the point I wonder who's buying new cars at these prices?
 

Monocrom

Flashaholic
Joined
Aug 27, 2006
Messages
20,123
Location
NYC
.... Automobile price inflation has steadily outpaced broader economic inflation for the last ~decade to the point I wonder who's buying new cars at these prices?
No one is buying them.
Folks are either leasing them, or financing them (realistically putting themselves in horrendous debt they cannot afford in order to get the luxurious or sporty vehicles they want).

Vast majority of which will see their new rides dangling from a Repo-man's hook as he drives away after the first handful of months of new car ownership.

Seriously, forget being a doctor or lawyer, or even an Entrepreneur with millions in investor money with the greatest idea in the world to make life easier for the masses.... being a Repo-Man is where the REAL money is at if you want to amass a fortune in as little time. Not even joking!
 

idleprocess

Flashaholic
Joined
Feb 29, 2004
Messages
7,197
Location
decamped
Folks are either leasing them, or financing them (realistically putting themselves in horrendous debt they cannot afford in order to get the luxurious or sporty vehicles they want).
I don't have the numbers but my sense is that financing - be it though the dealership or 3rd party - is how the overwhelming percentage of people buy cars. A slice of the exceptionally wealthy will pay cash as will the occasional proverbial regular Joe who saved for years to avoid interest and wants to walk away with keys and title ... but they're outliers.

But, really, regular people are being priced out of the new car market. The used market also being badly broken probably explains why even my far-flung suburb I'm seeing a marked uptick in the use of rideshare scooters and bicycles - even in profoundly cyclist- and pedestrian-unfriendly DFW with its sweltering climate.

Friend works for GMAF and has indicated that some staggering percentage of Escalades and Silverados on the longest note possible. Their payment histories are ... irregular. But they saw another dimension of that demo in a prior career working at a performance shop where payment for parts or upgrade installation was often in the form of 3 credit cards (to be charged exact dollars-and-cents values each), a check, and a pile of currency that looks like it was fished up from several couches but they always managed to come up with the money - and that was a very narrow demo fixated on things the average rando isn't likely to notice. The more general impress-the-Joneses/ladies/in-laws crowd probably somewhat more compelled to blow the vacation (or Junior's college) fund for that new ride with the Limited trim, genuine pleatherette-clad steering wheel, and the non-base model infotainment system.

being a Repo-Man is where the REAL money is at if you want to amass a fortune in as little time. Not even joking!
Same friend at GMAF described just how dystopian that field has become as well. Gone are the days of a towing company handing printouts to their drivers with vehicle descriptions, plates, and known addresses for vehicles under repossession. The instant a vehicle is under a repo order the equivalent of said printout is flashed realtime to ANPR-equipped vehicles in the area (who generally just circle likely places). If they register a hit it gets flashed realtime to tow trucks in the area who can descend to the location to collect. Sometimes they're the same vehicle. Friend said he's seen the cycle take less than 10 minutes for 2 independents, both operating on a bounty basis neither of whom communicated directly. Wal-Mart is where so many of these things happen and seems like every fifth time I'm at one I see a vehicle with ANPRs cruising the lot.
 
Last edited:

Monocrom

Flashaholic
Joined
Aug 27, 2006
Messages
20,123
Location
NYC
Technology certainly has changed things. Also, considering how most Wal-Marts have huge parking lots and are still generally friendly towards motorists who want to park overnight to get some sleep; I can see why those trucks would circle the lots.

My best friend is constantly hunting for a good deal on a Chevy Bolt. It's been months and he's been to numerous Chevy dealerships. Some of them multiple times. He's also heard the following expression multiple times: "Well, the average American spends ________ on a new vehicle."

He replies that's he's not the average American, and that he refuses to throw away ridiculous amounts of money on a new ride. As far as the amount from that statement above, he's gotten anywhere from $58K to $78K. Realistically, after taxes, I've heard that the most an individual should spend on a new car is no more than 10% of their income. And that includes everything. Including the taxes paid on the vehicle. Final price. I think a lot of folks would be very surprised as to what they can genuinely afford if they crunched the numbers.
 

Poppy

Flashaholic
Joined
Dec 20, 2012
Messages
8,406
Location
Northern New Jersey
I've noticed that used cars drop in price significantly as soon as they go over 100K miles. I wish that engines had tachs that recorded how many thousands of revs they went through, like they do in airplanes. After so many million revs, the engine is due for a rebuild.

A car in a metro area may have more revs on the engine but still have low mileage, when compared to a higher mileage engine that put its revs on the highway, commuting.

If I was in the market for a car, I think I would look for a later model vehicle with about 120K miles on it. I had a 1967 Cougar with a 289 in it that had a slight bearing knock in it at 89K miles. My previous car was a 1999 Crown Vic with a 4.6L engine that I bought new, in 1998. It went to the graveyard with 260,000 miles on it when it got rear-ended. I am currently driving what was my Dad's car, a 2008 Grand Marquis with 283,000 miles on it. It has some valve taps for about 5 seconds when I first start her up, but burns no oil, and runs like a top.

All this to say, I think that planned obsolescence is certainly a thing, perhaps, hopefully in vehicles that is taking a back seat.
 

KITROBASKIN

Flashlight Enthusiast
Joined
Mar 28, 2013
Messages
5,439
Location
New Mexico, USA
Seems like a reasonable article about what some of you are talking about. It is interesting:

IMG_2055.jpeg


IMG_2056.jpeg


"Earlier this year, GM idled two full-size truck plants in an effort to reduce inventory levels."

"With other brands, like Honda, Kia, Lexus, and Toyota, shoppers must be prepared to hunt and pay more for tougher-to-find models. Those hard-to-find cars and SUVs include the Toyota Corolla, Honda Civic, and Toyota Highlander."
 

Monocrom

Flashaholic
Joined
Aug 27, 2006
Messages
20,123
Location
NYC
Toyota lots in particular are like ghost towns. Very slim pickins.'
(And, I don't mean the overflow lots.)
 

bykfixer

Flashaholic
Joined
Aug 9, 2015
Messages
20,464
Location
Dust in the Wind
I've noticed that used cars drop in price significantly as soon as they go over 100K miles. I wish that engines had tachs that recorded how many thousands of revs they went through, like they do in airplanes. After so many million revs, the engine is due for a rebuild.

A car in a metro area may have more revs on the engine but still have low mileage, when compared to a higher mileage engine that put its revs on the highway, commuting.

If I was in the market for a car, I think I would look for a later model vehicle with about 120K miles on it. I had a 1967 Cougar with a 289 in it that had a slight bearing knock in it at 89K miles. My previous car was a 1999 Crown Vic with a 4.6L engine that I bought new, in 1998. It went to the graveyard with 260,000 miles on it when it got rear-ended. I am currently driving what was my Dad's car, a 2008 Grand Marquis with 283,000 miles on it. It has some valve taps for about 5 seconds when I first start her up, but burns no oil, and runs like a top.

All this to say, I think that planned obsolescence is certainly a thing, perhaps, hopefully in vehicles that is taking a back seat.
My cars have the ability to show how many hours are on the engine vs how many hours it was driven. Not some rev meter, but still provides a sense of how much time the engine ran without it moving anywhere. I think that is how the "oil life" meter gets it's data. Often in my work truck the oil life has expired long before the odometer says it's time for an oil change due to idling a lot with my flashling lights running in a work zone.

Car lots near me have way more used vehicles than new. Go by a Honda dealer and see lots of Toyotas, Kias, Hyundais, a few Fords and other non Honda brands filling up the spaces. When the Mrs and I went car shopping many of the 2 year old vehicles were priced higher than they were when new. We found a deal if you call it that. A low mileage 2 year old car less than it was new, but not by much. It had been on the lot 6 months. I talked the dealer down another thousand bucks saying "if you don't lower the price 2k I'm leaving".

One thing I'm glad to see is many things on sale. We're in a recession in some ways but buying and job creation statistics are saying otherwise.
 

jtr1962

Flashaholic
Joined
Nov 22, 2003
Messages
7,505
Location
Flushing, NY
Realistically, after taxes, I've heard that the most an individual should spend on a new car is no more than 10% of their income. And that includes everything. Including the taxes paid on the vehicle. Final price. I think a lot of folks would be very surprised as to what they can genuinely afford if they crunched the numbers.
I've said something similar. I've told people even in years when I made 6 figures I couldn't afford to own a car. They looked at me like I was crazy. At today's prices you need a household income of at least $200K to be able to really afford a car, any car. "Really afford" means you don't have to give up anything, like necessities, or putting aside money for retirement, or adding to a rainy day fund. I go by the old adage: Take your after tax income. 25% should go towards retirement, 25% towards emergency savings, no more than 25% towards housing, and the rest towards everything else, including transportation/vacations/food/etc. When you apply this with the cost of even a good used car, you're looking at a household income of at least $200K before taxes. Hard fact is probably 90% of the population can't really afford a car, me included. Living in NYC I really don't want or need one anyway.
 

Monocrom

Flashaholic
Joined
Aug 27, 2006
Messages
20,123
Location
NYC
....Hard fact is probably 90% of the population can't really afford a car, me included. Living in NYC I really don't want or need one anyway.
It depends on where in NYC you live, and where you work.
I couldn't be able to get to work on time if I relied on public transportation. Some areas of NYC still have zero subway service. And the bus service except for rush hour on weekdays is absolutely random and pathetic. Though I agree that folks horribly overestimate what they can afford. Still, there are a handful of new models out there in the sub-$20K range. But no one wants to be seen in an "economy" car.
 

orbital

Flashlight Enthusiast
Joined
Feb 8, 2007
Messages
4,289
Location
WI
+

Attention passengers & crew members, this is your captain speaking::

Happy to announce the forecast for our destination has improved and the stormy conditions have dissipated.
Looks like we're in for a Soft Landing 😁 and thanks for flying BigAir.

 

PhotonMaster3

Newly Enlightened
Joined
Aug 9, 2020
Messages
103
If you really want to understand why the economy is the way it is, and what we can do to improve it without violating anyone's natural rights, then I would suggest reading the following books. Links are given to free, legal versions. Regardless of your personal political inclinations, I think you will find something of value in all of these books, if not of the normative sort, then at the very least of the descriptive sort.

We don't really live in a capitalist socio-cultural-economic system. Our system is really more accurately described as "neoliberalism-neofeudalism". What most people incorrectly perceive as defects of "capitalism" really have nothing to do with capitalism, proper, but with the neofeudal rent-seeking behavior that is a result of economic monopoly privileges which enable private owners to privatize what is essentially the common wealth of humanity.

These books make the argument, none of them for the first time in the history of human scholarship, that all the living have an equal and common right to the gifts and produce of Nature, and that our failure to recognize and uphold this principle is at the root of literally everything wrong with human civilization.

"Neoliberalism", by contrast, is the dominant ideology of our times, and is in broad terms the ideology which seeks to apply market economy principles to all spheres of human life, regardless of consequences. To understand what is meant by neoliberalism better, I would suggest Simon Glendinning's paper, Varieties of Neoliberalism (2015).

1. Henry George, Progress and Poverty (1879). This actually should be at the top of everyone's required reading list. It's one of the most important books in history, particularly on the topic of political economy (which is more or less the philosophy of economics, rather than the mechanics of economics). In the years following its publication, it became the most popular book in the English language, after the Christian Bible, and resulted in the passage and ratification of Amendment XVI to the Constitution of the United States. Sadly, George's economic philosophies largely fell by the wayside, in the wake of WWI and the Influenza Pandemic of 1918, and have since been forgotten by most, to our detriment.

2. Ralph Borsodi, This Ugly Civilization (1929). Borsodi gives a very insightful breakdown of how the factory system of production and the drive for efficiency results in a race to the bottom.

3. John Sherwin Crosby, The Orthocratic State (1915). Crosby, like Borsodi, was a follower of Henry George, and I might say this book should be read even before Progress and Poverty, because it's much shorter, and lays out a plan that ties Georgist principles directly to the legitimacy of governance and how governments ought therefore to be structured.
I'm a sci-fi nerd so maybe you guys won't dig it, but my favorite book is " the moon is a harsh mistress" by Robert Heinlein. It will show you why we all have been brainwashed to think we need a government to tell us what to do and take care of us.

In this present crisis, government is not the solution to our problem; government is the problem.
From time to time we've been tempted to believe that society has become too complex to be
managed by self-rule, that government by an elite group is superior to government for, by, and of
the people. Well, if no one among us is capable of governing himself, then who among us has the
capacity to govern someone else? All of us together, in and out of government, must bear the
burden. The solutions we seek must be equitable, with no one group singled out to pay a higher
price.
Ronald Reagan
 

bykfixer

Flashaholic
Joined
Aug 9, 2015
Messages
20,464
Location
Dust in the Wind
I always felt a need to be "governed". Not necessarily by government but by those with experience enough to provide me some guardrails to stay between and the wisdom to allow me the freedom to make my own mistakes.... and courage to allow me to live and learn from said mistakes. Even during my rebellious period I felt like some governance did me good.

Leaders today, if you want call them that are opposed to the conventional norms on a very large scale these days. They often tell us what we think is truth is not and what we think is nuts is actually normal. "Inflation is up? What inflation, that's just some conspiracy". "Crime is up? No, you're just imagining that". "Let's just print some more monopoly money, budget deficiets are a good thing".

I'm all for change yet not up for letting the residents running the insane asylum. It's not about right or left anymore because both sides have gone off the rails. One side wants to drive us off a cliff in a speeding race car in the name of fairness. The other side is heading for the same cliff in a horse and buggy in the name of tradition.
 

orbital

Flashlight Enthusiast
Joined
Feb 8, 2007
Messages
4,289
Location
WI
+

Current administration has nothing to do w/ pricing or inventory of bushiness / manufacturers,
nor does it have any say over what our Federal Reserve does.

Bidenomics isn't a thing
 

idleprocess

Flashaholic
Joined
Feb 29, 2004
Messages
7,197
Location
decamped
It will show you why we all have been brainwashed to think we need a government to tell us what to do and take care of us.
Every society - by which I mean a group of self-sustaining humans quantity Dunbar's number or larger - has government of some form or another. The specific role of government is up for debate - intense debate - but in general as societies grow larger the general need for rules increases in count and specificity. This is due to the inexorable consequences of exceeding Dunbar's number - those outside one's circle are effectively abstractions of varying fidelity and complexity relative to those within; I know my SO and immediate family very well, my immediate co-workers relatively well, distant relatives and co-workers I see deal with occasionally moderately well, the local mail carrier very little, randos I encounter daily and never see again not at all.

government is the problem
Regardless of what Reagan meant or intended at the time, this sentiment has become a learned helplessness regarding government - that it cannot be engaged with.

government by an elite group
While various extremes - aristocracy, theocracy, technocracy - are to be avoided the reality is that government has always been by a form of elite one way or another.
 

bykfixer

Flashaholic
Joined
Aug 9, 2015
Messages
20,464
Location
Dust in the Wind
^^ I really tried to understand the first part of that post but have to look up stuff and by the time I do the voices send me off in other directions.

The last part, most definitely. Trouble these days is the elites are wack-o more than not. America had an orange man as president for 4 years and now has a doddering old puppet..... and they were the best choices 😱
 

idleprocess

Flashaholic
Joined
Feb 29, 2004
Messages
7,197
Location
decamped
^^ I really tried to understand the first part of that post but have to look up stuff and by the time I do the voices send me off in other directions.
A small group of people that know each other really well with common values and shared interests can get by with rules that are both few and brief declarations of principles and may not need a strict leadership structure. There's no crowd to hide in, no distortion of the message via telephone game, and few enough people that group membership is implicitly all-or-nothing.

Some examples:
  1. I joined the local makerspace at the very end of its small organization phase where the code of conduct was just an expansion of the original nucleus of be excellent to one another. They were more than 150 at that point but the regulars - the ones that were in for more than weekend projects - were closer in number to ~50. But as they grew so did the conflicts so the code of conduct expanded and member discipline became and increasingly regular thing - as did organizational procedures since succession was a very real thing to be handled.
  2. Experienced a more dramatic version of this in a workgroup ~20 years ago. When I was hired the workforce doubled from 20 to 40 - everyone knew one another. After another 6 weeks it hit 60 and it was still easy enough to absorb the additional faces will maintaining familiarity. But 6 weeks after that it was 180 and there were a whole lot of strangers on that work floor with a need for documented procedures, formal communications, loss of cohesion, and considerably more active management of the entire operation.
 

orbital

Flashlight Enthusiast
Joined
Feb 8, 2007
Messages
4,289
Location
WI
^^ I really tried to understand the first part of that post but have to look up stuff and by the time I do the voices send me off in other directions.

The last part, most definitely. Trouble these days is the elites are wack-o more than not. America had an orange man as president for 4 years and now has a doddering old puppet..... and they were the best choices 😱
+

A bit off topic;
but if you're able to view these episodes, really good

based on this book
 
Top