Weird Recession/Depression Indicators....

 These weird recession/depression indicators have been around for years, and I do not know it I agree with all of them....

- Snack Index- People are buying fewer chips, candy, junk food at the stores. Already I have spoken to someone in the know who told me that they are selling fewer junk food options at 7-11 type stores. Deliveries of these products are down.

- Smaller alcohol bottles. People are no longer buying as much alcohol especially in the fifth and 1.75lt. sizes. They are buying more pints, and even smaller airliner size bottles. 

-Lipstick sales. Ladies buy more lipstick during a recession. There is a psychological element in it. Can't buy everything, but can get a tube of lipstick. Makes them feel better.

- Underwear sales- Men especially put off buying new underwear. I know that included me. I am holding off on getting new boxers. I figured mine are good at least another 6-8 months. I know, TMI. This doesn't always effect lady buyers. 

- Hemline Index. This comes from the Great Depression. The worse the economy, the longer skirts get....I don't know. Ladies don't wear skirts like they once did, they nearly all wear pants. Heck, I am old enough to remember when girls had to wear skirts to public school, and it was literally called a "sin" when ladies wore pants to church....

In recession time periods in which I taught, when high school girls wore skirts, they were short, too short, and towards the end of my tenure, there was a lack of under-attire by some female students. But, we've talked about that and how that was another reason I retired. Literally there was nothing I could do about it. And if I was to send a kid to the office, what would they do, tell them to " Pull up your skirt to see if I can see your vagina? "  And then, word would get out who sent them, and I can just hear the parents coming to complain.... 

-  Cardboard Box index- Fewer cardboard boxes needed for shipping goods. That's just common sense. 

- Diaper Rash Index- Parents buying fewer Pampers, etc, let the diapers stay on longer causing diaper rash and more people buying ointment for diaper rash. 

- Champagne Index- People buy less of the bubbly wine...Just common sense.

- Stripper Index- Few men having the money to spend at the strip clubs, and few girls go into or stay in that job. 

- Work Ice Box- More people bringing lunch to work. Fewer going out to McDonald's, Chilies. etc.  

Just stuff to look for. Perhaps correct, perhaps, not....

 

The Elephant in the Room.....

 I am proud of myself I could spell elephant correctly.....Now, if I can just finally spell especially right. 

So, how much will tariff effect the car industry? 

Yeah, more and more people are asking me to write on this.....

Here are the cars assembled in Mexico and Canada and sold in the U.S. 

CANADA-

• Honda CR-V: Made in Indiana, Ohio, and Alliston, Ontario.
• Toyota RAV4: In addition to other factories, this popular SUV is made in Woodstock and Cambridge, Ontario.
• Lexus NX: In addition to two locations in Japan, the NX is made in Cambridge.
• Lexus RX: Made in Cambridge, Ontario.
• Chrysler Pacifica and Voyager: Made in Windsor, Ontario.
• Dodge Charger Daytona: Stellantis Windsor Assembly Plant in Windsor, Ontario.
• Chevrolet Silverado: Made in three US plants as well as in Oshawa, Ontario, and Silao, Mexico.
• Ford Mustang GTD: Finished in Markham, Ontario.
  

 

MEXICO-

• Chevrolet Silverado: Some made in Silao, including the 1500 model.
• Ford Maverick: Made in Hermosillo.
• Ford Bronco Sport: Made in Hermosillo.
• Ford Mustang Mach-E: Made in Cuautitlan.
• Audi Q5: Made in San José Chiapa.
• BMW 2-Series: Made in San Luis Potosi.
• BMW 3-Series: Made in San Luis Potosi.
• Chevrolet Equinox, Equinox EV: Some are made in San Luis Potosi and Ramos Arizpe, others in Ingersoll, Ontario, Canada.
• GMC Terrain: Made in San Luis Potosí. The first gen was built in Ingersoll, Ontario.
• Ram 1500 and 2500: The Ram 1500 is made at the Sterling Heights Assembly Plant in Michigan and at the Saltillo Truck Assembly Plant in Mexico, while the Ram 2500 is made in Saltillo.
• VW Jetta, Taos and Tiguan are made in Puebla, Mexico
• Honda Fit and HR-V are made in Celaya, Mexico

That's just Mexico and Canada...... Not the rest of the world.

This is just assembled.....If a 25% tariff is imposed, prices could increase by as much as $12,000 for some models, or as little as $4,000 for others, in both cases a cost that will almost certainly be passed on to U.S. buyers.

This includes parts in assembly.

Thousands of parts are used to make a vehicle....

They were talking on the Wall Street Journal how many times parts cross the border in the process of being made. For example. There is transmission company in Ontario, Canada that has a building process in which the manufacturing of the transmission is shipped back and forth between Ontario, in Canada to Ohio, to Illinois, back to Canada, to Indiana, back to Canada, each plant had a specialized process in the making of the transmission, and according to the Wall Street Journal, every time it is shipped across the border, a tariff would be applied. That's before it is sent to America to be put on the vehicle. 

That's just one part....

The car parts come from all overseas

GM Parts-

These are just a few, some made in the USA, but others..... Nothing, parts, is made in total in any country.

Wheels/Rims & Wheels- Mexico. Bulgaria. Hell, I'd want my rims made in Mexico. That probably sounds racist. But...true.

Tires- Korea

Engines- Mexico, Argentina

Brake Assembly- Romania

Transmissions- Canada, Mexico, China

Electronics- Japan, Taiwan, India,  China.....And others.....Most cars have electronics, computers, parts from all over the world. 

Already  a car maker has said that to move everything back to America is impossible. It would be like move the state of Maine, everyone, everything, land and all to Wyoming. And even then, it probably won't be enough....Far from it.  

I am sorry, but China is going to wind up being the world's large car maker. And I've ridden in Chinese vehicles over there. They are not junk like you think they are. They've come a long ways. They are building cars to compete with Honda and Mazda.My son's father in law drives a Mazda equivalent sedan....It's 12 years old, and has 140,000 miles on it. I was surprised at the quality....No, cannot but them here. And GM really want(ed) to tap the Chinese market, but now....And the Chinese love Buicks. It is why Buick still exists. Certainly not for the U.S. market.

That's just to name a few parts. In one vehicle, the parts might be from 50 different countries. 

I don't know. People can't afford cars now. And if you can, well, good for you, a lot of people just cannot. 

 

 

 

 

The Economists are Sounding Warning Bells.....

I watch and read a lot of economists, most of these guys are not " Gloom and Doom" people. 

Most are very conservative in what the U.S. Economy is doing.... 

In the last few months, they have changed their tunes, and it isn't just because of the present administration. They were already very concerned in the last two quarters of last year concerning Americans and the US Economy. 

One I listen to, read, is talking about " Economic Chaos." 

And we are not in a poor country compared to the rest of the world. But, we can face changes and how we live. 

It is time to be conservative with your lifestyle. 

It is time to seriously pay off debt. Don't be buying stuff just because it is a shiny new toy. It might be time to as I said, pay off debt. 

Might want to wait on that new car. Wait on buying that new house. If you buy a new car, you might want to look at a lower trim level. 

Say what you want, wages in this country have not increased. Prices have. 

I am going to talk about tariffs in coming blogs. And while some are you are saying the that it is good that manufacturing might be coming back to America, I don't think you know how long it'll take to come back. Literally, decades. It took decades to get us here, and decades to get back. 

America at this people is a consumer nation. Other nations send us their products and we send them a paper promise, and those nations are good with it. Literally, happy with it. 

We will at some point talk about the Cantillion Theory....Richard Cantillion, 1680s to 1734, Irish/British Economist-

Cantillon held that market prices are not immediately decided by intrinsic value, but are derived from supply and demand. He considered market prices to be derived by comparing supply, the quantity of a particular good in a particular market, to demand, the quantity of money brought to be exchanged.

 

I know Subaru has sent memos to dealers not to take orders on their cars.

 

And most Subaru dealerships have almost sold out of Outbacks, Forresters for fear of tariffs. Never mind Outbacks are made in Indiana. ( Not the Crosstrex the crossover Subie. And smaller car. Part of that is no incentives on Crosstrex.)  

 

Also, in America, we don't have manpower to build stuff, Gen Z, Gen A, well, babies to man the plants in the future, are just not there. And as a former student of mine wrote me yesterday, he has a small business. Gen Z, those under 30 just don't want to work hard. And don't be telling me how hard your son " Little Johnny" works, there are always outliers. 

I'm going to tell you stuff you just don't want to do, and the average American, well, they are just not going to do it.....Literally, buy that shiny new object today, with huge interest rates. And wonder why they can never get ahead...Why they live paycheck to paycheck.....

Hang-on folks, I may get ugly here in the next few blogs.