SSbaby

"Delay v8 engine development". Understandable but disheartening if you're a GM enthusiast.

FiefSS

Yeah but what they have now is good.. and they have other things developed that they haven't even released. The 3valve heads for the vette and DOD that was supposed to be on the LS3 for instance. I think they are fine for a few years..

Z28Wilson

Just curious, what makes you think that? I do believe fuel usage in the U.S. will decline in the years to come, but I'm not sure that even matters.

The only way fuel will come sliding down is if our dollar regains strength. The more, the better.

My Red 93Z-28

So does that mean the LS7 will stay around longer? What about the LSA and LS8 that are scheduled to go into the CTS-V and Z28?

GTOJack

GM was building 30,000 more trucks a month than they were selling. Current downward trend in truck sales is seen as permanent. People who were choosing to purchase a truck that didnt need one are no longer doing so. My buddy in southern Georgia says he knows several people trying to get out of their late model GM 2500 diesels due to $4.70/gal diesel fuel. Actual value is $5000 under book value.

formula79

Right now the reason oil is high is not because their is a shortage of oil....but rather because of speculation. So many investors are trying to buy oil it is causing a shortage of futures. When there is a shortage of futures investors pay more on the assumption it keeps going up. Also right now you need something like 20 cents in assets to back up every dollar of oil you buy on margin. That is way lower than the requirements for most other commodities. It's kinda like the housing bubble that just popped...fast and easy lending and all.

I think after the election you will see a regulatory change towards this behavior from whoever gets in office.

Eric Bryant

If speculation is driving up the demand, show me where all this surplus oil is being stored.

formula79

No...you are thinking about it wrong...

In terms of actual demand...we are covered. AFAIK..no one in the oil supply chain is waiting for anything.

What I am saying is after the housing crash...more investors are investing in oil because it is cheap and easy to do on margin, and the price of oil keeps going up. There are only so many oil futures to be bought because production is pretty static. However now that you have 10x the investors trying to buy each oil future, the demand is higher, and they are willing to pay more for an oil future on the asumption that by the time it gets here the price will have gone up more..and they can sell it at a profit.


Kinda like 3 years ago when it was easy for investors to get real estate loans and you would get 10 investors competing to buy a property. Whoever won..ended up paying a crazy high amount of money with a loan he likely should not have been able to get. But then again...houses never go down in value.....so why worry?

Same flawed logic is driving oil right now.

Big Als Z

Exactly Branden. Demand nor supply has gone up at the same rate that prices have jumped in 2 years.
If someone can prove to me that in 2 years, demand has increased enough to double the price of a barrel of oil, or that production has been cut in half in 2 years.
Dollar also throws the price out of wack. If the dollar was strong, we would be around 90-100 a barrel. Cut out the speculators, and we could see 60-75 dollar a barrel oil in two large sweeps.

Todd80Z28

If we go back to driving bloated SUVs and full-size trucks after this exercise in gas price tolerance, it will be a national tragedy, IMO.

Whether gas is $5/gal or $2.50 next year, it needs to remain solidified in our national collective thinking that being bent over by such a dependency is a bad thing, and the move away from it must be permanent.

There's no question that oil would be $80~ish/barrel if not for speculation. I got a recent email from United Airlines that stated current speculation is 68% of contracts- speculator being defined as a contract holder who has no intention of every taking delivery of said contract. Historically, according to the email, it has been around 20%.

Personally, I bet world demand increase from last year to this year is <5%.

formula79

No more a tragedy than some performance cars. My wife gets better gas milage in here Avalanche than our neighbor does in his SRT8 Charger.

Todd80Z28

Yeah, but Chrysler has always sucked at the fuel economy game. Besides, Cerberus is going to chop them into nothing anyway.

And, correct me if I'm wrong, but full size trucks and SUVs have a larger market share than "performance" cars by a fairly wide margin, no?

I know it's blasphemy here, but I don't *want* to see a 500hp $25k car in every garage.

formula79

No...but I am also saying I will take my Avalanche any day over some **** box with a 1.4L turbo motor.

I remember my wife used to have a RAV4 when I first met her. That thing got terrible gas milage because the 4 cylinder was always over worked they way she flogged the gas.

SSbaby

I don't believe in complacency. That is what is bringing GM undone. I'm disappointed GM isn't introducing technology on the V8s to make them even more powerful/fuel efficient and even better than that of its competitors'. But given their financial situation, the V8 would be one of their lower priorities right now.

GM need to lead with product. Quality product. As much as I believe the decision not to sell the Beat is bizarre, GM cannot make money of small cars... so again, they need to prioritize their product strategy. It's just a shame they haven't hedged against segments in the market, in the case any of the segments drop off (as per SUVs, now).

Eric Bryant

You're the one that doesn't understand:



As price increases, demand decreases and supply increases. If speculators are indeed driving up the price, then they're going to be stuck with a lot of excess inventory, as more suppliers are willing to provide product and there are fewer buyers.

That doesn't seem to be the case.

But at some point, the end user still has to buy that oil - and if they don't, then it has to be stored somewhere.

Speculators can't just magically drive up the price of a commodity, at least not for very long.

You fail to understand the concept of demand elasticity. If there exists no desirable alternative to a given commodity, then very small changes in supply or demand can cause large and seemingly disproportionate swings in price.

It'd be great if people would have paid attention in economics class, because this is all pretty basic stuff.