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That would love people keep buying cars but I'm unfortunately there they're just pushing forward -- my daughter for instance was a good example of someone who was not gonna buy a car for a couple of years.
She had a clunker I said yeah I don't know there's going to be a deal in two years maybe should take it now that's what she did.
But that's the -- not gonna happen now for 56 years again.
Overall though do you think that was a great program that -- -- incentives to people like your daughter who bought are now vs later.
It's hard for me to say that is not a good program if people are are stimulating the auto industry in Detroit but I don't think it's gonna have any major effect on the economy -- if that was the intent.
Let -- go back.
Now for a moment.
The Michael Michael Abydos with spot away from out in Detroit Michigan two to talk to your original point I need to get off that would be the breaking Ford news but did the idea.
The the baby boom generation is getting older the demographics.
But the economy in the market are shifting and you think the longer term effects of that there's an investment -- -- While it in the short term I think we're gonna have a dramatic.
Decline in the market much beyond what anybody is expecting are expecting that the recession is over this is just to vote for reprieve.
Of balls off a very dismal bottoms.
That weren't do you view bottoms.
The ultimate -- We look back and we study in the 1930s.
The same type of thing happen -- generation stop spending money after tremendous technological home.
And -- market went down 80%.
Other -- leveraging process is already started.
It's very hard to turn that around.
The next problem's going to be the credit to leveraging the credit card problems that that people are facing because they're not working.
Unemployment numbers we compared them to the Great Depression.
Unemployment numbers and I mean by measuring the same whether they use to measure than that.
Are already worse.
Than they were at this time frame from the beginning of the decline.
And seemed to be continuing to increase.
In Michigan I would assume that the unemployment rate if they measured it by the methods that they measured in the Great Depression would be close to 30% right now.
Michael is fundamental problem that we're gonna see in the economy considering -- consumer spending is the primary engine of the US economy -- what you're saying is that not only the baby boomers pulling back.
But other generations to generation acts.
I Generation Y.
A yeah ever ever want consumers across the board and so how then do we move forward if we do have an economy that's so.
Focused -- so reliant on consumer shelling out money to purchase goods and services -- that they're not gonna do that then where does recover.
Very come from.
That it doesn't come from anybody but the consumer.
There will come a time 35.
Years from the peak.
When the next generation.
Starts raising families.
And has to spend months.
And adds to the generation next that we already have so when the millennial generation.
And generate -- Generation X.
are making up a significant enough for the population and they're raising families because families half.
To spend money there is no choices many times when you're spending money.
That's what's gonna pull us out of this decline and unfortunately that's probably not gonna happen until sometime between 2011.
What other way that's number years away and I always like to ask our guest this it.
It ended in the -- -- our let's assume you're right -- you've laid out your -- you're right about this how are you investing money based upon.
That -- is -- -- if people agree with you what they do about it.
While there it's it's very simple you -- the buy and hold strategy -- Bob via holders and they get you anywhere of the market moves sideways for a decade.
If we look at the period between 1966.
And 1980 to the Dow came close to a fouls and about five times.
But over seventeen years didn't break a thousand.
If you spread out cross your fingers and hope for the best you make no money during that period you're gonna have to become more educated.
You gonna have to be more active in your investing and you're gonna have to try to take advantage of the upturn is that the market presents.
Public you're gonna have to be very wary -- -- -- to good to be it not going to be able to be greedy like you were in the ninety's in the early two thousands.
-- -- -- that this situation where the deficit is growing a lot of people are -- assuming that taxes are gonna have to be raised eventually and so the and -- it it'll be good looking for in terms of their investment in terms of how they're planning for their retirement at a clinic in their future.
Given the fact that we have this growing deficit -- our economy and also we could see a higher tax.
Environment down the road.
Well what they should be looking for are higher taxes and what they should be doing about that it's not just trying to manage their money to make money.
But manage their money to avoid taxes going forward.
If tax brackets increased significantly enhance our position that they will increase significantly.
Then anything you can do to make your portfolio more tax efficient.
Is gonna help just as much as getting a higher rate of return on the market.
And essentially that's what we tell our clients' most advisors out there are saying you know you need to get a good return you need to hang in there you need to do the best that you can.
I -- -- and hope for the -- If you do well.
The problem is going to be keeping the money away from a government.
And there are tremendous strategies that you can use to make your portfolio more tax efficient if you make 10% of market that's no different than saving 10% on your taxes.
And we try to do both to our cards -- enough.
You Michael thank you for coming out today and -- -- you're welcome thanks for having me with Michael -- -- -- with his thoughts from out in not -- Detroit area.
We're being off financial group and I think -- you know the next topic -- take up in the second -- is almost related to it is because people do want.
This ideas Michael's alluding to of saint Vincent and safe and that weather is -- hold or something else and maybe those answers aren't always there.
I don't ticket would he says people are gonna get more educated.
That that idea of buy and just stick to what -- -- -- you hold for a long term.
A lot of people we've -- on recently when I've had been in here as an event that strategies.
Gone you know it's it's it's got to be rethought at least none you have to be more involved -- you have to know more about where your investments are -- and really you know we can't just sort of be complacent.
Well one of the places that people look -- two when they -- they wanna be.
-- for them or their or their -- but scared is the bond market and our next -- is on to say you've got to be careful there too because that's not all it's cracked up to be that much more member -- with the classic cars slot or still to come fox this is dot com life.
-- kind of wondered if -- this market down -- 150 plus points on the Dow today despite the better than expected manufacturing data.
Is somebody like how Michael and housing data to be like Michael we just had on -- on to something in this is really the start of this big downward trend that a lot of people have been.
Expecting and some people -- even been hoping for after the big run we've had right.
And never with that you just don't go up in a straight line to -- -- expect to see some sort of pull back and it's not unusual to see it in September so I think a lot of people are bracing.
A little bit of wheat that's going forward and as you said just a moment ago and people brace for -- such things are there weren't a lot of times they moved to the safe haven of bonds -- the supposed safe haven of bonds Tom at a very joins us from first.
Opposite the devices -- an LA to tell us right Tom that that may not be the best idea is that right.
That is correct why's that.
Well if you look back at it say the ten year treasury bond and you look at its median yield over the last.
Fifty some odd years fifty plus years spent about six point 2%.
And it's roughly somewhere around three -- three and a half today.
So we just sort of went to an analysis it's -- -- -- what if we go back to those median levels over the next three or five years and someone has invested in the ten year treasury.
Their total return.
Could be anywhere from negative if -- after the three year period to a very small positive return of only about 1% on an annual basis.
If it took five years to get there now it took one -- to get there.
The returns -- because tremendous negatives but that's probably not a high probability of so why are -- after that risk now.
They're at risk -- because rates have gone far too.
So low and aren't there on a fundamental basis you've had a tremendous amount of money.
That is going to bond mutual funds this year not the tremendous amount really into the stock mutual fund business it's sort of flat.
And they've been chasing bonds is a place that they feel it's been a safe haven.
And we're looking at this going -- you really chased into something and you've driven its price up beyond its fundamental valuation.
And so we're extremely concerned looking out that bonds are going to be sort of a lesser performing asset going forward.
OK so how do you -- I go about sort of protecting yourself Tom from that if you if if that's the view because.
Again to go back to the original -- you wanna look to the bond market or people do you look to it.
Especially treasuries as a place to go when they're able to -- so -- and they do it said.
What you need to do is you need to shorten maturities and make sure at this point we would say you shouldn't have maturities beyond five years where you sit up bonds whether they're treasuries or whether other agencies whether -- high grade corporate bonds.
That mature in less than five years 234 years that's for one.
Except the lower yield in exchange for the -- preservation and protection of your capital and -- -- shall have a positive return.
When rates go against he would intend to rise.
So it the president.
I have -- is that bond set their price in the market why wouldn't yields rise as investors dumped them.
As investors dumped them if they prefer to go into the stock market saying they've they've -- not to own bonds prices bond will fall yield will rise that that is true.
There's less of that going on if you shorten down your maturity.
One of the things we found very interest in this little -- to this to look at seriously was the fact if you look at the past 25 years.
If you bought the S&P 500 but if you just -- the ten year treasury -- those were your two options.
You would have been better off if you -- the ten year treasury bond.
Bonds have outperformed stocks so we start to look forward don't know this probably isn't gonna continue the opposite will tend to be true okay -- you.
Are looking at this -- -- this analysis together what's your view by the way on the economy just in terms of that you know for far back to see how you look at things and Michael was just talking about how this is big.
Downturn that's coming this way he sees -- in the stock we'll follow now retired but the bond market.
What -- -- an economy.
-- view of the economy as you have probably ended what is being a classic recession where OK you've got negative GDP.
But you're gonna have zero -- very anemic growth going forward for an extended period time could be 234 years.
It has been well documented you have a consumer and it's highly levered that is need to -- -- themselves.
There need to increase their savings and those two events means they're going to spend less.
It would appear that tax policy is going to be higher tax rates -- higher tax rates equate to less after tax.
Income available for the consumer again another decline in spending in the consumer at this point has been about 7071%.
Of economic activity.
So your main driver is here in a savings mode.
-- is in a mode where they're gonna see taxes increased so you're probably looking at those -- spending less so we look at the economy going -- -- in Munich at best is what we -- it.
He says that -- thought to be careful up there there's some risk what investment grade corporate bonds that they fair bit better.
There are better but they're not great we did the same analysis and we -- -- what if that.
Look at this is longer term corporate -- sort of things ten years and longer as -- -- if they return to their median level of spread that they've had.
For the last fifty years and a treasury did the same and he -- was still one half to 3%.
Not great probably not greater than inflation.
But at least it was it was better than the treasury market.
So from a relative standpoint investment grade corporates are somewhat better again I go back and we would say if you're gonna invest in that area the inside of five years be short maturity.
Except a lower return but protect your capital and that should be somewhat better.
Then being a treasury treasury bond is an example -- -- -- comments are coming together to have Michael was talking about with religious stock market what Thomas -- -- the -- of the bond market in terms of being nimble and having to adjust.
To the times it is a tough.
I mean this is obviously -- but it really is tough to make money here have you ever seen anything like this -- even if you're wrong in terms of your assessment economy and it's a little bit better than -- -- still up.
Difficult environment in which even if the economy recovers to actually take advantage and and know how to how to play it right.
Yes it is as far as I've been doing this since the early eighties and I've not seen anything to the degree that I'm looking at today.
Your previous guests had talked about looking back at the thirty's I don't think there's many investors out there today that there were -- in the thirty -- -- -- it.
Yes this is a huge change in invest the investing world.
If you just think dividend terms of we've been and a consumer spending mode in the consumer leveraging mode for twenty plus years.
And now we may be in a consumer savings mode and a consumer deleveraging mode tremendous change in the.
Good one of the reasons I bring it up is that there's an editorial -- if you saw this morning Allan Meltzer wrote the economist in the Wall Street Journal who says that all these comparisons you brought up well our previous guest as you said -- the thirty.
That this is the worst economic downturn since the Great Depression he says -- this is over done the media making too much of -- the politicians are playing it up.
So that there's more you know political will if you if you will for four more stimulus in these types of things -- -- -- it's -- done that this is not as bad as people are saying.
I would say this is his status is is is what people are saying I don't think they've.
They've gone over the top of this -- we'll let you know this is a very serious recession.
Is it a Great Depression no.
Does it have other elements to -- we haven't seen before we've not dealt with the kind of developing countries such as China which is a trend of tremendous growth mode.
And just to say it you know you were talking about changes before and things investors need to be aware of we now -- a situation where the developing world is lending money to the developed world.
We've not had that before the past it was the other way around.
That being is the Chinese are lending us money in order for us to support our lifestyle.
That's it and it completely different situation than we've seen before -- to look at it and -- if things aren't as bad as we think well you know when your.
Primary lender is the Chinese and you're trying to borrow.
Trillions of dollars you're looking at a deficit the next five years it could be anywhere cumulative for a fortified.
Trillion dollar number.
That's a tremendous amount of uncertainty a tremendous amount of change and yes it is gonna have some serious consequences to to the economic activity in the country -- around on the market of.
Not like uncertainty and then looking ahead to him a lot of market -- -- economists are saying inflation is something there.
Got there on down ended that we certainly will see rates had -- big -- baby towards the end of the year what is your outlook on inflation is that something you're worried about.
Well as a bond investor you should always be worried about inflation.
-- -- I think in our view you sort of reached the bottom whether it's this sort of 2% sort of number for -- CPI that's about as low as it's gonna probably go.
So if that's his lowest it's probably gonna go -- you looking at the amount of money that's been -- of the system try to get it to the economy to move.
The demands on on things such as oil and and other resources.
Our view is is it -- I look out three to five -- why wouldn't surprise me to see the inflation in this country have a 3% handle on not a tremendously high number.
What one of which doesn't equate to the level of bond yields that you see today that he's gone -- guy tells -- I don't get this the -- -- investors what your your bike summit how investors are playing that version that would today be nothing -- Well as if you can tell from the picture I painted.
Worn out one of things of the bond market has tremendous attractive place to be is it's for treasuries and high grade corporates.
-- investor should be looking more towards equities looking towards investments that will.
Do well in an environment that's maybe higher inflationary will do well an environment -- savings is is is a higher component of economic activity in this country.
If you're in a bond market.
Maybe not today I don't think today's -- time to do it.
The high yield market which is more equity like probably -- off you better returns looking out.
Then things like treasuries.
Are to stocks outperform bonds -- -- sounds like you do believe the economy again as anemic as you described -- earlier will recover because those that are.
Really worried about falling back off a cliff the W whatever you wanna call it.
They're still worried -- talked to some of them last few days about deflation not inflation do you think the economy will recover -- -- for the lead to this inflationary environment right.
Yes well quite frankly if you're gonna get out of a message here and we need to grow our way out of it.
We need to grow and say.
So we've got to figure out what plans and policies we can put in place that can give is that and that's why it's part of that era right because we're saving at the same time.
Yes it's slow growth.
It's pretty difficult.
From two aspects if you look at one banks really don't have the willingness and ability to lend money and right now the consumer really doesn't have the willingness -- the ability to borrow money.
Will those two people -- that build those good to constituents in that situation.
Economy's gonna -- very slowly.
He -- our viewers I want to bring in here with talking about some lessons we can learn about past.
Recessions have scratches in the incident saying what can we learn from the 1987.
Pullback if we -- that may -- relevant to today an event and a New York.
The relevancy when you looked at 1987.
That was driven by.
And equity strategy which everyone wanted to participate in it once and you had a very violent decline.
The -- I think you learn from that -- is that we continue to have is the solution that the Fed came up with ways to put in easy money.
Lower short term interest rates to stimulate activity to counteract the stock market.
That's what Greenspan's reaction was to that he then proceeded to do that again several times what it was long term capital management whether it was after.
The -- -- dot com bubble of 2000.
And each and every one of those built more leverage into the system so the -- the last I think you need we need to learn is.
That may not be the best thing to do when the economy turns down is to throw tons of money which is what Bernanke is done him in his view.
Because you're just setting yourself up.
For potentially another bubble out in the future.
And you still haven't solved the problem of delivering your economy what's up next bubbles in his visit somebody I think that described as a kind of debt bubble -- know what what's the next the next bubble that we go to after.
Technology how is saying and then what if you're right.
Well one of the things we think -- you season on a small scale to some degree if you throw a tremendous amount of money at the treasury market lower treasury rates to unsustainable levels.
Why shouldn't they be back more towards -- 56%.
Ten year which by the way is where that yield was in the second quarter of 2000.
Not that -- and then -- path then.
Did we did we've.
You know put a bunch of money short term into stocks and high yield bonds it's unjustified for economic activity.
Those are probably small bubbles I wish I knew the answer to -- the next long term bubble it.
But I do know is if if fight stimulate the economy would trillions and trillions of dollars.
That money will find a place.
And it'll probably find a place that will cause a problem.
Although that problem maybe three to five years now and we've -- -- twice in the last ten years has done OK top -- yes and we're just like last.
I thought Tom thank you thank you Tom and -- Is from first Pacific advisors out -- -- who covered stocks covered bonds seventh.
Well we started to cover cars depth of the war here just a moment the auto sales lot more upbeat I think and.
We can get off -- right off suicide watch here and move on to have a little bit of fun.
So Ford's sales drop that stock by the way would you bring the big board for -- -- that stock is down and so are stocks in general 168 points today despite better than expected.
Economic data the selling beginning as the month of September does as well.
Right on cue as they say.
Are my favorite car buff is coming up next generally add in the classic cars that she's been looking at today and we have -- -- -- still to come -- later on as well.
Including a closer look at those auto sales figures foxbusiness.com -- RT -- look at these -- I can't wait you know -- we've asked our viewers you know -- you know are curious personally as I do from doing the show every day.
To send in -- questions while you guys are are showing -- the cars and a million to an interview here in the -- at the end.
We'll throw you some of the questions but because these.
Even from here your first report the the board was lighting up -- -- they're really looking forward to seeing what you have to show them so fire away from the on the.
Classic -- -- we have a couple -- We have a couple cars you to say -- I'm getting a little bit at that makes directions here in my ear so I'm just gonna -- UConn if it is found me at.
If you have any questions -- -- and -- they went that would be.
And -- you're gonna do you basically as they told -- -- classic guy egging me break a classic car club.
New York at Manhattan and basically what happens is given eight to 101000 dollar membership.
And you get access to you about fifteen different card and sitting by one of them with a Ferrari I think I think our viewers that like this -- -- street inside and just seconds well.
But this is 200000 dollar car and get -- that's -- membership you wanna drive this car you can go ahead and you can -- it.
Let me say 8000 dollars is a lot of money you just you say that you -- -- -- currently maybe not a Ferrari that you can buy your own car so why the -- but actually doing.
Good in every session I Zack Moseley and Mike personnel out.
At last name right are at the executives tear -- down at the classic part of the Manhattan didn't talk a little bit about that so -- might.
I know why is my business working during a recession.
I think it's working because we do a couple of things to give people access to a lot of really great cars every car you've ever wanted to drive we have here.
Owning a -- bureau is expensive especially right now says a lot of people with POWs porsches Honda is in the garage they're paying to park -- -- sure it campaign finance it.
You can drive our entire collection -- really special cars for cheaper than owning quite a regular car in New York City.
OK but you know 20000 dollars snack and -- and that's that's a lot of money you say August actually this this past month.
Was actually a good month despite the successes in the cash for clunkers program.
Right yeah we've we've been doing really well this month it we're seeing.
Increase in revenue over 2007 and and acres of just as well it's been it while while we have cut down our expenses and in response to the recess and we've seen revenues growing -- -- hire people.
-- -- now that we've been we've been smarter -- services and the you can imagine you get a couple guys.
Funds go by a million dollars for the cars are a little crazy for the first appears we've tighten their belts amid this lot leaner.
And and this service is only gotten better as a result of -- -- -- -- -- the membership is -- revenues -- -- can -- -- guys through leaning on actually this is a Ford GT haven't asked the guys talk a little bit about this carbon may be asked that gave you want to get a shot.
This Nissan over here is about the need sun -- -- that's farther away from my.
Is that one of the few Nissan GTR -- in America in -- calling our our viewers you know they call this bit.
Got -- because it's the monster from Japan my Grammy what's the big deal at this.
Let's discuss -- president making them for a decades being Europe and in Asia that they -- never for sale in America.
This car the newest version of -- they've been marketing and all hot video games like country is known for his and so America's been waiting for a little for a long time.
It hasn't had a at the -- frightened city it was like that.
There's like -- can't -- -- that nitrogen is set of oxygen.
When you when you drive it hard oxygen gets hot and its -- change tire pressure nitrogen stays nice and stable source of packed with breaks in their -- stops very quickly.
It has the most sophisticated gearbox on the market right now says a lot of technology content and -- I'm out yet haven't -- -- -- -- -- actually told me by the latest -- you know me well.
And you can't get this part that -- last twenty years Europe and Asia this is one -- the first month you can see here in the United States -- Bryant was telling me.
That this is actually a beasts to quote him I don't know if and the second Stephanie told me -- cars science they take that.
Think expert -- saw you know that's why did come back pep talk on the other side if your start pressing for the camera -- I had this is the fourteenth he has this special act anniversary car.
-- is 2005 for TT.
This car was made at the hundredth anniversary of Ford and also.
Commemorated the fortieth anniversary the -- -- forty of that car was built in sixty is.
Purpose built to beat -- on -- beat Ferrari at their own raise that amount they did they did three years in a row.
Just a race car Qaeda it is it is a race here -- the road going race car you know.
Modern American super car and it holds up look like there is -- it seven -- pays for that for ours is competing -- It will might not ever -- -- -- -- this part of -- gonna cost if you want to buy it got 865000.
You know I if you want to paid 8000 dollars then you're able to buy in is seventies or drives and -- these really cool -- there any limit any.
Tonight is coming take this that I know this for a guillotine to -- it like a month there -- miners.
Can't you -- take you for a day it's up to sixty is we're really flexible remembers that they need it for longer than sixty is violent and she's there was still on its you've definitely seen a cart missing that have to come back.
1112 -- is recalling that -- now.
And another let us know -- you know their vacation got extended such fun.
It's -- -- is that what about insurance for example what about that.
And everything's included -- membership.
We we insert the cars we maintain in the cars -- -- the cars here polyester junior members keep gas in the tank.
OK so what happens it now works like this -- to give it 8000 dollars right he gets you -- I'm -- a point seven feet 8000 dollars I mean we'll divide.
Or drive through.
Borrow the classic cars right not yet clearly these -- Right you you'll probably an opportunity get any of these phones because we do a lot of member events well we do you track days and you know -- we'll get a -- members together and throw a couple super cars.
On so chances aren't any level you get -- -- -- drive all the cars.
But you may not taking necessarily out of your membership of this starting level account you can you yet the by the points given to them how much -- more points off -- The first littlest 121000 dollars -- -- driving everything fleet.
Okay all right what about that the other thing about it -- to classically has you know the Nissan GT the Tesla Roadster.
It has modern modern classics and as well.
Well what about women have many members are women they think the thought is right is preventing -- -- but odds -- plus 1% of our members of the -- percent.
And how they find out about you mean how to get -- yourself.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Well you know wolf -- is still waiting lists I never know find out order said that waiting -- -- feet.
It's that it is better to keep a couple of good members really happy -- and have hundreds of members that you -- -- -- customer service that I -- talked about this around hiding out 6:15 in the morning behind me -- to get the guys comment on this behind me is actually bar.
Yet we haven't been drinking I wanna make actually a little island drinking and eating diet drink before you take -- -- out but.
The point is that this is actually opened play for hours.
A day and they actually off the happy happy hours once a week because of the clad is a community do that -- -- but what are some of those events that yet allowing me to.
We do we probably produce fifty -- years we do everything from party's right here in the club to rallies across your private race days.
All sorts -- exciting stuff that you want to do but just never really had the time comes and to plan yourself.
So an amber.
Is one site London's another site open -- and and the last got out and.
And then where LC it'd be standing -- didn't do that this this fall we're planning launch strategy for LA and in Miami will be -- and and when your memory could use any of those clubs and rooms though.
So how much cash street and then dedicate to buying new cars.
Well if we we lots LA you know that.
That -- supply to about five million.
You know that that includes ramp up marketing staff and as a whole -- the yes it California's academic offerings like we we we have to trust people on this yeah that's -- tourist you know.
-- -- Things out fending for -- of caddies and mean that's a whole lot careful that the level of trust in New York.
The -- I think having about the would you guys like -- say he added everything see if you read that I didn't know.
At UN and Atlanta sports -- you're paying a thousand dollars plus a month and finding young payments right and then you have the -- in New York -- are talking about another.
Couple hundred dollars at least in -- have insurance and -- -- maintenance.
And again maybe not driving it very often I -- did that I -- may be just if you works if it even would you guys do it.
Wolf actually that's one of the clintons and move you have to be an aficionado I think action one of our viewers asked that question I was crossing off the questions they can make you guys did a great job answering a want him about the recession impact insurance and everything else but somebody wanted out that would fly outside in New York is anything to these guys now.
That if you like this happen outside and -- Yeah let's talk a little bit of one of the questions is my out fattening maybe new York at workspace outside of New York maybe not mean I I haven't been to Edinburgh in Scotland for example up to wind down like I mean does it really -- -- that -- that -- really function if you went to.
You know Omaha -- -- -- -- even the Twin Cities.
I think it does -- for two reasons.
Right he works anywhere Zach and I have -- very special cause of our own because -- as -- on their own four GT we've had.
BM WM six -- share that we get that share in every regard -- -- -- Pain in the -- is you know if you drive 56 times.
About how great of -- card as -- -- so the variety always keeps you coming also -- been doing this for fourteen years now this this month actually and so they've they've been they've improved networks.
I think a lot of ways.
A city like -- would be great because people drive if you're an analyst at one you know if you have your hunger every day or you have something special.
Come to the club on Monday take something extremely special bring back on Friday.
Variety varieties of -- life on it.
If you think for example let's -- out there -- city and they say OK well what happens if I got all my buddies together.
How we formed a car you know we just put our cars get -- -- we share the financing.
And we got to take the checkers cards we would it would of working -- that you try to do it themselves.
It's it's the best way to lose your friends and tell him what labs and -- here 63 impala Atlanta and there's no in the -- -- -- it you know yeah.
It's probably the biggest mistake -- one is -- you this is done it they think their friends are going to be either members plan and that it's gonna work.
In their backyard and and -- it will work and duplicates in spending being honestly would be your backyard is the best beer.
They -- tip whenever you heard and I think you got it might have -- getting everyone keeps saying the luxury market is threatening and no one wants to drag around.
It's 1000 dollar -- down the streets of Wall Street right now because it's just -- maybe two years ago we have to do that story but it seems so.
The little out of place right now have you seen any pullback if people want to -- to I don't 2000.
More TV than the new car.
Until the Florida lawsuit on last Thursday that it really -- Yeah -- -- they think people smile that is all right you've enjoyed it that.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- The department -- is the to solicit because of 200000 dollar that's stuff that -- that brought my other question why yet again we have yeah final what question actually -- -- drivers have -- -- pointless and a white Jenna gets -- -- -- assignments while Jeff -- is sucks at an outside GM's headquarters and -- -- -- -- and put our mutual friend of trash wants to know which one you would.
Like to have when you're done you -- I don't know about -- when -- hear this big car buff I've been trying to tell people.
Well actually the car I hate to say that the car that I like is not here and we couldn't get it back.
I did it does a little bit about the -- read the cobra.
Yet it is -- -- One of the first cars that we started with it's is that you know looks -- it.
Six he's race car on the and it's since day one has been most desirable car we had so of course it's hard to -- back your CNN's Larry yeah I like okay.
-- -- -- But I can't -- -- I -- late summer.
-- remember is trying to get their last last night -- sudden you know event where he.
Yeah I haven't seen I got -- wrapping guys and I mean -- -- and Chelsea but their boat -- but they're both they're great people also you have to pick out.
Glenn McConnell he -- three kids.
And and Kelsey -- -- he's right around and all sorts of different things part of our business that we're gonna have a -- what -- -- -- place than men.
Mike Nolan I'd put her in the Tesla you picked up I think that's healthy he would get -- -- -- there at the 170.
That kind of anti.
Now I'm not -- It's all electric units in the best thing I don't like it actually -- -- miles an issue.
-- -- -- sixteen -- back in May mean what do you think about Connell would have been hung on well we've especially card just -- we have 1975.
Through eight GT -- Ferrari and it has were nice so you can drive.
Guy is definitely do you know why they -- like it's hot and Stewart Jerry did a good -- yeah.
If that's not found itself I think yeah I could get a that they hadn't upgraded our guys guys guys that definitely puts drive ferraris they got absolutely Michael -- -- I I was sure I'd check it out.
Yet classic car flat dot com and you can -- different locations and you can check out their new cars when they get it in check out the corporate.
Cobra tell you we know you're not been on -- -- to cool Staten carpal artwork.
You have a picture you all right the -- I had a lot of with -- -- and a that's right have fun we'll talk to tomorrow.
Definitely my favorite thing about that with the classic cars are -- that was really fun and enjoy that.
-- -- car driver grace coming up with the auto sales figures which I don't know if there is happy go lucky or not but that's next.
Much more still to come on Fox Business -- The cash for clunker deal had come to an end and we also boosted the cartels for the last couple months here -- -- last month but Robert -- have all the details for us how they do.
Well they've boosted -- -- -- but not quite as much as some people are expecting particularly -- -- we're coming in that top of the hour.
-- at first blush looked pretty good he started to look through the total numbers on comparing it taking what they sold a 182000.
Cars and change.
-- in the -- -- -- up about 10%.
From July -- you know an elevated and 70% vs a -- a year ago.
The problem is.
People looking for much more -- the stock -- when looking for a 21% putting -- a half percent boost from a year ago he could really see it in the stock reactions you're looking through the numbers you're seeing you know they're gaining market share they'd been numbers look pretty good.
You can really see the stock selling off and a lot of people are anticipating that was at least going to be as good or maybe better.
A big concern out there obviously with clunkers if you're not going to be pushing it to an elevated level.
What's -- gonna do and there's already concern about you know taking away sales from the future a Volkswagen for one also they were when they were up 11% year over year.
This feels the best month in US else's December of 2005 so clearly you know clunkers -- -- we're still looking you know for Hyundai for example -- step record sales according to Edmunds dot com.
During this time -- -- interest and see who the winners are going to be we know we saw that the sales list.
You have very few American cars in there and therefore did sell you know -- the most focuses folk I.
You know I had a record month for the -- a lot more or -- had a Ford Focus was moving off the lot it's you know if it does speak to the fact I guess at some AM the so called for an auto makers which is that something of a -- -- cars -- still made here in the United States.
Do a better job on this group of cars.
Or is that fair to say do according to analysts at bottom yet so tight that the new American car they would and if you you know look at what's expected -- -- taken a look at behind expert to 20% -- Hyundai about a left 45%.
From you know vs dust this month ever month here so they're really expecting a big bump there and if you look at the year over year.
I was taking a quick look here -- -- 63% bump vs a year ago -- was -- at one by the -- expected to be higher than a year even with.
Cash for clunkers so if not now when exactly so it could be addressing twit about a expecting just a 1% drop.
So we may see him actually with an -- -- -- of the year but.
Deadly keep -- -- you know General Motors Chrysler he has sort of you it's on the -- they haven't officially reported yet.
But they are expected to -- produces a drop of about 50% a year the year and have not crossed officially that would be a smaller drop than anticipated.
Now publicly traded that's hard to tell -- by that Fiat say ADRs really very thinly traded -- hard to get any kind of -- lead.
And the economy isn't saying it didn't have the big inventory related to keep up with some of the demanded that -- me.
Joining LA is actually we did have a guest on -- -- again but we had.
You know why one of their folks on this morning and it's about the the price for car actually hire you to that.
So people are actually paying -- you're getting this 4500 back -- you're paying sometimes 500 bucks.
More than you had happened earlier this year it certainly vs a year ago due to the -- -- actually spoken people throughout car shopping and they were driving from city to city.
-- -- North Carolina looking for a specific color because of color in the model they want it wasn't meant to -- to go to different dealerships all over the place to try to find some work cut a deal so.
Inventories Elaine we know that's pretty much across the economy and I was born out you know with the -- -- -- the manufacturing numbers we continue to see.
Yes and as you mention of the publicly traded that car companies Ford is down after its results even though they were absolutely right not much is exposed -- to have the numbers it it.
They losses doubled.
Move up 3% down to six up about some -- -- they started coming back off the lows of the keep in mind we have a broad sell off.
On the street anyway you're so right it's a big down day for the market you also mentioned -- a bunch of times thanks Robert agreed to go to bill does think now -- -- Edmonds.
Auto observer joins us by Skype up and bill what's your take on all these numbers of Robert's going through from as anything surprise you today.
Well good -- call you know I think what we're seeing isn't there it's incredibly sporadic dollar industry right now it's whenever you get some big artificial injection like this notebooks of buyers into the market in the end you know sort of influenced by a what cash for clunkers was all about what we're seeing is that there -- that's like throwing darts right now everybody solar group work.
-- -- laying up Volkswagen's.
Some of the others haven't done so well.
And you know what happened there -- woods is the inventory started to really get -- down as CEO.
As the program got ended in full year he saw that some auto makers were prepared -- -- had a little better inventory situation.
They were able to capitalize on that -- another's work.
And you know a lot of people even talking about this short term boost and could it eventually translate into long term growth.
Is that possible or has where have we seen that the that that bump up there and that's.
Well you know I think first of all but definitely see -- bump you know this is obviously going to be a you know a one time sort of the end I think it's not going to change the basic dynamic that was.
At work in the market right now which was you know everybody's going back on -- car purchase everywhere asking us -- -- there are a lot of people out there without jobs unemployment side the people who are employed are worried about seeking jobs so we're seeing a lot of purchased east for a little one on big ticket items like cars.
So I don't think you're gonna change that dynamic.
What happened was this as was mentioned earlier -- you all had a lot of people into the market it might have been thinking about buying our mind in a position behind you are six months or a year or even more current more.
Ever going to the market now and -- They'll be a payback -- the.
If this doesn't change the dynamic and we basically go back ever take to where we were before the clunkers program what.
And then when will that dynamic change the way you see things right now.
Don't you know I think the more we see everywhere talk about hobby and housing.
You know sector really affects economies.
I think you'll -- auto industry and you ought to sector he certainly canary in the coal mine pretty out.
-- -- Of winning economy truly starts to pick up and he seeks consumer confidence start to pick up that's I think it'd be win the auto industry will pick up and not before then consumers are not confident right now.
And you don't see that -- -- market the market so I think Intel MRSA general consensus that the economy is is -- improving.
And that your general personal -- situation -- in danger you know you probably won't let -- market pick up I don't think it'll be at least until.
The middle of next year -- me -- -- All of next year let me follow up on that this way you're saying that you know -- consumers aren't competent yet the numbers certainly consumer confidence surveys have shown that.
Why aren't they because the stock market you know today made you were starting to see the the beginnings of some sort sort of the fall sell -- as you see many times in the past we come 50% off the -- so.
People who had their wealth just decimated last year started to get some of that back.
Some of the other economic indicators manufacturing today seems to be out of recessionary levels showing us that there's a bounce back.
In the economy what's holding down the consumer from not being more confident and going out doing things like buying new cars and jobs what is it.
Carl you know I think.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- So the other companies that move forward here if if what you're saying is -- in the consumer isn't there yet they're not confident they're not really willing to take a lot of -- -- -- -- -- make big.
Purchases you know we talked about how the reduced inventories sort of held some of the momentum back from the car -- I'm assuming are ramping that up to try and restock their showrooms -- To be able to sell parts of people who do want them but it -- A worried that they might overshoot the runway may be too many -- and then we don't -- -- where we're back sort of of the problems that that we saw earlier in the year with the car companies -- -- how they navigate that future.
Of getting the cart people want to buy and yet also with this consumer is still pretty shell shocked.
They Kelsey that's a great question I mean right now bed is the big dilemma in the car business -- you now some you know iron on the on the lots to show people who are coming into the into the sure so you gotta have something -- you can't have an empty lot.
Let's say you're right and innocent and production is being raised most of the carmakers particularly the ball in carmakers.
-- said that they are raising production to try and go back yeah tourists.
-- Cast your -- workers program.
But -- that's the tightrope right now it is -- -- serious serious.
Business in the car industry to try to determine exactly what that level right now is production that you need.
Seem to get out there in the end inserted replenish your inventories without.
First talking again or -- room that you're not quite sure really going forward especially in the dark it's a winner here in the east and in brand in north.
You know how many people may be coming in November December.
Or you don't know -- dilemma that our business certain -- I had -- just a real quick cat.
Bill we've got to run -- -- another guest standing by so no no real explanation here but which of the car makers do you think our best position to kind of with stand or.
Or you know -- be OK in that environment is difficult was it May Day.
Well I think -- be the carmakers -- continue to have that mix of models that seems most appropriate once or not right now right in the carpet you know in the consumers' minds I think it'll have to be somewhat recently -- what -- -- brewers don't look too bigger to Boston cases are too large.
In you know -- big -- affordable now that are reasonably affordable and comparatively affordable for for people who are -- because the consumer mentality absolutely right now he sucks.
You know I -- value any value and I don't -- -- do you know we're seeing that in the -- -- -- it is with Edmunds -- observer thank you bill he has tried to thank you joining -- to talk about the car.
Industry all right a little bit more an -- to talk to a dealer because those are the people that really saw the boost from this clunkers program.
And now what next since it's ended.
And we want to know what's gonna happen going forward that's next foxbusiness.com.
The cash for clunkers deal it come tonight we got given -- -- to some of the auto makers that last month but we're.
Talk now with eighty dealer who owns the dealerships in Ohio Florida Arizona Columbus, Ohio -- wide range across the country there Steve Germain.
Is joining us thank you so much for being here today we want to go straight to the question did -- see a huge jump at your dealership from this program cash for clunkers.
Well -- thanks for having me out and that's could be married yes.
August was a great month for the Germain motor company's wells -- all most manufactured most of the dealers.
In Ohio as well as Florida and and -- Arizona so those are great great month and appreciate everything our associates did they worked long and hard.
And -- month of August and the results bear that out.
How about September October November because as our previous guests had mentioned that's a concern right now in the industry what your level concern that.
We go back right back whoever started.
Well I -- that were planning on going back to where we started in the forecast for this year was to be.
Much of the same for most of the year not all the year so we're looking we're just gonna get back to managing our businesses are ten man.
For the rest of this year that we expect that the -- to eleven million in oh with ten so it's back to business as usual the great.
-- a great stimulus plan and they did exactly what those supposed to do and and the environment and making the economy in the consumer overall winners.
I'm curious to know what you're taking the result of the cap for congress are gonna -- some cars are more popular I think regret the focus.
I don't know that other -- -- there are you learning about what can consumers want from what card they chose to get into through this program.
Yes and no I mean I don't think we can put too much.
Emphasis or or you know take too much away from the catcher -- -- -- short program.
Attracted 10% of the market into the assurance not a real good indicator probably but it could did does tell us that people.
Are looking for more fuel fuel efficient models probably in the future rear -- -- yeah -- we had enough inventory going and we had a great great sales plan and and we we managed to plan and we're down about a thirty day supply we started 53 -- supply and Bill Clinton beginning of August so.
Inventories are down a question about it -- take thirty days to build those back up but.
Better to have this problem and -- Vietnam what is your sense -- the consumer mean when you you could you have conversations with people all the time what types of comments have been making about where they're -- In their individual lives -- -- how they expect that to change of the next few months.
I don't think.
Anybody's expecting things to change much in the short term I think everybody is.
As prepared for -- you know this economic environment Doran and I don't think innings -- change anytime soon so it's business as usual.
For both I think the auto makers and dealers and the consumers as well moving forward in the short term.
And -- business as usual do you think you're gonna have to pick up on offering rebates and some incentives to buyers now that the incentive from the government.
Has gone -- -- sometimes in the fall there are a lot of car dealership that offer.
In Columbus State sales and -- looked -- -- thing -- those still in the works are you upping that to kind of keep that momentum that people thinking they're getting a deal.
Well I think one of the values of the -- clunker program was that is -- very limited short term program unlike.
00 for sixty back in note two or -- employee pricing for everyone know five so it was a very finite.
Program and people knew that and again and only -- 10% of the market so.
I don't think people are necessarily expecting overweight or going away for the next big deal.
Okay Steve thank you for joining us and and good luck with everything as their -- -- -- -- -- up.
Well thank you very much -- me out Steve Germain from a Columbus, Ohio which remain -- motor company -- an auto dealer can give you an idea of how things are out there I think before we get off the obvious today foxbusiness.com.
Live we should bring the big board up again just to see how the stock market is doing -- almost right on to Kelsey as we talked about at the top of the show.
Big sell off despite better than expected economic did that we -- for the banks maybe this is the start -- of of something in the month of September that we've seen a lot of times in the past.
And it didn't think it talked to few economists expert there's no exact reason as to why September is just terrible month but it just happens -- -- -- -- -- interesting -- -- now on whether this -- -- a different -- because it's -- different set -- circumstances -- In the middle and I sort of coming out of a recession subsequently were going in one direction but yet we also have a lot of government money be -- supporting the economy which is not unusual or not at that racing after so it's going to be interesting to see what factors really way.
On the markets and what come into play here and that's as good as ever on -- have to be educated beyond your -- and.
The involved -- will be following here at noon eastern time every single weekday thanks for joining us get out and only the other Kelsey -- from the Wall Street Journal digital network guy Jenna will be back we think from the -- from the classic cars that should happen to California that's right maybe should check out our -- -- library.
Tomorrow same time tickets out of Hulu and iTunes between now and then we'll -- guys.
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