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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (7509)	2/9/2004 9:20:07 PM
From: ldo79	Read Replies (3) \| Respond to of 110194

THE DECLINE AND FALL OF THE AMERICAN ECONOMY Geneva Steel is a hulking plant, a giant mass of industry thrown up by 10,000 men in the heat of the Second World War. Almost 2,000 acres of metal and fire where the backbone of an economy was forged. Geneva Steel. Proof that a nation’s strength is in its workplace, in the raw-boned productivity of sweat and toil and smarts. Geneva Steel. One more sign that the past is gone and the future is frightening, that America is headed down the path of weakness and insecurity. Geneva Steel. They sold her guts last week. A half a century of American steel rolled out in massive plates. The bellies of battleships and the frames of automobiles. Whatever the country needed, whatever the world hungered for. Clouds of black smoke and the steady hum of prosperity. In a state with a Carbon County and a Coalville, it was only natural to have a steel mill, and on the banks of Utah Lake Uncle Sam found just the spot. The government ran it until ’46 and then U.S. Steel took over but in recent years those words don’t go together – “U.S.” and “steel.” In recent years we’ve gotten our steel from overseas. They’ve just cut the legs out from under us. And Geneva went under. It tottered and struggled and downsized and lunged, but in the end it went under. Bankrupt and dissolved. Liquidated into rust and regret, a giant scar in the valley. And last week they sold her guts. The bankruptcy people had an auction and it came down to two bidders. Nanjing and Qingdao. Those are Chinese names. And they are Chinese industries. And for a mess of pottage China bought our birthright. A steelmaker and a slab caster and a rolling mill and a plate finisher. The guts. The machines and mills, the giant roller lines, the fiery furnaces that made Geneva a steel mill. Qingdao got those. And it is taking them to Shandong. They will be disassembled and packaged up and carted off and shipped across the seas. Then Chinese workers in a Chinese plant will put it back together to make Chinese steel for Chinese industry to build Chinese prosperity. While America rots. While America pretends that a “service economy” is anything other than economic suicide. Our national laziness has grown so prevalent and overwhelming that we prefer it to our own national self-interest. We have forgotten that the people on the top of the mountain got there by climbing. We seem to think that we have some “right” to our prosperity, and that nothing can endanger it. While year after year we run a trade deficit – importing the products of the world and exporting our wealth. Every foreign-made doodad comes here in exchange for American dollars – and they don’t grow on trees. We are hemorrhaging prosperity. We are pretending that we don’t need to make things. We somehow are so stupid as to think that massage therapists and record producers and tanning-salon operators actually make wealth. We somehow believe that writing computer code and selling real estate and being a stockbroker have something to do with economic prosperity. While the decades-long decline of American industry and manufacturing continues. And that’s too bad. Geneva Steel was built to strengthen our national security, and any nation that abandons its manufacturing base is jeopardizing its national security. If we can’t make the things we need, then we are slaves to those who can. When the United States was a manufacturing power, we bought things in a buyer’s market. As our manufacturing power is dying, we are increasingly shopping in a seller’s market. And that’s dangerous. There is a simple principle that always holds true: Those who work eventually come to the top. Productivity is always rewarded. And our society is not productive, while the societies of China and other nations increasingly are. Included in their number are nations – including China – whose cultures and national interests are belligerent to ours. America rose as a world power on the strength of its manufacturing base. In our arrogance, we forget that. In our arrogance, we fail to see that other economies are rising and ours is falling. We are so drunk with our status as a superpower that we cannot see the seeds of our own destruction sprouting all around us. No nation can be strong if it cannot be self-sufficient. And our reliance on foreign manufacturing has cut the throat of our national self-sufficiency. Geneva Steel used to be a strength. Now it is a metaphor. A metaphor for a national economy that has abandoned hard work and manufacturing productivity for the smoke and mirrors of lazy consumption. Our factories, our jobs, our prosperity and our future have all been sold overseas. And the price will be paid by our children and grandchildren. We will be the first generation of Americans to leave the nation less prosperous than we received it. Because we turned our noses up at factories. Geneva Steel. They sold her guts last week. - by Bob Lonsberry © 2004 lonsberry.com

To: Jim Willie CB who wrote (7509)	2/9/2004 10:08:23 PM
From: Roads End	Read Replies (2) \| Respond to of 110194

Autos and zero interest is simply marketing. GM is making a killing on their financing business. The interest is loaded in the price of the vehicle they sell at "zero interest" At the auto show this weekend I noticed prices for comparables roughly the same price as last year but what stood out was the number of new improved models at significantly higher prices. These no doubt have higher margins built in to the zero interest allure.

To: Jim Willie CB who wrote (7509)	2/9/2004 10:56:06 PM
From: mishedlo	Read Replies (3) \| Respond to of 110194

Jim I got a desperate call from my GM auto dealer at the end of January. We have a lease - my wife's car (not my choice). At any rate they offer me incentives to terminate the lease 7 months early, no penalty but I had to do it by the end of the month. I told them no way could we act that fast. I told him to call me back if the deal was extended. Got a call just this evening, 10 days later. Deal extended thru end of March. I asked why. He said sales were very poor and thought they needed to meet some target for January (does not know if it was met but doubts it). Said sales are very weak across the board, not just GM but every dealer in the area, and PROBABLY all GM dealers in the country although he was guessing on that latter point. At any rate 7 months early termination, no fees, and $4,000 off on a car (I am assuming a Grand AM which is what my wife picked out for herself). Tell me they can pass on rate hikes. I dare you. This smacks of a huge inventory glut and no pricing power whatsoever. Mish