WSJ.com - GM Discount Spurs 47% Sales Gain

WSJ.com - GM Discount Spurs 47% Sales Gain

WHAT SOFT PATCH?
3.8% GNP
A LITTLE DISCOUNT GOES A LONG WAY!

Don't tell me consumers are tapped-out. GM offered a discount off high margin vehicles and is about to run the table. Chrysler is now ready to offer their employee discount to all. The gross margin on SUVs which receive import protection is sweet. In recent years, GM or Ford have offered every thing from cash back to zero percent financing. The latest campaign of offering the employee discount is another way to make an attractive deal for the buyer and seller. After all, we late in the model year when the best prices are typically available.

Low mortgage costs are helping consumers. Those who have lived in the same house for 20 years but have refinanced have lowered their housing costs by half! Smart home owners have locked in low cost financing for the next 30 years. As long as long term interest rates remain at historically low levels, consumers will continue to reduce payments or cash out equity.

The fact that 78 million consumers are in the peak earnings and spending years of 46 to 59 years of age is an additional reason to believe that the economy is ready to strengthen. The combination of an empty nest and peak earnings is powerful. Restaurants, boats, RVs, recreation, second homes and travel will all benefit from boomers with cash.

A few weeks back, when I replied to a blog that I'd rather buy GM than HP, I should have taken my own advice. Those who need a high yielding stock should consider owning GM.

BUY THE BULL!