Epilogue (For Now)

Just a few items before leaving the topic of Hummers for hopefully a long while.

First, the amount of traffic that the story has generated has been remarkable - buttons have been unwittingly pushed and links have been posted at hundreds of different websites and message boards - you can get a feel for the quantity here.

By the way, as many of you probably know, overfloweth is not a word, even though if you search for it you'll see many uses of it (when last checked there was a link back to this blog in position four).

Hummer Sales

Much of the discussion over the weekend had to do with the actual Hummer sales recently, and that turned out to be a fairly complex topic, what with the introduction of the H3 in May and spotty information available via the internet (note that we fessed up to doing no real research for this article and just based our falling sales/rising inventory theme on the initial H2 sales report and the scene at the dealer storage lot).

The original Yahoo! News article clearly indicated a 52% drop in H2 sales year-over-year, but for the H3 it gets pretty confusing. This article says that H3 sales were 4054 in September, and this article says the H3 sales were 4461 in October, then another article from Automotive News excerpted in the comments section said that the H3 sales were up 120% for the month of October - all three of these pieces of information cannot be correct.

Then there was the confusing 129% increase in total-Hummer sales year-over-year in October, which was the result of introducing the H3 in May and selling a lot more of these at $30K-$40K, than of the H2 at $60K. This article indicates increased production for H3s in Louisiana, while this article talks of GM building inventory as sales fall to try to avoid a supply disruption in the event of a Delphi strike.

All this information, combined with comments from Stuart Brown at Fortune Magazine leads to the conclusion that H2 sales are tanking, but that H3 sales are not. How good H3 sales are is hard to tell - "brisk", "success story", "sales spike" are some of the phrases you hear, but keep in mind that it is relatively new on the market - time will tell.

Even if the H3 sales are great, this is not necessarily a great thing for GM, as pointed out in the comments, because as you see here, the new H3 has entered a market segment already crowded with GM products.

Comments

Over the weekend, on several occasions when catching up on some of the comments that were posted, there developed an overwhelming compulsion to take a shower. Depending on how things go, comments may be shut off for the original post and for this one - we'll see. In the event that they are shut off, the most opinionated commenters are encouraged to start their own blog where the discussion can continue.

A Failed AdSense Strategy

Also pointed out by a commenter, but something that we would have been poked fun at eventually, it is now clear that the advertising strategy employed here to date is fundamentally flawed. The way Google AdSense works is it looks for content on a site, then dynamically provides ads based on this content. Google does not assess the tone of the words, just the words, so when a post contains satire, you are apt to see ads for that which is the subject of the satire.

This didn't stop about a hundred people from clicking on Hummer ads in the last few days.

Inventory

There was some discussion about the exact number of Hummers for sale at this dealer - the number 300 was first offered here, then a dissenting commenter who took it upon himself to drive out to the lots and also do a count said it was 250. Another commenter went to the Thousand Oaks Hummer website and did a query, coming up with a list of Hummers "closer to 400".

As it turns out, the dealer list, which must be presumed to be the most accurate of the three, had a total of 385 Hummers, and it is reproduced below. Neither of the physical counts should be trusted, since in both cases, the counters were surely distracted - by laughter in one case, and probably rage in the other.

(Obviously, since it is now understood that the dealer keeps only ten or so at the showroom, this begs the question of a third remote lot containing somwhere between 75 and 125 more Hummers ...)

Through the wonder of website data queries and Microsoft Excel, just like government economic statistics, if you are handy with a keyboard and mouse it is relatively easy to analyze this inventory data. If anything interesting develops in the coming weeks or months, it will be posted here.

THE SUMMARY

H1 - 9 (1-2004, 8-2006)
H2 - 167 (38-2005, 129-2006)
H3 - 209 (all 2006)

THE LIST

1......2004....OPEN...SPTUTY.50198....BLACK....$112,011
2......2006....OPEN...SPTUTY.50200....BLACK....$135,125
3......2006....OPEN...SPTUTY.50202....RED......$135,125
4......2006....H1.....SUV....50205....PEWTER...$146,523
5......2006....H1.....SUV....50207....PEWTER...$146,523
6......2006....H1.....SUV....50208....GREY.....$146,523
7......2006....H1.....SUV....50209....SAND.....$146,523
8......2006....H1.....SUV....50210....WHITE....$146,523
9......2006....H1.....SUV....50211....PEWTER...$146,523
10.....2005....H2.....SPTUTY.70925....BLACK....$82,493
11.....2005....H2.SUT.SUV....71046....WHITE....$56,489
12.....2005....H2.SUT.SUV....71095....YELLOW...$59,389
13.....2005....H2.SUT.SUV....71147....RED......$58,500
14.....2005....H2.SUT.SUV....71169....RED......$53,354
15.....2005....H2.SUT.SUV....71174....YELLOW...$56,330
16.....2005....H2.SUT.SUV....71366....SAND.....$61,160
17.....2005....H2.....SPTUTY.71411....SAND.....$60,640
18.....2005....H2.SUT.SUV....71451....RED......$61,610
19.....2005....H2.....SPTUTY.71478....RED......$59,470
20.....2005....H2.....SPTUTY.71483....GRAY.....$53,879
21.....2006....H3.....SUV....71492....50U......$33,660
22.....2005....H2.....SPTUTY.71510....RED......$61,915
23.....2006....H3.....SUV....71526....31U......$31,590
24.....2006....H3.....SUV....71539....WHITE....$35,055
25.....2006....H3.....SUV....71549....YELLOW...$37,110
26.....2006....H3.....SUV....71551....RED......$29,500
27.....2005....H2.....SPTUTY.71555....PEWTER...$60,280
28.....2005....H2.SUT.SUV....71562....SAND.....$59,010
29.....2006....H3.....SUV....71573....BLACK....$34,509
30.....2006....H3.....SUV....71575....WHITE....$35,055
31.....2005....H2.....SPTUTY.71593....GRAY.....$60,640
32.....2005....H2.....SPTUTY.71594....YELLOW...$60,640
33.....2005....H2.....SPTUTY.71610....PEWTER...$61,480
34.....2006....H3.....SUV....71613....RED......$37,460
35.....2006....H3.....SUV....71630....RED......$35,055
36.....2006....H3.....SUV....71634....YELLOW...$37,460
37.....2006....H3.....SUV....71635....RED......$35,240
38.....2006....H3.....SUV....71636....WHITE....$34,905
39.....2006....H3.....SUV....71640....YELLOW...$37,460
40.....2006....H3.....SUV....71650....YELLOW...$34,730
41.....2006....H3.....SUV....71652....YELLOW...$34,730
42.....2006....H3.....SUV....71654....RED......$35,055
43.....2006....H3.....SUV....71667....RED......$37,460
44.....2006....H3.....SUV....71672....RED......$37,460
45.....2006....H3.....SUV....71673....BLACK....$38,060
46.....2006....H3.....SUV....71674....BLACK....$38,060
47.....2006....H3.....SUV....71676....WHITE....$38,060
48.....2006....H3.....SUV....71677....WHITE....$38,060
49.....2006....H3.....SUV....71678....WHITE....$38,060
50.....2006....H3.....SUV....71691....GRAY.....$38,060
51.....2005....H2.SUT.SUV....71703....PEWTER...$60,170
52.....2006....H3.....SUV....71706....BLACK....$38,060
53.....2006....H3.....SUV....71707....RED......$38,060
54.....2006....H3.....SUV....71708....WHITE....$38,060
55.....2006....H3.....SUV....71709....WHITE....$38,060
56.....2006....H3.....SUV....71710....GRAY.....$38,060
57.....2006....H3.....SUV....71711....GRAY.....$38,060
58.....2006....H3.....SUV....71712....GRAY.....$38,060
59.....2006....H3.....SUV....71713....GRAY.....$38,060
60.....2006....H3.....SUV....71720....BLACK....$38,060
61.....2006....H2.....SPTUTY.71731....MAROON...$60,315
62.....2006....H3.....SUV....71732....BLACK....$32,010
63.....2006....H3.....SUV....71733....BLACK....$32,235
64.....2006....H2.....SPTUTY.71734....PEWTER...$60,315
65.....2006....H2.....SPTUTY.71735....PEWTER...$60,315
66.....2006....H2.....SPTUTY.71736....MAROON...$60,315
67.....2006....H2.....SPTUTY.71737....MAROON...$60,315
68.....2006....H2.....SPTUTY.71738....MAROON...$60,315
69.....2006....H2.....SPTUTY.71739....MAROON...$60,315
70.....2006....H2.....SPTUTY.71740....MAROON...$61,590
71.....2006....H2.SUT.SUV....71754....PEWTER...$61,590
72.....2006....H2.....SPTUTY.71758....BLACK....$57,535
73.....2006....H3.....SUV....71760....WHITE....$32,490
74.....2006....H3.....SUV....71762....RED......$31,465
75.....2006....H3.....SUV....71765....RED......$31,465
76.....2006....H3.....SUV....71766....RED......$31,465
77.....2006....H3.....SUV....71767....RED......$31,465
78.....2006....H3.....SUV....71769....RED......$31,465
79.....2006....H3.....SUV....71770....WHITE....$32,490
80.....2006....H3.....SUV....71772....WHITE....$32,490
81.....2006....H3.....SUV....71773....WHITE....$32,490
82.....2006....H3.....SUV....71774....WHITE....$32,490
83.....2006....H3.....SUV....71775....RED......$31,465
84.....2006....H3.....SUV....71777....RED......$31,465
85.....2006....H3.....SUV....71778....WHITE....$32,490
86.....2006....H3.....SUV....71779....WHITE....$32,490
87.....2006....H3.....SUV....71780....WHITE....$32,490
88.....2006....H3.....SUV....71781....RED......$31,465
89.....2006....H3.....SUV....71782....WHITE....$32,490
90.....2006....H3.....SUV....71783....WHITE....$32,490
91.....2006....H3.....SUV....71784....WHITE....$32,490
92.....2006....H3.....SUV....71786....GRAY.....$37,010
93.....2006....H3.....SUV....71788....GRAY.....$37,010
94.....2006....H3.....SUV....71791....WHITE....$37,610
95.....2006....H3.....SUV....71792....WHITE....$37,610
96.....2006....H3.....SUV....71793....RED......$31,465
97.....2006....H3.....SUV....71794....GRAY.....$37,010
98.....2006....H2.....SPTUTY.71796....SLATE....$60,665
99.....2006....H2.....SPTUTY.71797....SLATE....$60,665
100....2006....H3.....SUV....71802....RED......$37,610
101....2006....H3.....SUV....71803....WHITE....$37,610
102....2006....H3.....SUV....71804....GRAY.....$37,610
103....2006....H3.....SUV....71805....YELLOW...$37,610
104....2006....H2.SUT.SUV....71806....SLATE....$61,190
105....2006....H3.....SUV....71807....RED......$31,465
106....2006....H3.....SUV....71810....BLACK....$37,610
107....2006....H3.....SUV....71811....BLUE.....$37,610
108....2006....H3.....SUV....71812....RED......$37,610
109....2006....H3.....SUV....71813....RED......$37,610
110....2006....H3.....SUV....71814....BLACK....$37,610
111....2006....H3.....SUV....71817....GRAY.....$37,610
112....2006....H3.....SUV....71819....BLUE.....$37,610
113....2006....H3.....SUV....71820....BLACK....$38,410
114....2006....H3.....SUV....71821....WHITE....$37,610
115....2006....H3.....SUV....71822....BLACK....$37,010
116....2006....H3.....SUV....71823....BLACK....$37,010
117....2006....H3.....SUV....71824....BLACK....$37,610
118....2006....H2.....SPTUTY.71825....MAROON...$60,665
119....2006....H2.....SPTUTY.71827....MAROON...$60,665
120....2006....H2.....SPTUTY.71828....WHITE....$60,920
121....2006....H3.....SUV....71829....BLUE.....$37,610
122....2006....H3.....SUV....71832....WHITE....$37,610
123....2006....H2.....SPTUTY.71837....WHITE....$60,920
124....2006....H3.....SUV....71839....BLUE.....$37,010
125....2006....H3.....SUV....71840....BLUE.....$37,610
126....2006....H3.....SUV....71841....BLUE.....$37,610
127....2006....H3.....SUV....71842....BLUE.....$37,610
128....2006....H3.....SUV....71843....BLUE.....$37,610
129....2006....H3.....SUV....71844....BLACK....$37,610
130....2006....H3.....SUV....71845....BLACK....$37,610
131....2006....H3.....SUV....71846....WHITE....$37,610
132....2006....H3.....SUV....71848....GREEN....$35,075
133....2006....H3.....SUV....71849....YELLOW...$35,075
134....2006....H2.....SPTUTY.71851....BLACK....$60,920
135....2006....H2.....SPTUTY.71852....BLACK....$60,920
136....2006....H2.....SPTUTY.71853....BLACK....$60,920
137....2006....H3.....SUV....71854....BLACK....$34,270
138....2006....H3.....SUV....71855....GRAY.....$34,670
139....2006....H3.....SUV....71856....BLACK....$34,670
140....2006....H3.....SUV....71857....WHITE....$34,945
141....2006....H2.....SPTUTY.71858....BLACK....$59,795
142....2006....H2.....SPTUTY.71863....SLATE....$59,795
143....2006....H2.....SPTUTY.71864....SLATE....$59,795
144....2006....H2.....SPTUTY.71865....SLATE....$59,795
145....2006....H2.....SPTUTY.71868....BLACK....$60,920
146....2006....H2.....SPTUTY.71869....BLACK....$60,920
147....2006....H2.....SPTUTY.71870....BLACK....$60,920
148....2006....H2.....SPTUTY.71871....WHITE....$60,920
149....2006....H2.....SPTUTY.71872....WHITE....$60,920
150....2006....H2.....SPTUTY.71874....BLACK....$59,645
151....2006....H2.....SPTUTY.71875....BLACK....$59,645
152....2006....H3.....SUV....71876....BLUE.....$37,010
153....2006....H3.....SUV....71877....BLUE.....$37,355
154....2006....H3.....SUV....71879....BLUE.....$37,610
155....2006....H3.....SUV....71880....BLACK....$35,075
156....2006....H3.....SUV....71881....BLACK....$35,075
157....2006....H2.....SPTUTY.71882....BLACK....$60,920
158....2006....H3.....SUV....71885....BLACK....$34,670
159....2006....H3.....SUV....71887....GRAY.....$34,670
160....2006....H3.....SUV....71888....YELLOW...$33,875
161....2006....H2.....SPTUTY.71889....BLACK....$60,920
162....2006....H3.....SUV....71890....BLUE.....$37,010
163....2006....H3.....SUV....71892....RED......$35,075
164....2006....H3.....SUV....71893....GRAY.....$34,670
165....2006....H3.....SUV....71894....BLACK....$34,670
166....2006....H3.....SUV....71895....BLUE.....$34,670
167....2006....H3.....SUV....71896....RED......$33,605
168....2006....H3.....SUV....71897....RED......$33,230
169....2006....H2.....SPTUTY.71902....BLACK....$60,920
170....2006....H2.....SPTUTY.71907....YELLOW...$62,095
171....2006....H2.SUT.SUV....71909....SLATE....$61,190
172....2006....H3.....SUV....71910....SLATE....$32,980
173....2006....H3.....SUV....71911....BLUE.....$33,030
174....2006....H2.....SPTUTY.71912....BLACK....$60,935
175....2006....H2.....SPTUTY.71913....BLACK....$60,935
176....2006....H2.....SPTUTY.71916....BLACK....$59,795
177....2006....H2.....SPTUTY.71940....WHITE....$60,935
178....2006....H2.....SPTUTY.71942....SLATE....$59,795
179....2006....H2.....SPTUTY.71945....MAROON...$62,615
180....2005....H2.SUT.SUV....71947....SAND.....$59,160
181....2006....H3.....SUV....71951....BLUE.....$36,960
182....2006....H2.SUT.SUV....71953....SLATE....$61,190
183....2006....H3.....SUV....71954....GRAY.....$34,670
184....2006....H3.....SUV....71955....WHITE....$34,170
185....2006....H2.....SPTUTY.71957....SLATE....$62,615
186....2006....H2.....SPTUTY.71958....SLATE....$62,615
187....2006....H2.....SPTUTY.71961....BLACK....$62,615
188....2006....H2.....SPTUTY.71962....WHITE....$62,615
189....2006....H2.....SPTUTY.71963....SAND.....$62,615
190....2006....H2.....SPTUTY.71970....MAROON...$63,665
191....2006....H2.....SPTUTY.71971....MAROON...$63,665
192....2006....H2.....SPTUTY.71972....YELLOW...$63,665
193....2006....H3.....SUV....71974....GRAY.....$37,405
194....2006....H3.....SUV....71976....RED......$37,405
195....2006....H3.....SUV....71977....RED......$37,405
196....2006....H3.....SUV....71984....BLUE.....$37,010
197....2006....H3.....SUV....71985....GRAY.....$34,170
198....2006....H2.....SPTUTY.71987....BLACK....$59,645
199....2006....H3.....SUV....71991....BLACK....$36,195
200....2006....H3.....SUV....71992....BLUE.....$36,195
201....2006....H3.....SUV....71993....BLUE.....$35,370
202....2006....H3.....SUV....71995....BLUE.....$35,795
203....2006....H3.....SUV....71996....BLUE.....$35,795
204....2006....H3.....SUV....71997....SLATE....$35,795
205....2006....H3.....SUV....71998....BLACK....$35,595
206....2006....H3.....SUV....71999....BLACK....$35,595
207....2006....H3.....SUV....72000....BLACK....$35,595
208....2006....H3.....SUV....72001....BLACK....$35,195
209....2006....H3.....SUV....72004....GRAY.....$35,595
210....2006....H3.....SUV....72005....GRAY.....$35,595
211....2006....H2.....SPTUTY.72006....MAROON...$62,615
212....2006....H2.....SPTUTY.72009....BLACK....$62,615
213....2006....H3.....SUV....72012....BLACK....$35,595
214....2006....H3.....SUV....72014....WHITE....$37,405
215....2006....H3.....SUV....72016....RED......$37,405
216....2006....H3.....SUV....72017....BLACK....$37,405
217....2006....H3.....SUV....72018....BLACK....$37,405
218....2006....H3.....SUV....72019....BLACK....$37,405
219....2006....H3.....SUV....72020....BLACK....$37,405
220....2006....H3.....SUV....72023....WHITE....$37,405
221....2006....H2.SUT.SUV....72025....MAROON...$61,370
222....2006....H2.SUT.SUV....72026....BLACK....$60,470
223....2006....H2.....SPTUTY.72028....PEWTER...$59,795
224....2006....H2.....SPTUTY.72029....PEWTER...$59,795
225....2006....H2.....SPTUTY.72030....PEWTER...$59,795
226....2006....H2.....SPTUTY.72031....SLATE....$59,795
227....2006....H2.....SPTUTY.72032....SLATE....$59,795
228....2006....H2.....SPTUTY.72033....SLATE....$59,795
229....2006....H2.....SPTUTY.72037....SAND.....$59,795
230....2006....H2.....SPTUTY.72038....SAND.....$59,795
231....2006....H2.....SPTUTY.72039....YELLOW...$59,795
232....2006....H3.....SUV....72040....BLACK....$38,260
233....2006....H2.....SPTUTY.72041....BLACK....$61,215
234....2006....H3.....SUV....72044....WHITE....$38,930
235....2006....H3.....SUV....72045....BLACK....$35,095
236....2006....H3.....SUV....72046....BLACK....$37,405
237....2006....H2.....SPTUTY.72047....MAROON...$59,795
238....2006....H3.....SUV....72050....BLACK....$38,260
239....2006....H3.....SUV....72052....BLUE.....$33,300
240....2006....H3.....SUV....72053....GRAY.....$33,695
241....2006....H3.....SUV....72054....GRAY.....$34,290
242....2006....H3.....SUV....72055....GRAY.....$35,465
243....2006....H3.....SUV....72056....BLACK....$35,965
244....2006....H3.....SUV....72057....BLACK....$35,965
245....2006....H3.....SUV....72058....BLACK....$35,965
246....2006....H3.....SUV....72060....WHITE....$34,870
247....2006....H3.....SUV....72061....WHITE....$38,850
248....2006....H3.....SUV....72062....WHITE....$38,850
249....2006....H3.....SUV....72063....BLUE.....$38,850
250....2006....H3.....SUV....72064....WHITE....$33,970
251....2006....H3.....SUV....72065....RED......$33,550
252....2006....H3.....SUV....72067....WHITE....$39,450
253....2006....H3.....SUV....72068....WHITE....$38,930
254....2006....H3.....SUV....72069....YELLOW...$38,700
255....2006....H3.....SUV....72070....YELLOW...$34,720
256....2006....H3.....SUV....72073....GRAY.....$38,330
257....2006....H3.....SUV....72074....GRAY.....$38,330
258....2006....H2.....SPTUTY.72077....SAND.....$62,615
259....2006....H3.....SUV....72079....BLACK....$37,675
260....2006....H3.....SUV....72080....BLACK....$37,675
261....2006....H3.....SUV....72081....YELLOW...$37,580
262....2006....H2.SUT.SUV....72082....BLACK....$59,520
263....2006....H2.SUT.SUV....72083....WHITE....$60,470
264....2006....H2.SUT.SUV....72084....MAROON...$60,470
265....2006....H2.SUT.SUV....72085....SAND.....$59,520
266....2006....H2.SUT.SUV....72086....WHITE....$59,890
267....2006....H2.....SPTUTY.72087....SAND.....$59,795
268....2006....H2.....SPTUTY.72088....BLACK....$59,795
269....2006....H2.....SPTUTY.72089....BLACK....$59,795
270....2006....H2.....SPTUTY.72090....BLACK....$59,795
271....2006....H2.....SPTUTY.72091....MAROON...$59,795
272....2006....H2.SUT.SUV....72092....BLACK....$57,650
273....2006....H3.....SUV....72095....BLACK....$36,460
274....2006....H3.....SUV....72097....SLATE....$38,850
275....2006....H2.....SPTUTY.72098....BLACK....$61,070
276....2006....H3.....SUV....72101....BLUE.....$38,180
277....2006....H3.....SUV....72102....SLATE....$38,455
278....2006....H3.....SUV....72103....SLATE....$38,455
279....2006....H3.....SUV....72104....YELLOW...$38,850
280....2006....H3.....SUV....72105....YELLOW...$38,850
281....2006....H3.....SUV....72106....SLATE....$38,850
282....2006....H3.....SUV....72107....SLATE....$36,610
283....2006....H2.....SPTUTY.72109....BLACK....$59,645
284....2006....H2.....SPTUTY.72110....BLACK....$61,070
285....2006....H2.....SPTUTY.72111....BLACK....$61,070
286....2006....H2.....SPTUTY.72112....BLACK....$68,130
287....2006....H2.....SPTUTY.72113....BLACK....$68,130
288....2006....H2.....SPTUTY.72114....BLACK....$59,645
289....2006....H2.....SPTUTY.72115....WHITE....$59,645
290....2006....H3.....SUV....72116....BLACK....$38,460
291....2006....H2.....SPTUTY.72117....BLACK....$59,645
292....2006....H2.....SPTUTY.72118....PEWTER...$61,070
293....2006....H2.....SPTUTY.72119....SAND.....$59,645
294....2006....H2.....SPTUTY.72120....SLATE....$61,070
295....2006....H2.....SPTUTY.72121....WHITE....$59,645
296....2006....H2.....SPTUTY.72122....BLACK....$59,645
297....2006....H2.....SPTUTY.72123....WHITE....$59,645
298....2006....H3.....SUV....72124....BLACK....$35,375
299....2006....H3.....SUV....72125....BLACK....$35,375
300....2006....H3.....SUV....72126....BLACK....$35,375
301....2006....H3.....SUV....72127....WHITE....$35,375
302....2006....H3.....SUV....72129....GRAY.....$38,180
303....2006....H3.....SUV....72130....GRAY.....$38,780
304....2006....H2.....SPTUTY.72131....BLACK....$63,783
305....2006....H3.....SUV....72134....BLACK....$37,510
306....2006....H3.....SUV....72135....BLACK....$37,510
307....2006....H3.....SUV....72137....BLACK....$38,460
308....2006....H2.....SPTUTY.72138....BLACK....$59,645
309....2006....H2.SUT.SUV....72139....PEWTER...$60,240
310....2006....H2.SUT.SUV....72140....YELLOW...$57,800
311....2006....H2.SUT.SUV....72142....WHITE....$60,240
312....2006....H2.....SPTUTY.72144....BLACK....$60,920
313....2006....H2.....SPTUTY.72145....BLACK....$60,920
314....2006....H2.....SPTUTY.72146....WHITE....$60,920
315....2006....H3.....SUV....72150....SLATE....$38,130
316....2006....H3.....SUV....72151....SLATE....$38,130
317....2006....H3.....SUV....72154....BLACK....$38,180
318....2006....H3.....SUV....72157....BLACK....$37,510
319....2006....H2.SUT.SUV....72158....BLACK....$59,945
320....2006....H2.SUT.SUV....72159....BLACK....$60,240
321....2006....H2.....SPTUTY.72161....BLACK....$60,920
322....2006....H2.....SPTUTY.72162....BLACK....$59,645
323....2006....H2.....SPTUTY.72164....WHITE....$60,920
324....2006....H3.....SUV....72165....WHITE....$38,850
325....2006....H3.....SUV....72166....BLACK....$39,450
326....2006....H3.....SUV....72168....BLACK....$38,180
327....2006....H3.....SUV....72171....YELLOW...$37,675
328....2006....H3.....SUV....72172....GREEN....$31,730
329....2006....H3.....SUV....72173....RED......$37,005
330....2006....H3.....SUV....72175....SLATE....$37,675
331....2006....H3.....SUV....72176....GRAY.....$29,500
332....2006....H2.SUT.SUV....72179....SAND.....$60,240
333....2006....H2.....SPTUTY.72182....BLACK....$68,130
334....2006....H2.....SPTUTY.72184....SLATE....$59,645
335....2006....H2.....SPTUTY.72186....YELLOW...$59,645
336....2006....H2.....SPTUTY.72187....SLATE....$59,645
337....2006....H2.....SPTUTY.72188....MAROON...$59,645
338....2006....H2.....SPTUTY.72189....SAND.....$61,070
339....2006....H2.....SPTUTY.72190....YELLOW...$61,070
340....2006....H2.....SPTUTY.72191....SLATE....$61,070
341....2006....H2.....SPTUTY.72193....BLACK....$60,920
342....2006....H2.....SPTUTY.72194....WHITE....$59,261
343....2006....H2.SUT.SUV....72195....BLACK....$58,670
344....2006....H3.....SUV....72197....YELLOW...$38,850
345....2006....H3.....SUV....72198....BLACK....$37,675
346....2006....H3.....SUV....72199....SLATE....$37,675
347....2006....H3.....SUV....72200....WHITE....$37,675
348....2006....H3.....SUV....72201....WHITE....$37,005
349....2006....H2.SUT.SUV....72203....SLATE....$57,650
350....2006....H3.....SUV....72204....BLACK....$37,510
351....2006....H3.....SUV....72205....BLACK....$37,510
352....2006....H2.....SPTUTY.72207....WHITE....$59,645
353....2006....H2.....SPTUTY.72208....PEWTER...$61,070
354....2006....H2.....SPTUTY.72209....SAND.....$68,130
355....2006....H2.....SPTUTY.72212....BLACK....$59,645
356....2006....H2.....SPTUTY.72213....BLACK....$59,645
357....2006....H2.....SPTUTY.72216....BLACK....$59,645
358....2006....H2.....SPTUTY.72217....WHITE....$54,055
359....2006....H3.....SUV....72218....BLACK....$38,135
360....2005....H2.SUT.SUV....D71479...PEWTER...$59,595
361....2005....H2.SUT.SUV....D71921...GRAY.....$62,518
362....2005....H2.....SPTUTY.D71922...BLACK....$63,718
363....2005....H2.....SPTUTY.D71923...WHITE....$62,313
364....2005....H2.....SPTUTY.D71924...PEWTER...$60,935
365....2005....H2.SUT.SUV....D71925...PEWTER...$61,535
366....2005....H2.....SPTUTY.D71926...BLACK....$60,935
367....2005....H2.....SPTUTY.D71927...BLACK....$61,165
368....2005....H2.....SPTUTY.D71928...GRAY.....$60,935
369....2005....H2.SUT.SUV....D71929...GRAY.....$59,160
370....2005....H2.SUT.SUV....D71930...PEWTER...$58,165
371....2006....H3.....SUV....D71931...YELLOW...$35,525
372....2005....H2.SUT.SUV....D71932...WHITE....$58,165
373....2005....H2.....SPTUTY.D71933...GRAY.....$61,635
374....2005....H2.SUT.SUV....D71934...BLACK....$60,435
375....2005....H2.SUT.SUV....D71935...WHITE....$59,985
376....2005....H2.SUT.SUV....D71936...BLACK....$59,735
377....2005....H2.....SPTUTY.D71937...BLACK....$61,635
378....2005....H2.....SPTUTY.D71938...YELLOW...$58,185
379....2006....H3.....SUV....D71950...BLACK....$32,310
380....2006....H3.....SUV....D72196...RED......$35,305
381....2006....H2.....SPTUTY.D72232...YELLOW...Call
382....2006....H2.....SPTUTY.D72233...PEWTER...$57,225
383....2006....H3.....SUV....D72234...GREY.....$32,900
384....2006....H3.....SUV....D72235...BLUE.....$37,055
385....2005....H2.SUT.SUV....U71176...WHITE....$53,204

Read more...

Inbox Overfloweth

Many emails have been directed this way in recent days. It has become impossible to respond to them all in a timely manner, and as many of them are thoughtfully written, enquiring about other material on this blog, they deserve a response - please be patient (don't bother clicking on the link below, this is the end of the message).

Weren't you told specifically not to do that?

Read more...

Deluge

This is a follow-up to the Hummer post from a couple days ago. It is intended to provide additional information that may be of interest to those who have taken the time to read the story, and who may have left comments here, or on other message boards.

Satire vs. Investigative Journalism

Many of you seem to think that the Hummer piece was investigative journalism when in fact much of it was satire. The pictures are real and the 52% year-over-year drop in Hummer H2 sales is real (see the first link to the Yahoo! News article) - but other elements are inaccurate or complete fabrications (e.g., Togo's does not have half-off coupons, and if there were coupons to be had, they would be located at the desk of our administrative assistant, not in Human Resources).

The long and the short of it is, we found a parking lot with Hummers lined up just begging for someone to photograph them and put them on the internet, so we did it. The first few paragraphs should have made clear that we were going for the funny, rather than for the well-researched, hard-hitting expose.

We had little idea how many people would end up reading this, and what commentary it would incite.

From a Real Investigative Journalist

Stuart Brown from Fortune Magazine called on Friday, and we had a pleasant conversation about the Hummer photos. With Stuart's permission, the unedited email he sent back to me is provided here without any additional commentary:

TIM ---

I talked to the sales manager at 1000 Oaks Hummer, Steve Gansert, who says all those Hummers do belong to them. He says the 300 trucks are a normal selling inventory for them, that they only have parking for about a dozen trucks right at the dealership, so lease these local parking lots to store their unsold inventory.

Our auto-industry editor tells me that the H3 is selling briskly, but the H2 isn't. A lot of auto dealers try to keep about 45 selling days worth of vehicles in their inventory, so those 300 are a plausible number to keep on hand. We're going to accept that answer.

So Thousand Oaks Hummer may not be the Area 51 of the SUV world. Maybe there's one way out in the Mojave?

A pleasure talking with you---I enjoy yer blog.

--- Stu Brown

Site Statistics

On a typical weekday, somewhere between a few hundred and a few thousand people stop by this blog - recently, the average has been somewhere around 500. Since the discussion here is mostly about economics and monetary policy, we don't really expect much more than that and often times wonder why we keep doing this, but that's an entirely different discussion.

Here are the counts of unique visitors to this site since the Hummer story was posted on Thursday:

Thursday: 4,000
Friday: 24,000
Saturday: 10,000 (as of 11 AM PST)

By Monday, you'll have forgotten about this blog, but we won't have forgotten about you. As software engineers, we were able to quickly develop a program that kept detailed records of who has been here, for how long, what pages were viewed, and what comments were left.

Next week, we'll begin pairing up pro-Hummer and anti-Hummer commenters in an attempt to make the world a better place - look for mail.

Crossing the Line

This blog seems to have stepped face first into the great American political debate of the early 21st century - now that Instapundit has provided a link, it's turning into a political free-for-all, and I'm being called a tree-hugger and worse, so next time we'll be more careful (the folks from Daily Kos had much kinder things to say).

Clearly a line was crossed with the "metaphor for America" comment - this just sort of slipped out. Maybe we should have let the pictures speak for themselves, but the piece would likely not have gotten the attention that it did, which, on the other hand, may not have necessarily been a bad thing.

Oh well ... it's done.

And, the "W" bumper sticker comment crossed a line too, but there was serious debate between using this and the ones that say "My child was an honor student of the month at ...", and in the end, the "W" bumper stickers were deemed to have more national recognition.

Of course, had we done actual research for this piece, we may have found that the honor student bumper stickers do have national appeal, but then, that may have stirred an entirely different group of dissenters, so in the end, maybe it was best that we didn't do any research.

Commenting on the comments

Here are my favorite comments so far:

Anti-Hummer (via Daily Kos):
can't remember where i saw it, but:
"you're a dentist, not the left leg of voltron!"

Pro-Hummer (Anonymous):
Everyone should own a Hummer and piss off peta and tree hugging idots.
(He probably meant idiots, or maybe i-dots, something new?)

Anti-Me (Doctor Memory):
bah, thank you, stupid blogger, for doubleposting
(Doctor Memory was a bit premature, since I am still writing this follow-up, but it hurts all the same.)

Comments have been turned off for this post - if you have anything to add, you'll have to go to the original post.

Next Week

We hope you'll all come back for next week's titillating economic discussions - wholesale inventories will print on Wednesday, but the big news will be Thursday's report on the trade balance.

Read more...

Inflation Has Been Close to Zero

The inflation rate, properly measured, at this particular stage, has been very close to zero for a very long period of time.
Alan Greenspan, November 3, 2005

Fed Chairman Alan Greenspan, set to retire in just a few months, made a final appearance before the Joint Economic Committee in Congress yesterday, stating that despite hurricanes Katrina, Rita and Wilma, the economy is continuing a healthy expansion.

"These events are likely to exert a drag on employment and production in the near term and to add to the upward pressures on the general price level. But the economic fundamentals remain firm, and the U.S. economy appears to retain important forward momentum."

He warned that given current spending and entitlement plans, the government may have already promised more than it can deliver to baby-boomers, set to retire in the years ahead.

"We owe it to those who will retire over the next couple of decades to promise only what the government can deliver. The present policy path makes current promises, at least in real terms, highly conjectural. If fewer resources will be available per retiree than promised under current law, those in their later working years need sufficient time to adjust their work and retirement decisions."

Once again, the prepared remarks offer little in the way of news - the headline "Greenspan warns Congress on deficits" seems to have been playing in a continuous loop for the last few years with little effect (pay no attention to the recently rosy White House budget predictions, things are about to take a turn for the worse).

The only real news during yesterday's appearance was during the Question and Answer session, which, as we've seen before, often provides interesting insight, yet does not seem to get much attention from the mainstream financial media.

Early on in the Q&A session, it is revealed that the yield curve is no longer a useful indicator of the future health of the economy. More specifically, if the short-term interest rates controlled by the Fed (currently at 4 percent) are pushed upwards past the long-term interest rates controlled by the bond market (currently near 4.5 percent), this should not be interpreted as an indication that a recession will follow.

So, despite having been the most reliable indicator of upcoming economic weakness in recent decades, it should no longer be viewed that way.

This has been mentioned on several occasions in recent months as long-term rates have failed to move upwards after repeated hikes to the short-term rates - part of the "conundrum".

Hmmm...

A short time later came this exchange with committee chairman Jim Saxton:

Saxton: Given the need for the Fed to preempt inflation, to what extent is the Fed now addressing inflationary expectations or fears that may not be fully evident in the current available data.

Greenspan: Inflationary expectations are reasonably well measured, concurrently, and in real time. In a sense, we pick it up from a variety of different sources but mostly from the structure of interest rates, very specifically, the differences between interest rates that are defined in real terms such as the TIPS (Treasury Inflation Protected Securities) and what we call additional compensation required for inflation.

So, long-term interest rates (relative to inflation protected Treasuries) are still useful for setting "inflation expectations", but long term interest rates (relative to short-term rates) are no longer useful for setting "economic weakness expectations".

Seems kind of arbitrary doesn't it? It's as if once the data starts yielding a result that you don't like you discredit it.

So why not discredit long bond yields in their role as an indicator for "inflation expectations"?

Just wondering.

Mrs. Maloney then asks an interesting question, one which many of us have been asking:

Mrs. Maloney: The question that my constituents ask me, I'm going to ask you, "If the economy is so good and inflation is so well behaved, and there's price stability, then why does everything cost so much more when you go to buy something?" They're feeling pressures in their lives and the question I hear from my neighbors and friends and constituents is, "When we have so many economic indicators that are unhealthy, how are we having a healthy economy?" ...

Greenspan: ... The reason people are seeing, think they're seeing, prices rising is that they are. They're seeing them, however, for a lot of petroleum related products. The one statistic that everyone is able to audit is the price of gasoline. It's a homogeneous product and it's listed up there on the signs at service stations all the time, and that needless to say has been fluctuating all over the place. But, the Bureau of Labor Statistics does an excellent job in trying to truly get what is the structure of price change in this country, and those data from the BLS, are as best as we can do.

So I think that it's mainly a selective view ... is what people often see in a period like this. But when you look at all of the data, it doesn't show the concern of acceleration, that I often hear as you do.

Well there you have it - do not be concerned about rising prices because when looking at all the inflation data, these rising prices are just not showing up. When the rising prices show up in the inflation data, then that will likely be cause for concern, but until then, everyone just relax.

When asked by Ron Paul why a 1987 dollar is now worth only 55 cents, and if we are cheating people who save money:

Greenspan: Well Congressman, I think the first thing that we have to recognize is that the inflation rate, properly measured, at this particular stage, has been very close to zero for a very long period of time. In other words, as I said earlier, those numbers (the Consumer Price Index) are biased upwards; because of the way we calculate it.

So, while it is true that a number of statistics you quote go back well before the inflation rate stabilized and are reflecting very substantial inflation pressures that existed, especially in the 1970s when the inflation rate was double digit, but the level of nominal GDP has gone up roughly the same, after certain kinds of adjustments, with what the real underlying GDP, properly measured, would have done, and that tells me that we are not unduly inflating the system.

Paul: Well, I don't think that reconciles with the facts that I can get from the Federal Reserve that shows that our dollar is worth 55 cents compared to 1987. If that's not the reverse of what you see in rising prices and inflation, my dollar just doesn't buy as much anymore and the trend is continuous since 1914, so I don't see how you can say there is no inflation.

Greenspan: You and I have discussed this issue at length many times over the years, and I agree with you in part, but I disagree with you in the other part.

Paul: Can you say anything favorable about gold?

Greenspan: I'm sorry?

Paul: Can you say anything favorable about gold today?

Saxton: The gentleman's time has expired, and we're going to go now to Mr. Hinchey.

Hinchey: Mr. Greenspan, I just want to say that we are going to miss you - really miss you. I think that you've probably been one of the most effective chairman in the history of the Federal Reserve ...

In the long history of Alan Greenspan vs. Ron Paul, it appears that it's going to end up as a draw. As seen here, here, and here, it seems there is so much more for these two to talk about. Will they ever get togethor over drinks and settle their differences?

Read more...

Hummer Overfloweth

The word around town was that the Hummers weren't moving. It looked like high gas prices and a White House reversal on fuel conservation meant that fewer "W" bumper stickers would find their exposed sticky sides mating gloriously with the smooth rear bumper of an H2, somewhere between the tow loop and the access hole for a Class 3 hitch.

We were skeptical at first. Sources can be unreliable, but the scuttlebutt was that inventory had been building for months now and the local Hummer dealer had panicked. He had begun storing his Hummer inventory at an undisclosed location, far from the dealer showroom so as not to spook jittery, prospective buyers with the mounting number of unsold H2s and H3s.

When an anonymous caller phoned in with the location, we were off. "The rear parking lot of the Hyatt Westlake Plaza Hotel", he said, just before the line went dead.

TMTGM investigative sleuths Erik Ustin and Ray Pizzuti grabbed your still somewhat skeptical editor, and after stopping at Human Resources to pick up a few "half-off at Togo's" coupons we scurried past security, through the main entrance, and out to the parking lot.

A security guard spotted us and yelled, "Hey you three, stop right there!"

We froze in place, eyeing our surroundings, thinking quickly, instantly evaluating possible courses of action.

"One of you didn't scan out! Get back here and run your badge past the scanner again and make sure it beeps this time!"

ooo

OK, we're not sure where this was headed or how long and how silly it would be enroute, so we'll just get to it. The Hummer dealer in this part of Southern California is apparently having trouble moving his merchandise. After a row of Hummers was spotted behind the Hyatt Hotel, three of us went on a reconnaissance mission to find out more. Here's the first picture we snapped:


Click to enlarge

Doesn't look like much - about 25 H3s in the far corner of the parking lot, and the next aisle over was pretty much the same. But then when we came around the corner we saw this:


Click to enlarge ... really, click it

That's a lot of Hummers, all H3s, lined up neatly waiting for someone to take them home and love them. Looking to the right there were more, so we walked all the way down to the end of the row and snapped this picture:


Click to enlarge ... now here, we will insist - click it and make it bigger

That's the same view as the previous picture, just taken from about 30 Hummers further down to the right. Behind this hotel were about 150 Hummers - about 80 in this row alone - almost all H3s, along with eight or ten original H1s.

A police car drove by slowly - surely he wondered why we were taking pictures and laughing, but then he looked closer, recognized the unthreatening physiques of three software engineers, spotted our badges, and quickly lost interest.

Someone from the dealership pulled in with another H3, so we wandered over and asked how business was these days. He said something about hurricanes and gas prices, then we asked where the H2s were. He said, "They're at the other lot".

Hmmm...

Thrilled and amused as we were, we'd only learned part of the story. After getting directions we proceeded to lot #2, while placing a few quick bets with an over/under quickly set at 60. The thinking here was that the despite looking like a Jeep Cherokee on steroids, the H3s were about $20K less expensive than the H2s and had respectable fuel economy (16 city / 19 highway is what the sticker said) - maybe the dealer had just placed a very large, poorly timed order, a few months back.

Surely the H2 inventory was under control.

Pulling into lot #2, the "under" looked liked it would be the clear winner - forty, fifty tops, from the first looks of it:


Click to enlarge ... this one's up to you

Then we walked down to the end of the aisle to see this:


Click to enlarge ... go for it

That's about fifty H2s on the left, and a bit of congestion in the middle as the Hummers appear to be entering the lot at a rate far exceeding the rate at which they leave. After walking down to the end of this aisle we spied another aisle of about the same length stretching around the corner:


Click to enlarge ... again, we will insist, make it bigger

When the counting was done, there were about 150 H2s in lot #2, for a grand total of around three hundred Hummers, just looking for someone to love them. In the above picture notice the attendant and the red 5-gallon gas cans - based on a brief conversation with this young man, we didn't sense any love from him.

Apparently the thrill of driving Hummers back and forth between the remote storage lot and the dealer showroom wears off quickly, as each round trip requires that another five gallons of fuel be dispensed in order to ensure a complete round trip.

We've talked about SUVs in these pages before, having developed a California SUV Fill Up Index which we then updated as gas prices in this area hit $2.80 and then $2.90 per gallon. What a person drives or how much fuel they consume matters little to us, so long as they leave some gas at the pumps for others and don't run us over on the freeway.

The reason that the story of rapidly rising Hummer inventory is so interesting and so amusing, is that America's most ostentatious Sport Utility Vehicle, the Hummer SUV, is a metaphor for America in the world today - overweight, overpriced, inefficient, and unloved.

-------------

UPDATE (11/5/2005 - 7:35 AM PST):

As discussed in the comments section, the following statement is incorrect:

"Apparently the thrill of driving Hummers back and forth between the remote storage lot and the dealer showroom wears off quickly, as each round trip requires that another five gallons of fuel be dispensed in order to ensure a complete round trip."

The remote lots are between one and two miles from the showroom, so five gallons of gas would provide many round trips for both an H2 and H3. It's not clear why the thrill had worn off - it had something to do with the gas cans.

An update to this story will be posted later today and a link will be provided here.

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UPDATE (11/5/2005 - 11:35 AM PST):

The follow-on to the Hummer post is now available here - enjoy.

------------

UPDATE(11/7/2005 - 6:32 AM PST):

The trilogy is now complete - the final installment is here.

------------

UPDATE(12/13/2005 - 6:32 AM PST):

We've checked back in on the inventory - some interesting results here.

Read more...

Fun With the Public Debt

Having developed a sense for which statistical data represented in tables would make interesting charts, when happening across this particular table, it was immediately clear that attention was needed. This data has surely appeared elsewhere in a chart such as this, but it was deemed worth the small effort to present it in a familiar format.

With short term interest rates rising another quarter point yesterday, and recently announced plans to borrow hundreds of billions more in the coming months, let's take a look at U.S. debt and to whom the money is owed, from a historical perspective.


Click to enlarge

It's a good thing no one overseas seems to be bothered with the major trend here - it might be difficult paying the bills next year if our generous overseas trading partners and offshore hedge funds were to dial back a little and force us to make ends meet on our own. That would result in either a lot of pain in the form of tax hikes and spending cuts, or more likely, just a huge expansion of the violet area of the chart. That would be the U.S. Monetary Authority as Treasury purchaser, as in, "Fire up the printing press Ben, and make some coffee - we're going to be here a while."

[Monetary Authority is described in Federal Reserve documentation as "Assets and liabilities of Federal Reserve Banks and Treasury monetary accounts that supply or absorb bank reserves." It is presumed that this is where monetizing the debt would appear on this chart.]

Debt Data

Now, keep in mind that U.S. Treasuries account for only about half the national debt, which is currently in the $8 trillion dollar range. For anyone who is interested, you can get the exact amount, The Debt to the Penny, compliments of some idle hands at the Treasury Department website support staff. As of yesterday it was:

$8,027,123,404,214.36

When you think about it, with all the government accounting deficiencies in the Defense Department and elsewhere, it's probably misleading to report the debt to the penny every day - increasing, on average, at over $2 billion daily, getting it to the closest billion once a week would probably suffice. Although, surprisingly, the submitter of this question to the Public Debt Online FAQ seems to feel differently:

Why does the debt only change once a day? Why doesn't Treasury keep a rolling tab?

Our current accounting system produces the Total Public Debt Outstanding amount each morning around 11:30 A.M. EST. Our system relies on approximately 50 different reporting entities (e.g. Federal Reserve Banks) to report a variety of Treasury security information to us. Furthermore, the bulk of information that these reporting entities report to us is sent all at once at the end of the day. On the following business day, our accounting system processes this information and generates the Total Public Debt Outstanding for the previous day. Although we continually look for methods to improve our process, daily accounting is still the most effective, efficient, and accurate manner to account for the debt.

Oh.

So, the other half of the national debt is referred to as Intragovernmental Holdings, and consists primarily of the Social Security Trust Fund, although again, just like debt monetization, it would be nice if they would mark these things clearly - money created out of thin air & social security trust fund - simple, why make people guess?

Here's the trust fund - Intragovernmental Holdings - the money's right there next to the debt held by the public, seemingly equal.

You can get all kinds of information about the public debt on government websites - The Public Debt Online has a vibrant color scheme, cartoonish fonts, and plentiful, well-organized data to make the experience an enjoyable one. Of course they do have a perpetual need to borrow money, so that may factor into making the website experience as pleasant as possible - just click on "Treasury Direct" on the left side-bar to start investing in U.S. Treasuries.

It really is quite easy - and fast. One of the relatively few processes that the U.S. government seems to have really perfected - borrowing money.

Debt and Deficits

For even more fun, go to the Office of Management and Budget, where you'll find a link to historical tables (warning - PDF) containing the Federal Budget of the United States. Now, compare the yearly budget deficits against the change in the public debt - that's an interesting exercise.

In the last few years, budget deficits have been in the $300 billion range while total government debt increases by close to $600 billion per year. And that off-budget category - that must be the government's version of "pro-forma" accounting.

Exclude all the bad stuff - if it works for business, why not government?

This data too is crying out for attention - if we had more time we'd whip up a chart or two to illustrate what most people already know about our government's finances, but something which can be brought to life through some colorful chart work and wry commentary.

That will have to wait for another day.

Read more...

Inflation in Indonesia

The Indonesian government and financial media should seriously consider calculating and reporting inflation as it is done in the United States before someone gets hurt. In this report, there is nary a mention of core inflation (which is probably well-contained), and it is likely they include real home costs rather than a benign proxy such as owners-equivalent-rent for shelter.

Indonesia's inflation rate surged to nearly 18 percent in October, the highest rate in four years, largely reflecting the government's move to hike domestic fuel prices...

Fuel price increases are a politically sensitive issue in Indonesia, where a big increase in 1998 triggered rioting that helped topple former dictator Suharto.

President Susilo Bambang Yudhoyono "is very concerned (with the situation) and had ordered the (economics ministers) to ... take necessary steps to ease the inflation," spokesman Andi Mallarangeng said after the inflation figure was released.

But Economy Minister Aburizal Bakrie played down concerns over inflation, describing the surge in October as a "temporary phenomenon."

Riots are temporary phenomenon too, Mr Bakrie - be careful.

Here's a guess at what the economic ministers might do to ease inflation - change the calculation! Come up with a lower number! Quality adjustments, substitution, ex-energy - figure it out before someone gets killed!

Read more...

What a Search Engine!

Microsoft's MSN Search continues to amaze. Many unsuspecting internet users continue to find their way here, to this little corner of the blogosphere, perhaps unprepared for what they find as a result of an innocent and maybe all-too-serious request for information about the soon to be former Chairman of the Federal Reserve.

A simple query for "Greenspan" finds this humble blog at #5 today - behind the the Federal Reserve, Washington Post, Wikipedia, and MSN Money Central, finally overtaking Stanley Greenspan, M.D.


Click to enlarge, then either view full screen or click again to enlarge more - click anywhere the second time when using Firefox, for MS Internet Explorer, wait for the bug-like thingy to show up in the lower right and click on that

A similar Google query yields no links back to this blog within the first 10 pages, but the good news is, as of today, Stanley Greenspan, M.D. is holding steady on the first page at #4.

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Listen to Jim Rogers

It is worth watching Cavuto on Business from time to time, if for no other reason than to listen to Jim Rogers. Sometimes you wonder why he bothers - his wealth and market knowledge are clearly multiples of the combined wealth and knowledge of all the other guests, and there are times when he seems irritated with some of the dumb things they say.

We'll get to Ben Stein in a minute.

Rogers went to Yale and Oxford, then made many millions of dollars with George Soros back in the seventies, then semi-retired in 1980 at age 38 to travel the world and occasionally teach. He has a fascination with bowties, his own wiki page, and has penned three excellent books:

• Investment Biker : On the Road with Jim Rogers (1994)
• Adventure Capitalist: The Ultimate Road Trip (2003)
• Hot Commodities : How Anyone Can Invest Profitably in the World's Best Market (2004)

The world's best known commodity bull, he founded the Rogers Raw Materials Fund in 1998 which has beaten nearly every other market index since its inception. Despite some recent problems with the Refco debacle, it seems destined for continued gains in the years ahead.

In last weekend's program, there were some particularly interesting exchanges between Jim Rogers and both Ben Stein and Gary Kaultbaum - they are related here.

On the potential impact of current White House and Republican party problems on the stock market:

Ben Stein: But it has nothing to do with the stock market. This market is undervalued. As the price of oil subsides, as the price at the pumps subside, this market is ever more of a buy.

Jim Rogers: Quite to the contrary Ben, as much as I love you like a father. The market is going to be down this year for it's own reasons - you say the market depends on earnings and interest rates, and you're exactly right. It's going to be down this year, and it's going to be worse next year, and part of the problems in Washington are going to contribute to the decline next year as well.

While Ben may be good with trivia, he does seem to have selective memory - his book from just a few years ago, Yes, You Can Time The Market, made a rather compelling case that stocks, in general, should be avoided for the foreseeable future. Now he seems to be spouting the supply side mantra at every opportunity, bullish on the market as a whole, with a mild obsession with energy stocks (the part about energy stocks is completely understandable).

On the health of the economy:

Stein: There's a big story out there, which is that the Federal Reserve thinks the economy is too strong. You're asking if it's going to falter and become too weak. The Federal Reserve thinks it's too strong and that aggregate demand is too powerful. They've got a big staff of economists headed by a very smart guy. They're saying White House problems or no White House problems, this economy is very, very strong.

Rogers: Ben, what more do you need to know? You get your advice from the Federal Reserve? Those guys have never gotten it right and they're wrong again. The economy is slowing down and it's going to be slower next year, and we'll probably have a recession next year.

Stein: Well the data is not that it's slowing down, with all due respect, the data was weak the quarter before this, the data this quarter is quite good. And I'm sorry, I know your intuitions are quite good and they've made you a rich man, but if they were perfect, you'd be richer than Warren Buffet.

Neil Cavuto: He is richer than Warren Buffet.

Ben's problem here is the same problem that millions of other Americans have - believing the government's economic statistics and hence mistaking grotesque Frankensteinian economic growth with that of a healthy economy. He believes the preliminary GDP growth of 3.8% reported last Friday is a sign that all is well, that recent employment gains are broad-based, and that inflation is under control.

Jim doesn't believe any of this - he knows better.

While Ben thinks about these last two exchanges, Gary Kaultbaum makes the mistake of recommending banking shares:

Gary Kaultbaum: If there's any one group I like right now it's PNC bank, the financials, PNC bank is breaking out to new highs for whatever reason the group is getting great money flows and I think there's a lot more to go from here.

Rogers: For what it's worth Gary, I'm short money center banks, I'm not short PNC, I have no position at all, but I think you're on the wrong side - finance is not the place to be.

Cavuto: Because interest rates are rising?

Rogers: Interest rates are rising, that's where all the speculation has been, there are gigantic derivative problems in the financial community, all of this is going to fall apart.

Gary might be better to go with some obscure natual resource company next time, so as not to be made such a fool. It should be pointed out however, that Jim's track record with shorting is not very good, once commenting that, "The only thing that goes straight up are my shorts" - maybe PNC is worth a look after all.

On the Bernanke appointment:

Rogers: Well, helicopter Ben Bernanke was appointed head of the Federal Reserve. He is as bad if not worse than Greenspan. Wer'e going to suffer the demise of the Federal Reserve, under this guy. It's really Greenspan's fault, but Bernanke is just as bad, so the two of them have ruined it.

Stein: Well, first of all Alan Greenspan is the best central banker that's ever been in the history of central banking by far, and, second, the inflation jitters are going to come out of the economy very soon as we see the effect of declining oil, natural gas, and gold prices. And, the market will see that and rally strongly.

Rogers: I hate to say it Ben, Greenspan is going to go down as one of the worst central bankers in the history of the country.

Stein: No, he has presided over a long period of financial growth with low price variance and that's very, very rare. OK, who would you say was a better central banker?

Rogers: Volcker was much better; the guy in the sixties was much better.

With near-endless yammering on about the virtues of our current Fed Chairman, Ben Stein reveals himself as another Greenspan sycophant in the mold of George Will and Alan Blinder - somebody, please (start echo chamber sound effect) Take Away Ben Stein's Microphone.

It is clear what makes Jim Rogers so likeable - he is negative about all the things that should be treated with disdain, and he is wildly bullish about things that one should be bullish about - commodities. He has the sensibilities of one who is not easily fooled and does not go with the crowd - he is refreshing to watch from time to time.

Listen to Jim Rogers.

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