Is Brexit a Risk to US Growth?

mike smitka

I made a short presentation as a component of board education for a local bank. The president was curious about Brexit, so I used that as a point of departure. What follows are thumbnails of slides; I add several at the end that (as expected) I did not get to during my talk.

First, I began by emphasizing that there is no business cycle, as emphasized in a previous posting on this blog. By chance in the immediate aftermath of WWII the US had 3 recessions with similar timing, but that's not happened since. Just because we've gone 7 years without a recession doesn't mean that one is more likely in the next year. Furthermore, the apparent causes vary, so predicting on the basis of past recessions is pointless. Now once a recession has begun, then certain changes occur – but those can also arise without a recession being underway. So it is possible to calculate recession probabilities, but those are weak and at best provide information on the next several quarters.

Jobs Update in 3 Graphs

Domestic Automotive Jobs: NOT the Sept Monthly Sales Report!

Domestic Vehicle Production

Domestic Industry Revenue

The domestic US auto industry has by two metrics finally recovered from the Great Recession. The first two graphs present total industry output in unit terms and in revenue (deflated by the producer price index for motor vehicles and parts). Both are at the highest in 40 years. The industry has never surpassed the boom that immediately preceded the First Oil Crisis.

Who Owns the Cars? The Billion Dollar Problem with Autonomous Taxis

Written by Maryann Keller, Principal at Maryann Keller & Associates
reposted with permission from a September 12, 2016 post on LinkedIn

The Uber business model is brilliant: private citizens use their own cars as taxis and Uber takes a piece of the fare for arranging the ride via the Smartphone Uber app. Uber avoids vehicle depreciation that piles up with miles driven, maintenance expenses (that can include damage done by passengers), and insurance. Although Uber now leases some cars to its drivers, essentially the company has been built on an asset-light balance sheet that has enabled it to avoid the messiness of buying, maintaining, and disposing of vast numbers of vehicles.

But how will that work with driverless autonomous cars that eliminate the people who are currently shouldering the responsibility for the majority of vehicles in Uber’s, Lyft’s and similar providers’ fleets? Even if these companies can avoid the inconvenience and investment of vehicle assembly, they, or another entity, would still have to own and maintain their fleets.