Paul,


Bad news.  Today on the radio and  in the news was a report that  Mazda is
stopping production of the rotary engine.

Strange news.  About four months ago they were saying the new 16X fuel
mileage was exceeding their piston engine line-up.

What gives?  You can put me back on the list now.

Doug in Japan

Not really bad news. They stopped selling RX7's in the US back in
1995 until 2004. It did not affect us as there are at least
a couple of hundred thousand RX8 engines out there somewhere.
Nobody is buying new cars in the states and Mazda is just trying
to stay alive. This won't change until we vote the crazy idiot
out of office. Perhaps they should only stay in office 2 years
instead of 4.

Paul Lamar


Yes.. Continuous campaigning would clearly be an improvement..  Ha.  ;)

Actually, on a two year cycle, maybe the office holder would be a bit
more focused on getting something done.  Maybe not though.

BTW, Car sales have continued to be pretty good.  Maybe not in
Kalifornia (where the balance of individual welfare/socialism to
corporate welfare/socialism)..  Lots of new cars on the roads in many
places I go, including NY and Austin, TX.


Cheers,

Matt-

You wonder where they get the money?
Smells like subprime mortgages :)
Is GM and Chrysler making the loans?
You and I and everybody else might become owners
of all those new cars? :)

Paul Lamar



Actually, Paul,

Despite what your "sources" tell you, _much_ of the economy is
continuing to function normally.  People are going to work, earning
money, paying taxes, buying and selling things.  Without much drama.
Most people are actually quite practical, believe it or not.  ;)

I doubt there will be much loan forgiveness on the new cars that are
being sold.  Most people understand that cars are a depreciating asset
and as such, can't be considered "investment" the way they used to
think of real estate.

Matt-

I don't think you are watching the biz channel Matt :)

Paul Lamar



CNBC is just another reality show..  Selling drama and laundry soap.
I read a little WSJ and go to work every day - watching what others
that go to work do.

Matt-

What do you do for a living Matt?

Paul Lamar


I do not agree with Matt, Miami is laying off police, Broward county is
laying off teachers, Hialeah is laying off over 100 firemen, and the list
goes on. And that is just here within a couple of hours of where I live.
Back home in NC, my brothers drive 4 hours each way to work, meaning they
stay gone Mon through Thu night every week.  Still no work for a lot of
people.


Kevin Alderman


That's interesting anecdotal information, but doesn't necessarily mean
much when analyzing the whole country..  South Florida (Broward
County) is essentially the epicenter of the speculative real estate
bust.  There are certainly some good sized problems around, but most
are isolated.  You can't hold the extreme case as a representative of
the state of the whole.

There are big chunks of the country where life is going on rather
normally - a bit of belt tightening, higher than normal unemployment,
but not an emergency.  These places don't make headlines because
nothing exciting is going on.  Scaring everyone is fun, and a great
business for the media.

http://www.bls.gov/lau/maps/twmcort.gif

The banks and credit institutions and then the stock market were
corrupted into overvaluing lots of assets - throughout the world.
This has had a large fallout.  Homes being overvalued in the US caused
lots of things to get expensive here - driving away jobs and other
types of investment to what, at the time, were markets with better
value.

There are several challenges to deal with:

- How to accurately evaluate assets: Value is based on what people
will pay you for something.  In the near term, lots of our assets have
questionable/negative value because things are slow right now, and
it's not clear what's going to happen next..  But, in the long run, we
still have lots of infrastructure, a rather talented workforce (as
compared to elsewhere in the world), and strong institutions.  Maybe
not the very best, but we can be competitive.  We don't even have the
highest tax structure for business.  That's found elsewhere.  I just
saw an article about how jobs are coming back from China because, for
a variety of reasons, China is starting to get expensive.

- Bad debt hanging around:  People/institutions aren't willing to
write off debt owed to them because it hurts the books, they know the
valuation will improve if the economy starts moving a bit better, and
because writing it off all at once has a destructive effect on various
aspects of the economy.  The bad debt is a drag, but it's largely a
necessary evil.  And, it is being slowly written-off.  Painfully
slowly.

- What/whether to do something about the market that allows assets to
be overvalued, corrupting the markets:  The ongoing conflict about
what should happen is a drag to the economy.  Uncertainty interferes
with a dynamic, healthy economy.  People -business will invest very
conservatively.

- Corrupt politicians: There are corrupt players on both sides of the
aisles.  These people are poisoning the governmental process by taking
graft, and then spreading propaganda.  Propaganda is a story that is
mostly based on truth, but has just enough untruth to cause people to
take wrong actions.  The media is a player in this arena.  On both
sides.

The libs have one set of ideas, and the cons have another.  I think
there are correct ideas on both sides of the line, but, I'm a
moderate, so that's not surprising.  Individuals from both extremes
have blind spots about what makes the world go round - market forces,
psychological motivation, etc.  We need lots of freedom in all aspects
of life, but we need institutions, rules and structures so that some
amount of stability is maintained.  An example of this:  I like to fly
on commercial airplanes regulated by the FAA.  I'll be the first to
throw stones at the FAA, but they provide a level of stability that
wouldn't exist without some form of regulation.  Airline businesses
wouldn't regulate themselves adequately.  Some airlines would crash
airplanes more often than others.  No thanks.


Cheers,

Matt-