Vincent Farrell, Jr. is Chief Investment Officer of Soleil Securities, a New York based investment management company. Over his long career on Wall Street, he has worked for numerous distinguished firms. Mr. Farrell graduated from Princeton University in 1969 and received his M.B.A. from the Iona College Graduate School of Business in 1972.
I have never bought a car in my life. My wife has bought a lot of them. I’m just not that into cars. I have usually referred to the cars we own by their color. I’m taking the blue car or the gray car or whatever. I actually did lease a car once. Back in the heady days of Spears, Benzak, Salomon, and Farrell, we all leased fancy cars and took advantage of the tax code provisions. But I even faded on that one a bit by going to the dealership with one of my partners and leasing the same car he did.
My most recent car was a Ford Escape (I had to ask — I thought of it as the dark gray car) with close to 100,000 miles on it. We swapped it and another we had no more need for since the kids are grown and gone, and I (we) got another SUV. It’s gray and American-made, and that’s as much as I know about it. The neat thing is it came loaded with XM satellite radio so I can now listen addictively to CNBC as well as addictively watch it. But only after Ken Prewitt and Tom Keene on Bloomberg radio. (They are the best.) I’m pretty sure we got XM for a year for free, as the dealer was desperate, or so my wife told me. If I get a bill though, XM is history.
We probably should have waited since my old car, which was fine by me, was a “clunker” and probably would have qualified for the “cash-for-clunkers” program soon to come out of Congress. Germany has registered a significant increase in new-car registrations since their program went into effect. Word from Britain is that, on the verge of their program being enacted, activity in showrooms is up substantially.
The U.S. House of Representatives has passed a plan and the Senate is likely to do the same this week. It looks like the plan would provide a $3500 subsidy to anyone trading in a car getting less than 18 miles per gallon as long as there is at least a 4-mpg improvement. (I think I got yardage on my old car, not mileage.) A 10-mpg improvement would get you another $1000.
So the car industry would be revitalized – at least a bit – and the environment would be aided. Here’s the hitch. Of the 9 or 10 most fuel-efficient vehicles being sold today – and presumably the
beneficiaries of such a program – four are built by Toyota, two by Volkswagen, one by Honda, one by Smart (never heard of that? it’s a Swiss-designed, Mercedes-owned, French produced mini-car) and one by a US-based company: Ford. Some of the others might be made on US soil, I don’t know. But is this really what we wanted to do?
Vincent Farrell, Chief Investment Officer
Soleil Securities Corporation
May 18, 2009
Vincent Farrell | 212-380-4909 | firstname.lastname@example.org
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