Understanding Banking

Joe points out it is necessary to join the dots to begin to understand the impact of bank actions and policy decisions.

http://www.nytimes.com/2012/05/29/opinion/nocera-the-simplicity-solution.html?nl=todaysheadlines&emc=edit_th_20120529

Do we need to remember Star Trek's Prime Directive as we go about daily business?

I think so.  I think we always need to ask, "How does this proposed action help us meet our mandate?".

If it does not help, then do we need to change the mandate or drop the idea.  Typically, I suspect, the correct choice is to drop the idea.

Thanks Joe.

Earth Calling, "S O S"

Please read this heartfelt letter.

http://uncloaked.wordpress.com/2012/05/18/an-open-letter-to-the-world-on-the-governmental-destruction-of-the-environment-in-canada/

Do Not Overbuild Capacity!

So it seems demand exceeds supply for NA autos.

I suggest not going nuts.

I wonder what the effect of having a chronic undersupply will be on profitability and pricing and resale value for consumers.

Remember the Prowler?  Chrysler refused to make more than they initially set out to make.  The demand was way over the supply.  The price went nuts.  The aftermarket or used car price went nuts.

Who lost here?  No one that I could make out.

The Prowler was not a mass market vehicle, but there is a valuable lesson here, especially when compared to flooding dealer lots with mass market cars that apparently no one wanted, no matter how many were sold.  The lots were bulging.

What does that do to price?  What does that do for resale price?

As I say, do not overbuild capacity because there you are then, once again stuck with high overhead costs, being forced to build ever more vehicles that might not be sold, thereby manufacturing waste that looks like finished goods, but is really waste.

Really expensive waste.

http://www.theglobeandmail.com/news/national/canada-seen-benefiting-as-us-auto-makers-scramble-to-restore-capacity/article2425602/?utm_medium=Newsletter&utm_source=Business%20Ticker&utm_type=text&utm_content=Canada%20seen%20benefiting%20as%20U.S.%20auto%20makers%20scramble%20to%20restore%20capacity&utm_campaign=94826265

Errors

If making mistakes were so easy to do, everyone would doing it.