Friday Lite

The Iranian oil bourse gets postponed, the reporting of M3 stops, and Ben Bernanke is about to make it through his seventh full week as Fed chief, presiding over a booming economy and a booming stock market with nary a hint of a problem.

Next week, inverted yield curve stress testing begins in earnest - confidence is high that nothing bad will ever happen again.

M3 R.I.P.

Hoping upon hope that Congress would act, data collectors around the world were disappointed to see that the Federal Reserve H.6 report was absent its M3 statistic yesterday. It's now official - M3, rest in peace.

It appears that Rep. Ron Paul of Texas was unsuccessful in his one-man crusade to convince the world that there was value in continuing to report the most complete measure of the supply of U.S. dollars - you have to wonder why he even bothered.

March 23, 2006
H.6 (508)

Discontinuance of M3

As previously announced on November 10, 2005, the Board of Governors ceased publication of the M3 monetary aggregate with today's release. The Board also ceased publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.

To reflect the discontinuance of M3, two sets of historical money stock tables are being published (www.federalreserve.gov/releases/h6/hist/). One set contains historical data related to M1, M2, and their components; this set will be updated each week. The second set contains historical data on M3 and the components of M3 not contained in M2; this set will not be updated.

Recall that the current totals for the three money supply components are as follows, where the M3-M2 has been the fastest growing category, by far, over the last ten years:

• M1 ---- $1.4 trillion
• M2-M1 - $5.4 trillion
• M3-M2 - $3.6 trillion

The final update of the M3 statistic from last week is shown in the chart below. Although we'll never know what the M3-M2 component looks like in the months and years ahead, compared to the previous 20%+ growth rates there doesn't seem to be much out of the ordinary going on here lately - if you consider 15%+ growth rates ordinary, that is.



It's a pretty neat trick when you think about it - how you can have inflation at two, three, or four percent while at the same time having total money supply growing at over eight percent.

Lost in Translation

The China Daily website had a makeover just a few days ago. Now they have a slide show with some pretty cool transitions from one picture to the next in a generally softer looking site.

It's funny when an entire website is changed without notice - you can't remember what the old one looked like, and have to search for an archived article to see what it used to be, since it's way too much work to update all the common html on all the old stuff and it is rarely done, as can be seen from this article from last year.


Not sure if it's me or whether the third headline above slipped through the political correctness filter during the translation. It's probably just me, but it does look, well, funny - not something you'd see in a headline in a western paper.

Maverick Thoughts on CEO and Shareholder Interests

Posted as guest commentary at Prudent Bear, where your humble editor's work occasionally appears, Mark Cuban exposes the big lie about what motivates CEOs to do the things they do.

There are two types of CEOs, those who are the founders or co-founders of their companies, and those who were hired to do the job. The difference is important because those involved with the founding of their companies not only have a different personal connection with the company and its employees, but more importantly, since they founded the company, they most likely already own a lot of stock. The motivation of a founding CEO will be money, but there will be other considerations. Sometimes.

Then there are those hired to be CEOs. What are the goals of hired CEOs? Plain and simple, its to get paid. To make as big a chunk of money as they possibly can in the shortest amount of time. No one in their right mind is going to take on a job with the amount of pressure, stress and away from family time that comes with being the CEO of a public company without getting paid incredible sums of money.

There is an interesting kinship between hired CEOs and professional athletes. Both realize that there are limited opportunities to make the big financial score, and if they dont make it this time through, they may never get the opportunity again.

There isnt a CEO in America with the opportunity to take the helm of a public corporation that didnt run the numbers in their head and play “what if”. What if the stock went to this price ? What if the stock went to that price? Then based on the total number they needed to get to the networth they always dreamed of, and using the CEO pay totals of men or women who had already done the same thing to get their current jobs as comps, they negotiated their deal from there. Any CEO in this position who tells you otherwise is lying.

Which is why the concept of CEO and shareholders interest being in alignment because they both own stock is a big lie. The CEO wants to hit the homerun of their career when they take the job, the shareholder just doesnt want to strike out with their life savings.

Mark may be a bit challenged when it comes to gold and the nature of money, but he does seem to understand one of the many fallacies of our "ownership" society.

Southpaw Snails

Wouldn't it be fun to have a job where you study nearly 2,000 snail fossils and draw a bold conclusion that then makes it onto the front page of Yahoo!, and then you call all your friends and family and say, "Check out the front page of Yahoo! - they're talking about my snail research."

That happened yesterday, well, at least the part about Yahoo! story.

Left-handed snails are better than righties at defending against predators, according to a new study that suggests lefties have the same competitive advantage in nature that they enjoy on the baseball diamond or in the boxing ring.

The study, published in this month's Royal Society Biology Letters, suggests that snails whose shells coil toward the left were more likely to survive crab attacks than those whose shells coil toward the right.

"It's just a frequency issue," said Yale geologist Gregory P. Dietl, one of the study's authors. "As long as you're rare, you're going to have an advantage."

The researchers studied about 1,800 snail fossils, looking for scarring evidence of a predator attack. Scarring was found more frequently on right-handed snails, the study said.

Researchers offered two explanations for the advantage. Because most crabs are right-handed, they said, cracking into a shell that opens on the opposite side might be more difficult.

Alternatively, researchers said crabs might simply not be used to attacking lefties, just as baseball pitchers face fewer left-handed batters.

"It's the same thing here in nature," Dietl said. "These snails that are left-handed, they have an advantage. It doesn't become an advantage if lefties are just as common as righties."

The researchers probably didn't look up any statistics before citing the baseball analogy (nor did we here, for that matter), but it seems that the further up you go in baseball ranks, the more lefties there are. There seem to be an unusually large number of left handed baseball players in professional baseball, something fairly unique to the sport, and this is likely a result of factors cited in the snail report above.

All through little league, it would appear that left-handers have an inherent advantage, where, at a young age everyone is playing the sport, and the normal 10 percent rule applies. All else being equal, lefties have this unfamiliarity advantage.

When you continue your baseball playing career, you meet up with all the other lefties who have had this advantage in their formative years, and voila!, you have an unusually high percentage of left-handers in professional baseball relative to the population as a whole.

Thus concludes our amateur geology/sports/biology lesson for the week.

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Rich Dad, Gold Bug

Donald Trump and Robeet Kiyosaki might want to compare notes if they plan to appear together during the Los Angeles Real Estate Wealth Expo next month - what The Donald has been saying in TV commercials doesn't seem to match up very well with what The Son has been writing lately.


Spared from having to view roughly 98 percent of the commercials airing during programs that are replayed on a faithful Tivo, now well into it's fourth year of service, to have seen this spot at least three times now is a sure indication that it is in a very heavy rotation leading up to the event in a few weeks at the L.A. Convention Center.

Donald Trump: Come see me at the Learning Annex Real Estate Wealth Expo and learn the secrets to making millions, even billions. I've done it, so can you. I'll be teaching you how to make serious money in real estate. If you're a first time buyer, or an experienced investor, this event will change your life.

Asian Woman: Great information. Very motivational. A hundred percent recommended.

Trump: Join me and Rich Dad, Robert Kiyosaki. We'll tell you the secrets to success. Stop dreaming and start doing. Register now!

Did you just read that in your best The Apprentice Donald Trump forceful monotone? Yes, it's hard not to do, but what about the content?

First time buyer? Change your life? That's entirely possible.

Planning for this event must have been done well in advance, so it's reasonable to think that when the deposit checks were being made out sometime last year, Southern California real estate had a completely different feel to it than it does now. That is, wildly bullish optimism where everyone grows fabulously wealthy by mailing in their monthly mortgage payment vs. the trepidation that is associated with For Sale signs that now sprout like weeds.

Oh well, the show must go on.

Although it's natural to wonder what The Donald will be teaching aspiring real estate millionaires (and don't forget the aspiring billionaires), you don't have to wonder what Robert Kiyosaki thinks about real estate these days - he's been writing about it lately.

We all know a real estate crash is coming. The problem is we don't know when.
...
I love [market crashes] because that's the best time to buy -- finding true value is a lot easier during such periods. And since so many people are selling, they're more willing to negotiate and make you a better deal.

Although a crash is the best time to buy, the market's high pessimism also makes it a tough time to do so. I remember buying gold at $275 an ounce in the late 1990s. Although I knew it was a great value at that price, the so-called experts were calling gold a "dog" and advised that everyone should be in high-tech and dot-com stocks. Today, with gold above $500 an ounce, those same experts are now recommending gold as a percentage of a well-diversified portfolio. Talk about expensive advice.
...
So the lesson is: Now, more than ever, it's important to focus on value, not price. When prices are low, finding value is easy. When prices are high, value is a lot harder to find -- which means you need to be smarter, more cautious, and resist your knee-jerk reactions.

Now, value is relative and it changes with time. To some people, getting 10 percent off the asking price for a San Diego condo that had doubled in price in recent years may seem to be a good value today. To others it may not.

The real problem with value is that you only know good value in retrospect. For example, to most people living in California in 2004, real estate appeared to be a good value, to others it was overpriced. Today it is clear that it was indeed a good value, but will that still be true in 2008 or 2010?

Whatever the discount from today's lofty prices, it's hard to imagine that any kind of real estate around here is the sort of value that Robert is referring to, however, you can't be a wet blanket all the time. It's way too early to start talking about making your millions in real estate foreclosures, which are rising briskly, but which are still near historic lows.

You have to wonder what Robert is going to talk about - gold?

A couple weeks after the above article, these views on real estate were offered:

Although I love real estate, I'm suspicious of any piece of property that doesn't generate cash flow today. I don't invest in future appreciation of real estate -- not today, at least.

Oh, now it's clear - Robert's got that weird, old cash flow valuation thinking in his head. Like where you buy a house, rent it out and hope for a black number at the end of the month. That's so last century Bobby!

Well, good luck finding something that can generate cash flow in Southern California. Rents are still very, very low relative to house values - it doesn't cost much over $2000 a month to rent a million dollar home. Do the math on that one, but don't factor in a negative amortization loan with a half million dollar down payment - that would be cheating.

You have to wonder just what it is that Robert is going to be saying at this event. Maybe his advice at the Real Estate Wealth Expo will be as simple as a single word - SELL!

A few weeks later, the inner Kiyosaki gold bug emerges.

The secret to surviving the next few years is keeping your wealth in real money, not in the U.S. dollar. Buy things that hold their value and are exchangeable all over the world. Commodities such as gold and silver have a world market that transcends national borders, politics, religions, and race. A person may not like someone else's religion, but he'll accept his gold.

One of the reasons why I'm bullish on gold and silver is because the American public is still sound asleep to this asset class. Most Americans have no idea how or where to buy physical gold and silver. The outlets that sell gold and silver I have visited are already low on inventory.

If and when the American public wakes up to the reality that their dollars are not money, but a currency, the panic and stampede will begin. Should that happen, today's prices for gold and silver will look like bargains.

Robert really does make a lot of sense. His book has done very well over the years, and maybe he'll enlighten some people at this gathering of real estate enthusiasts - it almost seems like it would be worth the $99 (using the special promo code "DONALD") to stop by just to try to assess the mood.

And maybe to hear a few more of his thought on real estate and gold.

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U.S. Central Bank Gold Sales

Why is it that you never hear the phrase U.S. Central Bank Gold Sales? In the news yesterday were two stories of European central banks and their gold - it seems the German Bundesbank now refuses to part with 600 tons (about $10 billion) of atomic element number 79 under the terms of the Washington Agreement, while future prime minister Gordon Brown is being roundly criticized for selling much of the U.K. stash at far too low a price a few years back.

But the U.S. central bank and their gold?

Why is that you never hear anything about the gold at Fort Knox being put to some good use, like maybe helping to balance the budget or paying for a new spy plane or something?

We'll get to that in a minute.

According to this report, the German central bank is causing problems for the politicos in Berlin by hoarding useless gold bars in a vault somewhere when they could instead be sold at today's lofty prices and the proceeds invested somewhere to earn four or five percent per annum.

“Gold is an essential part of the currency reserves of the Bundesbank,” said Axel Weber, Bundesbank president. “Decisions on the manner and size of reserves are taken autonomously.”
...
Mr Weber said no decisions had been taken about possible gold sales in future years. According to the Bundesbank’s annual report, it held 3,427.8 tonnes of gold at the end of 2005 – with just five tonnes sold for minting coins.

The bank is the largest holder of gold among the 15 signatories to the gold agreement. The cash-strapped Berlin government has stepped up pressure on the Bundesbank to sell gold, and for the interest on the proceeds to be used to fund research and education projects.

Based on Axel's comment, there doesn't seem to be much room for Ms. Merkel to negotiate, however, maybe a German named Axel just feels compelled to sound gruff when interviewed by the financial press about the new lady boss in Berlin.

This response is in striking contrast to what one might expect of the equivalent relationship here in the States. It is doubtful that Ben Bernanke will ever utter any form of the word autonomous in regard to a Bush Administration request, having toiled at the White House for more than six months last year prior to securing his appointment to the top spot at the Fed.

Across the English Channel, the Times reports that the Chancellor of the Exchequer is taking some heat for selling most of their useless gold bars five years ago at the market bottom - timing is everything they say.

The Chancellor sold 395 tonnes of Britain’s gold reserves between 1999 and 2002, generating $3.5 billion. At yesterday’s London closing price of $554.10 he would have generated more than $7 billion (£4 billion).

Vincent Cable, the Liberal Democrat treasury spokesman, said: “The decision to diversify Britain’s foreign reserves away from gold is a sensible one and one I have supported but the Treasury’s impatience over timing has obviously been very costly.”

Based on information from the World Gold Council via the always helpful Wikipedia, it appears that the Brits knocked themselves out of the top ten in gold reserves in addition to losing out on an extra few billion in paper money.


Note that resource rich and mining crazy Canada appears nowhere in the top twenty, or in the entire list of forty for that matter - here's one explanation for how the useless gold bars fled their vaults.

Which brings us back to the original question of the day - why don't you ever hear about the U.S. selling its gold? Over 8,000 tons! Just sitting there! If the proceeds could be used to help out with squaring the books on Capitol Hill, and they do seem to need some help, then shouldn't our elected officials start clamoring for the U.S. central bank to start emptying the vaults?

Mark Cuban of Broadcast.com and Dallas Mavericks fame wondered the same thing last year and, while not too handy with a calculator and maintaining a less than optimal knowledge of money, he does ask the obvious questions.

Where gold acted as the ultimate hedge against the devaluation of currency in the past, that is no longer the case. Gold is priced in dollars. Not services or other commodities. If the markets and economies were to crash, a basement full of gold bullion would just take space. I couldn’t imagine farmers trading chickens and milk cows or fresh vegetables for gold bullion. For guns, ammunition, gas and oil, yes. For gold no.

Nor could I imagine a scenario where our currency was completely devalued and a gold standard was reinstituted. The reality is that our population , and the world population has gotten too big. There isnt enough gold in the world, let alone in the US to reconstitute a new currency based on gold.

So to get to the point. Its easy to understand why the US needs to maintain oil reserves. Without, the country could grind to a halt. Government oil reserves would at least allow us to fight over who got to keep their lights on and their cars running.

What I don’t understand is why we still keep $10 billion dollars worth of gold stashed in depositories around the country.

My suggestion, let’s sell it.

Mark is right. Useless gold bars collecting dust in vaults in Kentucky and New York - taking up space, requiring guards, barbed wire fences, and security cameras seems to make no sense at all today. Selling 8,000 tons at $550 an ounce would net over $140 billion dollars - that's almost half the current budget deficit and then there would be a stream of income on the invested proceeds of $6-7 billion a year which would help make ends meet in the years ahead.

Of course, the way things are looking right now, maybe the better plan would be to hang on to the entire pile for at least a few more years - that 8,000 tons of gold could be worth near $300 billion if gold prices continue rising at their current pace. That would close the gap for an entire year of deficit spending.

Maybe it is best not to repeat the mistake of Gordon Brown by selling too early - perhaps the Bundesbank has this in mind as well. Maybe that explains why you never hear the phrase U.S. Central Bank Gold Sales.

Or, maybe there is some other reason...

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A Real Snoozer

Boy, that sure was a dull speech. It's hard to imagine what it would have been like sitting there last night actually listening to Ben Bernanke speak before the Economic Club of New York. As you read the prepared remarks, you kind of feel yourself sinking, unable to get traction and afraid to move too quickly for fear that it will swallow you in one big gulp.

A few in the mainstream financial media thought there was something newsworthy contained in there - see here, here, and here if you are so inclined. It seems all the words are best summarized as follows:

• We don't know why long-term bond yields are low
• An inverted yield curve does not predict economic weakness

Fortunately, the speech was followed by a Q&A session which was covered in this Reuters story. There are a couple of interesting comments to be found there, first on housing prices and net worth:

A slowdown in the U.S. housing market would still be entirely consistent with economic growth at or near potential, Federal Reserve Chairman Ben Bernanke said on Monday.

"There has not been but there may be in the future some stress in some areas, but broadly speaking I think that consumer finances are consistent with continued reasonable growth in consumption and enough to keep the economy at or close to its potential output growth rates," Bernanke said in answer to a question following a speech in New York.

"This increase in mortgage debt may not be a particularly serious problem. First, there has been on the other side of the balance sheet, significant increases in assets, so that balance sheets in general are looking stronger," he said.

Yes, a significant increase on the other side of the balance sheet - a few charts from a while back will help to put some meat on that bone. First the chart of household debt which rises even more rapidly than before when the housing ATM shifted into high gear in 2003.



But, as the supply-siders like to point out, this puny debt of $11 trillion pales in comparison with the assets on the other side of the ledger. At last count, the total was over $60 trillion which is very impressive indeed, but as evidenced in the chart below, asset values don't always go up.

Also note that real estate, stocks, and bonds now account for 66 percent of total assets vs. 54 percent in 1987. The other asset classes, such as durable goods and bank deposits are, of course, not inflatable.



The bottom line is clear - after a brief slowdown associated with the stock market bubble meeting its pin, household net worth is again rising. A synchronized real estate, equity, and bond market decline could radically change this picture - that's probably what the Federal Reserve is trying to avoid.

All the inflatable asset classes must be kept inflated ... indefinitely.



On the subject of the current account Mr. Bernanke expressed hope that, over time, the trade deficit could be reduced to more manageable levels. He didn't mention anything about having to dramatically increase our exports while holding imports steady just to keep the trade deficit at current levels.

"I have expressed concern about that because while I think it is possible over a number of years to bring the current account down, it does pose certain financial risks, particularly risks in changes in interest rates and the dollar," he said.
...
"I would add that it's also particularly important for there to be greater domestic demand absorption, in the economic lingo, in the economies of east Asia. We have a lot of economies that are essentially running an export-led development strategy -- which I guess is fine except that everyone can't run an export-led development strategy," he said.

"It is necessary over time for there to be an increased reliance on domestic demand in Asia to help move toward this balance," Bernanke said.

He said while there has not yet been a great deal of progress on this front, he was moderately encouraged that there was beginning to be a cyclical recovery in Europe and Asia, which would provide more strength to the global economy.

"Another slightly positive direction I think is that China and perhaps to some extent other Asian countries, have begun to speak about increasing their own domestic demand as part of their own development process and implicitly as part of the global rebalancing process," he said.

The only problem here is that once Asia develops a robust consumer class, and they discover the wondrous effects that a little (well, actually a lot) of debt can have on assets and hence the bottom line ... they might not need us anymore.

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Creative Refinancing in the OC

As each month passes, the mortgage finance business in the middle of this decade sounds more and more like the business of investment banking at the end of the last. What is legal and profitable today will one day be looked back upon as yet another symptom of a once great, free market economy run amok.

More and more, Yankee ingenuity is applied to financial processes and products that remain many steps ahead of regulators who seem either uninterested or uncaring.

In a bubble economy, the great American creative spirit is channeled to where the monetary rewards are greatest - what constitutes acceptable behavior is easily adapted to the mood of the populace and the reality on the ground.

It all sounds so familiar - everyone turns a blind eye as long as the bottom line pleases. After a while it all seems normal, routine. Time has a strange way of making things seem ordinary, until one day they don't seem ordinary anymore.

From yesterday's L.A. Times comes this story of creative refinancing in Orange County, California, home base to many large mortgage lenders where a median price hovel now fetches about $620,000.

Real estate has been a swell deal for just about everyone who owned a home in California during the last few years.

For hundreds of Orange County homeowners, it's been even better. Thanks to their mortgage broker, they essentially get paid to borrow money.

Mark Gallagher, the founder and president of Park Place Funding in Laguna Hills, uses a technique that unscrupulous brokers employ to bilk clients.

Gallagher's innovation was to cut his customers in on the action, giving them a share of the premium he earns for placing loans with high interest rates.

American business innovation circa 2006 - homeowners refinance every four months at above the prevailing interest rate resulting in a premium earned by the mortgage broker which is then split with homeowner. Repeat in four months.

"In boom times, all sorts of crazy things happen," said James Croft, executive director of the Mortgage Asset Research Institute near Washington. "New programs are invented that have no history. You say, 'This is going to work,' and then you find out three years later it wasn't such a great idea."

With the housing market cooling off, the evaluation period Croft is talking about seems set to begin. The mortgage industry, and some mortgage holders, may be in for an extensive period of second thoughts.

Ordinary people become swept up in extraordinary circumstances. What five years ago would have seemed outlandish, today seems unexceptional as house prices double in just a few years time, illegal immigrants are courted as an untapped source of a home buying public, and ordinary people collectively recalibrate their ideas of what is normal and what is not.

Broker bounties are standard in the home lending industry. The higher the interest rate is over the prevailing rate, the more valuable the loan and thus the greater the premium. The lender usually pays the broker 1% to 4% of the value of the loan.

In California, the bounties must be noted on the closing papers of the loan. But many brokers don't talk much about them, consumer advocates say, and therefore few home buyers are fully informed. In the worst cases, a high premium can tempt a broker to put unwitting clients into expensive loans. Such fraud occurs regularly, according to authorities.

But Park Place, a relatively new brokerage that Gallagher started in his home in the late 1990s, saw opportunity in this type of arrangement. In radio ads, Park Place touted the way the loans could make a house help pay for itself, a sort of perpetual-motion real estate machine.

Some refinancing customers came in, were told the risks — if rates rose before their next refinancing, for instance, they could be stuck paying more than they wanted — and decided to pass on the idea. But most, Gallagher said, responded, "This sounds awesome. Where do I sign?"

Bill Cusato, who lives in Long Beach, refinanced with Park Place in September and was recently in the midst of doing it again. "It's a very easy transaction, minimal fuss and muss," he said. The Park Place agent was out of his kitchen in half an hour.

These loans then become part of the single greatest mortgage innovation in the last half-century - mortgage backed securities, popularized by the accounting-challenged GSEs Fannie Mae and Freddie Mac. The loans originated by Park Place Funding wound up in the hands of unwitting investors seeking a little higher return for a little higher risk.

And here is where it all fell apart. One investor, Gallagher said he was told, bought an investment pool with an unusually large number of Park Place loans in it.

This investor apparently thought he was going to get nice, fat interest payments for at least a couple of years, courtesy of a bunch of foolish Southern California homeowners who were inexplicably paying more than they should have.

Instead, the investor got a surprise. The homeowners refinanced, and the investor's rich yield disappeared almost instantly. He complained, which started a chain of accusations and recriminations.

Everyone involved with the loans promptly identified who was at fault, and it wasn't them.

Sounds more and more like the late 1990s and what is currently known about real estate and lending practices is likely just the tip of the iceberg. There will be much hand-wringing and many a congressional inquiry to be sure - mortgage lenders, mortgage brokers, realtors, appraisers, buyers, and sellers, all seduced by easy money.

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CNN Presents

CNN Presents has been airing a great documentary this weekend - We Were Warned: Tomorrow's Oil Crisis. It covers the whole range of topics on global energy consumption and alternative energy, while including a 2009 energy crisis scenario which does not sound far-fetched at all.

The final airing this weekend is tonight at 8 PM PST and it is available for viewing online at the link provided above - it is well worth watching.

James Woolsey and Matt Simmons are among the people interviewed by correspondent Frank Sesno. While James Woolsey in his Prius doesn't seem to be a terribly compelling image, Matt Simmons' claim about Saudi oil reserves immediately preceding assurances from the head of Saudi Aramco does make you think (there has been no independent audit of Saudi oil reserves for many, many years).

The story of the Canadian tar sands and Brazilian sugar ethanol are informative and well done, as is the segment where a GM executive is questioned about the vehicles they build - why they build them and what drives them to change their product line mix.

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