Total SAAR: Cash for Clunkers Permanent Damage?

• By Dave Goodboy
• On 11:02 am EST, Monday November 2, 2009

David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.

The Event:

On Tuesday, November 2nd, Autodata Corp releases their all vehicle sales number for the previous month.

Description:

There is no exact time for this release as the auto manufacturers report their data at various times during the afternoon to Autodata Corp. Autodata then compiles the information releasing it in an annualized format. The idea behind the possible effect the USD is its reflective of consumer confidence. More vehicles being sold equals higher or growing confidence, less the opposite.

Trader Take:

The September figure spiked to 14.1 million due to the cash for clunkers program. October saw a steep drop off to 9.2 million and this month is predicting an increase to 9.7 million. I would not be surprised if this number is over optimistic. It is indeed possible that the actual figure will miss the estimate even to sub last months number. It is a tough call here, but I am not optimistic for a positive result. It's almost like the cash for clunkers may have a negative long term effect. Despite a short term acceleration of sales, it actually hurt the marketplace as consumers are now expecting the program to return. It will be interesting to see what actually happens this month!

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