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The Big Picture makes a funny point about the drop in core PPI and how it can be directly linked to the weakening sales of SUVs and Light Trucks.
From the blog:
The great irony here is that because GM can't move their trucks due to their lousy fuel economy, they have to offer big discounts -- i.e, rebate/mark them down.The sale prices of poor selling trucks makes it appear that there is no inflation, when what we actually have is everyone thinking inflation is going away -- so naturally the markets rally.Hence, by being unable to sell their 10MPG trucks, GM's stock price actually rises!
The great irony here is that because GM can't move their trucks due to their lousy fuel economy, they have to offer big discounts -- i.e, rebate/mark them down.
The sale prices of poor selling trucks makes it appear that there is no inflation, when what we actually have is everyone thinking inflation is going away -- so naturally the markets rally.
Hence, by being unable to sell their 10MPG trucks, GM's stock price actually rises!
Good stuff.
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator click to get a free, no-obligation rate quote.
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