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Entries in Economy (20)

Friday
Oct032014

Vroom Room

Good Morning,

Its Friday, its the Vroom Room, enjoy the cappuccino and biscotti, join the conversation, leave a comment.

Its a new month, we are back to fully engaged reality, with the expected increased turmoil in the world, and a ton of opinions on the Canadian economy, and the dollar.

Yes...we knew it was coming during the summer.

In case you missed our latest ebook "Behind Closed Doors"...Click. We are certain that you will find it interesting, captivating, and revealing.

As we move closer to "connected cars" and self driving cars. Old school mechanical cars are starting to look totally archaic, although easily restorable. You have to wonder about the challenges that these new cars will pose decades from now in the restoration process. By then the software to operate many of the features will be long gone.

Think about this for a moment.

Have you noticed how the mainstream media is increasingly in the eyeball business. Literally rehashing the same stories, photos, content, over and over in their quest to capture more eyeballs. 

In an atmosphere of diminished attention span, humans just "shut down" to ingesting the same s#&t over and over. 

Canadian Sales:

A record September, and a record 3rd quarter. Fascinating results when everyone fires on all cylinders, gets the game plan, and the money flows freely. Let's not forget new models too. It literally took years to arrive at this juncture in Canada. 

As expected trucks are increasing their popularity and market share.

Finally GM throttled up in September with a strong month...

Canada:

We are increasingly reading opinions by pundits that Canada is falling behind. A couple of years ago we mentioned that Canadian companies were sitting on mountains of cash, while the conomy was relying on the Canadian consumer, and cheap money. 

We are seeing the results of a lack of "corporate leadership and innovation" in Canada. Cheap money from the banks has camouflaged a myriad of weaknesses, while increasing a wave of consumption. 

Canadian auto sales are one effect of cheap money.

The Corvette Z06 has a 0 to 60 of 2.95 seconds with an 8 speed automatic...impressive.

Old and new cars at The Maserati Centennial 2014.

 

 

 

Thursday
Feb062014

Global Economic Intelligence

Interesting to look at the big picture and get a feel for what sort of economic world we will be navigating in 2014, take a look. An easy read the graphics are intuitive.

 

 

 

 

Monday
Dec022013

Current Reality

Lets start the last month of the year reflecting on  the big picture for a moment. 

Here is the deal:

  • CMS (Citizen Main Street) has been carrying the Canadian economy for a few years now. Its part of the New Reality from a few years ago.
  • We all know that CMS has been empowered by "cheap credit". Agreed it facilitated Canada dodging the bullet of the "global recession", although a ton of pundits constantly made reference to the "recession" which never really existed in Canada.
  • We all know that most companies are sitting on a ton of cash, withholding investments, and waiting for "something" (gotta wonder about that something).

 The present:

  • Auto sales powered by new product, but primarily cheap credit, and long term loans are literally through the roof in 2013. 
  • Real estate (construction, resale) powered by the same cheap credit is through the roof, and evolving into the main industry in Canada.
  • CMS appetite for credit is over the top, and through the roof.
  • Until Carney was cautionary the rest of the world was patient. Now that Poloz is saying that its normal, the rest of the world and some Canadian banks are pushing the "caution button".
  • Obvious that CMS is close to the end of the road dealing cheap credit.
  • Pundits have shared their thoughts from all directions since the beginning of the year, usually on the premise that its all normal, and part of a new reality.
  • The Canadian dollar recently embarked on an inexorable downward slide, which will help most Canadian companies exporting (the ones that have not closed or moved).

 The immediate horizon:

  • For how long can vehicles be sold with long finance terms, to facilitate rolling over deficiencies? 
  • What happens when CMS reigns in the appetite for cheap credit? We are getting a glimpse.
  • What happens as the "Bitumen Bubble" endures, and inexorably turns the Oil Sands into expensive oil?
  • What happens as Gen Y wages/income continue to stagnate?
  • What happens as the world continues to see Canada as a bubble on the cusp of bursting?

The immediate auto business:

  • Manufacturers after a through the roof 2013 will soften the level of incentives going into 2014.
  • Can CMS continue to budget $500/month for a vehicle, to do a deal?
  • Will dealers finally understand the relation between "brick and mortar" and "digital" that we described in iDealer.
  • It will be Plan A, Plan B, and even Plan C to navigate 2014.

 

 

 

Thursday
Oct172013

Citizen Main Street

We have been saying for a few years that CMS (Citizen Main Street) has been powering the Canadian economy, with many companies sitting on piles of money.

If the 2 largest purchases of a family are houses, and vehicles, house sales are booming in Canada, and vehicle sales are almost off the charts...in both instances its powered by OPM (Other People's Money) at extremely low rates.

At one point it was "Lets temporarily power up CMS with cheap OPM"...by now the rest is history...

The impact on contruction to build houses acquired with OPM

Chart-Ben Rabidoux

 

As housing takes off others sit on the sidelines "waiting"...waiting for what?

 

Chart-Ben Rabidoux

 

To bring it closer to home in the auto business...

 

Chart-JD Power

 Its a new reality in discovering the effects and impact of inexpensive OPM (Other People's Money) on CMS (Citizen Main Street) to temporarily power up the Canadian economy.

We urge you to connect your own dots for the last quarter of 2013 and 2014.

 

 

 

Friday
Sep202013

Vroom Room

Good Morning!

Its Friday, its the Vroom Room come in make yourself comfortable, we have cappuccino and biscotti, join the conversation.

Last Saturday we went for a drive to Owen Sound to attend the Cobble Beach Concours d'Elegance. We had not gone for a lenghty drive (over 2 hours) on surface roads in some time. Yes...Walter (E500) remains a fun car to drive on such roads, as well there is a country side peacefulness that is a contrast from the habitual crowded GTA roads.

On our return for a few kilometers there was a 1959 Cadillac following us. Revealing to see from the rear view mirror the side over hang, the narrow tires, and such a huge car. There a myriad reasons cars are safer today, less over hang, better tires are certainly a couple of components.

You must have noticed that numerous pundits are talking about the 5th anniversary of the "financial crisis" think about this...it was 5 years ago. At the time we shared our thoughts with New Reality, which still resonates today.

Fascinating this past Wednesday to see how the markets were behaving prior to, and past Ben Bernanke's (The Feds) announcement on wether they were going to "taper" or not. Even more interesting when everyone seemed to have the answer, and it was not the correct answer.

Its still CMS (Citizen Main Street) that is powering the Canadian economy...think about this for a moment.

Its still the Canadian taxpayer that is back stopping mortgages in Canada...think about this too.

Perhaps the lingering lesson from 5 years ago: "When folks get too creative with money in one fashion or another, it always takes a perilous / uncharted direction". Lets leave it at that for the moment...

In case you missed it, we also started "The Backstory" which we will continue, our first backstory was to get "Where is the Money" out of the vault, since it increasingly resonates, with most folks wondering where all the money has gone.

Keep an eye, it will be interesting, and fascinating to see how Sergio Marchionne deals with the Chrysler IPO, and VEBA, obvious the end result is to own Chrysler...lets see how Sergio plays this one out.

Our usual old race cars from the Goodwood Revival Tourist Trophy.