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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
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To: Killswitch who wrote (14894)10/29/2002 10:30:39 AM
From: robert b furman  Read Replies (2) of 19219
 
Hi Brian,

Last year was a statistical fluke.The first of free money for 5 year financing on everything.This took what was supposed to be a 16 - 16.5 unit year to a 17.2 unit year.All this volume increase took place in about 90 days - it was the best selling 90 in history.

Additionally inventories were very high vs historically low now.

A substantial decline from those frothy levels closely approximates the normal rate - a headline you won't see - let alone be burried in the detail.

Of course every manufacturer has a dog that doesn't sell well - consequently dealers don't order or stock i.e. Aztec.

I know Ford is about to idle 4 plants - they seem to have won the High inventory award of late.

The car market is another example of excess global capacity.This has resulted in declining prices for 18 years - certainly not the result of a bubble - more like healthy competitive globalization.

With affordability getting lower and lower year after year - it seems to confuse many that sales continue to maintain unit volumes that are often misconstued as "Bubble Mania".

It is simply economics - the more affordable autos become the more can afford/finance them.This assures continuous demand - it doesn't precede the demise of the global trade flows.

Bob
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