RIP Automobiles, Hold the Dinosaur Juice

An interesting article appeared in FT.com -- "Young Americans Turn Away from Driving" that supports something I've been thinking for a long time - cars as we've known them are done.  I would not be a buyer of automotive stocks.  In fact, they might make an interesting long-term short.   This position is immediately relevant to the western world, and although developing countries like China, Brazil, India may well have pretty strong auto markets for some time, they are just echoes of the automotive industrial boom.

Here's why cars as we've known them are doomed.

Demographics.  Baby Boomers becoming Aging Droolers reduce and eventually stop driving... plus everyone knows that older folks just don't buy new cars after a point... the old jalopy is just fine.  Even more importantly, the trends in X'ers and Millennials to live in cities, take public transportation, ride bikes, walk and actually SHARE THINGS like cars are killing auto demand.

There is an intriguing psychographic aspect to the falling demand for cars by younger people.  Cars don't have universal cachet the way they used to.  Kids that grew up on the internet, video games and smart phones have a different life focus and orientation than older people who grew up with land lines and the daily admonition from Mom to "go play outside".  Your station in life is no longer signaled by the wheels you have.  In fact it's kind of going in reverse... who hasn't had a chuckle at the some of the auto customizations originating in public housing?  No, having the latest iToy is far more important and relevant.  Cars are a pain in the butt.  They are expensive, costly to drive, costly to insure, they break down and lose value as they age, they are hard and/or costly to park, they get you courtesy notices and fines from your friendly local government, and they tend to embed dumb old technology.  If I need one, I'll borrow it.

If you are an auto maker, the outlook is dismal.  I don't care how big ZipCar gets, it won't replace demand generated by the suburban two-cars-in-every-garage paradigm.

Energy costs.  If you believe energy costs will rise long-term, it's obvious driving will be impacted. Will LNG come to the rescue?  Maybe.  But until something we see a viable substitute for the incredible portability and efficiency of fossil fuels, energy prices aren't likely to help increase demand for cars.

I guess this is the point where we might indulge in nostalgia for the passing of an era.  Go ahead, sit in your shiny baby, smell the leather.  Crank it and gun it... ahh the sound.  Turn on that AM radio and hear those fine tunes... fondly remember everywhere you've gone and everything you've done in your cars (or not)...   OK, time to go.

Clusterville - another trip to the abyss

I wrote the tune underneath the wordcloud in May 2008 ... it seemed we were on the edge of an economic abyss (we were).

Now in 2012 it feels like we're back at the edge of the abyss, only it's much bigger than last time.

All the same themes, just bigger, and worse--

State control over ever-increasing span of business and private life, making it harder and harder to get new economic growth underway.  Biggest growth industry in USA?  Department of Homeland Security!!!  LETTING GOVERNMENT DISMANTLE FREEDOM IS A HORRIBLE IDEA!

Kleptocracy and Crony Capitalism comprising banksters, politicians and their unelected apparatchiks.  If you are a saver, you have been and are continuing to be robbed by those in charge.  POLITICS SHOULD NOT BE A PAID CAREER!

Ever expending Central Bank balance sheets based on exactly what collateral? Cal it what it is - MONEY PRINTING!  GIVING MONOPOLY POWER OVER MONEY TO CENTRAL BANKS IS INSANE!

Now entering Clusterville... buckle up.

The Federal Debt vs. The Debtors in Chief

Michael Jackson's Black or White?  How about Red or Blue?  Now say, who really knew/knows how to run up that national credit card?  Of course, we are going to pay it all back...

It is staggering to think that this country had enough productive force to diminish its debt despite the Viet Nam war and Johnson's Great Society.   Now an extra $ of government debt doesn't even buy a $ of GDP.

Baby Boomers can fairly be pointed out as responsible for most of the great upswing... does anyone care anymore?  Are we all aiming to be wards of the nanny State?  Shame on us.

Spring Cleaning

Spring is definitely here.  Nature is doing its part to remind us that it's a great gift to be alive and experiencing what is.  Our consciences can take it from there - what we ought to do to honor life.  


And so, to that end, a good ritual, getting the crud out.  De-hibernating, sweeping the den.  Pretty straightforward to do in our little private lives.  Vexingly difficult at the level of the human hive.  Where to begin?


Almost everyone I talk with is sick of spin-world, scams and corrupt crony capitalism.   Let me humbly suggest a spring cleaning to refresh our reeling society.


1) Put an end to career politics.  No career politics = no escalating networks of corruption.  Everyone should serve in public office - ONCE.  And then, no more.  Whatever you did, you did it.  For a year, or maybe two. Then get out.  Next.  It's service, remember?  Not institutionalized theft by criminal dynasties.


2) Rein in and shrink unelected government bureaucracy.  When elected political careers go away, unelected Mandarins can hold sway.  But not if we get serious about sunsetting and privatizing government.  There is no reason to unthinkingly spawn and grow government agencies that have proven they have no fiduciary duty to their taxpayer funders.  How about that TSA?


3) Move from a secrecy-driven and manipulated fiat money system to hard money.  This is virtually impossible to even consider until we do #1 and #2.  No pun intended.  100 years of the Federal Reserve controlling the supply of US money has diminished the value of the Dollar by 95%.  Good thing no one lives long enough to see ALL their savings decimated.  Just most of them.  Government can spend and spend and increase debt for a long time, counting on the fact that the debt will be greatly devalued.  The only losers are savers and fixed-incomers... are there any savers left or am I the only idiot?


We all have our own closets, basements and attics to clean in the Spring.  Collectively, we've just put it off for way too long.  We owe it to our kids, grandkids and beyond.  

Oh those Happy Europeans

Is Wolfgang Schaeuble about to be smacked by Mme. LaGarde?  Don't you just love that French determination?


The guy in the chair in the background is obviously enjoying it.  Hey, it's big theater.  The Greek Tragedy continues to unfold while the Eurozone keeps rearranging the deck chairs on their sinking fiscal and monetary union ship.  Don't worry, China will save us all.


Adele's breakup anthem "Because of You" really is the perfect song for the times.


Not that things are really so much better here in Norte Mexico.  The unrelenting move to convert the country into a two-class bipolar kleptocracy continues apace with the Fed eating everything in the world financial without regard for future indigestion, the executive branch quietly sweeping the whole FraudClosureGate Robosigning fiasco under the rug (made with pure 1% wool), and the sickcare system pauperizing the middle class while comping those below the line.  Oh, and how about the rushed bipartisan show of public servitude by our federal elected officials to eschew trading on stocks based on information acquired in the course of their official duties?   Loophole sandwiches, anyone?


Now carry on.

Lies, Damn Lies, and Worse - GOVERNMENT Statistics

Today's tasty treat courtesy of the BUreau of LLabor SHITandards.


Amazing! Rocket Science!  More jobs and a lower labor participation rate magically drops the stated unemployment rate to 8.2%.  We're SAVED!


Woops - Charles Biederman, who runs TrimTabs, who bases their observations on withholding data, and, says: "actual jobs, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments – made at the sole discretion of the Bureau of Labor Statistics economists – that 2.9 million fewer jobs gets translated into 446,000 new seasonally adjusted jobs." A 3.3 million "adjustment" solely at the discretion of the BLS? "


I think I just saw something floating in the punchbowl.  

The Day the Tulips Wilted

Tulips are beautiful.  So beautiful they became objects of greed and envy.  Nowhere moreso than in 17th century Holland.  Tulip bulbs became a frenzied market, and eventually the most expensive commodity in the world.  Until February 3, 1637.  


This little chart shows how the tulip market wilted, rather quickly.  Fortunes that had been made vanished.  Happy 375th anniversary of the end of Tulipomania.