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Reports showing weakness in retail sales and surprising resilience in inflation sent the S&P 500 index down 9%. (http://www.businessweek.com/investor/content/oct2008/pi20081015_772153.htm?chan=top+news_top+news+index+-+temp_top+story)

http://www.cleanmpg.com/photos/data/501/Trader_Christopher_Morie_at_the_NYSE.jpgWill Andrews and Karyn McCormack – Business Week – Oct. 15, 2008

Trader Christopher Morie works on the floor of the NYSE during the 733 point plunge. Photo courtesy of AP.

At least the traders are making money :rolleyes: -- Ed.

US Stocks headed sharply lower Wednesday after a round of data showed more weakness in the U.S. economy and surprising resilience in inflation. Major indexes were down over 5% each with the blue-chip Dow industrials off over 500 points.

The gloom was pervasive Wednesday. In a speech, Federal Reserve Chairman Ben Bernanke said credit markets will take time to unfreeze and called for action on the "too-big-to-fail" problem involving U.S. financial institutions. The Fed's Beige Book survey of economic conditions suggests a difficult path for the rest of the year. Earlier, San Francisco Fed President Yellen said the U.S. economy is in a recession.

The market has almost wiped out the gains from Monday's historic rally.

Selling picked up in the final hour of trading Wednesday, leaving the Dow Jones industrial average down 733.08 points, or 7.87%, to 8,577.91. The S&P 500 index plunged 90.17 points, or 9.03%, to 907.84. The Nasdaq composite index dropped 150.68 points, or 8.47%, to 1,628.33.

Bonds were higher. The U.S. dollar index was lower. Gold futures were lower.

Oil stocks were plunging as crude oil futures skidded on worries about an Asian demand slowdown… http://www.businessweek.com/investor/content/oct2008/pi20081015_772153.htm?chan=top+news_top+news+index+-+temp_top+story

Mike from NY City:Are they that stupid or isolated? I had decreasing respect for the titans of Wall Street for the past 10 years, ever since the beginnings of the dot.com boom and now, I have none. I always compared playing the stock market as no better than playing the ponies but at least the data on the horses is better and more consistent.

Consider it to be a big hangover from the asset bubble party that got inflated in the beginning of the decade. Eventually the nation will recover and shake it off. We always do :)

Here at the dealership, the consensus is that the media is the one killing us. All these "expert" talking heads on TV telling everyone that people with 800 credit scores are being turned down for loans. It's BS. The people that actually show up are getting loans.

Chen, what has the impact been on loan applications? Do you know and are you able to share a ballpark percentage impact over some reasonable timeframe? I'm sure you are probably seeing fewer people come in...

Average APR's have raised maybe a point, and the banks are a little tighter with challenged-credit customers. But thats about it.

Remember that on an average car loan, a 1 point change equates to a monthly payment impact of only a few bucks. So going from 5.9 to 6.9 isn't going to keep your average customer from being able to afford a car. Heck, a shift in gas prices, as we all know, is going to have more of an impact than that, and most people blow that off as "is what it is". Well, the same thing goes for financing, as its at the mercy of the market conditions.

If the pundits in the media would explain it that way, it would help us out a lot. But noooo, its all doom and gloom. I then comes a self-fufilling prophecy, and the fear itself is what tanks the market. Its pretty frustrating, 'cause the incentives are there right now, and we've got 09 G5's (for example) priced at better than what they were last month with the employee pricing promo. Yet our floor traffic has just plummeted.

I guess I can't blame the customers, since anyone can turn on a TV and see the news, and expect that people are going to be in survival mode right now. It's the blatant sensationalist misleading that's chapping me, and I'd wish the media would just cut it out.

Hi ChenZhen:

___You are a GM dealership, right? How are your overall sales compared to this time last year and the prior month? I was guessing Ford/GM/Chrysler were going to be down 50 + % vs. November of 2007 but Ford released a small statement about sales last weakened beating the same from last year.

___Kacey works for a Honda dealership and he told me they were getting hit pretty hard too.

___Thanks in advance.

___Wayne

Wayne-

For us, sales for last month were about the same year/year, thanks in part to the employee pricing promo. We were one of the lucky ones, however, as many of the other BPG stores were down, and I'd say that just eyeballing the list it looks like about 15% in this region.

Used cars keep dealers afloat, and I don't have any #'s on that, but if I had to guess I'd say those were down significantly as well. Tough times.

Hi ChenZhen:

___Thank you.

___Wayne