Thursday, July 30, 2009

Cash for Clunkers running on empty

Wow, I guess that's why I'm not in the car business. According to reports tonight, the Cash for Clunkers program went from having $779 million still eligible for funding as of Thursday morning to being overdrawn by Thursday night. That means that roughly 225,000 cars were sold in a DAY (as point of reference that's almost equal to all the cars sold in the US every month)?!?!?! Hmmm, I think somethings not right with that number.

My suspicion is that car dealers might have had 3 - 5 applications per day this week and decided to game the system a bit. Maybe they found a loophole where they could file an application for funding with "details to follow". If a dealer had a block of 50-100 clunker applications on file it they would save their space in the line of dealers waiting for the rebates and find customers to file the final applications over the coming months.

Like I said, I've read through the red tape associated with this program and it is substantial. I can't believe that 250,000 consumers had eligible vehicles, that were insured/registered (with documentation - just getting DMV registration info can take days) and acceptable credit to buy that many cars in just a couple of days.

The markets continue to wind higher on the expectation that things continue to get worse more slowly. However, lots of signs of a top seem to be popping up --- Kudlow and Cramer both calling for new bull markets, Nasdaq acting like it did in Jan 2000 (remind me what happened in the 7 years after Jan 2000?), etc, etc.

File this under "Reasons to focus on MATH!!!"

In a recently released survey of starting salaries for college graduates you'll see a trend - engineering and math related fields....

Top 10 College Degrees by Highest Starting Salary
Petroleum engineering - $83,121
Chemical engineering - $64,902
Mining engineering - $64,404
Computer engineering - $61,738
Computer science - $61,407
Electrical Engineering - $60, 125
Mechanical Engineering - $58,766
Industrial Engineering - $58,358
Systems Engineering - $57,438
Engineering Technology - $56,447

The list is probably a little skewed by the recent surge in commodity prices that has allowed companies to pay more for new graduates, but the message is clear - math first, second and third, and focus on science during your breaks :)

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