Two Wolves and a Sheep

More letters on the electoral college over the weekend than any topic we’ve covered since healthcare reform last summer. Highlights:

“The electoral college is a very outdated system. We have the technology today to not only verify each ballot is a valid one, but to count them quickly.”

If that tech exists, we should start using it.

“The problem is people think we are living in a democracy when in fact we live in a constitutional republic and democracy is two wolves and a sheep voting on what to have for supper.”

This was a popular opinion among all the letters you sent.

“Without the electoral college you might as well simply hold the elections in New York and California.”

Well then Democrats would win all the time. Surely you don’t want that, do you?

“The electoral college was put in place to keep the big states from running over the little states. Without the electoral college there would not have been an America.”

And…

“We have a brilliant Constitution. Doing away with [the electoral college] will undermine our very Republic.”

Bottomline: The consensus is the Founders were right, put a system in place that worked and continues to work. We tinker with it at our own peril.

Your Rundown for Monday, January 14, 2019:

Automakers Smart, Reckless, or Somewhere in the Middle?

Page B1 of today’s Wall Street Journal: Small Cars Fall from Auto Makers’ Lineups.

But small cars serve a purpose. We can’t live in a world with no small cars, can we?

Well, we’re about to find out.

First off gas is, relatively speaking, cheap. It’s a cost of ownership concern that gets lots of people to buy bigger cars.

Plus, used cars offer great value.

There’s little difference in price all across the country between compact, midsize, and full-size used cars.

It makes sense, from a consumer’s perspective, to buy bigger. The mix of factors above is one reason why SUVs took over everything in the last generation.

Now, automakers are cutting the smallest models from their production lines.

As the WSJ points out, General Motors announced late last year the company intends to stop selling the compact Chevy Cruze in the U.S.

Toyota is now said to be “weighing the future” of its Yaris.

Ford is getting rid of the Focus. Fiat Chrysler already did away with the Dart.

At the risk of being blunt, this seems like terrible strategy.

At the faintest breath of recession or financial struggle, the American consumer’s wants could turn, and smaller, cheaper cars again become all the rage.

How quickly could automakers respond? Probably not fast enough.

Maybe it all comes down to gas prices. Maybe it all comes down to increasing American energy production. Or maybe Detroit and other major automakers just planted the seeds of their next crisis.

For context, a year of General Motors (NYSE: GM) stock.

chart

We hope automakers are as smart as they think they are.

Because if hard times hit and the smallest, most efficient car out there is a Ford F-150, we got problems.

Market Rundown for Mon. January 14, 2019

S&P 500 futures are down 20 at 2,575 this morning.

Oil’s down $0.73 at $50.86.

Gold is up $5.30 at $1,294 this morning.

How psychologically powerful is $1,300 gold for you?

Bitcoin goes for $3,586. Rough couple days. But up $35 today in fiat terms.

We’ll talk more tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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