Wednesday, December 3, 2008
Detroit is doomed.
We can slow the rate of change initially maybe, but that is about it.
And can we finally stop deluding ourselves about the VOLT electric car? If it was anything near what many believe, GM would be worth more than Exxon. Instead, it is worth less than Kmart.
It would be cheaper for the U.S. Federal Government to just BUY Toyota (market cap $96B) and Honda (market cap $72B) than to fix G.M, Ford, and Chrysler... they are going to need well over $150B before this is all said and done.
And it will NOT change the fact that we are running out of fuel to run our domestic fleet with. THAT is the issue that needs to be addressed. Problem is, the last politician that brought that up got fired (Jimmy Carter), so don't hold your breath.
The deflation problem might get solved in 3 months or 3 years, we will have to wait for more data. Here we are, heroically saving a patient with a heart transplant. Problem is, he needs a lung transplant, too, and we are running out of lungs.
The 10 year collapse has begun in earnest. There will certainly be an ebb and flow of the economic tides during this period, but make no mistake: We cannot bailout ourselves past the coming oil shortages, and we cannot make any headway whatsoever on the alternative fuel front while the credit crisis drags on - and drag on it will. (The Port Authority of NY and NJ received NO BIDS for today's offering. Gee, I wonder why? Would you buy bonds in high tax and spend states that depend on the financial services industry? Not unless you had rocks in your head.)
But if that is true why is Oil going down?
We only need Oil if we have a growing economy... have you seen one of those around lately? If one shows up again, or tries to, Oil will once again cross $100 with ease. The only way Oil crosses $200 and then $300 is when REAL shortages develop. The U.S. economy will have continuous collapses if it exports $500 Billion + in exchange for Oil. When the VOLUME of Oil imported goes down, the price can be maintained at those lofty levels - and not before. Keep your eye on imports.
Mentatt (at) yahoo (d0t) com
Posted by The Short Story Man at 1:19 PM