Carmageddon for Tesla

This is where Hype Goes to Die.
Today was the monthly moment of truth for automakers in the US. They reported the number of new vehicles that their dealers delivered to their customers and that the automakers delivered directly to large fleet customers. These are unit sales, not dollar sales, and they’re religiously followed by the industry.
Total sales rose 0.9% from a year ago to 1,393,010 new vehicles, according to Autodata, which tracks these sales as they’re reported by the automakers. Sales of cars dropped 8.2%. Sales of trucks – which include SUVs, crossovers, pickups, and vans – rose 6.6%. Strong replacement demand from the hurricane-affected areas in Texas papered over weaknesses elsewhere. As always, there were winners and losers.
And one of the losers was Tesla.
First things first: There is nothing wrong with a tiny automaker trying to design, make, and sell cool but expensive cars that a few thousand Americans might buy every month, and trying to do so on a battleground dominated by giants. Porsche has been doing that for years. Porsche AG is owned by Volkswagen AG, which is itself majority-owned by Porsche Automobil Holding SE. Tesla is out there by itself.

This post was published at Wolf Street by Wolf Richter ‘ Dec 1, 2017.

NAFTA Effect: Global Manufacturers Bet on Dirt-Cheap Mexico

That wages have remained so low for so long is not by accident; it’s by design.
President Trump’s repeated bashing of the North American Free Trade Agreement between the US, Canada, and Mexico has failed to dull the allure of Mexico’s maquiladoras for global manufacturers looking to cash in on the country’s much cheaper labor costs. Tecma Group, a firm that helps US and Canadian firms relocate to Mexico, has more business than ever. In the past few weeks alone, it has helped a cleaning equipment company and packaging company move.
Mexico Consulting Associates, headquartered in Chicago, has three new clients interested in Mexico. Keith Patridge, who heads McAllen Economic Development, estimates that at least 12 companies will be installed this year in the north-western city of Reynosa. Another firm, Tacna Services, has helped two companies get set up in the Baja California area.
The southward migration of U. S. companies continues unchecked even as Trump threatens to abandon NAFTA, provoking fear and consternation among manufacturers that have production and supply chains spread across the three countries. If Trump followed through on his threat, traded goods would be subject to tariffs of around 3.5% in the case of Mexican companies and 7% in the case of US ones, according to Benito Barber, an economist for Latin America for Nomura Holdings.
On Tuesday a new coalition of major automakers, suppliers, and car dealers urged Trump not to withdraw from NAFTA. The members of the ‘Driving American Jobs’ coalition include trade associations that represent major global car manufacturers such as General Motors, Toyota Motor, Volkswagen, Hyundai Motor, and Ford Motor.

This post was published at Wolf Street on Oct 26, 2017.

Wyoming’s Money Grab Against VW Dismissed

A Federal Judge Breyer ruled against Wyoming and in favor of Volkswagen (VW) dismissing the claim that because of VW’s manipulation of diesel emissions, they caused environmental damage and should pay damages to the State in addition to individual car owners. Judge Breyer stated that despite the fact that VW was indeed responsible for manipulation. However, since these were carried out during the production of the diesel cars, the Congress had decided that the EPA, rather than the individual federal states, was in the best position to deal with damage regulations.

This post was published at Armstrong Economics on Sep 5, 2017.

Hyundai-Kia Brutally Crushed in China, Mauled in the US

Its largest & second largest markets. In how much trouble is it?
Hyundai Motor Group is getting brutally crushed in its largest market, China, where it is, or rather was, the third largest automaker behind GM and Volkswagen. And it is getting mauled in its second largest market, the US, where it is the seventh largest automaker behind the Big Three US automakers and the Big Three Japanese automakers.
Hyundai Motor Group came about in 1998 after the Asian Financial Crisis, when it obtained a controlling stake in Kia after Kia went bankrupt. The Korean conglomerate, in addition to automakers Hyundai and Kia, has other affiliates, including Hyundai Steel, logistics company Hyundai Glovis, and auto components supplier Hyundai Mobis, all of which are listed separately on the Korean stock exchange.
These entities support and supply the automakers Hyundai and Kia and are dependent on what the automakers sell. And both automakers are in the same boat in China, where things were already hard before the 2017 collapse began.

This post was published at Wolf Street on Jul 25, 2017.

European Stocks Fall To 3 Month Lows On “Carmaker Cartel” Fears, Sliding PMIs; US Futures Lower

In a mixed session, which has seen Asian stocks ex-Japan broadly higher, the European Stoxx 600 index dropped as much as 0.6% after data Markit PMI data signalled euro-area economy grew in July at its slowest pace in six months while carmakers extended declines on continued concern about antitrust collusion in the industry. Germany’s DAX Index was hardest-hit euro-area benchmark, down as much as 0.8%. Autos continued to be the worst-performing sector on the Stoxx Europe 600 after EU and German regulators said they are studying possible collusion among German automakers. Der Spiegel magazine reported on Friday that BMW, Daimler and Volkswagen may have cooperated for decades on technology.
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Concerns have risen that with the Euro trading near its strongest level in 2 years and appreciating 11% against the USD YTD, it may weigh on exporters’ earnings; 1.20 on the EURUSD is being seen a key barrier beyond which European earnings will suffer. As a result, the euro headed for its first decline in three days as data showed the region’s economy cooling at the start of a week packed with earnings results and a Federal Reserve rate decision. Stocks were dragged down for a second day by carmakers amid a collusion probe.

This post was published at Zero Hedge on Jul 24, 2017.

Tesla Is Now Bigger Than Ford, GM, And BMW…

With today’s near 1% rise to a new record high, Tesla just became the 4th largest (by market cap) automaker in the world – surpassing BMW at over $61 billion.
Tesla passed GM and Ford by market cap in April, and now ranks 4th in the world behind Toyota, Daimler, Volkswagen.
If you look at the different auto companies on paper, it does seem a bit proposterous, where Tesla is at this moment, versus some of the more established auto companies,” Jessica Caldwell, director of industry analysis with automotive research firm Edmunds, said in an interview with CBC’s On The Money on Monday.

This post was published at Zero Hedge on Jun 9, 2017.

A Bird’s-Eye View Of American’s Largest Auto Port

In 1963, the Port of Baltimore was the first port of entry for the Volkswagen Beetle. We have to thank the Germans for supplying the ‘Conscious Revolution’ of the 1960s with transportation. On a side note, while everyone was getting high in their new Volkswagen, the Globalist started their grand scheme of stripping America of her wealth, ending the generational cycle called ‘the American High’ (1946-1964). What followed next is 50 years of deindustrialization and the decay of America’s inner-cities.
While deindustrialization crushed Baltimore City, Maryland, the powers to be constructed the Port of Baltimore to be America’s largest auto port of entry. The reason for it, is due to the area’s strategic positioning of 150-miles inland than any-other Mid-Atlantic port, which means shorter distances between critical links in the supply chain.
Fast forward to today, where decades of debt has peaked Motor Vehicle Loans at $1.2 Trillion signaling a possible generational top in the auto market. According to FT, US banks are now fearing a subprime bubble in auto loans, which is similar to the subprime mortgage crisis. On the chart below, notice how the 1960’s started the upward cycle in auto loans? Interesting to say the least…baby boomers needed transportation.

This post was published at Zero Hedge on Jun 4, 2017.

Chinese Carmakers, Volkswagen, BMW Roll Out “Tesla Killers”

The much anticipated Tesla Model 3 has yet to be released and already a groundswell of electric car competition is forming to challenge Elon Musk’s upcoming offering. Start in China, where the Model 3 is not due to arrive until next year, but already Chinese-funded, smart, connected plug-in car start-ups are scrambling to launch “Tesla killer” cars to go head-to-head against Tesla “mass market” sedan.
In taking on the monopoly, yet cash-burning premium electric car juggernaut that is Tesla, the key for leading Chinese electric vehicle start-ups such as Future Mobility, WM Motor and Singulato Motors, is that they will produce their cars locally, making them better able to match the Model 3’s price, Reuters notes. Tesla is expected to price its Model 3 from $35,000 in the United States. Buyers in China would expect to add 25% to that in import tariffs.
The Chinese strategy is simple: beat the Model 3 in China by making their cars more premium but cheaper than Tesla’s mass-market all-electric battery car.


This post was published at Zero Hedge on Apr 19, 2017.

Deutsche Bank purchases ads to apologize for “serious errors“

Deutsche Bank AG bought full-page ads in all major German newspapers over the weekend to apologize for ‘serious errors’ after misconduct costs helped tip the company into two years of losses.
Legal cases that date back many years cost the Frankfurt-based company ‘reputation and trust’ in addition to about 5 billion ($5.4 billion) since John Cryan took over as chief executive officer in July 2015, the CEO said in the ad, blaming the ‘misconduct of a few’ employees.
Cryan, who replaced Anshu Jain as co-CEO in 2015 and became sole CEO last year, is seeking to rebuild trust in the lender. He has settled some of the bank’s largest legal matters over the past two months and is adding staff to prevent financial crime. Concern over the lender’s financial strength led some wealthy and institutional clients to take their business elsewhere in the fourth quarter.
While Cryan hasn’t shied away from criticism of the bank’s controls and information technology, such paid-for apologies are rare. Volkswagen AG, the German carmaker that cheated on emissions tests, took out ads in 2015 to apologize for its behavior. In the U.S., Wells Fargo & Co. ran ads in newspapers and on TV, after authorities said branch workers may have opened more than 2 million unauthorized deposit accounts and credit cards over half a decade.

This post was published at bloomberg

How Trump Could Unwittingly Gut Boeing’s Global Business

Other US companies are equally vulnerable.
Boeing’s airliner business is in a slump. Serial large-scale layoffs of engineers and production workers have been percolating through its operations since early 2016, with another big wave announced a week ago, as net orders have collapsed 53% from 2014, to a seven-year low. The last thing Boeing needs is help from President Elect Trump to speed up the process.
But that’s what might happen next if the trade and investment policies proffered by Trump become reality after his inauguration.
In an interview published on Monday in the German tabloid Bild, Trump threatened BMW, Daimler, and Volkswagen with a 35% tax on imported vehicles, which would make them very expensive for US consumers. The automakers and their dealers would respond by cutting their margins, but it might not be enough to stem a large sales decline.
The three companies already have assembly plants, research & development offices, and logistics operations in the US, including:

This post was published at Wolf Street on Jan 16, 2017.

JAN 13/GOLD AND SILVER UNDER PRESSURE WITH THEIR USUAL FRIDAY WHACK/GOLD AND SILVER EQUITY SHARES RISE/JPMORGAN CONTINUES TO ACQUIRE SILVER EACH AND EVERY DAY THIS YEAR/CHINA VERY CONCERNED WITH …

Gold at (1:30 am est) $1195.30 down $3.60
silver at $16.72: DOWN 6 CENTS
Access market prices:
Gold: $1198.00
Silver: $16.81
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON .
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

This post was published at Harvey Organ Blog on January 13, 2017.

Futures Rise On Friday 13th Ahead Of Deluge Of Bank Earnings; Dollar Continues To Decline

European shares rose as Fiat rebounded on hopes concerns about parallel to Volkswagen are overblown, Asian stocks were little as Chinese shares fell to the lowest level of 2017 after poor export data, and U. S. equity-index futures rose ahead of a deluge of bank earnings. The dollar is headed for a weekly loss and gold trades at the highest price in almost two months.
On this supposedly unlucky day it’s US bank earnings that are going to be a big attraction with JPM, Wells Fargo and BofA reporting all prior to or at the open. As DB notes overnight, after the Trump trades disappointment this week – which continued yesterday – this will likely impact the overall direction of markets.
The focus this morning however has been the gloomy December trade numbers out of China which were released overnight. In US Dollar terms exports dropped -6.1% yoy in December which is a fair bit more than expected (-4.0% consensus) and also down from -1.6% in the month prior. At the same time imports shrunk to 3.1% yoy (vs. 3.0% expected) from 4.7% and so had the effect of reducing the surplus. A weaker yuan did help to cushion the fall in exports in local currency terms ( 0.6% yoy vs. -0.1% expected). The trade surplus was $40.82 billion for December, versus November’s $44.61 billion.

This post was published at Zero Hedge on Jan 13, 2017.

For How Long Did Fiat-Chrysler Hide its EPA Diesel Fiasco? Investors Found out the Hard Way Today

Just days ago, CEO Marchionne tried to soften up Trump.
Today, the EPA disclosed that Fiat-Chrysler was neck-deep in the diesel-gate fiasco pioneered by Volkswagen. When Volkswagen settled claims in a Canadian court in December for C$2.1 billion, it brought total costs so far to $18 billion, and it’s still not over. So these things can get expensive.
Volkswagen’s strategy at the outset had been to keep investors in the dark, and deny, deny, deny, until it finally buckled. Fiat-Chrysler (FCA) appears to follow the same time-honored corporate strategy.
The EPA today issued a notice of violation to FCA, alleging violations of the Clean Air Act…

This post was published at Wolf Street by Wolf Richter ‘ Jan 12, 2017.

JAN 11/JPMORGAN CONTINUES TO ACQUIRE SILVER INVENTORY/GOLD AND SILVER ADVANCE ON LACKLUSTRE TRUMP PRESS CONFERENCE WITH A LACK OF DETAIL/VOLKSWAGEN HIT WITH 4.3 BILLION DOLLAR USA FINE AND MUST F…

Gold at (1:30 am est) $1195.60 UP $11.40
silver at $16.78: DOWN 2 cents
Access market prices:
Gold: $1192.00
Silver: $16.75
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
TUESDAY gold fix Shanghai
Shanghai FIRST morning fix Jan 11/17 (10:15 pm est last night): $ 1207.31
NY ACCESS PRICE: $1187.50 (AT THE EXACT SAME TIME)/premium $19.80
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai SECOND afternoon fix: 2: 15 am est (second fix/early morning):$ 1205.91
NY ACCESS PRICE: $1189.40 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $16.01
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Jan 11/2017: 5:30 am est: $1187.55 (NY: same time: $1187.70 5:30AM)
London Second fix Jan 11.2017: 10 am est: $1178.55 (NY same time: $1180.10 (10 AM)
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

This post was published at Harvey Organ Blog on January 11, 2017.

JAN 9/GOLD AND SILVER RISE/ DESPITE THE RISE IN GOLD: 8.87 TONNES OF GOLD WITHDRAWN FROM GLD/ NO SILVER LEAVES SLV/CHINA CRACKDOWN ON BITCOIN/CHINESE FOREIGN EXCHANGES RESERVES FALL BELOW $3.0 TR…

Gold at (1:30 am est) $1183.50 UP $11.60
silver at $16.63: UP 17 cents
Access market prices:
Gold: $1181.20
Silver: $16.58
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
MONDAY gold fix Shanghai
Shanghai morning fix Jan 9/17 (10:15 pm est last night): $ 1193.79
NY ACCESS PRICE: $1174.95 (AT THE EXACT SAME TIME)/premium $18.75
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1192.97
NY ACCESS PRICE: $1174.25 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $18.72
China rejects NY pricing of gold as a fraud/arbitrage will now commence fully
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Jan 9/2017: 5:30 am est: $.1176.100 (NY: same time: $1176.10 5:30AM)
London Second fix Jan 9.2017: 10 am est: $1178.50 (NY same time: $1178.50 (10 AM)

This post was published at Harvey Organ Blog on January 9, 2017.

FBI Arrests Volkswagen Exec Charged With Conspiracy To Defraud The US

While various other carmakers, such as GM, Ford, Fiat and Toyota, have had their share of headaches in recent weeks worried if and when Trump will tweet about them next, the epicenter of all car scandals over the past two years remains Volkswagen, and sadly for the German carmaker things continue to get worse: according to the NYT, the FBI haed arrested a Volkswagen executive on charges of conspiracy to defraud the United States.
Oliver Schmidt, who headed the company’s regulatory compliance office in the U. S. from 2014 to March 2015, was arrested on Saturday by federal investigators in Florida, the newspaper said, citing people familiar with the matter. Starting in late 2014, Mr. Schmidt and other Volkswagen officials repeatedly cited false technical explanations for the high emissions levels, the state attorneys general said. In 2015, Mr. Schmidt acknowledged the existence of a so-called defeat device that allowed Volkswagen cars to cheat emissions tests.
VW admitted in September 2015 to installing secret software known as “defeat devices” in 475,000 U. S. 2.0-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing. In reality, the vehicles emitted up to 40 times the legally allowable pollution levels. Schmidt continued to represent Volkswagen after the company admitted in September that cars were programmed to dupe regulators. He appeared before a committee of the British Parliament in January, telling legislators that Volkswagen’s behavior was not illegal in Europe. Schmidt is expected to be brought before court in Detroit on Monday, the NYT said.

This post was published at Zero Hedge on Jan 9, 2017.

Here Are the Multinationals whose Bonds the ECB is Discreetly Buying

The ECB’s new role as ‘debt-buyer of first resort’ raises a whole litany of concerns.
In June 2016, the ECB activated its corporate bond buying program, ostensibly to revive the Eurozone’s stalled economy. The program has been shrouded in secrecy, as the ECB has refused to reveal the identity of most of the companies, divulging only the International Securities Identification Number (ISIN) of the bonds, but not the amounts.
The ECB coordinates the overall effort, but the actual buying is done by the national central banks. Now the non-profit Corporate Europe Observatory (CEO) has cracked the code, so to speak:
Finding the names via the ISIN code is a simple job. CEO has looked them all up to see what investments the ECB has found worthy of public money.
Unfortunately, a lack of transparency at the ECB means the amounts held in bonds of individual corporations are not revealed. While many pension funds do release this information, it seems that the common national bank for hundreds of millions of European citizens is unable to! Nevertheless, a lot can be learned from the lists…
For instance, the fact that Europe’s oil majors have been particularly spoiled, with the ECB splurging on bonds issued by Shell no less than 11 times. The central bank bought bonds from Italian oil company Eni 16 times, Spain’s Repsol six times, Austrian OMV six times, and Total 7 times. Gas companies have also fared remarkably well. When counting the purchase of bonds in Spain, for example, 53% are from companies involved in the natural gas sector. The corresponding number in Italy is an astounding 68%.
Also well favored are Europe’s biggest car companies, in particular those from Germany, with Daimler and BMW tied in top spot with 15 purchases apiece. The ECB also bought seven times bonds issued by Volkswagen, despite the reputational and financial fallout from its emissions scandal. And it bought Renault bonds three times.

This post was published at Wolf Street on Dec 15, 2016.

Rattled German CEOs Seek ‘Revival of Germany Inc.’ as ‘Protective Wall’ against US and China

In response to the ‘destabilization of the world.’ About 20 German industry chieftains, rattled by the hits German companies have recently taken, including Deutsche Bank and Volkswagen, spent Saturday and Sunday two weeks ago on the phone with each other. They were fretting about the future of Germany’s export-dependent industry and outlining solutions. Some of the participants have since talked to the German daily, Die Welt, which published its report on Sunday.
Participants included Siemens CEO Joe Kaeser, BASF CEO Kurt Bock, Deutsche Bank CEO John Cryan, BDI (Association of German Industry) president Ulrich Grillo, and BDI General Manager Markus Kerber.
How to protect key industries in Germany is also topic of a paper being worked on by the Economy Minister Sigmar Gabriel and his folks, the Welt reported. They’re searching for ‘protective walls,’ and are working on a ‘list of options for actions to protect key German industries.’ Finance Minister Wolfgang Schuble and State Secretary at the Finance Ministry Thomas Steffen are in on it.

This post was published at Wolf Street on October 17, 2016.

SEPT 27/AS PROMISED, A HUGE RAID ON GOLD/SILVER ON COMEX OPTIONS EXPIRY/DEUTSCHE BANK’S STOCK LANDS INTO SINGLE DIGITS/ITS CREDIT DEFAULTS SWAPS RISE AND SIGNALS BIG TROUBLE/DEPT OF JUSTICE IN TH…

The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
Shanghai morning fix Sept 27 (10:15 pm est last night): $ 1337.76
NY ACCESS PRICE: $1335.55 (AT THE EXACT SAME TIME)
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1336.83
NY ACCESS PRICE: 1334.80 (AT THE EXACT SAME TIME)
HUGE SPREAD TODAY!!
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Sept 27: 5:30 am est: $1335.85 (NY: same time: $1336.00: 5:30AM)
London Second fix Sept 16: 10 am est: $1327.00 (NY same time: $1326.90 , 10 AM)
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.
Also why would mining companies hand in their gold to the comex and receive constantly lower prices. They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

This post was published at Harvey Organ Blog on September 27, 2016.