1st Gear: The Fed Tries To Juice Housing, Which Could Juice Car Sales
CNBC reports that the Federal Reserve is putting on a full court press to boost the housing market. It's going to buy $40 billion in mortgage-backed securities every month indefinitely. a clear sign that it thinks the housing market needs some help. This whole event is called QE3 — not for some future Queen Elizabeth, but because it's the third time the Fed has done this quantitative easing. Here's a good explainer from the Washington Post. Remember that we care a lot about the housing market because it's one of the three drivers of car sales (the other two are jobs and consumer confidence).
Interest rates aren't the issue: people who can borrow have done so and/or refinanced their homes. But there's still a big problem with people who don't have any equity in their homes, who can't afford to pay the fees needed to refinance, or whose credit took a hit during the recession. Says CNBC: "What remains to be seen is how many potential buyers will be able to take advantage of these low rates, given the still tight lending standards that rule today's market."
2nd Gear: In Atlanta, Take A Porsche To Your Plane
The Wall Street Journal (sub. required) tells us about a service Delta Air Lines is providing to some very elite fliers in Atlanta. It is picking them up at their planes in a Porsche Cayenne S, and zipping them across the airport for their connecting flights. Now, airlines have given special treatment to major corporate customers and VIPs for years. But usually, this plane to plane service is done in a minivan or one of those party buses. The Journal says Delta isn't advertising the service, which is being offered to selected diamond and platinum level members of its frequent flier club, because it doesn't want to raise customer expectations. And on a busy day or amid weather delays, we can't imagine that the airport wants Porsches getting in the way on the tarmac. The suggestion came from Porsche Cars North America, which is based in Atlanta, Clearly, George Clooney missed out on something that could have kept him flying even more miles.
3rd Gear: Nissan Terra Concept Has A Tablet On Its Dashboard
Tab Times reports that Nissan has tossed out a big chunk of the dashboard on its Terra concept car and replaced it with a tablet. The car, which is set to be shown in Paris, looks a lot like the Nissan Juke on the outside. On the inside, however, there's a removable tablet that the driver docks in a port. The slate shows a speedometer and the energy usage for the Terra, a hydrogen fuel cell vehicle. The tablet sits behind the steering wheel, and it can be programmed to show other information about the car, but the speed and energy use stay on the screen. There isn't any information available about the car's performance. Tab Times says car companies increasingly are playing around with tablets. Renault, which is Nissan's sister company, showed a tablet GPS system at the LeWeb conference in Paris last December.
4th Gear: CAW Ready To Cut A Deal
Reuters says the Canadian Auto Workers union has begun talking about the concessions it's willing to make, with just a few days left before its auto company contracts expire. It sounds like the union is going to try to protect its veterans and put the burden on new hires (if there are any). For instance, the CAW is offering to accept a lower starting wage, and for its baby chicks to take longer to reach top scale. Unlike the UAW, the Canadians are balking at a permanent two-tier wage system, saying that workers ought to have the ability to reach parity with veteran workers eventually.
The union also is proposing that newly hired workers contribute to pensions, something that veteran workers do not have to do. The union is willing to give ground for new hires on 30-and-out provisions, which allow workers to retire after they've achieved 30 years on the ground. Instead, new workers would have to reach a specific age before they could retire after 30 years. The CAW still could go out on strike on Monday, but in light of this proposal, it sounds like it doesn't want to risk a walkout. No doubt some folks were spooked when Sergio Marchionne made it clear that Chrysler didn't have to build cars in Canada.
5th Gear: This Is BMW's Front-Wheel Drive City Car
It has been known for a while that BMW will be releasing a front-wheel drive variant of the 1-Series.
BMW has just released official details on the car with these shots of the Concept Active Tourer, a front-wheel drive BMW for the complicatedly named luxury compact segment. More »
6th Gear:The Paceman Is Mini's Tall, Two-Door Countryman
The BMW Group will be focusing on front-wheel drive at the upcoming Paris Motor Show.
The first car is the Concept Active Tourer, and the second is this, the Mini Paceman.
Mini is calling the Paceman the "the world's first Sports Activity Coupé in the premium small and compact vehicle segment." That's a mouthful. Basically, it appears to be a Countryman with two fewer doors and a roof influenced by the Mini Cooper Coupe. More »
Reverse: Isadora Wavers Her Final Goodbye
On this day in in 1927, dancer and performance artist Isadora Duncan was strangled when her flowing silk scarf got caught in the rear hubcabs of her open Bugatti. And forever after, moms have been telling their scarf-wearing children to be careful when they close car doors. Isadora had some pretty terrible luck with automobiles. Her two children with Paris Singer (23rd child of Isaac Singer, the sewing machine magnate) were killed when the car in which they were riding went off an embankment and plunged into the Seine. Moral of the story: don't drive in France. [History]
In keeping with our new discussion system, here's a place for you to own the floor. We're asking each day what you think about an issue that comes up in TMS.
Let's have you economic experts weigh in today. What do you think of the Fed's action on housing? Is it going to help the auto companies? Or too little too late? Remember there's no right answer or wrong answer. It's Neutral.
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