Why Chevrolet Spin Phase Out

Why the C8 Corvette Is About To FLATLINE The Sports Car Market. Favorite Cars About To Be Hit!

chillznax:

The C8 Corvette's is going to kill everything
on the market. Anything from $55,000
to $150,000
is dead, it's dead!
The reason I think the C8 Corvette is
going to destroy everything in the mark
is because it just offers way too much
value for the money. I mean the Corvette
has always offered a lot of value but we
are at a place in time where you can
manufacture an exotic platform for an
affordable price. I mean the Corvette was
always a pretty fast car but there
wasn't anything super special about it.
Now you're approaching supercar
territory. I mean the Z06 was always kind
of supercar territory but it didn't have
that exotic platform and now it does.
Cars I think that will be safe. High
school cars, college cars. The Subaru BRZ
at $25,000 I think it'll probably be
fine. The Toyota 86 at $26,000 I think
it'll be fine. Miata you can get those
trims for up to $35,000 and have a spect
out car. Pretty decent lower level trim
Mustang GT's I think they'll probably be
fine. You can get one for $35,000. It's a
lot of performance for the money. They're
great cars. This is my safe/kind of
dead list. Camaro, I think GM kind of
knows that the Camaro at least in its
current state is somewhat dead which is
kind of sad because the Alpha platform
is an amazing platform and I think maybe
the engineering that went into the Alpha
platform is why we have the C8. I think
people don't realize just how
spectacular that platform is but it
really doesn't matter does it because
it's just not a sexy car. You can't see
out of it and it drives people nuts!
Another safe maybe dead I think is the
Supra. They start at $49,000.
I think those upper level trims that
approach $55,000 they're just not
going to sell. I think they'll have a
hard time moving off the lots.
Maybe us enthusiasts are kind of
overreacting. I think it just kind of
pisses us enthusiasts off they made a
BMW, slapped a Supra on it and
thought that we would just think that
that's totally fine when for us the Supra
is amazing because of the 2JZ engine and
the packaging. The fact that that engine
is just fully forged and you can throw a
massive turbo at it and that thing will
just scream. It's a lot of value for the
money, over engineering. I think we might
be overreacting a little bit.
It sounds like Toyota put a lot of
effort into stringent testing of
reliability. I mean they're Toyota right?
But
they stress tested bolts, they stress
tested the engine, and I think if tuners
come out and they can show that this
engine will produce 800 to 900 horsepower
without blowing up, maybe the super has a
chance. But $55,000 and up I don't know I
think it's probably dead. Ok
so let's talk about the dead cars. The
BMW Z4. Why would you get it when you can
get a BMW Z4 in a Supra. Upper level trim
Camaros and Mustangs. The GT350 cost
$60,000 who's going to
spend sixty thousand dollars on the GT350. That flat plane crank is just not
special enough to justify $60,000. I think the GT500 will sell.
They're producing five thousand units.
I think shortly after they'll
depreciate like mad because of the C8
Corvette. Alfa Romeo 4C at $68,000
I think it is dead. Audi TT, it's a hairdresser car. That car
sells because of that, they just don't
have to have horsepower. It's almost like
the Cayman though that's an enthusiast
car. But the Audi TT RS
I think it's dead. BMW M4 $70,000 forget
about it. F-Type unfortunately I think
it's kind of dead. For $62,000 to get a four-banger, who thought
that up? To get 550 horsepower you have
to spend over $150,000
I think that that is absolute madness!
The Mercedes AMG SLC at $63,000
yeah I don't think so!
Now the 718 Cayman in at $56,000
for 300 HP, those lower level trims
I don't know I think that's a tough
sell. The Mercedes AMG GT. Now that's an
absolutely sexy and spectacular car but
for $115,000 you get 469 HP
That's kind of
ridiculous. If you spend $150,000
you can get an
AMG GT that'll go 0 - 60 in 3.6 seconds
and have 550
horsepower but 3.6 seconds! Hellcat,
there's just way too many of them.
There's an extensive used market of
Hellcats that you can get. I think that
car is maybe approaching end of life.
Dodge keeps whippin out new ones though
so you never know. Cars that are in the
homestretch. So quite possibly the
wide-body Hellcat and the Redeye. I think
that
you know if the price of the wide-body
comes down to the price of the Hellcat
then I think it'll sell. The Redeye
offers insane horsepower. It's just
special enough that I think it'll sell.
Godzilla the GTR. Car and Driver tested
that car at 0 - 60 in 2.9 seconds.
That is insanely fast! You can buy one
for $115,000. I think you know that car
is end-of-life it's going out with a
bang. At least I think it's end-of-life.
Watch, we'll still have the GTR in its
current form for another 10 years. The
Audi R8. It's basically a Lamborghini
Huracan and for $169,000 it just creeps
outside of that $150,000 range that I
think the C8 destroys. It's special, it's
super luxurious.
It's an insane car I think it'll be just
fine. Porsche 911 base trims. They're as
fast as a Camaro and Mustang. I don't
know, see a Corvette mid-engine platform,
exotic. Hey look, I know there's gonna be
a lot of them unless it's a Porsche 911
Turbo at $161,000 I don't
think, I think they're gonna be slow
moving. That's not even taking into
account the Carrera T and Targa. Those
are like a half second slower than the
base Porsche 911. I don't know, I think, I
think they're just gonna
struggle. Now if you're not convinced
think about this. It's obvious the C8 is
going to sell like mad. There's gonna be
so many of them out on the road people
are going to want something special but
the problem is enough of them are going
to sell that it's going to hurt the
profits of these companies and it's just
not going to make a lot of sense to have
these cars out there. They're going to have
to, they need more customers than just the few customers that will be left over
after the C8 so I think that these cars
are all going to have to go back to the
drawing board to be something special.
And if you're not convinced just think
about this. The engine it is forged top
to bottom. You have a forged crank, pistons, and
rods. It has a multi-stage dry sump
system. One in the V, 2 and the crank which
is just insane that will sustain 1g of
lubrication. The engine is dropped a full
inch lower than the previous C7 Corvette.
Now imagine the handling of your car
when you drop at an inch. Imagine the
handling of a Corvette when it drops an
inch
and that is basically what this car has
done. Supercharging of this engine.
Because it's forged I think it's going
to be cheap. We're gonna see the
aftermarket just explode with this car.
You're going to be able to build a unique
car with whatever the hell you want on
it. They're gonna look insane and they're
just gonna take over everything. I think
when the C8 Corvette drops on the
market it is going to be a bomb and not
to itself. It's going to destroy the
market. Everything that you see out today
is going to get refreshed, prices dropped
market correction. I think it is going to
have such an impact on the market it is
going to be just absolutely ridiculous. I
can't wait for it to come out. I know I
have an F-Type, I love this car but I
bought this car used and well under
$60,000. So I guess we can look forward
to an awesome used car market when the
C8 comes out because everything is going
to flatline. All right guys thanks for
watching, see you later!

The Coal Town System

AmericanExperiencePBS:

Rosemary Feurer: A coal town really is almost an instruction ground for exploitation.
Mine workers can see it very directly and their families see it very directly.
They take all the risks. They bring out that coal and it's producing wealth for people who don't live there.
Narrator: The coal towns were almost always unincorporated; there were no elected officials,
no independent police forces.
Owners hired private detective agencies to watch over their workforce.
Company towns were also untethered from the free market competition owners usually championed.
Operators often paid workers in company currency, called scrip.
They forced mining families to shop exclusively at the company store,
which they stocked with food, fuel and clothing,
even the tools and blasting powder required on the job.
They set the prices of all those goods to assure a profit,
a hedge against operating losses in the mines themselves.
Carl Starr, Sr.: They paid you with their money.
You bought your food off of 'em unless you wanted to take a dollar scrip and sell it for
75 cents government money and lose a fourth of your wages.
They was oppressed all the time.
Ellis Ray Williams: If they give the miners a raise then they're going to raise the rent
and raise everything, the cost of food in the company store, and raise the clothing
and everything so you actually, you're right back where you started from.
Jean Battlo: When a miner went to pick up his check they had what was called a check-off list.
"Your house belongs to company," we'd check that much off,
"You, you bought your groceries here this month at the company store," we'd check that off.
By the time they finished the check off there was very little, little left.
Chuck Keeney: The only options that you have once you're kind of trapped in that system
is to keep your head down, and do what you're told,
or stand up and fight.

Market to Market (November 29, 2019)

Market to Market:

Coming up on Market to
Market -- Global emissions
and temperatures
climb - again.
Cracking open a wild
North American market.
And commodity market
analysis with Elaine Kub,
next.
♪♪
Pioneer Hi-Bred
International is a proud
sponsor of
Market to Market.
Tomorrow.
For over 100 years we
have worked to help our
customers be ready
for tomorrow.
Trust in tomorrow.
Information is available
from a Grinnell Mutual
agent today.
♪♪
Sukup
Manufacturing Company -
providing equipment and
buildings to store and
condition grain to help
farmers adjust to market
swings.
We build drying, moving
and storage equipment
designed to preserve the
quality of their crops.
Sukup Manufacturing,
store now, profit later.
♪♪
This is the
Friday, November 29
edition of Market to
Market, the Weekly Journal
of Rural America.
♪♪
Hello, I'm
Delaney Howell.
Black Friday originated
as the first day retailers
broke even for the year.
Now this family tradition
helps drive our entire
economy.
Prior to the holiday
shopping sprint to
Christmas, consumers were
already in a festive mood
as spending was up 0.3
percent in October.
U.S.
factories were feeling
the spirit as orders for
big-ticket items increased
on a surge in demand for
military aircraft.
Deere and Company posted
a $3.25 billion net income
for the year, despite a
slower fourth quarter.
The agricultural
manufacturing giant issued
a weak outlook for
2020 based on U.S.
and China trade concerns.
Sales of new homes dipped
slightly last month even
with lower mortgage rates.
Getting to that new
house was a challenge this
Thanksgiving week
because of the weather.
Several systems altered
travel plans, even cutting
power to more than 100,000
people across the country.
The weather is usually
a benign conversation
starter, but mentioning
climate change will likely
disrupt the pleasantries.
This week the United
Nations released a report
citing emissions numbers
are rising and so too, is
the temperature
around the world.
Peter Tubbs has more
on the latest findings.
Three of the main
heat-trapping gasses
emitted into the
atmosphere again hit a
high according to the
World Meteorological
Organization's
latest report.
The WMO Gas Bulletin said
levels of carbon dioxide,
methane and nitrous oxide
again rose 43 percent
since 1990.
The group said the world's
work on reducing carbon
emissions are proceeding
too slowly to prevent
large shifts in the
world's climate.
The report detailed global
greenhouse gas emissions
have increased 1.5 percent
in each of the last 10
years, with little sign of
abatement on the horizon.
Each year of increases
means steeper cuts will be
needed in the future
to reduce the amount of
greenhouse gasses in the
atmosphere later in the
century.
Petteri Taalas,
Secretary-General of the
World Meteorological
Organization (WMO): "We
have again broken
records in carbon dioxide
concentrations and we have
already exceeded 400ppm
level which was regarded
as a critical level.
That happened already two
years ago and this growth
of carbon dioxide
concentration continues
and last year's increase
was about the same as we
have been observing in
the past ten years, as an
average." The energy
sector is the primary
source of global
greenhouse gas emissions,
and a transition to
renewable energy has the
largest potential for
reducing those emissions.
Petteri Taalas,
Secretary-General of the
World Meteorological
Organisation (WMO): "At
the moment we produce 85
per cent of the global
energy based on fossil
ones - coal, oil and gas -
which are shown here, and
only 15 per cent based on
nuclear, hydro
and renewables.
And to be successful in
the implementation of the
Paris Agreement we should
revert (reverse) those
numbers in the coming
decades." Then-U.S.
Secretary of State John
Kerry signed the Paris
Agreement in 2016 on
behalf of the United
States.
President Donald Trump:
“The United States will
withdraw from the Paris
Climate Accord.” Early in
his administration,
President Trump announced
the U.S would be pulling
out of the voluntary pact.
This month, the White
House began the formal
process to leave the
agreement aimed at
reducing the collective
emission of greenhouse
gasses and limiting
the rise in global
temperatures to 2.7
degrees Fahrenheit
compared to
pre-industrial times.
The Agreement carries no
enforcement mechanism.
Reaching a less ambitious
target of a 3.6 degree
rise would require an
annual reduction of
emissions 2.7% each year
between 2020 and 2030
according to the WMO.
Current estimates see a
climate almost 6 degrees
warmer in 2100 than
the 19th-century world
average, with dramatic
consequences for life on
earth.
Petteri Taalas,
Secretary-General of the
World Meteorological
Organisation (WMO):
"Governments nowadays
understand that this is a
challenge, and what is
good news is that the
visibility of these issues
is (at its) highest ever.
And the good news is also
that the private sector is
more and more interested
in finding solutions." For
Market to Market,
I'm Peter Tubbs.
The Norman Rockwell
imagery of fall included
leaves, pumpkins
and hunting.
For many of you, your
autumn ritual likely
encompassed picking up
walnuts from the yard
before the squirrels did.
The wild American Walnut
is native to more than
half of the country and an
economic opportunity for
some entrepreneurs.
Josh Buettner reports
in our Cover Story.
While Midwest farmers
harvest row crops, there
are autumn foragers who
have found another, wilder
heartland bounty all
it's cracked up to be.
Brian Hammons/Hammons
Black Walnuts: “Black
walnuts are really known
now as a superfood and
they're getting a lot of
attention because of the
nutritional value.” Brian
Hammons is the third
generation President
and CEO of Hammons Black
Walnuts.
His family business has
grown and diversified over
seven decades to become
the sole company of its
kind in the nation.
Not to be confused with
California's orchard-grown
English variety, black
walnut trees are native to
North America.
Brian Hammons/Hammons
Black Walnuts: “The black
walnut has a very wild,
bold, rich flavor.
It's very distinctive.
More protein than any
other tree nuts, also a
high degree of omega
three fatty acids,
polyunsaturated fats, no
cholesterol...” Hammons
holds 280 acres with over
5,000 black walnut trees
in their portfolio.
And though the plant is
renowned for its disease
resistance - an important
component in any
commercial production
- its alternate varying
fruit cycle hampers
consistent yields.
So every October 1st,
roughly 230 hulling
stations in 15 states
begin redeeming
hand-harvested urban and
rural black walnuts for
about five weeks.
Prices fluctuate, but in
recent years, hullers have
been able to offer a
record high 15 to 16 cents
per-pound - and collective
harvests can average
around 25 million pounds.
Brian Hammons/Hammons
Black Walnuts: “These are
looking really, pretty
good right over here.
It's going to be really
nice...” Once hulled and
bagged, nuts are shipped
to Hammons' headquarters
in Stockton, Missouri.
Situated at the edge of
the Ozarks, the town draws
thousands to its annual
Black Walnut Festival.
Brian Hammons/Hammons
Black Walnuts: “It takes a
lot to develop all of
the network of buying
operations to bring in
the wild crop and then to
process the nuts to be
sure that we're producing
a product that consumers
know is safe and is top
quality.” The walnuts
are cracked in Hammons'
sophisticated shelling
plant, where infrared
light and human
inspectors sort product.
The company keeps a year's
worth of inventory onsite,
in cold storage, or in
caves underneath nearby
Springfield.
In addition to nut meat -
consumed raw, in culinary
dishes and pressed to
produce oil and flour -
ground up shells are sold
for oil filtration, sports
turf and industrial
abrasives which have been
used to blast-clean
battleships and the Statue
of Liberty.
Also, the hull encasing
the shell can be used as
fertilizer, ink, and
a dietary extract.
Academia is deeply rooted
in the region's commercial
tree crops as well.
Over a century ago, the
Show-Me State was a top
fruit producer.
To this day, Missouri
State University's Fruit
Experiment Station in
Mountain Grove continues
with research and
educational outreach.
Dr. Michael
Goerndt/Assistant
Professor/William H.
Darr College of
Agriculture - Missouri
State University: “When I
use the term fruit I refer
to nuts, major seeds, most
things that comes off of
trees.
So yeah, black walnut is
considered a fruit in that
regard.” Assistant
Professor Michael Goerndt
implements agroforestry
- the process of
incorporating agriculture
into an orchard-like
setting.
Branching out at Journagan
Ranch, a 3,300 acre
working cattle farm gifted
to Missouri State a decade
ago by philanthropist
rancher Leo Journagan, the
school is cultivating
silvopasture, which
integrates forest
management, forage and
livestock.
Dr. Michael
Goerndt/Assistant
Professor/William H.
Darr College of
Agriculture - Missouri
State University: “Kind of
a traditional mantra for a
lot of foresters when it
comes to grazing is to
tell landowners not to
graze in the forest.
But grazing in the timber
in this part of the
country is something
that's going to happen.
And it happens a lot.
So do we want it to happen
any old way or do we want
to come up with a better
way of doing it that will
be sustainable and
actually get dual benefit
out of the process?”
Goerndt and ranch manager
Marty Lueck are adding
more black walnut trees,
which among other things
provide shade for cattle
rotationally grazing
across the landscape.
Marty Lueck: “We're the
largest pure bred Hereford
herd here in the state of
Missouri and then one of
the 15th largest in the
United States.” Andy
Thomas/Assistant
Professor/University of
Missouri Southwest
Research Center: “See how
much more kernel
is in there?”
Like Missouri State, the
University of Missouri
also is pushing the
boundaries of black walnut
production through
improved variety cultivars
- which produce a more
reliable, higher quality
crop.
Andy Thomas/Assistant
Professor/University of
Missouri Southwest
Research Center: “A lot of
people pick up regular,
ordinary black walnuts and
sell them to
local hullers.
But the price can be
anywhere from 9 to maybe
15 cents a pound.
But for the improved
walnuts, I can get up to
90, 92 cents a pound.”
Andy Thomas is a Research
Assistant Professor
at Mizzou's Southwest
Research Center
in Mount Vernon.
The 900 acre site
represents various soil
types found on
the Ozark Plateau.
Consulting with Hammons,
whose current production
model is based on a 99
percent wild crop, Thomas
has joined hobbyists and
landowners who've derived
over 100 black walnut
varieties through
selective breeding.
Thinner shells and more
nut meat maximizes value
per acre, and Thomas touts
one hardy strain, Sparrow.
Andy Thomas/Assistant
Professor/University of
Missouri Southwest
Research Center: “They're
by far the best walnut
that I would recommend for
farmers to produce
for several reasons.
The main reason is that
they produce year after
year,s very reliably,
where a lot of walnut
varieties produce every
other year.” USDA keeps
statistics on almond,
pecan and pistachio
production, but the
federal agency doesn't
furnish numbers
for black walnuts.
Hammons' officials believe
the industry reaps over $5
million annually, but for
the boss, there's more to
it than just hauling in
the specialty crop and
refining it for sale.
Brian Hammons/Hammons
Black Walnuts: “It's the
people that are involved
in this whole process that
really makes it worthwhile
- folks who pick up black
walnuts, folks that make
black walnuts a part of
their lives.
It's a natural, wonderful
product, and we're excited
to be part of it and
looking forward to what
the future may hold down
the road.” For Market to
Market, I'm Josh Buettner.
Next, the Market
to Market report.
We are producing
this episode ahead of
Thanksgiving to allow our
production staff a chance
to enjoy the holiday
with friends and family.
For the shortened week,
March wheat increased 8
cents, while the nearby
corn contract dropped a
nickel.
Limited sales to China
helped keep soy complex in
two-month lows as the
January contract fell
another 15 cents.
January meal
declined $5 per ton.
March cotton improved
96 per hundredweight.
Over in the dairy parlor,
December Class III milk
futures expanded 52 cents.
The livestock
sector was mixed.
The February cattle
contract rose $2.85 and
January feeders
jumped $4.05.
The February lean hog
contract dropped 50 cents.
In the currency
markets, the U.S.
Dollar index
gained 14 ticks.
January crude oil expanded
7 cents per barrel.
COMEX Gold fell
$10 per ounce.
And the Goldman Sachs
Commodity Index declined
nearly 2 points to
finish at 419.50.
Joining us now to offer
insight on these and other
trends is one of our
regular market analysts,
Elaine Kub.
Elaine, welcome back.
Kub: Happy Thanksgiving.
Howell: Happy
Thanksgiving, Elaine.
In the spirit of
Thanksgiving theme, I
wanted to ask you what do
you think that producers
have to be thankful for
this year when they look
at the commodity markets?
Kub: Well, if they're done
with harvest they can be
thankful that they're done
with harvest eventually.
And the folks that aren't
done with harvest can be
thankful that
someday they will be.
Eventually this will end.
Eventually 2019 will be
over and in fact it's only
like five, six weeks from
now that we'll be in 2020.
Howell: That indeed.
But I think one of the
markets that has been
probably happy with the
way that the markets have
been trading is
the wheat market.
We had another big
trading session on Monday.
Why do they continue to
see such strength right
now?
Kub: It's the cash market
that is leading it.
It's the actual physical
fundamentals of people
needing the SRW variety of
wheat, the soft red winter
wheat.
That's where we're seeing
these incredibly strong
basis values like along
the Illinois River.
It's kind of all over the
map but anywhere from 20
over to 35 over and
10 over in Ohio.
So it's the cash market
that we're seeing people
really needing to get
that variety of wheat.
You've already got
Chicago, the futures
markets already inverted
from the July timeframe.
So it's really strong,
that market is screaming
for it, but we're really
not seeing the futures
responding very much to
those bullish signals.
You've still got a futures
price of about $5.30.
Big deal.
Compared to how bullish
those cash market signals
are, the futures market
isn't really responding.
Howell: And is it just
because of the global
wheat supply that we
continue to sit on?
Kub: That seems to be it
is that there must be draw
from people who could
otherwise have been going
to Russia or Europe.
But it's complex and it's
confounding to not see the
same reaction in the hard
wheat varieties because
there you've got a bullish
story from Australia.
They still have this very
widespread drought and so
there's concern six
months down the line that
Australia won't be much of
a wheat market and yet we
don't really see any
response from that in the
Kansas City or the
Minneapolis wheat markets.
Howell: Elaine, turning to
look at the corn markets,
this week as we mentioned
there earlier in the
program we've seen a lot
of inclement weather for
folks trying to travel,
but that also has an
effect on harvest.
Is the corn market
factoring any of this
weather storms that are
coming this way into the
market?
And if not, why?
Kub: Well, the futures
market doesn't seem to be.
But again, and this
will sound like a broken
record, but the cash
market is reflecting the
fundamental bullishness
of these supply problems.
So the latest crop
progress report said that
70% of North Dakota's corn
wasn't even harvested yet.
Nationwide this
all calculates to
approximately over 2
billion bushels of corn
that still wasn't
harvested as of last
weekend.
And a lot of that will
have been harvested in
these few nice days that
folks have had, but a lot
of it won't because
in North Dakota, for
instance, folks might be
waiting for the ground to
actually freeze before
they can get to the really
wet areas.
So a lot of this is still
going to be waiting.
And by the time the USDA
goes and resurveys people
in the first two weeks
of December there's still
going to be unharvested
grain that we won't have
yield numbers for and
there still will be
incredible uncertainty
about what is actually
there.
Howell: And we've been
focusing so much of our
attention on the U.S.
corn crop, we haven't
been really paying as much
attention about what is
going on in South America.
It sounds like they're
gearing up here for a
really large corn harvest.
How will that put a cap
in the corn rally here
domestically?
Kub: I think
it is related.
We did see the Brazilian
currency reach a fresh 20
year low on Tuesday.
It has collapsed about
four and a quarter
Brazilian per U.S.
dollar.
So that is typically
associated with
bearishness in the
soybean market.
But you're right to the
extent that South America,
Brazil and Argentina, are
going to be coming onto
the global corn
export market too.
That wheat currency from
Brazil puts them in a good
position there to not only
be planting as much as
they obviously can this
fall and to be putting in
as much inputs as they can
and really boost yields as
well as they can this
year, it adds bearishness
to the global
corn prices too.
Howell: Elaine, switching
tracks to talk about the
soybean prices.
As we just said there
they lost 15 cents.
Compared to last week
we're still at that
subpar, or sub-$9 level.
What is your new area of
support for the January
soybean contract?
Kub: I don't think that
there is necessarily a
chart level that
I'm looking at.
I think it just
continues day-by-day.
When you see that
Brazilian currency
movement I think that has
been the number one mover
for soybeans this week.
There are some
supportive bits of news.
You have bullishness in
the edible oils market,
the Malaysian palm oil
market has continued to be
strong.
You see noise about some
sort of trade agreement
reaching its
final throws here.
Who knows what that means
or what the timeline would
be on that.
But there is some
potential for soybeans to
be supported but not as
long as that Brazilian
story continues
to be bearish.
Howell: Elaine, we
obviously know that corn
is still continuing to be
harvested, especially up
there in the Dakota areas,
but soybean harvest has
pretty much wrapped
up for the year.
Do you think that there
is the possibility we're
still going to see some
sort of post-harvest
rally?
Or is really any sort
of weather or condition
problem in the soybean
market already factored
in?
Kub: If we were in
a scenario where the
speculators were caring
about harvest headlines,
if we were in an area
where that kind of
fundamental news was
boosting the markets, then
there would still be an
argument for soybeans to
go up too because it's not
just North Dakota, it was
Illinois and Missouri also
that had soybean acres
left unharvested.
And you're talking about
that math works out to
something like 200 million
bushels of soybeans that
were still unharvested
as of last weekend.
So there is still
certainly fundamental
bullishness about
soybean harvest.
I think we're just in a
scenario where the futures
markets are not responding
to reality, let's say, out
in the cash markets.
Howell: So, Elaine, we
talked about wheat, corn
and soybeans.
I've got a question that
I think sums up the grain
markets nicely looking
again into that 2020 lens
if you will.
We've got a question from
Scott in Wisconsin wanting
to know, which commodity
do you believe is the most
undervalued and has the
most upside potential in
2020?
Kub: Sorry that you
set that up as a grains
question, but he asked for
commodities in general.
So I'm going to go for
feeder cattle actually.
When you look at the price
relationship between them
and the fat cattle there
is some bullishness there
and certainly just the
bullishness of feeding
that market right now
because of the grain, the
cheap feed that
is available.
The corn that is being
harvested right now
there's a lot of low test
weight corn, a lot of wet
corn, so there's a lot of
potential for folks to go
into the market and buy
damaged corn, buy sample
grade corn, buy number
four corn where you can
get a lot of discounts on
that and it still feeds
well, the feed value is
still there, the nutrients
are still there
in the matter.
So I think there is
opportunities for folks in
the cattle feeding
business to be making
money just on a
feed arbitrage.
Howell: And so feeder
cattle aside, what about
the live cattle market?
Are you as bullish about
that market heading into
2020?
Kub: I'm not as bullish on
that in the near-term just
because I feel like
they've already had their
recovery.
But I do think that the
strength will remain in
there.
We saw cash prices this
week at $117 live basis
which is about a dollar
higher than last week, so
the strength
is still there.
The packers are still
making a lot of money,
somewhere in the
range of $500 a head.
So that is still there for
them to pass that along
down the line to the
feeders that are coming to
the market and I think the
strength will remain but
I'm not super bullish
in the near-term.
Howell: We saw that the
April live cattle contract
finished on Monday the
highest point at $125 I
think which was the
highest in seven months.
Do you think they can stay
sustained at that level?
You said you did.
But how long do you think
they can stay at those
levels?
Kub: Yeah, when you've
got that April contract at
$126 it does start to make
you think of locking in a
price there because if you
just think historically
where live cattle, what is
a price level where they
tend to roam around it
tends to be about $120.
So to see that April
contract at $126 I think
there is potential for
that to pull back between
now and spring.
So if you've got those
calves and you've got the
cheap feed or cheap feed
opportunities you can look
forward to after this
terrible harvest I think
it's a good idea to be
looking at locking in some
of those April prices.
Howell: Elaine, final
question, as you look at
the cattle complex this
week they were all over
the board.
Was it just because of the
aftermath of the cattle on
feed report and those
large estimates by
traders?
Kub: It could
have been that.
Traditionally in a week
like this you think it's
just low volume and you
get streaky trade any time
there is low volume.
But you're right that the
cattle on feed report was
a lot for people to
chew over and it wasn't
necessarily bearish.
We knew that these large
numbers were going to be
coming in after the light
September report and then
you have to sort of
calculate all these 800
pounders or 900 pounders
that did come in, in
October.
What timeframe are they
going to be hitting the
actual slaughter market?
So I think there was a
lot for traders and there
could have been some
of that coming in.
What volume you did
see that ended up being
streaky prices.
Howell: And we've finally
got to talk about what is
going on in
the hog market.
Is it time for them to put
in a seasonal cash low?
Kub: Not necessarily.
You think this
Thanksgiving was coming up
here and nobody likes
turkey, I hate to say it.
Do you like turkey?
Howell: Well, so I read a
statistic that said 88% of
the average American
households eat turkey on
Thanksgiving so I don't
think it's a matter of if
I like it, I think it's a
traditional staple so you
eat it.
Kub: And I think more and
more families also have
ham.
We saw that in the past
couple of weeks, we saw
really hot ham prices and
that was holding up that
pork cutout, ham prices
like $95 a hundredweight.
So that translates, I
bought some ham today at
Costco and it was more
like $3 or $4 a pound at
the retail level.
But I think that is what
has been holding up any
sort of support there
has been for the lean hog
contracts right now has
been that cutout value.
But I think that moment
has passed, seasonally
that Thanksgiving push for
ham has certainly passed.
So that last bit of
bullish support for the
lean hog futures contracts
I think has now passed
away and I don't
necessarily think that
we'll find support
here at these levels.
Howell: So with that being
said, Elaine, where do we
head from here?
Kub: In these two closest
futures contracts they
have gone down about
7% through the month of
November.
Could they fall below 70?
Absolutely.
I think that there's no
magic number that folks
are going to step
in and support that.
Howell: Elaine, I want to
turn our attention to one
thing we didn't get to
mention during today's
program and that is what
is going on in the biofuel
industry.
The EPA said they are
not going to release the
biofuel mandates until
after Thanksgiving, we
don't know when
that is going to be.
But is that going to have
any impact you see here
short-term or long-term
for ethanol or biofuels?
Kub: I suppose it depends
on what they release.
But we did see ethanol
futures really pop on
Tuesday this week,
Monday or Tuesday.
So obviously the market
is anticipating a bullish
boost from that.
Howell: All right.
Elaine, we've got
Thanksgiving here.
I wanted to ask what is
your favorite Thanksgiving
food before we wrap
up today's show?
Kub: Brussel sprouts.
Howell: That's an
interesting one, not a
traditional
Thanksgiving food.
Kub: And I should back up
what I said about turkey.
Obviously we love the
turkey industry and the
soybean meal that
they consume.
Folks love that too.
Howell: Elaine Kub,
thank you so much.
Kub: Thanks, Delaney.
Howell: That wraps up
the broadcast portion of
Market to Market.
But we will keep this
conversation going on
Market Plus where we'll
answer more of your
questions.
You can find it
on our website at
Market-to-Market.org.
Also on our website, links
to our YouTube page are
there so you can see
all our videos in one
location.
Or just search
YouTube.com/Market to
Market.
Join us next week when
we head east in search of
farmland.
So until then,
thanks for watching.
I'm Delaney Howell.
Happy Thanksgiving
and have a great week!
♪♪
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Why Global Military Spending Is On The Rise

CNBC:

Global military spending is
on the rise.
That means more and better
equipped soldiers on land
more warships at sea
and more high tech fighter
jets in the skies.
In 2018, worldwide, military
spending hit 1.8
trillion dollars.
It has reached the highest point since
us at SIPRI have started compiling
world data over the
last 30 something years.
So what does all this mean?
Does more military spending
make the world safer?
Or is it a warning
of conflict to come?
The last time spending rivaled today's
levels was at the height of
President Reagan's Cold War arms
buildup in the late 1980s.
But the sudden collapse of the Soviet
Union in 1991 changed the game.
Military spending soon plummeted.
Large scale military conflicts virtually disappeared
for the most part, at
least. And the global economy boomed.
By 1998, global spending hit its
lowest point since the Cold War.
But then...
There is a major
incident in lower Manhattan.
Apparently, a plane has crashed into one
of the upper floors of the World
Trade Center.
The September 11th attacks in
2001 prompted a massive U.S.
military mobilization for President
Bush's 'War on Terror'.
Our enemy is a radical network
of terrorists and every government that
supports them.
As the U.S.
and its allies deploy troops to
Afghanistan and Iraq, global spending
numbers swelled, until Obama's first
term, when war fatigue, internal
budget pressures and troop withdrawals
pushed spending back down again.
So if it wasn't Iraq and
Afghanistan that propelled military spending to
record levels in 2018, what was it?
During all of this, a tectonic geopolitical
shift was taking place in East
Asia, the rise of China.
In 1990, the U.S.,
the Soviet Union, then
Germany, France, the U.K.
and so on made up
the top 10 military spenders.
But fast forward to 2018 and
those top spenders have drastically changed.
China has jumped from a share of just
2 percent to 14 percent, the second
largest behind the U.S.
The country's explosive economic growth allowed
it to increase spending for
24 straight years, culminating in a
2018 budget of 250 billion dollars.
So where's all that money going
to modernize China's People's Liberation
Army? President Xi Jinping hopes to
fully modernize the military by 2035
and complete training into a
world class force by 2049.
They want to assert themselves as a
regional superpower, but also as a
world superpower competing
with the U.S.
on a military basis.
Progress has been swift.
Since just 2011, China has gone
from having zero commissioned aircraft
carriers to two in operation
and a third under construction.
The U.S.
in comparison has eleven much more
massive and highly advanced carriers.
The Chinese are fielding elite fighter jets
as well, like the J-20 Chengdu
and the Shenyang FC-31.
Together, these fighters are designed
to compete with America's latest
generation Stealth F-22
Raptor and F-35.
U.S. officials claim the Chinese used hacked
F-35 plans to help build these
next generation aircraft.
And that leads us to cyber warfare.
China is spending big there, too.
China doesn't only want
to hack into U.S.
computer networks, it wants to find
a way to neutralize U.S.
advantages on the
physical battlefield.
China has been watching how the
United States has conducted military
operations very closely for
the last 25 years.
They understand how dependent we
are on information enabled technologies
and they have been developing asymmetric
capabilities to deny us those key
enabling technologies.
China's also spending money to update
its nuclear arsenal and the bombers
and submarines that carry those
weapons of mass destruction.
Then there's hypersonic missiles.
They travel more than five times the
speed of sound, making them difficult
to detect and neutralize.
And if that wasn't enough, these cutting
edge weapons also come tipped with
nuclear warheads.
Another really significant area is
China's development of anti satellite
weapons.
Space is critical to just about everything
we do with regards to military
operations, for reconnaissance, to communicating
with our own forces, to
placing weapons on targets.
If China or other adversaries can deny
the United States access to space
based capabilities that would fundamentally
change the military equation
here on Earth.
China is also expanding its
military presence beyond its borders.
In 2017, China opened its first overseas
base in the African country of
Djibouti. China has been flexing its
military muscles in its own backyard
as well.
China is trying to project power into
the South China Sea, where it has
territorial disputes over resource rich
islands and shallow reefs with
nations like the
Philippines and Vietnam.
China has begun unilaterally asserting
claims over these islands, turning
several into full scale military
installations and demanding vessels
recognize Chinese authority
in surrounding waters.
An international court ruled against
these actions in 2016.
The U.S.
also rebuffs China's demands by frequently
sailing Navy ships through the
waters, China claims.
Still, China shows no
signs of backing down.
There is the prospect that the two
sides could get into a skirmish, a
crisis, or even potentially a war in
the waters or airspace over the South
China Sea, or even more likely,
in my view, over Taiwan.
The island of Taiwan, once under
mainland China's control, broke away
during China's communist
revolution with U.S.
support and now governs
itself as a democracy.
But today's mainland communist leadership
still claims the island.
Most analysts don't believe that China has
the ability today to launch an
amphibious invasion of Taiwan and take
the country over by force and
occupy it.
What concerns more observers is the
possibility that China might use some
of its increasing military capabilities to
try to blockade or coerce
Taiwan into politically unifying
with the mainland.
President Xi Jinping has ramped up
military exercises around Taiwan and
further diplomatically isolated the island since
he came to power in 2012.
The other thing to remember about China's
military spending is a lot of its
military spending is actually
directed internally toward maintaining
political stability within China.
2019's unrest in Hong Kong has prompted
concern over how China might use
its upgraded military capabilities.
After weeks of protests, the People's
Liberation Army released this video
showing soldiers conducting battle exercises
in urban environments and
quelling simulated civilian unrest.
The overall worry?
a newly empowered China will not be
a benevolent player on the world
stage. Instead, using its military
prowess to bully weaker neighboring
countries and to suppress its own people
or those it claims it represents.
This worry has helped prompt
spending increases throughout the
Asia-Pacific region, countries as diverse
as Japan, South Korea, Vietnam
and Australia all increased
spending in 2018.
Vietnam started buying submarines.
Taiwan started developing more anti
aircraft missiles for instance.
Japan is also starting
to modernize its weapons.
Overall, in the whole Asia, it's
almost seen as action reaction.
But perhaps most
importantly, the U.S.
has taken notice, too.
The United States remains the
world's undisputed foremost military power.
Its budget is larger than the
next eight biggest spenders combined.
The United States defense budget actually
still dwarfs China by a
significant margin.
Not only is the United States still
the number one defense spender in the
world, but most of the other
major spenders are also U.S.
allies. Countries such as South Korea,
Japan, Germany, France, Britain and
so on.
In 2018, U.S.
military spending hits 649 billion dollars,
an increase of four point six
percent from 2017 and the first time
the budget had increased at all since
2011. China's rise remains a
major factor behind the increase.
China's expanding its influence into the
Pacific, which has always been
this area controlled by the
US since World War 2.
So it is this pushing the boundaries
of sphere influence between China and
U.S. China's expanding power has
been on the U.S.'s
radar for years.
But President Trump's election ushered
in a particularly hawkish national
security staff.
This staff has pushed the idea that the
world is entering a new era of
so-called great power competition, reviving
justifications for the large
scale conventional forces and nuclear arsenals
that fell out of style
after the collapse of
the Soviet Union.
To help prepare for potential conflict in
this perceived new era of great
power competition, the Trump administration
has fast track military
modernization and expansion plans, from
recruiting more soldiers to
upgrading the Navy's aircraft carriers,
completing the acquisition of the
new F-35 fighter jet platform,
designing next generation bombers and
submarines, upgrading nuclear forces, dumping
money into cyber operations
and more.
This spending shows few signs of
slowing down, with the U.S.
charting a defense budget
increase for 2019.
And it's not all about China.
There is also a Russian resurgence
under way that few saw coming.
The view back in the late 1990s
is that we were always going to
most likely be dealing
with a benign Russia.
That's fundamentally changed.
From President Vladimir Putin's snatching
of Crimea to his destabilization
of Ukraine, election meddling in the
West, advanced cyber capabilities and
cutting edge hypersonic missile technology, Russia
is back in the great
power game.
It's been increasing spending since 2011 and
had a very big and expensive
modernization program until
about 2016.
And then as the program is nearing its
end, we of course see the spending
taper out and slightly decrease.
That resurgence has prompted considerable
spending increases in former
Soviet states fearing
Russian aggression.
Increases include Poland, Bulgaria,
Latvia, Lithuania and Romania.
So does 2018's record spending
levels mean conflict is imminent?
These numbers do indicate issues
of increased tension, increased rivalries,
possible conflicts that might occur.
I think the question is
whether spending causes conflicts.
So far, no definitive answer, but
there definitely is a relationship
there.
Global military spending by itself
is not necessarily the problem.
Rather, the spending reflects how countries
are seeing their interests and
their beliefs that they are in
competition with other great powers and
that they have to prepare
for the possibility of conflict.

🔴 Subprime Crisis Building In Auto Sector | Real Vision™

Real Vision Finance:

Hi, I'm Grant Williams.
About a month ago, in Things That Make You
Go
Hmmm, I wrote a report called "Car Trouble"
about the US auto industry.
And I wanted to
flesh that story out for you today because
it's something that is happening right now,
and it's
a lot bigger story than people think.
To do this, I'm going to enlist the help of
a couple of people-- Daniel Ruiz, a fantastic
auto
analyst from a company called Blinders Off,
who presents an incredible amount of information
and digs really deep into the sector; and
my good friend Michael Lewitt, who's a person
I
spend a lot of time talking to about this
particular industry because he follows it
very, very
closely.
We're going to give you a sense of what's
going on, give you a sense of where the
problems lie, how big they are, and at the
end hopefully a few ideas how you might profit
from it.
The US auto industry is a big deal.
It represents 3% of US GDP and employs roughly
5% of
the total workforce in the United States.
In the last six years, $775 billion of exports
of cars
and auto parts have left the United States,
making it by far the biggest export sector.
The
number two is aerospace, which is a distant
$125 billion dollars behind it.
On a global basis,
research and development in the auto industry
is the second biggest sector of 40 sectors
measured worldwide-- it really is a big deal,
not just in the United States but beyond.
Car sales have been rising now for some six
straight years, ever since Cash for Clunkers
was
instituted in 2010, and that's been a huge
benefit for the industry as a whole.
It gave the auto
industry a $3 billion jump start when it needed
it most, back in the depths of the post Great
Recession period.
But what it's actually done is pulled forward
a hell of a lot of demand.
And we're at the point now where we're seeing
the back side of that demand, and the missing
purchases that have all been made in the last
six years are starting to be felt.
Throw in the fact
that in the era of cheap money you've had
this surge of people looking to borrow money
to
buy cars at really low interest rates, and
you see auto loans ballooned to over a trillion
dollars
now-- that's way higher than they were before
the credit crisis.
In amongst those trillion dollars, the fastest
growing sector-- I hate to say it-- is once
again
subprime.
And while the subprime sector is not as big
a problem on a wider basis as
mortgages were back in 2007, 2008, the 2015
series of subprime auto originations are
forecast to see the biggest delinquencies
of any tranche before that, with default rates
projected
to hit 15%-- that's a major problem.
To help me pick this apart and give you a
sense of where the problems lie, how big they
potentially are, and what you can do about
them, I've enlisted the help of two really
smart
guys.
First of all Daniel Ruiz of Blinders Off,
who's a hardcore auto industry analyst who
has
as good a grasp on this sector as anyone I've
seen, and he's got some fascinating information
and charts for us that gives us his perspective
of where he thinks the problems lie.
And my old friend Michael Lewitt, who runs
The Credit Strategist.
Michael's a brilliant thinker,
a great communicator.
He's one of the guys I rely on when I'm thinking
through the auto sector,
trying to get a handle on where the problems
lie, Michael's someone I go to frequently.
So those two guys are going to help me and,
hopefully, help you make sense of this whole
thing.
Kicking things off is Daniel Ruiz.
And Daniel starts by looking at a sector of
market that
perhaps is not intuitive to most of us.
He goes straight for the used car sector.
And there's a
really good set of reasons for that, and Daniel's
going to lay them out for you right now.
I'm going to start with the used car values,
which really, in my opinion, is
the foundation of the entire automotive industry.
And one chart that's gotten a lot of
popularity lately is the NADA Used Vehicle
Price Index.
It's been falling, significantly, and
because of that decline, we've had a lot of
attention on used car values.
It's probably best that I start at the beginning,
which is what happened during the last
recession?
Because used car values fell significantly
during the last recession, but something
else happened.
And I want to talk more about the recovery
and why we've had the results
that we've had in the automotive industry,
with last year being a record-setting year--
and
so was the previous year.
Used car values have rebounded really, really
sharply since the recession.
That was largely
in part because new car sales volume was very,
very low during the recession.
Used car is
nothing more than a new car once it rolls
over the curb.
So we had a really, really short supply of
pre-owned cars coming out of the recession.
The
government stimulated the automotive industry
with what we all know as Cash for Clunkers-
- great program, stimulated sales, we had
a huge spike in volume of new cars sold.
But
used car supply was actually starved, because
those sales did not produce trades.
So we
actually took trade ins out of the equation
with Cash for Clunkers and further starved
used
car supply.
Since then, we've enjoyed what I would consider
are extremely short trade cycles.
So I'm
going to start with the why-- why are we seeing
the things that we're seeing?
Why are we
reading about the negative effects that falling
used car values are having?
We've all become very familiar with the NADA
Used Car Value Index.
I'm going to explain
why it relates to higher delinquency rates
and subprime, why auto loan originations are
falling, and why there has been a divergence
between auto incentives and sales volume.
Typically the more manufacturers support cars
with incentives, the more cars they sell,
but
that's not been the case.
We've now missed new car comparisons four
months in a row
despite a higher incentive spend.
So again, why is this happening?
It all relates to used car values.
The simple answer is as used car values fall,
it has a lot of
impact on all the things that we've just talked
about.
And there's a lot of negative equity
out there.
So that's at the core of things, and I truly
believe that used car values are the
foundation for the entire automotive industry.
I'm going to start with talking about trade
cycles, because I think that's something that's
at
the core of this.
We've enjoyed really, really great sales numbers
for a long time.
And the
reason why is because we've had extremely
short trade cycles.
When used car values are really outperforming,
as they did shortly after the recession, it
allows dealerships to trade folks out of cars
a lot quicker.
An optimal trade cycle happens
when the principal balance owed on a car meets
the current market value of that vehicle,
at the point where there is no inequity or
when you're in an equitable position.
That allows
an easy transition from the car that you currently
own to that new car that you may consider
purchasing.
So for years we had a very, very strong and
very short trade cycle.
Customers would come
into a car dealership for an oil change, and
it was a very, very easy thing for a salesperson
to walk up and say, hey, would you like a
new one?
Would you like a different color?
Would you like something with the newest upgrades?
And by the way, your payment's not
going to go up, because you have equity in
your car and we really need it.
So it was a very, very easy transaction for
quite a long time.
But things have changed.
The
effect of falling used car values takes that
out of the equation.
Trade cycles are extremely important.
The vast majority of new car sales involve
a trade-in.
If we're bringing our cars back quicker, that
has a direct effect on sales velocity of new
cars.
The shorter the trade cycle, the higher the
sales velocity of new cars.
The longer the
trade cycle, the slower the velocity of new
cars.
What caused used car values to fall?
What was the correction?
What happens?
It's important to understand the effect that
leases have on used car values.
As a used car
manager working at a car dealership, you have
to consider quite a few things when you're
trading in a vehicle.
How am I going to market the vehicle?
How am I going to sell the car?
Where am I going to price the vehicle?
Who's my competition in my local market?
Something that needs to be of big consideration
is that used cars always have to have a
value proposition to a new car.
And what most consumers measure as value is
their monthly
payment.
There has to be a good reason for buying something
that may not be the perfect
color, that might have some miles and some
wear and tear, that that's had some usage.
And the reason why folks buy pre-owned cars
is because they present a better value in
terms of monthly payments than new cars.
Well, when leasing gets to a certain level--
and really to extremes, which we've seen where
$50,000 cars are leasing in the mid $400 range.
That puts a really, really significant
downward pressure on used car values.
Used car managers really have to figure, how
am I going to market this car to a potential
customer?
How am I going to justify the payment compared
to a potential lease on a new
car?
It leaves you in a situation where if you
have a $45,000 car and somebody wants to trade
it one year later, is a $10,000 depreciation
enough?
Is a $15,000 depreciation enough?
$400 is a $20,000 loan.
And when you have $50,000 cars that are leasing
for $400 or
$500 per month, there's no market for that
one-year-old car.
There's no market for the twoyear-
old car.
And it puts significant pressure on all vehicles
that are pre-owned.
I think when most of us think about the auto
sector, we instinctively think
about new cars.
You drive down the street and see dealer lot
after dealer lot filled to the brim
with shiny new cars.
But as Daniel points out, it's the used car
market that really has a massive
effect on the overall industry, and the undercurrents
that Daniel lays out are really quite
surprising.
I was taken aback with just how serious they
are when you look into it, and
illustrates perfectly the knock-on effect,
which is something we try and talk about at
Real Vision
all the time.
To get another perspective on the auto industry,
I wanted to call my friend Michael Lewitt.
Michael is someone that I rely on when I'm
thinking about this and trying to get my head
around it, because he looks at this stuff
all the time.
He's one of the best credit writers out
there.
He writes The Credit Strategist.
So I sat down with Michael for a chat to get
his
perspective on the auto industry.
OK, well, when we were putting this story
together about the auto sector, one of the
first people
I thought of, Michael, was you, because over
the years you have been one of the people
that
I've relied on to keep me current on the state
of play in the auto sector.
So I wanted to bring
you in and get your thoughts on where we are
on the time line for this whole thing playing
out.
Right now you have retail suffering from a
real structural shift that's clearly
having an impact not only on industry but
on the economy, unemployment-- everything
else.
And I think autos are the next industry.
Just like retail, a lot of it is technology-driven
through
Amazon.
I think autos are the next.
I think autos have one advantage-- they were
not sunk by private equity firms coming in
and
loading them down with debt.
They don't have that problem, although they
still have significant
health care and legacy obligations left over
from the bankruptcies and so on.
Michael makes a great point tying in the auto
industry to the retail sector and the US consumer.
It's a very important linkage to make.
Now, the US consumer is 70% of the economy.
So it's vital to understand what's happening
to the US consumer.
Michael takes a typical credit guys look at
the auto companies.
And his point that they're not
weighed down by the debt strapped on to them
by private equity is important because with
that they've been even more trouble.
But it's clear that as the US consumer comes
under
pressure, the auto industry is going to be
one of the sectors that suffers the most.
The overall industry, I think, is probably
going to see-- at least in the US-- lower
volumes.
I
mean, China and other places is a whole other
issue.
But there's clearly secular change
coming, and it's going to have major impact
on the US economy.
While we're talking about
what's already happened to the manufacturing
economy in the US, and there's been some
positive signs because of the recovery of
GM and Ford and so on, I think we're now going
to
see another potential leg down.
If the volumes, which are now like-- what--
$17, $18 million a year, fueled by a lot of
subprime
auto loans and so on are going to fade.
I mean, right now we're at peak inventories.
We're
at peak subprime loans.
We're at levels that are not sustainable.
So you're also going have
to deal with that.
But it's unlikely that these levels are going
to continue in a 2% growth
economy, so you have—
Well, that's something I wanted to dig into
with you, because if you look at this, these
companies they have pulled forward a lot of
demand, going all the way back to Cash for
Clunkers.
They've managed to have rising sales for seven
straight years now after that.
But the last four months, we've seen that
turn.
We've started to see auto sales decline, and
most worryingly-- perhaps-- truck sales, which
as the price of gas came down.
So if you add that, you add the massive amount
of inventories on dealer forecourts, which
is
at levels-- I don't think the data goes back
to the '80s.
We have never even had close to this.
And the subprime trade-- you're are three
to five year time line.
I'm interested to see how you
see that playing out, because when you look
at how important the US auto industry is to
the
US GDP-- it's 3% GDP and employs 5% of the
workforce, I think-- it's something that they
can't
allow to be in trouble, you know what I mean?
So--
Well, Three to five year-- I didn't mean to
interrupt.
Three to five years is-- what I'm talking
about is the beginning of real secular structural
change.
I'm not talking about the cyclical change,
the turn in the market.
Inventories are at record
highs.
There are record numbers of cars coming off
leases.
Used car prices are dropping
sharply.
The average age-- I still think the average
age of the fleet is over 11 years, if I'm
not mistaken.
People keep their cars longer.
I keep hearing about the strength of the consumer,
the strength of the consumer.
I think that's
one of the great fairy tales.
The consumer is still dealing with epically
high and rising health
care costs.
The health care system is failing, and until
they-- and even if they come up with a
solution to Obamacare, it's going to take
at least a three-year sort of turnover to
fix it.
So people don't have-- they're borrowing money
to buy these cars.
And so you have over $1
trillion of subprime loans, all this other
stuff.
And the Fed is raising rates-- they're still
very low,
but you have a situation where it may not
be three to five years until you start seeing
the
numbers of cars manufactured and so on get
reduced.
And that would be coincident with other things
we're seeing that suggest that a recession
is a
real possibility.
You know, the yield curve is inverting.
It gets flatter every day.
The Fed's going
to raise rates later today unless a meteor
hits the world.
And so the shorter end's going to
likely to move up further.
I don't see that.
The long end this morning, I thought I was
misreading
the tenure of the 213, which really shocked
me, which was at 220 just last Friday-- Monday.
So the curve is flattening.
So when you have all these indicia that show
you that the economy is not growing and that
we're likely heading towards slower conditions,
and autos are right in the heart of that.
So I
think that when you have what I call cyclical
conditions combining with secular conditions
or
structural conditions that are all negative,
that's not good.
And I think-- in fairness, I think the auto
industry needs to be commended, because it
is
definitely trying to get ahead of the curve
on the technology side and everything.
But on the
sales side, it's doing the same old stuff,
which is incentives and all this stuff.
And then the
lenders are just making money available, but
money's getting cheaper.
I mean, remember-- auto loans are on the shorter
end of the curve, and that's the side that's
going up.
Now, it's still very low, but it'll end up
being a problem and you'll see defaults rise
and everything.
Now, I don't view auto loans as a threat to
the economy the way housing was.
It's just not--
you can walk away from your car.
You can't walk away from your house as easily.
But it's going to be a problem.
And I think that time frame is shorter than
three years, because
you're just seeing it coincide with other
signs that the economy is slowing down.
We'll come back to Michael later.
But what I want to do now is switch the focus,
go back to
Daniel, and get his thoughts on the leasing
and securitization of the auto industry, which
plays
a big part in trying to understand, again,
these cross-currents that are forced upon
the industry
by securitization of finance.
So let's get Daniel back in and hear his thoughts
on the lease
market.
Another thing to consider is the level of
negative equity that we have in leases today--
active
leases that have not matured yet.
Credit risk on a lease is very different than
credit risk on
a regular automobile loan.
Losses happen on regular automobile loans
when they default.
How much was owed?
What was the balance on the vehicle, and how
much should we
recover when we sent the vehicle to auction?
But they require that default in order to
realize
those losses.
With leasing, you introduced residual risk.
A lease does not have to default in order
for a
captive bank to lose money on the transaction--
it just has to mature.
And what's concerning
is the level to which these loans have been
securitized.
An auto lease, asset-backed security is a
thing, and it adds a layer of complexity that
really
needs to be looked into.
The level to which loans have been securitized
is back to the peaks
before the recession.
And it's very understandable, because for
years used car values
outperformed residual values.
So as these leases matured, the clients--
it was never a risk
to the captive bank or the bondholder.
When leases mature and they have equity, it's
a huge boost to new car sales, because the
equity can be used towards a down payment.
The customer rarely ever returns the car.
They'll choose to buy it before returning
it, because they want that built-in equity,
and they
look at it as a value.
It's only when used car values start underperforming
residual values that we need to become
concerned.
And this is what concerns me about these securitized
loans and leases-- it's
needless to say that the amount of residual
losses that are currently on the books unrealized
is significant.
There are over 10 million leases outstanding,
and for every $1,000 that these
captive banks miss that residual calculation
by, every $1,000 represents $10 billion.
So now I'm going to focus on GM, because they
have the largest day supply out there right
now as far as manufacturers, and their response
has been the most extreme, in my opinion.
I was concerned that if we miss sales figures
in April, manufacturers were going to respond
by raising incentives pretty aggressively,
because we're so close to the time of the
year
where we have to get rid of leftover product.
Higher incentives is exactly what we got.
They responded to their day supply problem
very
aggressively with a very, very low lease payment
on a Silverado and a 20% reduction from
MSRP on a Chevrolet Malibu.
One has to consider what the direct effect
of that level of discounting is going to be
on
used car values.
What's a one-year-old Silverado worth today?
A two-year-old Silverado?
If you're taking 20% off on a new Malibu,
how much do you have to discount that one
or
two-year-old Malibu so that, if you try to
retail it, there's some sort of a value proposition
to
the new car?
As buyers of cars, we look out for incentives,
and we like them to be as big as they possibly
can be in order to get a discount on their
shiny, new car.
But when Daniel talks about the
incentives and what the dealers are having
to do to try to shift some of this massive
inventory
overhang, you start to think of it in a different
way.
And this notion of incentives and the
degree to with which they're becoming increasingly
more important to the manufacturers, is
something that Michael and I spoke about on
our call.
The incentives now are at all-time highs--
I think $4,000.
I heard an advert on the radio this
past week advertising $14,000 off a Dodge
Ram truck.
And I was trying to figure out what a
Dodge Ram truck must cost.
And that's got to be a 30% discount on that
thing, or 20%.
It's a good--yeah, the incentives are crazy,
because the lots are full.
Driving around South
Florida the lots are full, and there are only
so many people for so many cars.
There are a lot
of immigrants down here, there are a lot of
immigrants in the US, but now there are fewer
immigrants in the US.
So if the population stops growing from that
segment, they're not going
to be getting cars.
So I think that the industry is running up
against it, and they're trying to deal with
it in the
traditional way on the sales side, on the
nontraditional way with the technology and
everything, but it's not going to be a smooth
transition.
That commercial I heard on the radio for the
big discount for the Dodge truck-- when I
heard
it, I was astounded at the sheer size of the
discount.
But Daniel makes a great point-- that this
is something that, once it starts, this is
a set of dominoes that just keeps toppling.
And as GM
cuts prices, so Ford will have to cut prices,
so Chevy cut prices, and the dominoes just
keep
cascading.
And this is really just starting to get going
now.
So it's a great time to be a buyer of a car
because the incentives you're going to get
offered, but it might not be such a great
time to be
a buyer of the stocks of the automakers.
Another thing to consider is that when one
manufacturer has a day supply problem-- like
GM, for example-- the other manufacturers
don't rest while they get their house in order.
The auto industry is very, very competitive.
Anyone that competes directly with GM is going
to adjust in order to not lose market share.
So the heavy discounting becomes contagious
and the unintended collateral damage is used
car values.
This is all happening at a very bad time,
and it's why I consider this to be the perfect
storm
for used car value declines.
There's such heavy emphasis on new car incentives
to deal
with this day supply problem and it's putting
such enormous pressure on used cars, and the
timing couldn't be worse.
Something that I'm keeping an eye on that
is extremely concerning to me is the amount
of
2016 leftovers that we have in May of 2017.
Pick your favorite search engine for vehicles.
Plug in 2016 new cars at any distance, and
you will be amazed at how many vehicles we
have available.
And we're halfway into 2017.
This is extremely alarming, and the reason
why is because 2016's represent the most
heavily discounted portion of new car inventory,
and these cars aren't selling.
It's a very
strong indication that demand has fallen for
new vehicles.
Dealers put a lot of emphasis on making sure
that new vehicles never roll into the next
model year.
And the reason why is because, at a certain
point in time, a manufacturer will
stop supporting leftover models.
They'll simply make a lump sum payment to
the dealership,
and at that point, it becomes their problem.
This makes the 2016's that are leftover today
extremely difficult to sell because they're
competing against the heavy incentives on
the 2017's.
In a lot of cases, it's less expensive,
from a payment standpoint, to purchase a new
2017 versus a heavily discounted 2016.
I look at the 2016 leftovers like plaque that
builds in an artery-- they're just slowing
things
down.
And you have to wonder how many 2017's are
going to be leftover.
Once enough
these cars pile up, the patient has a heart
attack.
You have to stop production.
So perhaps you've seen the chart for Morgan
Stanley Research projecting as much as a
50% decline in used car values in the next
two years.
When I first saw the chart, I just
simply could not believe that something like
that would be possible, knowing full well
that
we have a perfect storm that would make that
scenario very, very likely.
We have a day
supply problem from new car manufacturers
that's putting a massive amount of pressure
on
used car values, ahead of a huge, huge supply
problem from lease maturities.
And the
leases are going to go to auction, because
they have negative equity.
We also have the potential for more supply
from subprime loan defaults.
There's a recent
report that Santander, one of the largest
subprime lenders out there, only verified
income
on 8% of their customers.
This is extremely concerning to me.
It's because the subprime lending industry
is also extremely competitive.
When somebody
walks into a dealership, they want to purchase
a car and they have bad credit, their
application gets sent to multiple banks.
The responses are then reviewed and the most
appealing terms are selected.
The most appealing terms are not always interest
rate.
Oftentimes the approval that has the
least amount of stipulations, the one that
has the least amount of checks, is the one
that's
chosen to quicken the sale.
If a customer can't provide proof of income,
if they can't provide
proof of residence, it could delay the sale.
There's also a risk that the customer might
go to
another dealership and purchase from them.
The lenders know this, and no income verification
is a competitive advantage.
Does any of
that sound familiar?
Taking shortcuts, not verifying things, all
in the pursuit of more loan
originations?
We've been here before.
Apparently we haven't learned anything.
Daniel asked exactly the right question--
haven't we learned anything?
But unfortunately these
days that question always seems to just be
rhetorical, because of course we haven't learned
anything.
We're right back where we are, and all the
conditions are in place for another storm
along the same lines as we saw in 2008.
And although, as I said earlier in the program,
the subprime auto sector is a much smaller
part of the US economy, the ripples that this
can have through a sector that employs 5%
of the
entire US workforce are seriously, seriously
dangerous.
So having established all this, having understood
where the problems lie, and hopefully giving
you some sort of sense of the severity of
them, what happens next?
Where do we go from
here?
Well, Daniel has a roadmap of his own, which
I want to share with you.
What happens next will be a series of events
that will have a domino effect.
In my opinion,
what we'll see next is-- we've already seen
elongated trade cycles in passenger cars.
We
will now see elongated trade cycles in light
pickup trucks and SUVs.
The next thing that we're going to experiences
is an affordability issue, when residuals--
which adjust quarterly-- continue to fall
until they reach equilibrium with used car
values.
New car sales volume will continue to decline.
The day supply at dealers will continue to
rise.
At some point, dealers will refuse inventory
from manufacturers.
When that happens,
manufacturing will slow or stop while we work
through the supply issues.
This has a potential to last for a very long
time, because we not only have a new car supply
problem, we also have an inbound used car
supply problem.
And that used car supply
problem is unrelenting until the end of 2019.
So that's how Daniel sees things playing out
in the not too distant future.
But I wanted to get
another perspective and I wanted to see what
Michael thought.
And Michael brought up
something very, very interesting, and that's
the effect that technology is going to have
on the
car industry.
And unfortunately, like all technological
change, it's massively deflationary.
And for an
industry like the auto industry, that relies
on selling more and more cars every year,
that's
another headwind it's going to have to deal
with.
Their balance sheets are OK.
The issue is they are wrestling with truly
historic technological
shifts.
A double whammy of electric cars-- or what
I call non-fossil fueled cars-- and this
driverless car thing.
My mom's a perfect example.
My mom is 86.
God bless her.
She can still drive, but she doesn't
like to.
So we just gave back her car last week.
And she doesn't need it anymore, between
Uber and if she wanted to get a car, we could
get her a car that she doesn't have to drive.
I
mean, that's historic.
Otherwise I got to go schlep and take her
everywhere, which I am happy
to do.
But that's just a whole segment of the population.
And I live down here in Florida, so we see
all these elderly people driving, which is
not a good thing.
And it just ripples through.
It's
number of cars manufactured.
It affects the insurance.
It affects everything.
But I still think it's three to five years
away, but it's three to five years of, I think,
a continual
transition away from the traditional auto
manufacturers.
And unless they are able to shift,
which I think they're doing--
But what does all this mean for us as investors?
Michael and Daniel have painted a pretty
troubling picture of the US auto industry,
and I wanted to ask Michael how he thought
this
would play out and where we as investors should
be looking to try and, A, represent the view
that's been put forward in this video and,
B, the companies and the stocks through which
we
want to make some money out of it.
When you think about this and you lay this
progression out in your head, where do you
think
people should be looking for the first sign?
Should they be looking at the credit company?
Should they be looking at the Big Three?
Should they be looking at like the Ally Financials
or
the Santander-- the subprime auto loans?
Where do you think the signs are going to
come
and where do you think people should be focusing
their attention?
Well, the first thing is I think the Big Three
are sort of dead money.
I think that GM is the
cheapest stock in the S&P 500.
And I think its going to stay near the bottom.
I just think that these are deep cyclicals,
and they're just not going to go anywhere,
in my
opinion.
I mean it is a cheap stock by every measure,
but it's going to stay cheap because of
what we've discussed.
I think that the problems are going to come.
I think that you're going to see rising defaults
with
the lenders, and they're going to be problematic.
And they're going to have other problems
with consumer loans and everything else, so
I think they're depending on-- you have to
sort of
go granularly-- but I think they're an area
that's going to be a problem.
What's interesting is everybody looks at the
financials and go, oh, well, rates are going
up,
that's good for the financials.
But it doesn't always work out that way, because
there are other
things going on.
And then I think the rental car business is
going to continue to suffer.
And then you have the
auto parts industry and anything ancillary,
because if in fact-- the first wave is going
to be just
cyclical.
The second wave is going to be structural.
And when the structural wave comes, it's
going to look more like what's happening in
retail, where we actually have much lower
demand for your product.
And then you're going to see the auto parts
makers and so on-- the Auto Zones, Pep Boys,
and all that stuff.
And it's funny-- those seem to be real favorites
of a lot of the hedge funds,
and I wouldn't be surprised to see that money
sort of start to exit, because the macro picture
for them is not there yet, but it's going
to start to become problematic.
And that's a business-- one of the reasons
the FANG stocks are so popular is because
future
growth is considered very high.
I don't see how you make that case for anything
auto related,
other than possibly Tesla-- but that story's
so far ahead of itself it's just ridiculous.
I think that you're looking at a slowing growth
sector that you need to sort of start exiting,
because it's moving away from the old model
to something that we don't know what it's
going
to look like, but it's not going to look the
same.
OK, so we've covered a lot of ground today,
and I want to try and wrap that up for you
and
give you an overall sense and recap some of
the charts we've seen.
And the first component
of this that I really want to pay attention
to is the physical side of the cars themselves.
You look at auto sales which, as you can see
here, have rallied strongly since the trough
in
2009, we've had six straight years of rising
sales.
But that trend has clearly changed.
And
you can see it's not just a domestic problem.
Domestic cars, imported cars, are all seeing
declines in sales on a year-on-year basis,
and that is a big problem for companies like
GM
and Ford, for example.
And Michael Lewitt calls GM and Ford dead
money, which means he doesn't expect the stocks
to really go anywhere.
And that's never a good thing if you're looking
to invest in a company,
but if you're looking to short something or
you see a story with problems, then having
stocks
that really aren't going to go anywhere is
actually a great head start.
If you add into the mix
the finance arms that GM and Ford have, which
could be a source of some trouble for them,
as we've seen with the loan numbers, that
could give you a good tailwind if you want
to have
a short in either of those companies.
So that's the physical side of the equation.
The other component of this is the finance
side, and this is where, perhaps, the problems
are
going to start manifested themselves very
soon.
Auto loans in total now are over a trillion
dollars-- and of that, subprime loans have
increased rapidly.
And we started to see a--
delinquency rates rise very, very quickly.
That shows the stress that these guys are
under
because, as Michael pointed out, most of these
loans are at the short end of the curve, and
that's where the Fed tightening is going to
have its biggest effect.
So you can expect to see that contagion spread
through the 2015 series of subprime loans
are forecast to hit possibly 15% default rates,
which is a significant increase.
And this is
going to put some material pressure on companies
like Capital One, as you can see here.
And another company that you might look at
is Ally Financial.
And the third one may be
Credit Acceptance Corporation.
But to me the poster child for all this is
Santander.
Daniel talked about them only doing due
diligence on about 8% of their subprime loans.
And when you understand that those
subprime loans form 80% of their loan book,
you realize what a precarious position they're
in and how easily that stress could come to
bear on them and cause severe problems for
the
stock.
So there you have it.
The US auto sector is a big part of the economy--
3% of the economy,
employs 5% of the workforce-- and it's a major
driver of US economic performance.
And to
me, to Daniel, to Michael, and to many other
smart thinkers around the world who are
looking at this stuff, the problems are starting
to build in that sector and it looks like
a place
that's going to come under significant pressure.
Hopefully we've give you a sense of the currents
and the dynamics that are going to create
that pressure and we've given you a few ideas
as to how you might profit from it.

China's Coronavirus is Much Worse Than You Think

laowhy86:

Before we get into this
I really regret not doing this a couple days earlier because I was calling this amongst my Chinese friends that at some point
the government or you know
Chinese people are going to attribute this new coronaviruses new SARS to America and say that America planted this on China and
Yeah, yeah that's going around in the WeChat circles right now. I literally am flabbergasted
I was almost half kidding. But anyway, here's why you should care about the new coronavirus in China
This cousin of SARS is a virus that causes respiratory problems
But can also cause diarrhea fatigue shortness of breath respiratory distress and kidney failure
Depending on the patient's age the death rate with SARS. Well, at least this brand of SARS
It seems to range from about zero to 50% of the cases with older people being the most vulnerable
Many are claiming that this virus originated in Wuhan
Which is in south central China being brought on by seafood at a wet market
I can tell you one thing
If you've been to a Chinese wet market you will know exactly how a mega virus or bacterial infection could begin here
Chinese wet markets are a proverbial zoo of disease with animals being slaughtered
chopped mixed in coming from random sources at the end of the day the blood and guts are simply washed on the floor drains of
The hose without an ounce of disinfectant being used rinse and repeat and the next morning it begins again
These markets are an absolute paradise for viral and bacterial growth and mutation and largely go unchecked
There are around 700 plus reported cases right now of the corona virus with a majority found in Wuhan
But it spreads to different countries in Asia. Now, this is the dangerous part
I'm very skeptical about these figures and a simple look at history shows us that this is nothing new
Back in 2003 SARS or severe acute respiratory syndrome
ravaged China and claimed hundreds of lives
It was thought to have come from a market in Guangdong and southern China where I lived and actually were my wife's from as well
unfortunately
No one was really talking about it until it hit Hong Kong when stars hit Hong Kong and they quarantined and dealt with the outbreak
With utmost vigilance while mainland China tried to keep it hush-hush in order to prove social order
They didn't want a bunch of people freaking out and causing anarchy
Social order is at all times the most important feature of Chinese governance
Unfortunately trying to keep a lid on the news of an outbreak
Just meant that it allowed the virus to spread and measures couldn't properly be implemented to stop it
Doctors that I spoke to remember the grim experience of SARS and told me that they were given special orders at a top
provincial level to not spread awareness
But instead when a patient comes in with symptoms to tell them just to stay home and not to go out
With an elderly generation that is largely undereducated. Most people just went out anyway and continued to buy and sell at the wet markets
Fast-forward and thousands had contracted the virus and the beginning of a pandemic started
This however is not limited to disease when the 2008 Sichuan earthquake happened that killed
70,000 people the officials knew why and shut down all
communication which ended up in more deaths the deaths were largely attributed to the fact that
everyone lived in concrete buildings and many of them had not been built to code due to bribery and corruption on a local and
provincial level
the officials blocked messages calls and any effort to spread awareness for aid all in the name of stopping the flow of
information that might challenge the CCP's claim to rule
There's a thing in Chinese culture called the Mandate of Heaven which basically means that when a dynasty is at its end
It will be marked by a great tragedy
usually a natural disaster and that's the signal for political change and
Although this is an older idea
The Communist Party of China would rather have thousands of people die
Cut off its citizens from the affected area all to preserve its right to lead
I'm concerned that this virus that is currently spreading like wildfire has been a thing for a while
so I
Contacted a physician that I personally knew
My suspicions were confirmed and he told me that they were again given orders to tell people to stay home
This time to wear a mask
But were explicitly told not to spread the information
Outside of the doctor's office and not even to share the messages about it to other medical professionals. This was last month
You don't believe me you think face isn't that bored in China we'll check this out
By booting community, which is in Wuhan where the you know the entire virus started
Literally in a village seven kilometers away from the South China Sea Food City where the virus started
They organized a hundred thousand people to share a massive community meal in just two days
Before this massive harmonious event fifty nine cases were reported in the area
Yet with this knowledge state media managed to promote a communal banquet where everyone eats from the same dishes together
Literally where the virus started no worries. The virus doesn't exist. Right? Keep the harmony
We now have an official death toll of at least six and it's rising
But I suspect that the seven hundred declared affected individuals is much much higher notice that it took
International cases of the virus to make the government finally issue a statement. It wasn't a domestic issue anymore
I said this for years
But the Chinese government seems competence in massive infrastructure projects and grand leadership until you look at smaller details
like building materials
societal issues health care and more
Top-down leadership means that the government has always waited into the last minute to do with a crisis because no one
Wants their head on the line to break the bad news. That's how top-down politics work
CCTV which is Chinese Communist Party state media quoted the leader of China in an address to the public to be vigilant
But the underlying message was to not freak out and preserve social harmony
Quote party committees governments and relevant departments at all levels should put people's lives and health first
They should ensure the masses to have a quiet peaceful and joyous Spring Festival
There were no messages about how to address the crisis just that now
It's on the local Communist authorities to deal with it talked about passing
the blame
Chinese New Year is the biggest migration in the world each year and millions of people head to their hometowns to visit family
this is because a huge chunk of the
Population has moved to the urban areas and a lot of them are very very far from home
so it's their one chance per year to go home and see family this means
In trains crowded planes crowded buses and these are ripe breeding grounds for the virus also
Keep in mind a huge chunk of the population, especially the people that grew up in the lost generation
do not believe in Western medicine or even very basic elements of bacteria or
Viruses they believe in traditional Chinese medicine. So this information is not going to be super helpful for them
Now I'm extremely happy that this broke international news as fast as it did, but I'm terrified for the Chinese people
Who are not being properly educated on what to do in this very dangerous time?
It's not time to have a peaceful and joyous Spring Festival. It's time to tell your citizens how to deal with this potential pandemic
Put your credibility to the test and not your political face-saving maneuvers and work on an international
Level to save your citizens and to prevent this from becoming a global crisis
I lived in China too long to know how things are dealt with I
mean when my city banned
Motorcycles completely they brought in a bunch of officials to make sure it actually happened and had cops snatching bikes left and right
But as soon as they left the cops stopped cracking down on the motorcycles and this is always how it works
It's always to impress the next guy up
So when you have a situation like this a local area like Wuhan would rather just clamp down on and say hey
It's not that bad. This is totally not an outbreak. Don't worry about anything. We got this under control. They'd rather do that
So that they don't get in trouble from the next guy up. Let's say provincially or maybe even at a national level
This is how it works with corruption crackdowns
This is how it works with literally everything where the government is involved in this trickled top-down politics
Now I know it sounds like doom and gloom and it is very worrying
Now that Chinese New Year has just begun and that people have actually started their big migration. I think you're gonna see some serious serious
problems coming out of this epidemic
I think the cases are gonna go through the roof and the thing that really concerns me is that and the reason I'm skeptical about
These numbers is that they have all the areas where they're claiming that people have gotten the virus
But I've already gotten videos from my friends in Hawaii Joe where I lived of
multiple people being shipped off in
Kind of bubbles basically and protect the spread so when they're not reporting on where this is actually happening
I'm gonna and I'm relying on friends to send me videos if they're seeing out their window
I have a feeling that this one out of thousands of Chinese cities if I'm getting videos from this place
I have a feeling it's much much worse than it actually is
Now it has kind of taken ahold of the Chinese Internet and they're doing their best to kind of like calm it down
but I like to end this on a fun note with some hilarious memes and
Corona virus related joke. So my Chinese friends have been sharing during Chinese New Year people hand out something called a home bow
Which is like a red envelope and usually that's full of money in this case
They're handing out home bow full of face masks to prevent the spread of the virus, which I thought was pretty funny
This one's getting real popular with different variations
But I believe this is the original
The dude in like a full hazmat suit talking to some guy in the window and it says come on
Let's go out and play. Here's some different of variations on mask wearing techniques
This guy's made a little peephole. So you can see out of it for this woman. She's completely blind to this scenario
well
This woman is I believe wearing ten different masks which I think may weigh it down and let the virus sneak in a little more
Look at this absolute. Gee, everyone is protecting themselves their mess, but this guy doesn't give off
This guy definitely wins the badass competition though. He is decked out
This is a wee chat message, which is like a Chinese social media messaging app and the guy says hey
Do you want to hang out? I just landed and the person replies. We're from he says Wuhan Wuhan is where the
Coronavirus started you want to have dinner together and then he gets blocked poor lad
there's this game back in the day where you either like prevent or promote the spread of a pandemic and this is exactly exactly
What the government would be worried about is they don't want the you know the country to go into Anarchy because of this
Anyway, I want to wish to everyone out there a happy Chinese New Year. Please stay safe
If you are a Chinese viewer that is heading back to China to visit family
Please stay vigilant make sure you're covered up try to avoid any unnecessary travel if poss
Well, I really think this has potential to spiral out of control
But either way, I do appreciate all of you guys. Don't forget if you want to support the channel head over to patreon calm
Is expose all kinds of behind-the-scenes stuff and you can contact me directly there
And I want to say thanks so much for watching guys. We'll see you next Wednesday at 1 p.m. Eastern Standard Time
don't forget you can check out a
Adv China motorcycle talk show on 2 wheels every single Monday at 1 p.m
Est and you can check out a serpent's at a video every single Friday just in time for a beer at 1 p.m
Est and we got our new car channel
Which is called worthless whips we buy a car for a thousand dollars fix it up review it and then flip it for a profit
If you haven't checked it out yet, please go subscribe to worthless whips. Thank you so much leaveners and i'll catch you on the next

The Rise And Fall Of Cadillac

Business Insider:

Irene Kim: Owning a Cadillac in America
was once the ultimate status symbol,
synonymous with success and achievement.
The company dominated the market,
outselling all luxury automakers
in the US for decades.
Just 40 years ago, nearly one-third
of all luxury cars sold
in the US were Cadillacs.
Now, less than 7% of luxury cars
purchased by Americans are Cadillacs,
and the company is struggling
to keep up with competitors
it once outsold.
So, what happened?
Cadillac got its start in 1902.
It was actually formed from what was left
of the Henry Ford Company after
the departure of Henry Ford
following disputes with his investors.
Engineer Henry M. Leland was brought on
to appraise the company's
factory in order to sell it
but instead saw potential.
Leland chose to reorganize the company
as Cadillac Automobile Company,
naming it after French explorer
Antoine de la Mothe Cadillac,
the founder of Detroit,
which was America's automotive hub
as well as the home of the company.
At face value, Cadillac's
cars seemed almost identical
to those the company produced under Ford.
But they quickly distinguished themselves
and gained a reputation for being
better made and more reliable.
In 1909, the company was purchased
by up-and-coming
conglomerate General Motors
and officially named its
most prestigious division.
Over the next few decades,
Cadillac set huge milestones
in the auto industry,
including the first passenger car
with a fully enclosed cabin.
Perhaps most impressive
was the development
of the first electronic self-starter.
Up to that point, starting a car
required the awkward and strenuous task
of cranking up the engine.
With some help from
inventor Charles Kettering,
Cadillac simplified it to
just the push of a button.
Breakthroughs like this
inspired the company
to adopt its iconic slogan:
"Cadillac: Standard of the World."
Fast-forward to 1927.
Cadillac established the
concept of a luxury car
with its LaSalle convertible coupe.
Before the LaSalle, cars
were strictly created
based on their engineering needs.
With this new car, it was
the first time a company
called in a designer rather
than an engineer for the job.
Designed by car stylist Harley Earl
to be lavish and eye-catching,
the LaSalle became a
trendsetting automobile
that once again highlighted
Cadillac's high standards for car-making.
Cadillac's success and technical progress
continued through the 1930s.
But then World War II hit,
and the entire car
industry slowed production
in order to produce tanks
and aircraft engines.
But that didn't stop the car brand.
Cadillac introduced designs that came
to both define the car industry
and embody the prosperity of
the "fabulous '50s" and 1960s.
While the company received recognition
for its continued
engineering developments,
it was Cadillac's iconic tail fins
that became a staple feature
of all luxury automobiles.
Not to mention its cars'
enormous dimensions
and Dagmar bumpers, nicknamed
after the voluptuous TV star.
At the height of its popularity,
Cadillac was selling over five times
that of rival Lincoln,
and in 1968 managed to sell
over 200,000 vehicles for the year.
But Cadillac was more than
just America's most stylish
and top-selling premium car brand.
Through General Motors'
aggressive marketing,
driving a Cadillac became
a status symbol in America
to everyone from celebrities
and professional athletes
to presidents.
Matthew DeBord: It was the
pinnacle of achievement
in American society at that point.
They also have had these zany names,
like Fleetwood, Eldorado.
They came up with these
crazy, crazy names,
you know, drawn from the
most pretentious notions
around European heraldic
badges and stuff like that,
and the whole idea was to sell people
on the notion that they had really made it
and they were gonna ascend to some kind of
premium status in American society.
Kim: At the start of the 1970s,
Cadillac remained the dominating force
in the luxury car market,
as the idea that "bigger is better"
still rang true with buyers.
However, as the economy declined
and a widespread oil crisis spread,
owning giant, gas-guzzling sedans
became far less convenient
and far more expensive.
But more than anything,
the rise of imported cars
gave Cadillac some serious competition,
and the brand started to lose ground
as the standard of excellence in America.
DeBord: When the Europeans showed up,
the Germans in particular,
with their snazzy little sport
sedans, it was a revelation,
and a lot of people who,
you know, liked to drive
gravitated toward those.
And they were gonna go
for Porsches and BMWs
and Mercedes and that sort of thing.
And they also started to think about
European automobiles as just being better,
them being superior.
And then the Japanese arrived
with their little fuel-sipping machines
that're, you know, really quite reliable
relative to American cars.
And so people started
looking at these and saying,
"Well, it's a better car,
it gets better fuel economy.
Why am I driving around
in this giant Cadillac?"
Kim: Although the 1980s started
well enough for Cadillac,
with sales continuing to increase,
the company responded poorly
to this rise of imports.
To compete with all the new
compact foreign automobiles,
the company began
downsizing its entire lineup
to create a team of smaller,
fuel-efficient cars.
But its cars quickly
became indistinguishable,
not only from each other,
but from General Motors'
other brands as well.
Cadillac owner: The
black Cadillac, please.
Valet: Right away, sir.
Buick owner: Excuse me, I
believe that's my Buick.
[laughs nervously]
Cadillac owner: Yes, so it is.
Kim: And as the company hastily pushed out
these smaller cars to try and match
the influx of luxury imports,
Cadillac encountered a number of failures,
the prime example being the Cimarron,
the smallest car Cadillac had
ever produced to that point.
It sold so poorly that it
was axed from their lineup
by 1988, just six years after its launch.
DeBord: It's a Chevy with a
Cadillac badge slapped on.
It looks like a Chevy.
It's just a ghastly little car.
I mean, if you wanted a Chevy, it was OK.
But if you wanted a
Cadillac, you looked at it
like, "What the F is this," basically.
So it was just an embarrassment.
But it was an attempt by, you know,
General Motors and Cadillac
to keep the brand going
in a much more competitive environment
where some of the value proposition
of Cadillac had gone away.
Kim: Consumers recognized the decline
in quality of Cadillac's cars,
and it reflected in the company's sales.
Cadillac's share of the
US luxury car market
dropped from 31% in 1980
to just 22% in 1990.
As Cadillac fell, its competitor
Lincoln reaped the benefits.
Lincoln's share doubled
during the course of the decade to 20%.
And in 1998, for the
first time in 59 years,
Lincoln outsold Cadillac.
By the 1990s, Cadillac lost any appeal
it had with the younger market.
The running joke became
that all Cadillac owners
were somewhere between 60 and death.
America's luxury car market
was now heavily dominated by Mercedes,
with Toyota's newly introduced
Lexus brand close behind,
followed by BMW, whose
sales were quickly rising.
But in 1999, the introduction
of what would become
one of Cadillac's most iconic vehicles
would prevent a total collapse
and help revamp the brand.
The 1999 Escalade was Cadillac's answer
to the full-size SUV boom
and its response to the
success of Lincoln's Navigator.
The Escalade not only
performed well sales-wise;
it became a pop-culture icon in itself,
making its way into
movies and music videos,
as well as becoming a popular choice
among celebrity car buyers.
Things were starting to look up.
Cadillac saw a bump in sales,
a rise in popularity with the youth market
thanks to the Escalade,
and somehow survived
General Motors' 2009 bankruptcy
that saw multiple brands dissolve.
Unfortunately, the 21st century
has not been completely kind
to the once glorious name of Cadillac.
While Cadillac's array
of modern sport sedans
and performance models
has been well received
by reviewers and the media,
the numbers say otherwise.
In 2018, the brand saw its
US luxury car market share
dip to a lowly 7%,
selling only 154,702 cars that year,
which put it behind even Acura.
And its sales among American buyers
only continue to plummet.
But why? How does a company that continues
to churn out high-quality cars
with top-level technology,
like its self-driving Super Cruise system,
continue to dip in sales?
Well, Cadillac took a long time
to join the crossover SUV craze,
something that now makes up 60%
of luxury car sales in the US.
But despite its problems in the US,
the company may have found its answers
in the global market,
particularly in China.
DeBord: The US market is at
peak levels right now as far as sales,
so there's not a whole lot of
additional room for growth.
And you say, "Wait a minute,
where are we gonna see
all the growth in the future?"
And General Motors looks, you know,
across the ocean and sees China,
whose market is already much
larger than the US market,
you know, in excess of $20
million in annual sales
and could probably go to $30 million
or $40 million eventually.
People don't have a lot of cars in China.
And General Motors is
looking at this situation
and saying, "People in China are going
to get richer in the future,
and they're going to want
to identify their status
as a wealthy person with an automobile.
Why shouldn't that be a Cadillac?"
So they're just thinking, "Well,
why don't we put Cadillac in there?"
Well, they put Cadillac
in there 10 years ago,
and it's been extremely impressive.
Kim: Between 2016 and 2017,
Cadillac sales in China
exploded by over 50%,
leading Cadillac to record
its second-highest global sales mark
in the company's 115-year history.
The company already has plans to expand
its network of dealers
to 500 in China by 2025.
DeBord: We look at a rise in Cadillac,
we look at a fall in Cadillac,
and the fall may be
something that can't be
arrested in the market
where the brand was created.
I mean, it's one of the
original General Motors brands.
But they could create a brand
that means something in
another part of the world.

Ford to cut 7,000 jobs by August to cope changing auto industry landscape

ARIRANG NEWS:

Global automakers are pushing for massive
restructuring...
The latest layoff of workers comes from Ford
Motor Company, which plans to reduce 10 percent
of its labor force by the end of August.
Kim Hyesung reports on why and what this means.
Ford announced plans Monday to cut 7-thousand
white-collar jobs, 10 percent of its global
workforce, by the end of August.
And Ford is not alone.
In the past six months, a number of global
automakers including Volkwagen and General
Motors have unveiled plans to downsize.
"Global car demand is falling amid slowing
global economic growth.
An increase in car-sharing services is also
changing the auto industry landscape.
Emission restrictions are stricter...To cope
with falling sales and invest in new technologies
to develop electric cars and driverless cars,
automakers are cutting their laborforce to
generate cash to spend on innovation."
In a memo to employees Monday, Ford CEO Jim
Hackett said slashing the white-collar positions
will save the company about 600 million U.S.
dollars a year, and help Ford focus on new
product development like smart cars and new
technologies.
Volkwagen has also vowed to cut 7-thousand
workers by 2023 to accelerate its transition
into electric cars.
General Motors said it will use the saved
costs of around six billion dollars a year
from the cut of 14-thousand jobs to focus
on future cars.
"Electric cars and autonomous cars require
fewer auto parts than fossil fuel cars, and
automation in factories mean fewer workers
are needed.
But it's not clear if the shift to future
cars will drive down overall jobs because
it does create new jobs in infotainment car
services and other areas."
To keep up with the changes in the market,
Korean automakers including Hyundai Motor,
are also investing in future cars by cooperating
with startups and university research centers.
The government also vowed to increase the
number of electric vehicles and hydrogen cars
to 10 percent of total auto production in
the country by 2022.
It's unclear if the number of overall car
related jobs will decrease in the future,
but being proactive to save costs and invest
in future cars is now becoming the new normal
in the auto industry.
Kim Hyesung, Arirang News.

Why Cuban cab drivers earn more than doctors

Vox:

[“A doctor ends up making about $40 a month.
On my worst days driving taxi, I bring in
$60--In one day”]
Did you catch that? This guy makes more in
one day than a doctor makes in a month.
And he’s a taxi driver. He’s actually
trained as an engineer but engineers make
even less than doctors.
“I like being a taxi driver, not an engineer”
Welcome to the Cuban economy.
Right after the socialist revolution in 1959,
Fidel Castro’s government seized almost
all private businesses and land.
[You won’t have to worry about next year.
The state will do your planning from now on.]
Every restaurant, factory, hospital and home
was property of the government.
The State set prices for everything and decided
how much people got paid. The private sector
disappeared overnight.
[The men in this world desperately need: economic
reform.]
You can see the result of this when you go
looking for food in Havana.
When I showed up, I was pretty excited to
see what street food was on offer.
But all i could find was this. Everywhere
I turned.
This is a typical scene in a Cuban eatery:
too many employees in an empty establishment
with empty shelves, just waiting for food
deliveries from the government, and putting
in their eight hours so they can go home.
They get paid the same whether they sell one
plate of food, or fifty.
This model doesn’t work.
Cuba survived for many years with subsidies
from the Soviet Union.
But since its collapse, the economy been getting
worse every year.
This lady is showing me her government ration
cards that she’s kept for decades. Cubans
use these monthly cards to go the storage
house to get their monthly rations.
The
government realized this in the 90s and has
started giving out private licenses, fueling
a small but growing private sector.
I stumbled upon a private restaurant in Havana
that was a totally different experience than
the public ones. There was actually movement,
and good service.
The owners had to actually sell good food
if they wanted to stay in business.
Which brings me back to the Taxi driver and
the doctor.
The reason a taxi drivers make so much more
than doctors is because they have private
licenses. Their salaries are not set by the
state.
And they can charge tourists high prices.
I paid 25 dollars to get from the airport
into Havana.
And inn that 30 minute drive, my driver made
more than the average monthly salary of a
Cuban, which is $20.
One of the problems with this is that you
have highly trained workers leaving their
trade to go do remedial work in the private
sector.
This guy is an engineer, but he’s cooking
in a private restaurant.
These guys are accountants by trade but make
a killing driving around tourists on taxi
bikes. This woman is a nurse, but she hasn’t
been in a hospital in years.
This guy is an electrical engineer but opened
up a barber shop in his house and makes ten
times more than he would in his field of study.
Imagine trying to live on the Cuban average
of $20 per month. When you ask them how they
do it, they all have the same response.
“Everyone has to do something in addition
to their official salary.”
Just beneath the surface in Cuba is a bustling
informal market where Cuban’s make an additional
income on top of their official salary, just
to survive.
We tend to associate black markets with dangerous
activities. But in Cuba, people sell illegal
popsicles, or newspapers — not to get rich,
but just to survive.
But things are slowly changing.
Since Fidel’s brother Raul took over in
2008, the number of private licenses has increased
significantly every year. And now 20% of the
economy is now private.
Still, most Cubans are jaded by the decades
they have had to use illegal creativity just
to survive.
“There is one party. They control everything.
What change could there possibly be?”

7 Reasons Nissan is Failing (and 3 Ways to Turn It Around)

Donut Media:

(engine accelerating)
- Look, I love Nissan, but right now,
it feels like they're on the path
to going out of business.
How did we go from the S13, to the Versa;
from the R34
to the Murano convertible?
(upbeat music playing)
In this video, we're gonna
take a look at what Nissan
did right in their past,
and what they're doing wrong, now,
and then, I'm gonna
take a look at some ways
that could turn things around.
So come with me, if you wanna survive!
Problem #1: all we care
about are old Nissans.
Nissan had some of the sickest,
most iconic cars ever made.
But over the last 20 years,
they've really dropped the ball.
The quality of their
cars has gone downhill,
and they've lost their core audience.
And it shows in their numbers;
in the beginning of 2019,
they lost 99%
of their operating profit,
and had to lay off
nearly 13,000 employees.
Which makes me wonder:
how does a company, that
made so many of the cars
that we all wanted and loved,
fail so hard?
We're gonna get into that,
but first, let's look at why
we love their cars so much.
(upbeat music playing)
Nissan, or as they used
to be called, Datsun,
has been around for over 100 years.
Bur most of the coolest
cars they made were
from the 1970's,
80's,
and 90's.
The z line really put Nissan
on the map in the U.S.,
starting off with the 240z, in 1969.
This family of affordable
sportscars made it possible
for every Joe Shmoe to
drive a fun, stylish car
that could rip.
Then, there was, of course, the Skyline,
which is arguably one of
the most influential cars
of the last 50 years.
As American cars got worse
in the 70's and 80's,
both the Skyline and the z
cars continued to get better,
building a core fan base with
cars that really stood out.
By the 1990's Nissan was
at the top of their game,
with new models like the twin turbo 300zx,
even the 240sx, they gained
a whole new generation
of enthusiasts.
Even their entry-level models
had high performance versions,
like the Sentra SER.
They made great cars that
drove well, they were reliable,
and felt planted on the road.
Nissan spent a lot of money
making their cars great.
The yen was so strong,
that they could afford to.
But, before long, Nissan was
struggling to make a profit.
Actually, for most of the 90's,
they didn't even make a profit, at all.
When you're not making a
profit, it's hard to innovate.
That's Business 101.
(chime sounding)
So, while their competitors
were releasing new models
every couple of years,
Nissan almost went a decade
without a major update
to their models, which,
uhhhh, sounds familiar.
From a car enthusiast
standpoint, we look back
at the Nissans from the
90's as some of the most fun
drivers' cars out there.
But, little did we know,
that they were on the verge of bankruptcy.
They were actually losing
$1000 for every car they
sold in the U.S.
I never took any business
courses, but that's,
that's not good.
By 1999, things were looking
even bleaker for Nissan.
They entered into an alliance
with French car manufacturer, Renault,
who offered to take on $5.4
billion of Nissan's debt,
in exchange for 36% stake in the company.
On the other hand, Nissan
would import, and sell,
Renaults in Japan.
It was a solution that
benefited both companies.
To spearhead the new initiative
that would bring Nissan
out of the red, Renault
brought in the notorious
Carlos Ghosn as CEO, who
is in jail, right now.
More on that, later.
So, what are the seven ways
that Nissan is failing?
Well, let's get into it.
(apprehensive music playing)
Cutting too many corners.
The first major change
Carlos Ghosn enacted, as CEO,
was to cut production cost.
Nissan was spending 15
to 25% more on parts
than their competitors.
So, they started to install cheaper parts.
Which makes sense, from
a business perspective,
but then we get things
like timing belt guides
made out of plastic.
Guides and tensioners that
kept the timing belt in place,
on six different Nissan
models, made from 2004 to 2010,
were made out of plastic
that degraded really quickly.
Which meant timing belts on those cars
had to be replaced early
on in that car's life.
Nissan actually lost a class
action lawsuit over it,
and they were forced
to address the problem.
One of the more well-known
foibles that afflicted
Nissan cars was their CVT.
Nissan's continuously
variable transmissions
were some of the worst-made
transmissions in recent history.
They commonly failed around 60,000 miles,
which is, conveniently, right
when their warranty ran out.
Luckily for owners, Nissan
was sued, yet again,
and was forced to recall
the cars that had the CVT.
They also extended the warranty
from 60,000 miles to 100,000.
So, good for them.
(jazzy music playing)
Even with a new round of updates in 2012,
they weren't quite able
to improve quality,
or driver satisfaction.
In a consumer report study, done in 2014,
14 of the 22 Nissans and
Infinities ranked last
or second-to last in their
respected categories.
Some testers said the cars
felt cheaper, less refined,
and even less enjoyable than before.
That's,
that's not progress.
If there's one good thing to
be said about Carlos Ghosn,
it's that he did get
Nissan out of the hole.
Without his contributions,
we might not have the brand around, today.
If he didn't cut cost in
jobs and lower the overhead,
they wouldn't have been
able to design new cars.
This is when Nissan started
developing more entry level
volume cars, like the Versa.
You know, everyone's
most hated rental car.
I sat in one, and it somehow felt older
than an, like, old Sentra.
It was weird.
To their credit, though, these volume cars
are the biggest reason Nissan was able
to turn things around.
But, in the process, they kind of
lost the company's soul.
Cars, like the crossover Murano and the
new generations of the Altima and Maxima,
were decent, but the market
quickly became saturated.
It seemed like every other car on the road
was a freakin' Altima.
This early 2000's gen was
the most powerful yet,
but mechanical issues plagued the cars-
usually, right after the warranty ran out.
Floorboards rusted
through, they ate up oil,
and catalytic converters
were known to fail.
These cars wouldn't have
been volume cars, though,
if people didn't buy them.
To ensure that
that happened, Nissan sold to anyone,
despite if they could afford it, or not.
This was possible because
of a little thing called
subprime loans.
(quirky music playing)
(party horn sounding)
if you're not familiar
with these kinds of loans,
they're, basically, what led
to the recession of 2008.
- What in the world is
happening on Wall Street?
- They're aimed at people with bad credit,
and have insanely high interest rates,
like 25%!
One guy in Indiana financed
a $21,000 used truck
with a subprime loan.
But, by the time he would have owned it,
it would have cost him over $44,000!
Good thing he couldn't make
that $750 monthly payment,
and ended up having to go bankrupt.
There are 1000's of stories like this,
and Nissan's not the only
one causing this issue.
(engine accelerating)
(upbeat music playing)
Maybe the biggest reason
Nissan is blowing it,
is because they're in
the same situation that
they were in the late 90's.
Their most fun, most
enthusiast-based models
haven't been updated frequently enough.
The 350z was in production
for seven years.
The 370z has gone 10 years
with almost no updates!
I mean, the 370 was basically
just an upgraded 350,
to start off with.
Even Nissans's flagship model, the GTR,
has been around for 12
years, with only a handful
of performance upgrades.
Most changes they make are
based on comfort and style.
You can't do that and expect
fans to stick by your side.
We get bored!
We're just cats, man!
I'll play with that toy
for like, five minutes,
and then never touch it again.
Then, there's the whole
Carlos Ghosn fiasco.
The man who turned the company around
turned out to be siphoning
money from said company.
He got busted last year.
We actually made a whole video on it,
if you wanna learn more.
The whole Carlos Ghosn
thing kind of soured
the public's perception of Nissan,
and they have yet to bounce back.
In the spring of 2019 Nissan
lost 95% of net income,
and 99% of their operating profit.
Their revenue dropped 13%,
and the company was forced
to lay off 12,500 employees.
Nissan is basically in the same
exact position they were in
before Carlos Ghosn took over.
So.
How should they turn
things around, this time?
(resolute music playing)
I think the most pressing issue is that
Nissan needs to make
their cars more reliable,
starting with the quality of their parts.
There's a reason that
30-year-old s13's are still
the preferred car for drifting.
They're solid as hell,
especially the chassis.
You can strip them down,
and they still maintain
structural rigidity.
Can you imagine, people in 30 years,
drifting clapped out Murano Cabriolets?
Not gonna happen.
But let's take a look at what
happened with the KDM cars.
Kia and Hyundai had some
of the worst reputations
in the late 90's and early 2000's.
But, they turned things
around, and nowadays,
they're affordable, reliable,
and some of the best-selling
cars in America.
The quality is great,
and some of them look
cool as hell.
The Veloster N is a certified ripper,
and Hyundai even has a luxury
brand, now, the Genesis.
The Kia Stinger is amazing.
I love that car.
Good work, KDM.
Nissan, you should copy their homework.
I know the type of
person who drives a GTR,
but I don't know who drives Nissans.
I don't think Nissan
knows who drives Nissans .
They need to find their
audience, and then cater to them.
Maybe they should take a
page out of Dodge's book.
They debuted the Hellcat,
maybe the most ridiculous
production car, ever made.
And instantly, that
cemented their identity.
This is a consistent message
across all their cars
and marketing, and we
like them better, for it.
They paid James to get a Dodge tattoo.
- Ow!
Owowowow!
Ow!
- Third, and, most
importantly, in my mind,
take a page out of your
own book, and bring back
some fan favorites, Nissan.
How sick would it be if
Nissan made a new Sylvia?
It would be great
competition for the GT86.
Overall, I think they need
to be more competitive
with their cars.
You hop into a new
Corolla, it's pretty nice!
You hop into a new Sentra and you're like,
how does this interior feel
older than the old Sentra?
It doesn't make sense.
This just might be the car nerd in me,
but I think it's vital that
Nissan focus their efforts
on updating the z and the GTR.
Both those cars are sick,
and still relevant in the bigger picture.
But, it's been more than a decade, Nissan.
That's unacceptable.
Think about how sick
a new z model would be
to usher in this new decade.
And maybe a new GTR?
The R36, perhaps?
I think most of all, we
just wanna see Nissan
make some fun cars, again.
When the GTR came out, it was awesome.
It is still an awesome car.
But Nissan needs to follow it up
with something else, soon,
before our excitement-
and our bank account-
runs out.
Hey, so this is the first
new episode of 2020.
Let's resolve to be
more kind to each other.
Nissan, I love you.
I wanna see you guys succeed, man.
Be kind!
See ya next time.
New catchphrase 2020, baby!
Being nice is not the same as being kind.
Being nice, people be nice to your face.
Don't be nice!
Be kind!
See ya next time.