It’s officially over… The government’s “Cash for Clunkers” program has closed out under budget.
CNNMoney reports, “With the final numbers now in, the Department of Transportation said Wednesday that nearly 700,000 old cars had been traded in for new ones under the Cash for Clunkers program.”
“This is one of the best economic news stories we’ve seen and I’m proud we were able to give consumers a helping hand,” Transportation Secretary Ray LaHood said as reported by CNN’s Peter Valdes-Dapena.
Here are the final numbers…
The Associated Press reports, “The government, releasing final data on the car incentives, said Wednesday that dealers submitted 690,114 sales totaling $2.88 billion, bringing the program to a close under its $3 billion budget.”
Interestingly, Japanese automakers lead the program in sales.
No surprise that the top seller was Toyota Motors (TM:NYSE). MarketWatch notes:
Toyota accounted for 19.4% of 690,114 rebate applications worth $2.88 billion dealers submitted to the department by the deadline of Tuesday night, surpassing 17.6% logged by General Motors Co., now under reconstruction.
GM was followed by 14.4% for Ford Motor Co., 13.0% for Honda Motor Co. and 8.7% for Nissan Motor Co. Chrysler LLC came seventh with a 6.6% share.
But the top three models sold goes to Japanese makers.
“The Toyota Corolla was the most popular model purchased under the program, followed by the Honda Civic and the Toyota Camry,” reported MarketWatch.
Interestingly, though, Japanese automakers are wary of U.S. government bailouts. Some believe American companies might get preferential treatment.
The Wall Street Journal’s Josh Mitchell writes, “A spending bill passed by the U.S. House of Representatives this summer forbids some federal agencies from purchasing vehicles other than those made by GM, Chrysler and Ford Motor Co. A climate-change bill passed by the House appears to favor U.S. companies in doling out $2 billion in government funds to develop plug-in electric vehicles.”
The fleet restrictions, according to Cindy Knight, a spokeswoman for Toyota, are unprecedented, said the WSJ.
But government manipulation of certain markets has become par for the course.
Adam Lass, editor of WaveStrength Options Weekly, writes, “When the market is subject to massive manipulation like this, it can seem for a time like the very laws of physics have been abrogated. Any astute student of history knows that this isn’t true, that all we are really doing is forestalling – indeed perhaps even intensifying – an eventual reckoning day.”
As far as the “Cash for Clunkers” program, Adam says that if you dump trillions into the car market, folks on the margin, who probably shouldn’t be taking on another monthly payment right now, rush in to trade in their paid-off “clunkers” for shiny new $20,000 Toyotas.
“Do you feel the awful shiver of déjà vu?” Adam asks. “Perhaps, but it bought Washington a 4.9% spike in durable goods sales in July.”
When the government manipulates markets there are only two things you can do: Fight the bull, or ride him.
“If you know for a fact that certain sectors such as auto manufacturing and housing are being manipulated higher,” says Adam, “you ought to at least buy some call options against these sectors. These will enable you to harvest substantial gains off this artificially imposed upside action without actually investing in it.”
Adam’s service has already seen as much as 691% gains on one play doing just that… Find out more on WaveStrength Options Weekly here...
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