September 13, 2006

Want to know why truck sales (and GM and Ford) are plunging? Hint: It's not high gas prices


Everyone thinks high gas prices are what are taking pickup sales down. I'd suggest it's the housing bubble bursting that is destroying the market for trucks.

Who buys trucks? You got it - construction workers, and anyone involved in building new houses.

What's not happening anymore? You got it- new homes are not being built. And it's just gonna get worse and worse and worse, to the point that it'll be surprising to see a new home being built anywhere in the US. We have overbuilt to a point that we many not need any new houses for years.

And that means the unemployed construction workers don't need many new pickup trucks either.

DETROIT (Reuters) - U.S. auto sales have been slipping as domestic automakers have struggled to boost sales amid high gas prices this year -- a trend that will continue into next year, industry executives and analysts said

"Pickup trucks correlate historically pretty well to construction trends," Ross said. "So the problem that the home builders are having now very likely will have some impact on that area."

Slowing housing starts can mean slower pickup truck sales, since the vehicles are often driven by construction crews. The auto industry benefited in recent years from the boom in housing refinancing at lower interest rates, but U.S. sales of pickup trucks have fallen nearly 14 percent so far this year. Overall sales at U.S. automakers are down about 11 percent.

80 comments:

Mr Vincent said...

You might be right! I used to see those massive pickup trucks with their "feeling high and mighty" General Contractors behind the wheel. They were everywhere a couple of years ago. I don't see them anymore.

I wonder if the price of Granite has come down. Hehe

http://earlyretirementadvice.blogspot.com/

Anonymous said...

You're right about it mr. vincent. It's funny that some of these mom and pop "start-up" construction companies SPENDS MORE towards the purchase those "high and mighty" trucks, instead of their tools and equipment.

Anonymous said...

With peak oil - who would be crazy to buy a house in suburbia?

When it takes you 15 minutes to get to the store or an hour to go to work and gas is $6 a gallon... how long will it be before you move closer to the city center where you can walk?

Overcapacity by far! Alot of suburbs will look like the old ghost towns of the wild west.

LauraVella said...

Recently here in Reno a used truck lot opened and they have nothing but newer makes american used trucks. I thought it strange, a used truck lot?

Also, it doesnt seems to be as many big he-man 4x4 super 8 trucks driving around here in bubble Reno area.

Richard said...

Dang Keith - why are you so shallow. Connect the dots....

The housing crash is not the answer to all humanities woes. (I know you would like to go to your grave known as a prophet).

High gas prices ARE and will continue to tank SUV owners and makers.

The lack of oil, the burning of fossil fuels, and the US$ tied to oil plus a little greed...ARE the cause of our current situation (current within the last 150 years).

Open your eyes buddy.

Anonymous said...

keith, what are you talking about...

GM up 50% in the past 6 monyhs, Ford up 50% in last 3 months

you are an idiot

David in JAX said...

I think it's a three part scenario. I grew up in Texas and driving a truck, for many people, was a status symbol much like driving a mercedes or cadillac would be in other parts of the country. I assume this the same for many other parts of the country (OK, NM, the south, etc.).

The first reason is gas prices. I really believe people are reconsidering trucks and SUVs because it costs so much to drive them. The second reason is that the construction industry is down. The third reason is that people can't afford new trucks because they were using HELOCs and refinancing to buy trucks. No "easy money" and no new truck.

Mark in San Diego said...

It is like blaming housing crash on high interest rates. . .housing was WAY to expensive - less than 10% of California population in most counties could afford an average house. . .the interest rates just gave it a gentle push over the edge. . .people just would not pay 10 time salary for a house!!!

twib said...

For most of my adult life I happily drove fwd 4 cylinder econoboxes. I moved to TX, bought a house, and then bought a truck. When I was filling up for about a $1/gallon back in 01/02 timeframe, driving a truck cost only marginally more than my old Escort. Now with gat at $2.49/gallon, it is quite a bit more expensive.

Own a home?? Trucks are incredibly useful vehicles. Mine seats 4 comfortably for short trips, tows 5000lbs with ease, and very useful for Home Depot or dump runs. It gets 18mpg in city driving which isn't too different from most large or performance cars. They are easy to work on and maintain (everything is soooo much easier to access than working on fwd cars). Since my truck is the second best selling vehicle in the US, finding parts is easy and inexpensive and auto part stores will stock them for more than the customary 10yrs.

For me the psychological threshold would be a $100 fill-up. If gas becomes that expensive (around $4.50), I'll trade it in on another econobox. Then I'll buy a small utility trailer for those Home Depot runs.

Anonymous said...

Year-to-date, GM’s sales fell 12.2 percent, including a 13 percent drop for trucks and an 11 percent dip for cars.

At Ford, sales of light trucks plummeted 14.6 percent.

I think Keith was speaking of the automakers' sales plummenting, regardless of where their stock trades

both companies are doing a good job preparing for the devastation, laying off tens of thousands and closing factories as fast as they can

devestment said...

GM and FORD make JUNK. People who try their prodicts do not return to buy another. This is why there is a huge forclosure auction in the Detroit area.
http://www.hudsonandmarshall.com/

Anonymous said...

A friend of mine told me yesterday that her boyfriend who works for Ford as a saleman said it has been extremely slow all of a sudden- had to relocate to the Reno office from Carson.

No more heloc money or contractors buying new trucks these days.

Anonymous said...

I don't notice any 'Less' pickups, but i sure as Hell see a lot more Hummers, H2 and H3, and Escalades out there!
Someones buying those overpriced Ego strokers!

Anonymous said...

I own a *big* pickup truck (a dually) and don't work in construction.

What I have noticed over years:

- Fords are the standard construction worker truck. Low end ones are bought by construction companies for fleets and are the workhorses of the industry. They are usually 2 wheel drive. The workers themselves buy the big fancy F-350 Super Duty 4x4's to ride to work at the job site with.

- Chevy's and GMC's are bought mostly by the business owners for their own use to drive around in. You can tell because these have a lot of paper work in them, a lap top, etc. They usually have a pretty clean bed just used for hauling an incidental item needed at a site.

- Dodges are a mix. I rarely see them bought as fleet vehicles, and find find a few owned by either a business owner or worker who wants to be "different". I do seem a fair number used to haul tractors around due to the Cummins Turbo Diesel.


So maybe by watching the automakers reports you can see who is getting hurt first. Last I saw, Ford has had a steeper slide percentage wise than Chevy, so this means the fleet buyer and the workers are the first to feel it. When the bosses stop buying GMC's, we are really deep in the sh*t.

borkafatty said...

I have owned nothing but GM product cars, no wonder why I had to buy a new car every 2 years, nothinh but pieces of shit with 4 wheels. I own a 2004 impala, and already it feels like i need a new suspension. I will drive this car to the ground, and then buy a shit box to get back and fourth to work, that is all i need a car for back and fourth to work, to the store down the street and then it sits.

And when i do buy that shit box ill pay cash, screw payments, nothing but a scam, like a lease..after 2 years that nice new driving car drives like shit.

Anonymous said...

>>> Peak oil ramblings and suburbia

Not everyone wants to live in a city. You can have your crime, noise, protests, etc. If things go down, remember "gangs of new york?"

In the 'burb's, we will change to efficient cars, carpool, shorten trips, but enjoy isolation from the steaming masses. Yes, the economic choices change, but suburbia does not go away.

Actually "peak oil" would be the best thing to happen economically rather than a sudden cut off due to a war or other political action. This is because a slow decline can be adjusted for in peoples day to day choices.

Joe Logic said...

Reno sucks. I can't understand why there's a bubble there. Yeah, Vegas sucks too and I had to move, but Reno? The armpit of Nevada? Oh well.. go REBELS!

On another note, it seems those oversized ego-fueled pickups like the F350 or whatever are out of vogue with the "poorly endowed, insecure" crowd these days. It's all upscale now, it's about the H2's and BMW SUVs now baby...

Anonymous said...

>>> GM and FORD make JUNK. People who try their prodicts do not return to buy another. This is why there is a huge forclosure auction in the Detroit area.
http://www.hudsonandmarshall.com/

Not true anymore. I don't know about Ford, but I have owned 4 GM trucks and they are great. A *lot* more reliable than my Mercedes and BMW's.

The problems in Detroit is the UAW and the unions killing the companies. Like the big steel industry, the unions years of featherbedding are finally coming home to roost.

I hope the US auto industry works through this, and jobs in the industry are eventually saved at a sustainable employment and salary level, and not the ridiculus "job bank" we have today.

Anonymous said...

>>> Borkafatty and GM cars

I have owned many GM vehicles over 20 years, and am a stock holder. I agree that most of their cars are crap and this concerns me greatly.

I have found that their trucks are great (pickup's, Tahoe's, Suburbans's) and Corvettes. I won't buy anything else from GM.

I also agree with the pay cash for a good used car and drive it into the ground. I do this with my fun cars (Corvettes) but buy my trucks new and drive them for 8-10 years.

I don't know if you are an isolated case, but if GM is not getting their cars right this does not bold well long term.

Richard said...

"slow decline can be adjusted for in peoples day to day choices."

too funny - peak oil and slow decline

just like housing market and slow decline.

the logic abounds on this site

Anonymous said...

Who really needs to buy a new pickup truck?

Bought a ’87 Mazda pickup 2 years ago; need to add a quart of oil every 500 miles but that’s a lot cheaper than making payments on a new vehicle. It has a 4-cylinder/5-speed combo so the gas mileage isn’t bad.

This is all that I need for my small business (growing & selling plants). My customers care more about the quality of my plants, and of the service they receive, than about the appearance of my vehicle.

Why buy a new truck?

borkafatty said...

I don't know if you are an isolated case, but if GM is not getting their cars right this does not bold well long term.\


Good morning anonymous, no not isolated at all, in 6 years i bought 3 new cars, and nothing but problems after 2 years..the problem with GM cars is just that. After 2 years it's a throw away. Throw away cars thats all they are.. My next car will be an import at best used import. Not saying that they do not have their problems. My sister drives a Toyota with 265,000 miles and no bull shit it drives smoother than my 2 year old GM.

borkafatty said...

Go to trade that in and i am insulted on the trade in value..so like i said ill drive it till the wheels fall off, then ill pull over to the side of the road when it shits the bed, call the tow truck and tell him take it to the nearest bone yard..true story!

Then go to Craigs List and buy some poor souls shit box for cash no more new cars for me...done! my money is to valuable to keep buying junk.

Stuck in So Pa said...

Never buy new! Buy used,three years,30,000 mile,give or take, let the first guy eat the major depreciation. Pay cash. Amount of used PU's out there is going to increase, big time, both on the dealer's lots and FSBO!

Anonymous said...

As housing construction winds down, there will be a lot of used trucks on the market competing with new vehicles. A friend of mine just sold his pickup for that reason. And a lot of former realtors will be selling their Lexus's, too.

After the .com bust, the market was flooded with used Herman Miller Aeron chairs. Herman Miller had to shut down factories and lay people off until the market absorbed all the used chairs, which took years. The same thing will be happening with trucks and other construction equipment.

Anonymous said...

I work in construction and I'm driving a little Toyota, 22RE, 2WD, 1993 model and with 250k miles in it and still runs great,and passes smog test all the time. Boy, I'm lovin it. I've had it for 13 years now, free and clear of course.

Guess what, 5 people came by to ask if I'm selling it. They told me that this model was the best, even better than the V6 Tacoma model that came after it.

Gene Quinney Associate Broker said...
This comment has been removed by a blog administrator.
Anonymous said...

Truck sales are just one tiny part of the big picture. Look around and you'll see many other examples of a slowing, faltering economy. We are seeing restaurant closings, small mom-n-pop stores going under, and crowds at entertainment venues much smaller than in prior years.

Anonymous said...

"You people dislike success. Am I wrong, or do you think everyone should ride a bike or drive an overpriced fuel effecient hybrid, live in government housing or apartments"

I think it's more a return to the economy, during the 60s and 70s, when manufacturing was strong, the middle class was stable, the trade deficits were manageable, and the class A personalities could still get rich in finance, law, or medicine. That society is no longer in place.

Instead of becoming engineers, most of today's bright students have to vie for the same jobs in finance, consulting, or medicine and the average Joes have to be carpenters or roofers (ala RE related tasks) instead of building computers or vehicles which are shipped worldwide.

Anonymous said...

devestment said...
GM and FORD make JUNK. People who try their prodicts do not return to buy another. This is why there is a huge forclosure auction in the Detroit area.
http://www.hudsonandmarshall.com

To this and other US auto bashers I say BS! I've owned both US and Japanese, lots. If you have not owned lots of both then your oppinion means nothing! I have had bad US cars I have had bad Jap cars. I have had good versions of both as well. I owned a 1985 Toyota pickup with the famed 22RE, 40K miles and tons of them needed valve jobs, smoked like a old diesel pulling away from a stop. By 100k it had had sooo many repairs and barely was drivable (only 3rd gear still worked) to make it in to trade on a 1989 Chevy Astro van. Astro vans bullit proof way over 100K miles. 1995 Nissan Altima, fair share of repairs and toast at 100K, felt like total junk!. 1998 Dodge Ram feels new at 130K and zero repairs, yes zero, maint. only! 2004 Buick Rendezvous 60K ZERO repairs awesome smaller SUV built on car chassis holds 7 people & gets 25 MPG.

Today the difference is really negligable, go to any Japanese auto dealer and you'll find their service department just as full as their US counterpart's. I've worked in a Japanese dealership and until you've seen their problems on a day to day basis you can't really talk either!

When it was the auto workers good job they came for I said nothing, because I was not an auto worker.

When they came for the Intel worker's good jobs I said nothing, because I did not work there.

When they came for my good job.....

Anonymous said...

"You people dislike success. Am I wrong."

Yes, you are wrong if what you meant by success is borrow and keep on borrow in order to finance all those "big" ticket items. Now, because you're a broker and you need these people's business, if you keep on misleading them in order to borrow some more, even beyond their means, then you can be successful, as you will be raking tons and tons of commission.

Just a word of caution, don't buy anything on credit, until you've saved enough in your commissions and pay cash if you can. That's the real startegy for success.

Anonymous said...

Bork:

You've been spending too much time in the internet. Go back to work and take care of those taxpayers waiting for their turn to be served. You public employees! LOL.

Anonymous said...

A normal truck is OK, that would be like the usual tacoma's or ranger's.

Just a plain, utility vehicle: cheap and reliable.

Almost nobody needs 4wd, and certainly not those goofy "monster truck" tires.

Not a girnormous super-chromed locomotive-channeling 250/350 Saudi Arabian terrorist financing machine.

Anonymous said...

Buy a Toyota Tundra and you will never think about American trucks again. Oh you see those American trucks broke down along the road. I work construction and I drive a 2wd Tundra and get 22mpg on the hwy with a V8. Ford, Chevy and Dodge wonder why they are having problems! Yes, I too laugh at the macho type guys with jacked up trucks and fancy rims and sound systems, hey its a work truck. My boss has a toyota Prius that he drives if he's not hauling anything.

Anonymous said...

GM is not plunging. It has almost doubled from its $18 low this past December. I wish I bought some, just enough to brag about. I think that long term the stock is a dog, but you can make money on the stock of trashy companies.

My advice to all of you who are living in McMansions that you'll be squeezed out of is to go and buy a used van on sale. You can live in this truck and after you are evicted from one blue-chip neighborhood, just drive into the next one. I park my truck by the river and have an inflatable mattress in the back.

David in JAX said...

Gene Quinney Associate Broker said...
I guess I'm a little confused, ...wealthy over-acheivers should be controled by the little people?


Gene, by making this comment, it shows you know very little about wealthy over-achievers. People who earn their own big money typically don't over buy. That's one of the ways they make their businesses successful and how they become rich. Spouses, people who inherit money and people who don't have money are the ones that you see overspending. I have 12 biological aunts and uncles. Eight of them are self made millionaires and three of them are self made 100 millionaires. All of them agree that the key to success is not overspending. On the other hand, most of their kids drive very fancy cars and have earned very little in their lives.

I also agree with Anon 7:41:37. I drive a Tundra and it is fantastic. Before the Tundra I drove three GM cars and one VW. I got 200k, 350k, 200k miles out of my first three GM vehicles (all purchased used). I got 40k out of the VW before it completely fell apart. My wife has had a Ford and a Honda. The Ford lasted about 50k miles before it was a complete nightmare. The Honda is relatively new with less than 50k miles and runs great.

Shakster said...

Lets not forget that just like housing,the last four years has produced a monumental GLUT of trucks,and cars for that matter.These all are on the resell market in huge numbers already.The First glut of trucks started with Class 8 trucks in 1995 and hasn't ended yet.That glut has forced Paccar,andFreightliner to outsource production.Freightliner tried to remedy the glut by buying a large decommissioned military depot in utah to refurbish used trucks then up the price.Didn't work,the price of a good used low mileage truck is very low.

Shakster said...

The glut of Harleys should be interesting.

Anonymous said...

"The glut of Harleys should be interesting."

No kidding, I was in Durango, CO over Labor Day and they had thousands of Harley riders in town for some kind of hooha. The only thing missing was the AARP float. I've never seen so many geezers tooling around in their black leather outfits trying to look cool. The phrase "my old lady" is just an accurate description for the women hanging around with most of these guys.

Ten years from now all those bikes will be sitting idle with "For Sale" signs.

keith said...

gm sales are plummeting. gm stock is rising because wall street loves cost cutting, layoffs, restructuring and selling off components, all the things gm and ford are doing

don't confuse sales with stock price. they tell two very different stories. kind of like sears holdings - sales are plummeting at sears and kmart but stock is great

Anonymous said...

Bought a ’87 Mazda pickup 2 years ago; need to add a quart of oil every 500 miles but that’s a lot cheaper than making payments on a new vehicle. It has a 4-cylinder/5-speed combo so the gas mileage isn’t bad.

This is all that I need for my small business (growing & selling plants). My customers care more about the quality of my plants, and of the service they receive, than about the appearance of my vehicle. Why buy a new truck?

HolyHelocBatman said...

Why have gas prices dropped fifty cents/gal in the last month or so...election year? Kind of a head scratcher

HolyHelocBatman said...
This comment has been removed by a blog administrator.
borkafatty said...

"Spent Out"

After all how many Plasma tv's, DVD Players, Harley Davidsons, & all the other useless crap can one family own?

Me Ill take the simple life thank you...Debt free!


http://tinyurl.com/g6doc

Anonymous said...

Here's a good one for you HP guys and gals. Last week we held a HOA meeting to assess members for an emergency repair. The total was only $105 per househould and per our bylaws, assessments under $250 are payable on demand. Out of 48 members only 3 have paid up, and many are asking if they can delay their payment until next month!

The houses in this neighborhood are running $600K-$800K, and it looks like more than a few owners don't even have $105 to spare. How sad is that?

borkafatty said...

$105 to spare. How sad is that?

Quite sad, but to some $105 is food in the house for the kids..hmm let's see HOA or food..you decide.

Anonymous said...

"In the 'burb's, we will change to efficient cars, carpool, shorten trips, but enjoy isolation from the steaming masses. Yes, the economic choices change, but suburbia does not go away."


Ummm... no you wont. Try it now and see.

Suburbia IS an economic choice. What... you think everyone in the city wouldn't want to live outside like a richnik? And how many who live in suburbia can afford to stay there when gas hits $6 bucks a gallon.

When peak oil hits - you have one of two options. Move to the countryside and become a farmer or move to the city to keep your job.

The one thing which people don't understand is that suburbia... ALL suburbias in north america - were not PLANNED. This means that there is usually lousy bus or train service because of the huge terrain which these houses cover.

So... the service will not improve when oil becomes scarce - it'll just become more expensive.

As for carpooling... yes comrade, I'm sure 50 of you on the block will fit easily into that big LADA!

More than likely what will happen - as people rush back into the city, people will demand better law enforcement which will clean things up significantly.

Combine this with improving the greenspace, better bus and transit, removal of unused highways... and you'll get a decent city center again.

borkafatty said...

I guess I'm a little confused, although I have a theroy to everyones, well...Not everyones, but most everyones constant bickering and complaining about big oil, big trucks, big houses and house prices. You people dislike success. Am I wrong, or do you think everyone should ride a bike or drive an overpriced fuel effecient hybrid, live in government housing or apartments, wear second hand clothes, feel like the MAN is always after them and wealthy over-acheivers should be controled by the little people?

Not at all, success is a great thing it is what we all strive for. I consider myself successfull, 20 years at the same job is an achivement in itself.

I think the point some people make here is one cannot consider a person to be successfull because one made a killing selling ones over priced cardboard box or recived a great tip on a hot stock. You dont have to have a collage degree to sell something to a sucker..a sucker is born everyday.

If you worked hard for your wealth you deserve the credit for sure, but if your wealth came upon the back of some FB! the only credit you deserve is being at the right place at the right time..and lucky for you, you didnt miss the boat.

Anonymous said...

"Why have gas prices dropped fifty cents/gal in the last month or so...election year? Kind of a head scratcher"

During the autumn period of every year, producers convert crude oil into heating fuel for homes - this is in preparation for the winter.

One of the by-products is gasoline - which is why there's a small glut and gas prices come down... slightly

Usually - all of the fuel oil needed is finished by Decmeber. They don't make more because they can't sell it (people don't need to heat homes in July), and storage of fuel oil is more difficult than crude oil.

So... you can expect the gas prices to go back up again in December/January time frame... conveniently after the elections.

You also might want to consider that they began making fuel oil earlier this year because of Hurricane Katrina destroying most of their processing facilities last year. There was a SERIOUS shortage of fuel oil last year and the only reason people didn't freeze to death was because we had a relatively mild winter. So... they decided to get a head start.

borkafatty said...

Also consider we have a Summer Blend and a Winter Blend of Petro, Winter beig the cheaper less expansive blend which is obivious.

Anonymous said...

"In the 'burb's, we will change to efficient cars, carpool, shorten trips, but enjoy isolation from the steaming masses. Yes, the economic choices change, but suburbia does not go away."

That sounds well and good, creative and industrious people in the 'burbs banding together to adapt and solve problems. I see another possibility. Have you driven through New Mexico recently? In a microscosm, I think NM might represent the economic future of this country.

About 25% of NM residents work for the government in some fashion and they have a reasonable standard of living. Another 15% are retired or self-employed and also live well. The rest, 60%, are stuck in abject poverty because there are no jobs or they are uneducated and/or live in remote areas.

borkafatty said...

There will always be those who view anothers success with skepticism whether it's selling real estate or home loans to willing and able people, selling gas guzzling SUV's, selling fatty burgers through a successful franchise, clearing habitat for wider roads using your developement company or creating violent computer and or video games from a cubicle somewhere. Or selling expensive coffee at every street corner. I guess it's just the flavor of the day...As long as it's not illegal or immoral I applaud EVERYONES success.

Agreed! Even a person who collects nickle cans is considered successfull in my book. Why you ask?

He is out making a living the best way he can that he knows how, that is a sucessfull individual, working for it.

Dogcrap Green said...

With Ford now at a 52 week high what should we do with those shorts you got us into?

rich_and_board_in_ohio said...

>"The glut of Harleys should be interesting."

I have been kicking tires at Harley dealerships for the past two years. I'm in my early 40's and have the money to pay cash for any brand new bike on the showroom floor. I currently own a Honda and have been riding for the past 3 years.

PROBLEM: Owning a Harley is like joining an EXCLUSIVE CLUB. You get to go to all the HOG events and socialize. Where is the fun in customizing your new Harley and riding it at events unless you get to make new friends and show off your bikes customizations? So what's my problem? All the HOG events consisit mostly 85%+ of my parents generation (folks 55 years old to 70 years old). Almost no one in my age group at all.

My wife suggested that we try to form our own Harley CLUB and contact old friends from college and high school; co-workers; and neighbors. We failed. Not from lack of interest (lots of folks our age would love to get involved in such a CLUB); but can't afford both the TIME AND MONEY to do it.

Hell, most are working more than 1 job just to feed that ARM mortgage, car payments, creditcard payments, and feed the kids.

THE DAMN GREED THAT CAUSED THE HOUSING BUBBLE -- is destroying the FUN of LIVING.

I talked to a man today who is 46 years old, has a sea of debt; and just last week was told by his doctor that he has bone cancer. He then told me that he is glad that the doctor told him he has less than 2 years to live. Shocked, I asked why. He replied, "Cause, I got nothing to live for."

Anonymous said...

To Anon above -

LIVE TO RIDE

RIDE TO LIVE

keith said...

dogcrap - I would never have shorted ford. crappy company, crappy product, crappy management, that could unlock value in their stock just as gm did with some good moves (like selling off pieces and firing 1/3 of their workers)

keith said...

how's that "real estate boom" website of yours doing dogcrap

he he he

Anonymous said...

An example of a failure at life:

I talked to a man today who is 46 years old, has a sea of debt; and just last week was told by his doctor that he has bone cancer. He then told me that he is glad that the doctor told him he has less than 2 years to live. Shocked, I asked why. He replied, "Cause, I got nothing to live for."

Now he really does have nothing to live for. What? 46 years old and no wife? No kids? Just a collection of junk in the garage and all that trash did not buy him happiness? Sounds like he had a shit career too. At least he could look back and say he accomplished something if his job had any real purpose.

Madison Avenue marketing provides the fantasy that product X will turn your life into a beer commercial. If you have no friends, no personality, no physique, looks or money then what difference will product X make? People have been programmed by TV to buy crap to fill the emptiness of their existence which is their job and whatever they do after work.

Anonymous said...

It's the boycott against Ford and GM for their support of "alternative lifestyle" organizations and their agendas.

I personally know half a dozen people who did not buy GM SUVs or Trucks for that reason, even with the GM employee discount program given to everybody and then some.

Anonymous said...

Perhaps it is not the actual change in gas prices that makes us not want vehicles with poor gas mileage. It is the feeling we are getting screwed that puts us over the edge.

Anonymous said...

Nice call Keith, however it could just be that the truck market is normalizing while cooling to a soft landing.

Anonymous said...

LA to SF in a escalade costs $500.00 round trip.

Anonymous said...

I had to put 2 new transmisions in a NEW Ford Explorer! We called it "The Ford Exploder" before we dumped it. I will never buy another American car as long as I live. Heck, I have a Porsche with far less problems.

Anonymous said...

>>> too funny - peak oil and slow decline

Well Richard, if you actually *read the book* and studied the data behind it, you would see the historical petroleum production curves for current oil fields in production. The whole peak oil "theory" is that new discoveries don't keep up with this natural and predictable decline. Assuming that we have no more oil discoveries (what was that the other day about the gulf of mexico?), the current fields in production have a predictable slow decline.

That's why my point is a sudden oil supply shock would come from war or politics, not from natural resource extraction.

Do the homework please.

Anonymous said...

>>> A normal truck is OK, that would be like the usual tacoma's or ranger's.

Just a plain, utility vehicle: cheap and reliable.

Almost nobody needs 4wd, and certainly not those goofy "monster truck" tires.

Not a girnormous super-chromed locomotive-channeling 250/350 Saudi Arabian terrorist financing machine.

--> My camper weights 5000 lbs. There is *nothing* in Toyota's or any Jap truck lineups that have that payload capacity.

Anonymous said...

Kieth you stated to short Ford because the house ATM was closing.

Or am I not keeping up?

Anonymous said...

"With peak oil - who would be crazy to buy a house in suburbia?"

Sounds like someone bought an overpriced city condo and is trying to justify it by predicting suburban doom.

Cars that can get 250 mpg already exist, and mass production is on the horizon. That's more than 8X the fuel efficiency of the average car today, meaning gas could rise to $16 to $20 per gallon and the drivers of these vehicles would be paying the same rate.

Solar panels are about to be mass produced, significantly lowering the price to consumers. Wind turbines are getting smaller, more efficient and affordable.

Many people would make a lot of sacrifices before giving up their suburban lifestyle. You also seem to have forgotten that cities have higher tax rates and property is generally more expensive.

For example, in my metro area, a comparable home inside the inner loop limits goes for about an 80% premium to suburban homes. Gas prices would have to rise well beyond $8 for that premium to make sense in terms of commute costs. On top of that, more and more corporations are setting up shop outside the city limits to save on taxes and to be closer to the housing that their employees prefer.

It looks like suburbia is here to stay.

Anonymous said...

"Pickup trucks correlate historically pretty well to construction trends," Ross said. "So the problem that the home builders are having now very likely will have some impact on that area."

One thing that i noticed during the peak of the SCal Re boom from 2003 to 2005-6 was the large number of recent Hispanic immigrants here in Scal/LA who were driving large brand-new large pickup trucks. F-150's, sliverados, GM's.Tundra's,ect. And not just for contracting either. Latino immigrants, hell all Male Latinos love US Pickups, and they do not care about the size or the gas usage either.

Anonymous said...

the large number of recent Hispanic immigrants here in Scal/LA who were driving large brand-new large pickup trucks. F-150's, sliverados, GM's.Tundra's,ect. And not just for contracting either.

Especially for those trips back and forth across the border. Cargo capacity y 4WD estan muy importante para todos las cucarachas!

Anonymous said...

Have you been squeezed out of yet another short that shoe shine boy recommended?

Close your Ford short Kieth told you to take 25% ago and do some real investing

Dogcrap Green says load up on TOL

LauraVella said...
This comment has been removed by a blog administrator.
Mendoman said...

3Buy a Tundra and move on. I own one and its great. The ford and gmc crowd complain about not supporting the US worker. Wrong more Tundra's and its parts are made in American then its lessor American brand. USA carmakers just don't get it you lost and its only going to get worse.

LauraVella said...

Anon said:"Buy a Toyota Tundra and you will never think about American trucks again. Oh you see those American trucks broke down along the road. I work construction and I drive a 2wd Tundra and get 22mpg on the hwy with a V8. Ford, Chevy and Dodge wonder why they are having problems"!

I totally agree-my husband has a 01' Tundra - hasnt even had the brake pads changed yet. I recently sold my babied all original 93'Cougar that I had for 10 years. It had only 130k, and started leaking oil at 90K, now I am done with american cars.

Bought a used 1999 Celica and a 1984-yes 84' Tercel 4WD wagon for cash, both cars are like brand-new. These cars will easily get 300k...its great driving the Tercel relic around town - it very economical, and the 4wd is great for the winter. Car are only depreciating liability anyway. Who cares how old it is?

LauraVella said...

GM is not plunging. It has almost doubled from its $18 low this past December. I wish I bought some, just enough to brag about. I think that long term the stock is a dog, but you can make money on the stock of trashy companies.

I wish I would have bought Sears stock-havent checked it lately, but earlier this year is was up to $108 dollars a share. Can you imagine?

Anonymous said...

""With peak oil - who would be crazy to buy a house in suburbia?"

Sounds like someone bought an overpriced city condo and is trying to justify it by predicting suburban doom.

Cars that can get 250 mpg already exist, and mass production is on the horizon. That's more than 8X "

Actually... no. I rent, and I own a small place far outside of the city which I bought a few years ago. It's newest apraisal was set at 4X what I bought it for - so I can sell it and buy a 4000 sq. foot behemoth in Suburbia.

But then why would I want to add an extra $2000 a month in heating for the wintertime to be stuck in a bland faceless subdivision? I prefer downtown - thanks.

You're also being very myopic - just because you can afford to live in Suburbia when high gas prices hit - doesn't mean everyone else can. Travel time is just one problem. You can also add high heating costs. High prices at the stores, etc.

And when half of the houses on your street are empty - how long before looters come around to start tearing up the places for spare parts, copper tubing, windows, etc?

I would suggest you watch a good documentary on the subject called "End of Suburbia"

Suburbia was created with the prospect of low gas prices and a growing GDP of above 5% because of the low energy prices - which is unrealistic (especially when you put peak oil into the picture).

You know... there was an earlier quote on this website - to get people to hate you, tell them what they don't want to hear.

If I'm wrong - big deal. Life goes on. But don't you owe it to yourself and your family to do some research and educate yourself on the possibility that more than the economy can go "pop"?

Efficient cars and solar cells are fine and wonderful - but when people paying $600,000 mortgages can't pay an extra $105 for repairs... how can they afford a new $30,000 car or $10,000 dollar electrical generating system? How are you going to replace over 100 million cars in the US alone?

(Oh - and btw - a solar cell costs about $750, and you need about 4 to 8 of them to power your house - depending on size. So we're talking $3000 to $6000 for solar cells. Even if they drop to half their price - which they won't - you won't be saving much. Frankly... with a $600,000 dollar house, I'm surprised they don't come pre-installed. Yes... I've done the research. I suggest everyone do their own as well.)

Anonymous said...

I would suggest you watch a good documentary on the subject called "End of Suburbia"

Great movie, it shows what will happen as oil becomes more expensive and harder to produce. Matthew Simmons from King Bush energy and oil group, just lays it on the line saying the US will not grow with peak oil. Either living inside town or outside on a farm will be the best way to live. Suburbia will get hit the hardest, long drives, big houses to heat and cool and no area to grow food.

Anonymous said...

"The whole peak oil "theory" is that new discoveries don't keep up with this natural and predictable decline. Assuming that we have no more oil discoveries (what was that the other day about the gulf of mexico?), the current fields in production have a predictable slow decline."

That discovery in the Gulf is ten years away from coming on line. By then the existing fields will have even lower production, so in total, we could have less supply and more demand even with this new discovery.

What most people fail to understand is that at some point after the peak, we won't have enough oil to use it for stuff like exploration or massive infrastructure projects. It will have to be used to fly airplanes and fuel trucks and trains. When we reach that point, it will no longer be possible to build replacement energy sources, and we're screwed. The real solution is a massive push for nuclear.

Anonymous said...

The discovery in the Gulf of Mexico is 7 miles under the surface. That plays into peak oil ( new oil discoveries are harder and harder) to get at the oil. All the easy oil is gone, in the middle east they have to inject salt water to help pump out the oil and their wells are declining. Who thinks OPEC is worried about high prices?

Anonymous said...

The end of suburbia. Now that's funny. NEVER, I repeat NEVER will the hyper sensitive enviroMENTAL whack jobs out there remove Americans from their cars, no matter how expensive gas gets. This European wannabe super liberal utopia scenerio starting with Carter and the so called "gas shortage" of the 70's with long lines in concert with screams of an impending "Ice Age" if the industrialized countries didn't take a more proactive inviromentially conscience position is nothing new to anyone who's been paying attention.

Anonymous said...

>>> What most people fail to understand is that at some point after the peak, we won't have enough oil to use it for stuff like exploration or massive infrastructure projects. It will have to be used to fly airplanes and fuel trucks and trains. When we reach that point, it will no longer be possible to build replacement energy sources, and we're screwed. The real solution is a massive push for nuclear.


--> Severe lack of critical thinking here. Even if peak oil hits, there is still enough oil to continue energy development activities, even if its building nuclear power plants. It only takes a fraction of the energy yielded to build the plant, or extract even a 7 mile deep field.

Even if this did happen, did you even hear or think of "bootstrapping"? This is where you use other sources of energy to construct something that will yield more.

Again, unlike the peak oil hysterics, the oil does not shut off overnight like a switch. It would be a more gradual, painful decline, but we can deal with it.

As I say again and again, politics and war are much more likely to cause a sudden oil supply disruption. This is one reason to have a strong military and a strategic petroleum reserve.