Why Used Car Prices Are Rising

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🗓️ 15 June 2021

⏱️ 17 minutes

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Summary

The U.S. and European Union settle a 17-year trade dispute involving Boeing and Airbus. Shares of CD Projekt rise on reports that Cyberpunk 2077 is being added back to the PlayStation store. Yasser El-Shimy analyzes those stories and talks about Vroom, Carvana, and the increasing prices of used cars.

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Transcript

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0:00.0	It's Tuesday, June 15th. Welcome to Marketfoolery.
0:05.3	I'm Chris Hill with me today. Yes, sir, El Shimi. Good to see you, sir. Good to see you, Chris.
0:11.6	We've got video game news. We've got automotive news. We're going to start in the aerospace
0:16.4	industry. The United States and the European Union have resolved a 17-year trade dispute
0:22.9	involving Boeing and Airbus. They're suspending tariffs for I think the next five years and
0:31.8	not surprisingly on the resolution of the dispute shares of both Airbus and Boeing up a little
0:38.7	bit this morning. It's a day to cheer for sure for both Airbus and Boeing shareholders.
0:45.3	Let me just say the best business after monopoly is a duopoly and that's exactly what we have
0:50.2	here. Airbus has a 45% market share to Boeing's 43%. And so policy makers in both sides of the
0:58.3	Atlantic are not actually trying to get more competition in that sector. In fact, they both
1:04.9	American and European governments have for long-shoured both companies with subsidies and they've
1:10.5	been litigating each other over it at the World Trade Organization. And we have seen over the past
1:18.2	few years the Trump administration had imposed duties worth roughly $7.5 billion on European
1:26.4	products after the WTO ruled that the EU had given unfair subsidies to Airbus and shortly
1:32.6	afterward the EU imposed tariffs for about $4 billion on US products also on the back of another
1:40.3	WTO ruling that the US had given illegal aid to Boeing. But what we're seeing now is that probably
1:48.7	both sides have finally woken up to realize that this cozy duopoly in the plain-making industry cannot
1:55.5	be taken for granted any longer. We have seen a slew of plain manufacturers springing up in China,
2:03.0	Russia, Japan, Canada, and Brazil over the past decade or so. And I imagine the success of the
2:10.5	commercial aircraft corporation of China or KOMAC is really weighing on the minds of Western
2:17.8	government officials here. Yeah, I mean, these are, I have to say, as an investor,
2:25.8	I absolutely agree with you with your opening statement that anytime you can invest in a monopoly,
	...

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