Thursday, June 01, 2006

Gas Guzzlers Are Out! Good Morning America

If this year's May figures for auto sales was any indication in the US, it showed Americans don't prefer their sporty SUVs any more. Demand for these gas guzzlers along with trucks, is on the wane.

General Motors released a 16% lower sales figure for May as compared to 2005. Similarly Ford and Chrysler's May sales declined.

For years, pampered with cheap fuel, the US is slowly becoming sensitive to rising fuel costs and taking steps to reduce its dependence on it. This obviously has impacted the US's biggest vehicle manufacturers.

For those interested in the auto industry, it may be interesting to note that GM posted an average loss of $2,496 on every vehicle it sold in North America in 2005, while Ford lost $590, according to a report by the independent auto research firm Harbor Consulting.

The losses reflected a variety of factors, including the large difference in health-care and pension costs, as well as rebates and low interest rate financing, the report said.

Chrysler was the lone Detroit-based automaker to turn a pretax profit on the average vehicle, estimated at $223, Harbor said.

By contrast, Nissan, Toyota and Honda each earned a pretax profit of more than $1,200 on every vehicle they sold in North America last year, the report said.

Source: Reuters





Consider how the crisis has unfolded over the past eighteen months. The proximate cause is to be found in the housing bubble or more exactly in the excesses of the subprime mortgage market. The longer a double-digit rise in house prices lasted, the more lax the lending practices became. In the end, people could borrow 100 percent of inflated house prices with no money down. Insiders referred to subprime loans as ninja loans—no income, no job, no questions asked. - George Soros in latest book

everything’s going up, there’s a feelgood factor and people tell each other how much their houses are going up at dinner parties,” says Professor Mark Stephens of York University’s Centre for Housing Policy. “Then the music stops, as it always does.”

year, Japan was a more attractive market to put money in. If you look at the US, we can now get an internal rate of return of 25% there, so why would anyone want to come to India?” - a senior executive at an international financial services group, who did not wish to be named.

people told us house prices never go down on a national level, and that there had never been a default of an investment-grade-rated mortgage bond, "Mortgage experts were too caught up." - John Paulson, trader, who bet against subprime market and made $15 billion.

most puzzling are the real-estate projects of Parsvnath. Just have a look at the Pride Asia project near Chandigarh. They are asking almost US $300K-$350 K dollars for 2 bed room apartments. They have Villas in this project that costs more than US $1.5 million dollars. It is true that some people in India have that kind of money in India. However most of their wealth is black money and that can not be used to buy these properties. Obviously, these projects have been launched keeping NRIs in mind. - Sanjeev, comment from another site

Desai, aka Bani, the star of Balalji Telefilms's soap, Kasam Se, has been house hunting for over a year. She had almost closed a 2-BHK deal last year for Rs 1.5 crore in a Oberoi Constructions' building located at Andheri, Mumbai, but when she went back to confirm it, she was asked to cough up Rs 2.61 crore. Since then, she is still house hunting. - Mumbai Mirror


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