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To: Jack of All Trades who wrote (5739)	4/13/2005 11:30:51 PM
From: Chip McVickar	Read Replies (2) \| Respond to of 12411

I'm tired of hearing about oil... There is no oil shortage.... They should have delt with the this in 1978... I'm gonna start heating with coal, use solar power for electricity... and walk to the grocery store.... and forget about oil...!!!

To: Jack of All Trades who wrote (5739)	4/13/2005 11:41:00 PM
From: robert b furman	Read Replies (1) \| Respond to of 12411

Hi JoT, Excellent point, Here's a report from car land. Just spent the day at a GM and used vehicle auction. Today combined (for the second time in my life ) a GM "program auction" and an independant used car auction - reason for combination - no rental car returns (low units 100 vs 300)- needing to be sold. Used car market is sky high,today I saw 34,000 mile Grand Ams sell for $10,100-$10,400.Last December I bought 6 Grand Ams - miles in the mid 20,000 for an average of $9200! The big problem - no trades and a shortage of used vehicles coming out of rent car service. Why the shortage? No new vehicle sales as (domestic)mfrs. attempt to wean the public from rising incentives. No rental returns as domestic manufacturers finally have learned that discounting to rental companies negatively impacts residual values and resale of their models - after they are returned.duh So in an effort to support resale values- domestic mfrs. have deincentivized rental/fleet deals, and the cars must be in service for longer,as travel has actually been growing (nothing coming out of service). Recent incentives (from GM) are markedly less than a year ago (Suburban @ 3500 cash now vs 6000 last year). BIG question is can the factory hold the plan - not known at this point. Big rumor has it huge wave of returns in Florida getting loaded on trains now for selling into peak summer period (good idea and timing for GM). The real problem with the car market (domestic) is it is pent up-due to gas prices. You and I won't change our vehicle buying preference for over $500 -$800 a year in energy costs. Butat the fringe, - the marginal buyer,who has'nt had a raise in a year or so is just charging the energy (oil tax) impact onto their revolving credit lines. To the affluent - it retards savings - no biggy. To the marginal buyer it adds to debt.This increased debt must be paid off before any contemplation of an additional capital purchase can even be considered. Thusly Walmart says 0-2 % growth and GM/Ford says earnings will be down. Biggest leading indicator - trade imbalance with USA and China. Second best - commodity prices. Third best - consumer optimism. Last and best - consumer debt. If/as energy demand throttles back growth, and supply meets increased price,consumer debt will get reduced (with a lag) and purchasing will pick up above normal as the pent up nature has held back intended purchases- Texas market has been in decline since October of 03). We are in a transition period that will resume - but the oil tax has caused pain and incurred credit debt. P.S. small cars have not appreciably increased - preferences have not been modified as yet - however the market has definitely been pent up. I believe many are scared, and in an effort to be conservative,they are chasing used cars. My market only shows used cars as the growth area vs a year ago. This is a conservative solution to the spike in gas prices. New car sales have not increased.I say this not from a GM dealer persective ,but rather from the entire market registration perspective. Time will tell,but I think crude oil has peaked and it will still impact a lag on new vehicle sales, as revolving credit must be paid off by the marginal buyer before they entertain a new vehicle payment. Too bad ,as it may well be the perfect time to take advantage of manufacturers panic incentives during this summer? New vehicle inventories are 4.3% above a year ago and sales are down vs a year ago. Very unusual combination - most beneficial to consumer that wants a new vehicle. When OEM's go from greed to fear - the summer deals will be most beneficial for those able to lock in free money.JMHO Bob