In the Fed's most recent release to regulated institutions under the Supervisory Letters rubric, they address the topic of Model Risk Management. Included is the following:

" Banking organizations should conduct a periodic review—at least annually but more frequently if warranted—of each model to determine whether it is working as intended and if the existing validation activities are sufficient. Key elements of comprehensive validation include:

•Evaluation of Conceptual Soundness. This element involves assessing the quality of the model design and construction, as well as re...
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GM: Incentives increased sales
By Brad Emerson
April 21, 2011 10:08 AM

From "The Detroit Bureau"

http://bit.ly/g1Ij6Q

The CEO of GM said at the New York Auto Show that an average incentive increase of $400 grew General Motors sales by "as much as" 100,000 units in the first quarter of 2011.

"The maker surprised analysts and competitors alike when it boosted rebates and other givebacks by about $400 a vehicle during the early days of the new year, a time when rising demand led some makers to curb their incentives."

So there's stronger demand, and GM cuts prices. They say the price breaks increase sales by ...
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Used vehicle values
By Brad Emerson
April 16, 2011 09:25 AM

Just read some information on used car values for the month of March: every category of vehicle (e.g. Compact, Mid-size, Sports car, etc) is up in value both month-over-month and year-over-year, EXCEPT full-size SUV's, full-size pickups and luxury cars. We surmised that this would be the case some time ago (see our earlier blog: http://decisiveonline.net/blog-detail.cfm?blogID=38 ) where we quoth:

"Economy and gasoline prices: There is some tension between general economic improvement (in and outside the US) on commodity prices (including/especially gasoline) and demand for vehicles ...
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Auto ABS
By Gary Sherman
April 12, 2011 11:48 AM

At its peak, the automobile ABS market was about $700 billion/yr. Issuance shrunk to $135 billion in 2010. Estimates for 2011 are approximately the same as 2010.
...
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Elasticity
By Brad Emerson
April 12, 2011 08:31 AM

My daughter came home from school a couple of weeks ago excited about one of her classes..... Economics. After pulling myself back together, we began talking about what they are studying and I was told "elasticity of demand." She went on to say that "a lot of kids don't get it, but I do." You don't say?

What my daughter really meant was "Price elasticity of demand" (sometimes "PED"). And we have a very interesting example of it to examine right now in gasoline prices. According to the US Energy Information Administration the average weekly price of all grades of gasoline for the ...
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