This is the Wrong Year to Buy a Car

Consumer Reports is now saying that unless you need a new car now is not the time to make a buy. Some models are so hard to come by that consumers are paying well above the sticker price for them. Many do not even have a good rating by CR.

Many of my local dealers have very limited selection of popular brands like Honda and Toyota. Some dealers have no cars of some models. This situation has driven up the price of used cars.

Here is a list of cars being sold at substantial prices over MSRP window stickers according to Consumer Reports.

Kia Rio: 21% Over MSRP

Hyundai Accent: 19% Over MSRP

Chevrolet Spark: 19% Over MSRP

Kia Telluride: 19% Over MSRP

Chevrolet Camaro: 18% Over MSRP

Subaru Crosstrek: 18% Over MSRP

Kia Seltos: 18% Over MSRP

Kia Sorento: 18% Over MSRP

Hyundai Tucson: 18% Over MSRP

Kia Carnival: 17% Over MSRP

We Will Buy Your Car

This is a great time to sell your old unwanted car. These are the words posted on the internet ad by my local Toyota dealer. “We will buy your car even if you don’t buy from us.” Carvana is running a similar ad on their cable television ads. What’s going on? Why do they want my old car?

It’s simple. Car dealers lack inventory. After going to the Los Angeles Auto Show and sitting in their new cars I looked at my local dealer web sites to see what models they had in stock. Some had none. Some had a handful of 2021 cars and the trim choice was one. Take it or leave it. 2022 cars are even rarer. To keep their business alive those new car dealers want your old car so they will have any inventory to sell.

What’s going on here? It’s a year of shortages. The auto industry’s turmoil may be unrivaled. It’s all about the computer chips in short supply. Every car needs them and so do appliances. The chip makers are overwhelmed by the unexpected demand. Most of the chips are made overseas in China and Taiwan. Most the cargo ships are waiting to be unloaded in the ports of Long Beach and Los Angeles. Those computer chips are somewhere among the cargo containers on the ships.

2022 will be an expensive year to buy a car. This is definitely a supply demand situation. Some car dealers are actually asking for more than the sticker price. Unless you really need another car it has been advised by many to wait until 2023.

Weekly Jobless Claims Plunge to 199,000

Jobless claims reached the lowest level in more than 50 years. This is the lowest level for initial claims since November 15, 1969 when it was 197,000. The 71,000 slide marks the eighth straight week of declines, a reflection of a tight labor market that has companies scrambling to retain and expand their workforces.

Unemployment is still higher than it was before the pandemic, resignations are soaring, and employers are struggling to keep their workers. Workers are demanding higher pay and walking away from jobs that don’t provide a living wage or are just plain boring and don’t offer an opportunity for more satisfying work.

Inflation may be up but the economy is growing. Most businesses are seeing higher profits.

Staples Center Gets a New Name

So let’s get this straight. The new name of Staples Center is going to be Crypto.com Arena. The center has been the home of Los Angeles Lakers, Los Angeles Clippers, Los Angeles Kings, Los Angeles Sparks. The owner of the stadium is Anschutz Entertainment Group (AEG).

L.A. Live is an entertainment complex that adjoins the Staples Center and it too is owned by AEG. So what is the big deal over its name? Absolutely nothing. Staples stationary paid for the naming but their naming rights contract has expired.

It’s not the first theater complex to have its name changed. Kodak Theater in Hollywood next to the Chinese Theater became the Dolby Theater when Kodak went out of business. We survived that name change.

The Los Angeles Memorial Coliseum became United Airlines Field at Los Angeles Memorial Coliseum in 2019 That helped to fund a $315 million renovation.

It’s obvious. Money talks! We’ll soon adjust to Crypto.com Arena.

I Refuse Your Lousy Pay

The latest jobs report from the federal government provided some shocking information. The total number of new jobs rose by only 194,000. The economic experts had predicted about 500,000. What happened?

Many people are not willing to return to their old jobs. It’s not just one reason. The obvious reason is fear of contracting COVID-19. The less obvious is many people thinking they never did like their old job because the pay was lousy, the hours were too long, and the chances for advancement were limited. Even the poorly educated are thinking they want a more rewarding occupation so maybe I can find something else to do.

That feeling that “I’ve had enough” according to the BLS report resulted in 4.3 million workers, or 2.9% of the labor force, quitting their jobs in August. That’s the highest rate since the BLS began tracking the data in December 2000.

After all who wants to drive a truck and who wants to deal with difficult patrons? Who in the hell wants these jobs?

To lure those workers back to those mind numbing jobs it is going to take higher pay and that will mean higher prices for everything. After all businesses still want the same profits they have had in the past.

Now it appears certain that many of these strains, both economic and viral, will continue well into 2022, and perhaps beyond. “There’s just no road map to opening a global economy in a pandemic, and people keep forgetting we’re still in a pandemic,” said Diane Swonk, chief economist at Grant Thornton. Now the recovery not only has to fix what was lost, but also the “scars and wounds have to heal” after hard-hit workers and industries reevaluated their futures,” Swonk said.

“Too Many Containers Inside the Terminal”

This is all about the supply chain issues. Trucks, warehouses, port docks are all involved in this.

For more than 30 years, Octavio Guadarama’s trucking career has seen its ups and downs. But this is the worst he’s seen it.

“I think they don’t have enough people to move everything,” he said.

On the dock, complaints are with warehouses that receive the goods. At the warehouses, complaints are with the dock that unloads them. For Guadarama, it’s the lack of trucks to get from point A to B.

“There are too many containers inside the terminal but there are no chassis to take those containers out,” he said.

More than 60 cargo ships are parked at sea and waiting to come into San Pedro and Long Beach. The estimated wait time as of today is 12 days. Wednesday President Joe Biden made the announcement that both LA and Long Beach would move to a 24-7 operation, calling it a potential game changer.

“I say potential because all of these goods won’t move by themselves,” he said.

But there’s no timeline as to when that will begin or how. The White House is making the push to clear the supply chain from slowing the nation’s economic recovery from the coronavirus pandemic.

Gene Seroka, the executive director of the Port of Los Angeles.

“We have to push this cargo out as quickly as we can,” he said.

Today port leaders say it’ll take a commitment of more than just those on the dock. Private companies such as Walmart, Target, FedEx and UPS have agreed to up their plans to work overnight hours to move goods faster.

“You have the commitment of the Biden administration, the commitment of the hardworking women and men in the supply chain to do their very best,” said John Porcari, who works the White House supply chain disruptions task force. “What we’re doing together is to accelerate the velocity of the supply chain using the available capacity, which is at night.”

But some along that chain worry there’s still an equipment issue that has to be solved first. No trucks – no movement.

“If they don’t have no chassis, it’s going to be the same thing,” Guadarama said.

This article posted on line provided by Los Angeles TV station NBC4.

The Impact of COVID-19

The world has been dislocated by the COVID-19 pandemic in ways most of us cannot comprehend. Shortages, higher prices, and few of us are willing to work in low paying jobs with no future are outcomes of this world wide catastrophe.

When fewer items are available, consumers are willing to pay more to obtain the item—as outlined in the economic principle of supply and demand. The result is higher prices due to demand-pull inflation.

Employers have faced a number of challenges throughout the COVID-19 pandemic — most recently, a labor shortage. In order to protect profitability, companies will have to pass on the additional costs to the consumer, adding to inflationary pressures.

cargo ships awaiting a birth at Los Angeles harbor

There is a cargo ship bottleneck trying to get into ports along the California coast. The supply chain is backed up and affecting businesses all the way down to the consumer. Another in inflationary pressure.

Add social behavior caused by the COVID-19 pandemic and the world is confronted with an inflationary period with no ending in sight.

Government solution of aid in the form of unemployment benefits, regulations protecting tenants against evictions, and other programs to protect the unemployed causes many to believe the United States is becoming a socialist society.

Those “experts” writing their opinion pieces and appearing on news media outlets don’t really know where this situation is going. Your opinion an my opinion is just as valid.

‘It takes just “one extra snowflake to start an avalanche — and boom!” Indeed, according to Harry S. Dent Jr., aka The Contrarian’s Contrarian, flurries could come in July: The ever-building market bubble is likely to “blow at the end of this month, if not September,” predicts Dent in an interview with ThinkAdvisor.’

The Conference Board opinion: Looking further ahead, we forecast that the US economy will grow by 3.8 percent (year-over-year) in 2022 and 3.0 percent (year-over-year) in 2023.

My opinion: The sky is not falling. Despite politics we will muddle through despite our lack of a strong leader. Ignore the noise.

Sorry, We are Out Of Stock

A new MacBook Pro. There are none in the local stores. Order today and it will be shipped in two to three weeks. Charmin Toilet Paper at Costco. Sorry all we have is our own Kirkland Signature in stock. Orville Redenbacher Kettle Corn at the local supermarket. There will be a delivery sometime next week. Rice Krispies. Try our house brand, it’s really good.

What’s going on? Why all the shortages? It’s called logistics or the supply chain. Logistics is the network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.

Of course some of this situation is due to high demand but the real issue is the lack of personnel in warehouses, port workers, and the shortage of truck drivers.

When any of the functions don’t work as expected we have shortages and stock-outs.

Why now? Low paying jobs and the impact of COVID-19 causing many people to remain unemployed or searching other work opportunities. This is a worldwide issue. A shortage of truck drivers in the UK resulted from that country’s departure from the EU. Non-citizens were forced to leave that country. The result is not enough drivers to deliver gasoline (petrol) and other products.

China Ningbo-Zhoushan container port on August 15, 2021

Big plans for Christmas shopping? You best start shopping now if there are special things you was to give. The ports have ships waiting to unload.

California’s Government is a Failure

Larry Elder was a gift to Governor Gavin Newsom. Follows are his views.

Elder opposes the minimum wage and gun control. He’s said he doesn’t believe that a gender wage gap exists, and has called the climate crisis a “crock”. He has suggested that fatherless families drive up crime rates in Black communities. During the coronavirus crisis, he has given a platform to Covid-19 conspiracy theorists, including a self-identified physician who promoted the false claim that coronavirus vaccines were being pushed in minority communities as “population control”. Elder has said he has been vaccinated but has vowed to repeal California’s mask and vaccine requirements if he wins the governorship.

The Elder platform is the reason Newsom was not recalled.

Forget the social issues that divide Democrats and Republicans. California’s state government has failed.

The list of things that our California government has failed to address is long. Neither Jerry Brown nor Gavin Newsom and the Democratic Party controlled legislature has addressed any of these issues in a meaningful way.

In the long term climate change is an issue but there are many other issues that demand immediate attention.

-The income gap. California has more millionaires than any other state but also has one of the highest poverty rates.

-Low minimum wage law. The low rate of pay perpetuates poverty.

-Homelessness. It’s not just the drug addicted and mentally challenged. The poorly paid cannot afford an apartment. Many are living in motorhomes.

-Lack of affordable housing. Low cost housing units are in short supply and the building codes and zoning laws prevent construction due to regulations and high construction costs.

-Poorly managed state agencies. Examples are the delays in payment of unemployment benefits, long lines at DMV facilities.

-High cost of college education. $46 per unit at two year community colleges. State university’s fee is $396 per semester unit and $264 per quarterly unit.

-Water shortage. Yes it is a natural disaster but where is the plan to ensure both agriculture and urban areas have adequate supplies?

-Death penalty. A ballot measure retaining that law was passed by the public but Gavin Newsom has suspended its use.

-Bullet train. In their voter guides, Californians were informed of an estimate from the California High-Speed Rail Authority estimating that, “the total cost to develop and construct the entire high-speed train system would be about $45 billion.” Current estimates place the possible cost as high as around $100 billion. Newsom has scaled back the project to 171 miles from Merced to Bakersfield.

-Taxes. California has the highest income tax rate in the nation.

First there is the issue of jobs that pay enough to live comfortably without the need for food stamps and rent subsidies.

The big employers have either closed or moved

Toyota: 3,000 jobs moved to Texas
Walt Disney: 2,000 jobs moved to Florida
Lockheed Martin: 5,000 jobs moved to Georgia
Rocketedyne
General Motors
Price Pfister
Hewlett Packard Enterprise

When all of those companies left California the state government was silent in the press.

California needs new leadership.