Last month I wrote one daily on the auto sector’s effect on non-recession reading. The gist of that post was that the auto sector was positively influencing both production and employment, helping the US avoid outright recession. Retail sales have been negative for three straight months but auto makers in the US have been keeping production levels high in anticipation of sustained demand. This is problematic for a couple of reasons.
First, as Investor's Business Daily has profiled, GM at a minimum has ramped up riskier subprime lending to goose its numbers. At this point in the cycle, with retail sales flagging, it suggests GM is taking a riskier credit strategy that could backfire dramatically as the cycle turns down. In all business cycles, credit conditions loosen a...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.