usa recession, page-2

manz...

Throughout that entire piece, I kept saying to myself...yes, but they have forgotten to factor in the fundamental influences of a permanent rise in fuel costs.

But then they finally mentioned it in the closing passages...in effect, countering their own argument.

The significant rise in the cost of fuel is bound to have a short/medium term flattening effect on car sales, as people delay or abandon new car purchases...and in some cases, re-direct funds to "conversion" of existing vehicles to alternative and cheaper fuels.

I think they are confusing cause and effect.

In their examples, the reduction in car sales is reflective of a down-turning economy, not the other way around...that is, the downturn does not cause, nor necessarily indicate a recession is at hand, however clearly, a likely recession should result in a reduction in sales.

On this occassion, the downturn is not specifically related to the wider economy, just one section of it...fuel...and that just so happens to directly effect their market.

We may well still get that recession...and it may be directly due to the fuel equation...but I think any down-turn in car sales will not be a leading indicator (nor cause) on this occassion.

Cheers!