Are automaker’s stock prices forecasting a double-dip recession?

Posted By on July 23, 2012

I’ve noticed that Americans have been buying a few more new cars this year and that after a few lean years car manufacturers “were” starting to feel the recession ending. Now that sounds like good news, eh? (below: first half 2012 sales increase or decrease based on a new car sales price … all up except luxury models)

jdpower_carbuying120723JD Power reporting on first half 2012 new car sales*

But … I saywere” starting to feel the recession ending because recently the odds seem to be increasing that we are looking at (are near or are “in”) another recession … perhaps indicated when analyzing stock prices in the auto sector – a decent indicator of expected sales and company earnings.

f_gm_pricingmomentum120723

Those charged with keeping the economy growing aren’t necessarily working together in order to help grow the economy and shrink the deficit – or as I prefer, putting policies in place that encourage investment and growth. The mismanagement when it comes to spending tax revenue and living within our means leaves much to be desired as does the leadership coming from the top (President Obama). It would great if there was an easy and painless answer, but without private sector growth and jobs, we can’t “tax the rich” or even “cut spending” enough to dig our way out of our debt.

The only answer is growth … not growing government or the entitlements … but business growth. More jobs creates more taxpayers. Employers competing for the best and brightest employees makes for higher salaries and more tax revenue. So before electing politicians who want to micromanage the long list of federal departments (and it is long!) and add even more bureaucracy … remember that every tax dollar pulled from the private sector is one fewer that can be used to “make another dollar” — the reason we invest in business.

Comments

Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.