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Wednesday, December 03, 2008

Detroit's Song of the Doomed

November saw the sales of cars manufactured in North America drop to 236,000 units. That's 17% below October (which was already horrible) and 40% below the number sold in November of 2007.
Source: Econbrowser.

Meanwhile, GM and Chrysler are seeking $11 billion to avert collapse this year. In short, they are simply running out of cash. Democrats pledged to keep them out of bankruptcy without saying how.

And Marketwatch tells us that Ford, Lincoln and Mercury combined car sales fell 31.5%, GM took an even harder hit with its 41.3% drop, Volvo sales tumbled 46.5% (ouch!) and Hummer sales dropped the most, downa stunning 63.9%.

Toyota, Nissan and Honda had less-bad news, but each saw sales drop by more than 31%.

Cars are piling up on the lots. If you think they're cheap now, just wait until the after-Christmas sales. But we may be approaching the point where auto makers start to just shut down factories. Maybe Kunstler had it right when he wrote last month: "Many Americans have already bought their last car -- they just don't know it yet."

Here is some other news I'm reading ...

Qatar looks to grow food in Kenya
The deal is the latest example of wealthy countries and companies trying to secure food supplies from the developing world.

China gasoline, diesel stockpiles at record in Oct
Gasoline and diesel stockpiles belonging to China's two oil giants, Sinopec Group and CNPC, hit record highs in October, according to the OGP newsletter published by Xinhua news agency.

<>Bleak outlook for U.S. oil refiners U.S. refiners now have too much capacity and produce the wrong products (gasoline) in a fuel economy increasingly dominated by ethanol and diesel. Capacity cuts of as much as 0.5-1.0 million bpd (equivalent to 4-8 average refineries) and expensive investment to reconfigure the system to increase the diesel yield seem inevitable.

Hedge Funds, Index Funds Lose Influence on Copper Market, Bloomsbury Says Hedge funds and index funds that helped drive copper to a record in July have “dropped out” in the last several weeks, leaving “almost traditional” factors such as inventories more influential, according to Bloomsbury Minerals Economics Ltd. in London.

HSBC Investment Fund Returns to Buying Gold to Hedge Against Inflation HSBC Investment Management’s $2.6 billion Absolute Return Service started buying gold again on expectations that inflation will accelerate and may start adding coffee, sugar and grains next year.

OPEC Will `Definitely' Cut Output at Dec. 17 Meeting, Qatari Minister Says OPEC, supplier of more than 40 percent of the world’s oil, will “definitely” cut output at its next meeting in Algeria on Dec. 17 after postponing a decision last month, Qatar’s oil minister said.
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