"This is horrible, but we're die-hard union, so we have to," Ahrens said. "We got a mortgage, two car payments and tons of freaking bills."
That is the quote that struck me. You have 73,000 people striking because GM cannot afford the health costs for 339,000 retirees. Ouch. 73,000 trying to pay for 400,000. No wonder GM and Ford are losing market share. :(
But look what the stock market did as soon as the strike was announced. The cause or coincident? I don't know.
GM on strike
Its going to be interesting when the house sales and Case-Shiller come out tomorrow for August. Since only two weeks of August were part of the credit-crunch, I'm expecting a 3% to 15% decline in sales over July. August should have stronger sales than July... From what I'm hearing September is down, but not enough to calibrate.
We're in a cycle of moderate price drops. I expect the peak rate of drops to match the peak rate of price increases: 2.5% to 4.0% per month. The question is when do we get to that accelerated rate (we're at 0.5% to 1.5% per month now) and for how long?
Got popcorn?
Neil
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2 comments:
I don't see major price drops until we hit "panic". From your chart, that would mean spring 2008. Sounds about right.
How long will they last? I'll go out on a limb and say longer than the average bear may think. I can see 2.5-4% per month drops for 10+ months (with a few false rebounds sprinkled in - but not counted towards the 10 months). Once people realize that it's "sell now, or be priced in forever", the whole thing will snowball like we've never before seen. There's a LOT of pain ahead, for everybody.
Sandman,
Unfortunately, there will be a lot of pain for everyone. :(
But this is the time of year with normal price drops. So for the same emotional state, one would expect a greater down slope. Just as one expects right after the superbowl a trend toward strengthening (notice I didn't say higher prices).
Late spring is probably when panic will start. If I'm off by a few months... cest la vie.
Got popcorn?
Neil
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