[meadsjn]

The automaker blamed lower sales in North America and a shift in the sales mix away from high-profit trucks to lower-profit cars for the earnings falloff.

This is no surprize. When 70% of your economy is consumer spending, and those consumers are losing jobs to outsourcing and immigration, and the lucky consumers who still have jobs are suffering pay cuts combined with tax increases, discretionary spending will decline.

Productivity is higher, and investment returns reflect that, but the investors reaping the benefits are a minority of the population of consumers. The individuals among the investor class aren't going to buy up the surplus vehicles just because they have the extra cash or the cash flow. Foreign markets in China and India haven't opened up as promised to buy up the surplus.

With declining sales, profits will decline. With declining profits, investment in the stocks will decline. With declining demand for the stocks, the stock prices will decline.

That is what happened in the late twenties, and it is happening again.

[Southack]

"That is what happened in the late twenties, and it is happening again."

Don't quit your day job.

Ha!

[Southack]

"...those consumers are losing jobs to outsourcing and immigration, and the lucky consumers who still have jobs are suffering pay cuts combined with tax increases..."

Unemployment is low. Taxes are down, not up. Inflation is low. Overall employment is at record levels. Payrolls, salaries, and wages are all up, too.

In contrast, you got *all* of the above wrong. You just batted zero.

[Happy2BMe]

#20 - REAL-WORLD LESSON IN OUTSOURCING ECONOMICS - ping.

(Interesting thread on blaming the poor economy on everything from health care to the price of tea in China.)

[FBD]

You make some good points, but I think a large part of the reason is increased cost of gas. People aren't going to buy SUV's and pickups that only get 12 miles to the gallon, when it appears that gas prices are going to keep going up.

But I agree with you that outsourcing is affecting consumer spending. I just had a customer who canceled a sale with me, because his IT job with IBM was just outsourced to India. No job for him...no job for me...a reverse trickle down effect, so to speak.

Southack may not agree on that point, I don't know.
But when people who made $70,000 a year working on computer software suddenly find themselves losing their job to some guy in India, who will work for $7000 a year, that has a negative effect on consumer confidence and spending power.

It doesn't take an egghead economist to figure that one out.