Cathie Wood: This Is TWO TIMES Worse Than The 2008 Recession

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The automotive industry crisis of 2008 destroyed hundreds of billions of dollars within months. Automakers worldwide struggled to survive a massive decline in sales. The US government bailed out GM and Chrysler while Ford had to secure a line of credit from the government. Toyota experienced the first loss in 70 years and Honda saw its car sales drop 31.6%. Dealerships dropped like flies and were forced to make permanent changes. The $2.8 trillion automobile industry fell apart overnight, but what if I told you that our current situation is two times worse? That’s what a leading indicator is showing and the CEO of Ark Invest, Cathie Wood, has spotted these problems. Serious trouble lies ahead and the world is about to wake up to a complete disaster.

The University of Michigan Consumer Sentiment Survey is known as one of the most reliable surveys in the financial industry. One of the key components that the survey includes is the following question: “Speaking of the automobile market — do you think the next 12 months or so will be a good time or a bad time to buy a new vehicle, such as a car, pickup, van or sport utility vehicle?” This question has been asked since 1961, which gives it an extensive data set to compare to. As you can see from this graph, the percent of respondents indicating that it’s a bad time to purchase a vehicle has increased to record heights. This level of negative consumer sentiment is the highest that it has ever been in the history of the survey. Contrary to what this graph is showing, Automakers are claiming that the demand for vehicles is robust, but that’s not the case at all. The rising automobile prices are all due to a lack of supply rather than a lack of demand. Dealer inventories have dropped to record lows and that is causing prices to increase drastically. Just like the level of inventories, the consumer demand for vehicles is at an all-time low. Automakers are rapidly attempting to order new semiconductors for their vehicles, but the consumer demand likely won’t be there by the time the chips arrive. The automobile industry is undergoing an accelerating shift towards electric vehicles that is keeping consumers on the sidelines for new developments. Top that off with the fact that car prices just keep on increasing year after year and the automobile industry is in serious trouble. The average new car price has increased by $11,000 in the past three years, which is hurting consumer sentiment. The University of Michigan survey cited the primary reason for the low consumer sentiment as high prices. That demonstrates that car prices are not sustainable at the current price level. The Manheim Used Vehicle Value Index perfectly demonstrates the decelerating growth of car prices. Everyone knows that the exponential price increase in the auto industry can’t be sustained. There’s a massive price bubble and the supply is starting to catch up. As supply increases disproportionately to decreasing demand, automakers and dealerships worldwide could be left in a glut. A glut is when there is an oversupply of a good that leads to a massive crash in prices. Elon Musk, Lisa Su and GM have all been saying that chip supply constraints are starting to dissipate. Everything that I just described is what Ark Invest has been focusing on, particularly analyst Sam Korus. Automobile sales are already showing signs of a rebound from the chip shortage. Total vehicle sales recently came in at 15.5 million vehicles in January 2022, which was up almost 20% from the prior month. That is obviously a substantial increase and is likely fulfilling the remaining consumer demand from the supply shortage. Once the consumer demand for higher priced vehicles is satisfied, urgent demand problems will likely appear. Cathie believes that all of these factors are building upon each other to instigate the biggest price crash in the history of the auto industry.
The impending crash of the auto industry is not just specific to automobiles, but rather goods in general. Total business inventories are starting to increase significantly. In December of 2021, the inventories to sales ratio increased to 1.29, which was up 3.2% from the previous month. A 3.2% increase might not seem like much, but that’s a 38% increase when annualized. Such a rapid increase is a sign that new supply plants are starting to ramp up. AMD CEO Lisa Su explained this before at a conference. Lisa Su stated that because of the supply shortages, many businesses have invested in new supply plants. The problem is that those supply plants don’t go into production immediately.

30 gedachten over “Cathie Wood: This Is TWO TIMES Worse Than The 2008 Recession”

  1. Interesting to hear peopled blather on about inflation and deflation and totally ignore the money supply — the 800 lb gorilla in our tiny economic cage.

  2. The American economy revolves around the Auto Industry. Buying Selling Parts Repairs fuel Insurance Lawyer…. I want to know what America looks like without dependency on the Automobile

  3. Cathie wood has been wrong on majority of investment calls she’s made. Her fund has underperformed the market by 25% on average – not throwing shade but wouldn’t be using her for authority.

  4. The market is growing daily with new strategies and trading opportunity.
    Financially empowerment is our everyday chase and James Lucas has proven to be part of this mission. his strategy is the best

  5. The other imminent issue for American carmakers will be their almost total lack of smaller or even midsize vehicles, as they are yet again only focusing on gas guzzling SUV production. Now Putin lost his trump card, the EU and NATO (till 2024 at least), he ran out of options to keep the Ukraine for himself resulting in having to invade it. His legacy building campaign in the Ukraine also shoots oil prices through the roof now. This exposes the fact that America was never really energy independent. Gas prices in the States will almost match reality as there is no way to artificially support such huge subsidies especially just for peasants to drive around. Certainly great for republicans because they will of course blame "Sleepy Joe Brandon" for it. Sales of SUVs are going to plummet, and smaller cars are only imports, so the evil government will have to private jet fly the numbnuts from Detroit to DC again to put up a shit show for yet another taxpayer bailout.

  6. This economy crisis is just a time that differentiate the wise from the other, the wise will invest right now either in stock or cryptocurrency just to hold some shares of something

  7. Yeah and you'll be even worse than the market cathie if this happens

  8. Oh man….she isnt as smart as people have given her credit for. Its the dealerships making the extra money, not the automakers. When you have the biggest price increase followed by the biggest plunge, thats just called a correction, not a crash

  9. Let's not forget that the biggest payouts in the markets don't come from great performances but rather it's great promotions. Stay invested, diversification for streams of incomes is very important.

  10. Hello, Thank you for the video. At 5:50 there is a scroll of various ETFs. Is that a website? If so, would you please supply a link?

  11. Tech Sell Off, Bubble Comparisons, China | ITK with Cathie Wood,
    I don't lose money every single trade, but my main problem is trying to let my runners run. Very rarely do I catch big moves, Instead they go a few pips in my direction then go against me if when I try holding them. Also my entries could use a lot of improvement.

  12. Will the gas prices going up make this worse? It at 6$ it wilde dude

  13. Any bubble will always burst wuth no exceprion, especially this time which is a percefy story with hyper inflation, the worst pandemic refuse to end, the weakest economy and Fed run out of liqudity/

  14. Can you have your sister come and speak to us. She is a Fox.

  15. I strongly believe that my primary YouTube account is hacked with this fake company! All this content are fake and fraud!

  16. We must bring this war to Russia in the form of Guerrilla warfare. This is a form of irregular warfare in which small groups of combatants, such as paramilitary personnel, armed civilians, or irregulars, use military tactics including ambushes, sabotage, raids, petty warfare, hit-and-run tactics, and mobility, to fight a larger and less-mobile traditional military. We must attack the Kremlin and various areas of Moscow. We must have an offensive strategy and this must take place now….


  18. The amount of time we spend believing we can't is more than enough time to learn how you can.

    – my Brain

  19. Cathie Wood does 2 things well.
    Takes your money.
    Loses it.

  20. Don't use Cathie Wood. She has no option but to keep on drumming her innovation beat, which will happen some day. But we heard her innovation brainwash so much, it is getting annoying

  21. After all this crap forget about capitol riots. People should riot at one of the 12 federal reserve bank buildings.

  22. So, could this be worse than 2008 for car companies, only time will tell, but what is it really, the chip shortage, the decontenting of some features (because of the chip shortage), the quick transition to EVs, or some combination or something else completely, so, sales are down, that's blamed on the chip shortage and to some degree their right, but pricing has played a much big factored than people are letting on, not to mention, like it or not, vehicle last longer

  23. WTF everyone is talking about inflation and this guy and Cathie talking about over supply of inventory and thus deflation? LOL No idea what to do anymore.

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