Tuesday, May 26, 2009

Cars of the Future and the Prediction

We've all heard the Obama speeches regarding his policies to push car companies to build "greener" cars... the cars of the future.

When I saw this Brit's review of one of those so-called green cars, I couldn't stop laughing. It was hilarious. Here are just a few of the descriptive details:
1. "It's the first car I’ve ever considered crashing into a tree, on purpose, so I didn’t have to drive it any more."

2. "The biggest problem, and it’s taken me a while to work this out, because all the other problems are so vast and so cancerous, is the gearbox."

3. "It feels like the clutch is slipping. It feels horrid."

4. "And the sound is worse. ...at full chat, makes a noise worse than someone else's crying baby on an airliner. It's worse than the sound of your parachute failing to open. Really, to get an idea of how awful it is, you'd have to sit a dog on a ham slicer."

5. "So you're sitting there with the engine screaming its head off, and your ears bleeding, and you're doing only 23mph because that's about the top speed, and you're thinking things can't get any worse, and then they do because you run over a small piece of grit."

6. "Normally, Hondas feel as though they have been screwed together by eye surgeons. This one, however, feels as if it's been made from steel so thin, you could read through it. And the seats, finished in pleblon, are designed specifically, it seems, to ruin your skeleton."

The entire review is well worth the read. Here's the link.

Deep in the review is this quote:
Car makers, then, have had nearly a century to develop and hone the principles of suck, squeeze, bang, blow. And they have become very good at it.

But now comes the need to throw away the heart of the beast, the internal combustion engine, and start again. And, critically, the first of the new cars with their new power systems must be better than the last of the old ones. Or no one will buy them.
Now that's a message all auto makers need to pay close attention to if they plan to stay in bailouts... errrrr, I mean business.

Speaking of Bailouts

Watch for news coming out soon on Pension Benefit Guaranty Corp. Here's a snapshot:
In an ominous setback, the government agency that insures the pensions of 44 million Americans has amassed a record $33.5 billion deficit -- triple what it was just six months ago. [link]

Interestingly enough, "Investment losses from the stock market were only the third contributing factor."

The Prediction

Awhile back, I made a prediction right after the election results were in.

I posted it online a few months later.

In case you missed it, here it is again:
I remember telling a friend of mine to "get out of stocks" immediately after the election results were announced. He listened. Saved a small fortune.

I told him this is what was going to happen...

The DOW would fall to between 6500 to 6200. Then there will be a brief rally. Everyone will think we've finally hit the bottom. And it will look like everything is finally shoring up, that the crisis is over.

In fact, I wouldn't be surprised to see the Dems crowing, hootin' and hollarin' that they fixed everything... that it will be because of the massive amounts of money they've thrown at the problems. They'll be strutting about, gleefully exclaiming, "I told you so."

That's when the "stupid money" will start pouring in.

The rally will be brief.

It will be a relief to millions of people.

But it will be short-lived.

Then everything will fall off a cliff. It will slide to about 3800, plus or minus a few hundred.

DISCLAIMER: I am NOT an investment adviser. I am NOT a tax advisor. Everything in this post is simply my personal and humble opinion/analysis. If you want investment advice and/or tax advice, talk to a professional, if you can find one you trust.

I'm repeating it all here because some of you have seen this video.

And also, because it looks like the stupid money is now being skimmed out, just as I knew it would be...
"...in the last couple weeks, company chief executives and chief financial officers have gone from big buyers to heavy sellers. According to InsiderScore.com, two weeks ago there was a slight bias towards selling, while last week turned in the biggest disparity of sellers to buyers — more than 1.2 sellers for every buyer — since September." (Excerpt from "Insider Selling Adds to Cautious Tone" - WSJ)

Watch carefully over the next few short months.

If you haven't already done so already, start building up your cash reserves. I'm talking CASH... not bank balance. How much? Ask yourself this question: "If you were to lose all sources of your income for the next 12 to 18 months, do you have enough cash on hand to see your family through?"

Maybe I'm just being paranoid.

Maybe not.

You will either need it (and thank me for telling you this)... or at the very least, be able to have a nice party 5 - 9 years from now once the dust settles and rebuilding our battered economy really begins.

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