(Please excuse us for getting off subject.)
Will somebody explain to us the following: Unemployment has grown by 4% over the past six months. Gross Domestic Product has fallen by 6.2%. Yet auto sales are off a whopping 37% in February. Why would a disproportionate percentage of the 92% employed people, presumably earning at least 93.8% as much as in the past, stop buying cars?
The answer would seem to be fear. But fear of what? Losing their jobs? Few can imagine the unemployment rate at its worse becoming more than 10%. And most people have reason to feel secure in their employment.
We attribute the auto sale drop off to unprecedented jawboning from September onwards by government officials about how bad the economy was going to become. Talk about self fulfilling prophesies!
When the history is written of what triggered the deep recession or, perish the thought, even depression of 2009 / 2010, historians will likely see the housing and credit crisis as the trigger but the fear mongering of the Bush and then Obama governments as the accelerant.