From the Wall Street Journal…

GM, the nation’s largest auto maker, said it sold 220,030 light vehicles in December, down 31% from a year earlier. Car sales dropped 25% while light-truck sales dropped 35%. There were 26 selling days in the month, the same as a year earlier.

And from later in the article….

Ford, the No. 3 U.S. auto maker by sales behind GM and Toyota, said it sold 138,325 light vehicles in December, down 32%.

Also from later in the article…..

At Toyota, December sales fell 37% to 141,949, the eighth-straight month of sales drops for the No. 2 seller in the U.S., which earlier had defied the negative sales trends that have slammed Detroit.

Toyota’s sales fell by more than GM or Ford in percentage terms? What a shocker.

Its probably a combination of the fact that Toyota sales started falling later and the fact that Toyota is more popular in the housing boom areas then GM and Ford were (Think Florida and California). Those who don’t like change will be comforted by the fact that nobody did worse in percentage terms than Chrysler. This from Market Watch….

Chrysler LLC said Monday that U.S. December sales fell 53% to 89,813 vehicles from 191,423 a year ago.

Tell me again how the government loaning money to the Auto makers is going to help them when consumers don’t have the money to buy cars. Especially when the loans to people looking buy cars are becoming more expensive. This from Felix Salmon…..

Yes, despite the falling interest rate environment, 95% of banks have increased the cost of their loans. Sounds like a credit crunch to me — and sounds, too, like the stated aim of the government buying equity stakes in banks simply isn’t working.

From the Telegraph…

As temperatures dropped below zero across much of Europe, the Russian prime minister instructed the head of Gazprom: “Cut it – starting today.”

I am starting to wonder if Russia is not using the current spat with Ukraine as an excuse to extract a higher price out of the EU. As long as Russia is sending any gas through the pipeline, Ukraine will be able to take what it needs. So by cutting the gas that Russia is sending down the line, it does not really put anymore pressure on Ukraine. But it does put more pressure on the EU.

Since Russia is getting killed by falling oil prices, it must be desperate to do whatever it can to keep natural gas prices as high as possible. A fight with Ukraine is as good as excuse for undertaking actions towards that end as any other.

As far as Ukraine goes, it simply can’t afford to pay the higher prices that Russia wants no matter what the rights and wrongs of the matter are. This from the Economist…..

For Ukraine, the weakening of its currency presents an additional problem. For several years the hryvnya has been worth around HRN5:US$1 yet since December it has been trading at HRN8:US$1 or weaker. Even if the US dollar import price for gas were to remain unchanged in 2008, this translates into a rise in the import bill for Naftohaz on constant volumes to HRN80bn from HRN50bn in 2008. Even a doubling of transit fees, which currently bring Naftohaz around US$2bn in revenue, would not cover the increase.

In other words, even if Ukraine could somehow convince Russia to hold prices steady in dollars terms (which is how Russia prices its gas to the Ukraine as I understand it), it still would result in a huge effective price increase for Ukraine. Just think of how much worse it would be for Ukraine if they had to pay an even higher dollar price for their gas.

And this on top of all their other problems.

This week’s rant of the week comes from Naked Capitalism and it is called “Woefully Misleading Piece on Value at Risk in New York Times”

From Reuters….

A grim economic outlook highlights the need for the Federal Reserve to step up quantitative measures to boost growth, with official interest rates already effectively at zero, Charles Evans, president of the Chicago Fed, said on Saturday.

Evans said that based on the outlook for rising unemployment, falling industrial production and a wider output gap, economic models suggest rates should be below zero.

“If it were not constrained by zero, those models would want to push it below zero, but that’s not possible,” Evans told reporters after a panel at the American Economic Association’s meeting in San Francisco.

Quantitative easing, a way to flood the banking system with large amounts of money, “is a way to mimic below-zero rates and provide support to the economy,” he said.

The only way to have real below zero interest rates is to have inflation. Why they think that will help matters is beyond me. Part of the reason we are having all the problems that we are having now is because Greenspan cut rates so sharply in 2001.