It’s been all downhill ever since, the numbers dropping to just barely 13 million (again, both) during August. For September, though, Autodata’s newly released figure was an astoundingly low 9.66 million.

How low is that? COVID-level low; bottom of the Great “Recession” territory. Off the (my) chart.

The shortage of semiconductors is certainly weighing on automakers who can’t finish off their products without them. This bottleneck continues to choke off inventory, as the earlier spike in sales gifted by the government’s “stimulus” tore through whatever limited stock dealers (and some wholesalers) had on hand. Unable to keep up production without sufficient semis, overall inventory of available-for-sale cars and trucks is at historic lows.

Without much in stock, few units available to sell, there can’t be much for sales.

But is that all? Chips, yes, yet there are more fundamental questions arising over on the demand side.

More generally, first, no more helicopters. Second, a lot less unemployment payments (benefits cliff). Last and most of all, none of those things appear to have generated anything like a full recovery; meaning, the underlying economy which got whacked by the coronavirus restrictions and GFC2 during 2020 may really have been durably perhaps permanently damaged and in the same horrific way as the 2008 crisis had (see: labor force).

To that end, start with commodities immediately related to autos; those like palladium. This silvery metal is closely tied to the manufacture of combustion vehicles, used largely for environmental solutions put onto them (along with platinum). It’s been the familiar story in terms of price, with supply problems (and Chinese hoarding) in getting the commodity out of the ground running against a much faster rebound in demand.

Palladium prices naturally sky-rocketed to just about $3,000 per troy ounce at their peak in early May 2021. After May, it is shaping up to be a nearly equally epic crash; the front month price is down almost 40% since that top.

But palladium prices aren’t the only commodity to suffer. How about iron? Another of the “supercycle” darlings, the futures prices for iron ore has likewise plummeted; even more than palladium. Down almost 50% from its high, it may be good that China’s markets are closed this week for their National Golden Week celebrations.

Iron, of course, is used to make steel and the Chinese have been cracking down on pollution at the same time as rationing electricity.

Yet, there’s an uncomfortable similarity between the two:

There are more; copper likewise topped out in early May, too. Unrelated to semis, not as directly subject to Chinese electrical rations, Dr. Copper has been substantially lower going back to that same spot on 2021’s calendar. While the decline isn’t in the same neighborhood as either iron or palladium’s, the similarities are obvious enough anyway.

Blinded by the dazzling “stimulus” produced in the US as well as in other places, too little emphasis was left to peering behind the fuzziness of neo-Keynesianism to more thoroughly understand the true macro potential for when the world got to the other side of all that government intervention.

Everyone seems to have assumed there wouldn’t be anything to trouble global demand. Inflation to the moon forever!

The recent downturn in palladium prices has taken some onlookers by surprise, with several analysts having held a bullish stance mid-year after the steep PGM price rallies of the previous 12 months, buoyed by expectations that steady Covid-19 vaccine rollouts would boost consumption. But the mood appears to have now changed, with Heraeus among others saying that the outlook for the second half the year is now “weaker than anticipated only a few months ago and the price could slip further”.

One reason for swinging at least toward demand uncertainty had been delta COVID; the summer was filled with media sensationalism about its rabid dangers. That’s on the downswing, too, now, which then proposes more durable uncertainty than what’s attributable to what’s left of the pandemic.

Something is going on here which defies in time and substance all the common explanations.

It had been widely believed the US and global economy would fully recover at some point. Ironically, much of that belief was based on Uncle Sam on the one hand and Chairman Xi on the other. The former is proving more and more transitory by the month, by the week, while the latter was never in that category to begin with (Xi had even said so all along).

Without hope for a rededicated China, and with fewer of the US federal government’s nickels floating freely around, while there are still supply issues present and they are causing some serious chaos and limiting potential, there may also be a growing realizing how as those fade they’ll be replaced and superseded by more serious, perhaps intractable problems with the world’s demand side.