Fundamentally this market can't hold up much longer.
I heard a GM ad on the radio discounting a brand new 2008 vehicle 50%. As these kind of sales go through, the existing privately owned vehichles, many already upside down, will lose equity even faster. Bond investors will react by selling auto loans to reduce risk of incomplete repayment of loan in case of default. Symptomatically, interest rates will spike UP, choking off funds for future auto loans. The FED went to grest lengths to avoid mark-to-market in the financial sector.
Discounting prices to sell anything exhausts a market very quickly. Bargain hunters buy sooner, and wait longer to replace their bargain. Lower vehicle prices and fewer buyers are the last things The Big 3 want as they avoid bankruptcy.
So it looks like the dealers are trying to liquidate ahead of the Big 3.
