A few months ago, I bet a buddy of mine $100 that 2 of the 3 big 3 wouldn't be around in 10 years. American cars are really lame - I'm not ever going to buy one.
Except for the 1977 Chevy Nova I used to drive. That was a sweet ride.
I think Ford Credit could surely make a case that it is an investment bank, so it can trade its trash loan for cash via the Fed Window. I'm sure if Paulson ran Ford instead of GS before, this would be a non-issue. Later, Ford Credit's bad collateral would be forgiven and Ford would be saved. So neat and tightey.
The Ford family could have given up control of this company some time ago and saved it.
The only use for any of the US brands is a distribution network for an overseas manufacturer. These are not viable manufacturers anymore. Sad.
Wachovia To Exit Retail Mortgages in 19 States: Report
Wachovia is exiting retail mortgages in 19 states including Illinois, according to a published report Friday in the Chicago Tribune. Citing a company spokesperson, the Tribune reports that the exit from branch-based mortgage origination will cost roughly 125 workers their jobs, 20 of them in Illinois.
The moves comes as the company is looking to refocus its operations in locations where it has a meaningful retail branch presence, according to the report, and is effective Sept. 30.
Wachovia CEO Richard Steel reiterated last week that the bank will not look to equity markets to raise additional capital, although he did acknowledge the fresh capital was needed. Instead, the Journal reported, he said that Wachovia would meet its capital needs through asset sales and cost savings measures.
Exiting a chunk of retail mortgage lending certainly qualifies as a cost saving measure.
Wachovia holds $122 billion in option ARMs, a substantial part of the banks $488.2 billion in total loans; no other U.S. bank has as much exposure to option ARMs in real-dollar terms. The North Carolina-based bank yanked its option ARM lending program earlier in the year, as mounting losses and continuing home price declines made the product unprofitable.
All these stories today and this year are about JOBS and EMPOYMENT!
King Bush 1 lost to Clinton because of JOBS:
"Employment statistics from the US Department of Labor show what most IT people have already realized: IT jobs are getting harder to come by. According to the Bureau of Labor Statistics, 13,000 jobs in the information industry were cut in July, bringing the total to 44,000 year over year. An additional 5,000 jobs were lost in telecom this past month. The statistics reinforce a recent survey of top CIOs who indicated that they will be reducing their IT staff over the coming year. According to a staffing research firm, some jobs have gone to outsourcers, while other jobs are simply going away, either due to cost-oriented automation efforts or due to increasing the remaining staff's workload."
This is a global PROBLEM:
Canada's labour market shed 55,000 jobs in July to post the worst monthly decline in 17 years, Statistics Canada reported on Friday. The drop amounted to the steepest one-month net loss in jobs since the 1991 recession.
"Try as we might to find them, there was no silver lining to this report as all the details were bad," wrote Scotia economist Derek Holt in a morning research note.
About 25% of Ford Credit's committed capacity is up for renewal during the remainder of 2008. Given the nature of its asset-backed committed facilities, Ford Credit has the ability to obtain term funding up to the time that the facilities mature. Any outstanding debt at the maturity of the facilities remains outstanding through the term of the underlying assets.
What this says to me, without saying it directly, is that Ford Credit could soon be insolvent. It has to pay back 25% of the money it has borrowed before the end of the year. It isn't saying that it will be able to (or will) borrow any more money to replace it. And it isn't saying that it expects the lease recovery amounts to equal the debt owed.
Will Ford make the lenders whole? Probably, at some cost. But how can Ford function without a viable dealer financing arm, at a time when banks are pulling back from car lending?
How many could or would pay cash on the barrel for a new car?
How long before we see ads hyping the current decline in fuel? Time to jump back in and get yourself a Hummer since oil is heading back down to $40 a barrel.
Leasing was always a poor option for these gas guzzlers. They were the ultimate sign of conspicuous consumption and laughed in the face of any sort of conservation. Now as the leases are ending, people are just taking back these cars and letting the dealers handle the mess.
Thiers so many incredible deals on used 05-08 large car, suv's and truck
in great condition that used will eat into new sales going forward 2-4 years...
funny to note that a 40-50K car loan in 06 was normal, repos in 08,09 car value now 15K or less at auction...huge loss when you add reserve to dealer..
Aug. 8 (Bloomberg) -- ACA Capital Holdings Inc., the bond insurer that lost its investment-grade credit ratings in December, terminated $65 billion in credit-default swap contracts and turned over most of the company to creditors
It ain't even 6:00 on the east coast yet. And it's almost 3.5 hours to quittin' time out here in leftcoastland. Patience. if you order the Pizza too soon, it gets cold and rubbery before the real fun begins.
HOUSTON, Aug 8, 2008 (PrimeNewswire via COMTEX) -- The Board of Directors of Franklin Bank Corp. has resolved not to declare or pay the dividend on Franklin's Series A Non-Cumulative Perpetual Preferred Stock (the "Preferred Stock") scheduled for September 15, 2008.
Charges by Massachusetts against Merrill Lynch & Co Inc are more serious than those against Swiss bank UBS because they involved the manipulation of research of auction-rate securities, the state's top securities regulator said on Friday.
"It ain't even 6:00 on the east coast yet. And it's almost 3.5 hours to quittin' time out here in leftcoastland. Patience. if you order the Pizza too soon, it gets cold and rubbery before the real fun begins."
Yah, the likely Ritual Sacrifice of the Week is out here in California. You might be drinking your warm milk and cookies out East before the hammer comes down.
Here's my obligatory weekly post on the the major index PE ratios (from the WSJ$ Market Data Center, using TTM earnings)... Unfortunately, the Dow and Russel2K are both showing "nil" again, meaning the PE is too large to print...
The S&P 500 is now a very healthy 60% over its historic trend value of 16! Wow! Good times must be coming soon!
JimPortlandOR writes: Short Courage: when the 2BR apts run out, the 1BRs will nicely hold two folks (or more).
Jim, I remember when I was growing up in Orange County (before it was referred to as "The OC"), and gradually the neighborhoods around us started housing 2 or more families per house. These were mostly low-income immigrant families in the most affordable parts of Fullerton.
I think this time we might see the same trend across a much wider demographic.
They also have a great series of articles clearing up the confusion about the various measurements of PE that are used, and why they favor 12-month trailing earnings, using GAAP earnings.
"Airlines are set to make the reduction, the equivalent of one in every 14 seats, in response to high oil prices and the global credit crisis, according to the Official Airline Guide (OAG). Reduced availability is almost certain to force up ticket prices.
In all there will be 59.7m fewer tickets available compared to October-December last year. Routes will be scrapped at 275 airports around the world and 3,500 fewer planes will be needed, according to the OAG.
While Europe will suffer the loss of 5.5m seats, America will be worst hit, with a reduction of about 20m. "
Maybe this is a question for dryfly but how long would it take the car manufacturers to dust off the prints, get suppliers lined up and start producing some of their non-bloated older models? A new 1986 jeep comanchee pickup would suit me just fine. And no, I would not opt for the gold edition with the six-disk CD player.
Re: Increase in boarders. I have long suspected there is quite a bit of elasticity to housing supply.
In a really tough crunch, half the people in the country could move in with friends or relatives. (They just need to have a big yerd sale at the new location to make space in a spare room or garage.) Americans have more housing space than they think - just get rid of some of that "stuff" built up from years of being dutiful consumers.
I was in central Washington (Yakima) last weekend; a local dealer has a TV commercial talking about how SUV's and big pickups are "necessary" for "our lifestyle" (farming, boat-hauling, ATV-hauling) and now is a great time to buy.....
I saw lots of souped-up new big pickups with all the options, sitting in front of trailer homes that needed some upkeep. Quite sad.
Ford is last. Or is that GM?
Can the Fed open a window for leasing?
"But, if I cannot lease this car, does that mean I have to buy it? That would be anti-consumerism, you pig bastard."
A few months ago, I bet a buddy of mine $100 that 2 of the 3 big 3 wouldn't be around in 10 years. American cars are really lame - I'm not ever going to buy one.
Except for the 1977 Chevy Nova I used to drive. That was a sweet ride.
Where's my Friday bank failure?!
These clowns are hosed, the Japs are going to take them out and give them an old fashioned ass beating with that Yen carry trade.
Just keep making parts for my truck...please.
I think Ford Credit could surely make a case that it is an investment bank, so it can trade its trash loan for cash via the Fed Window. I'm sure if Paulson ran Ford instead of GS before, this would be a non-issue. Later, Ford Credit's bad collateral would be forgiven and Ford would be saved. So neat and tightey.
Sheila, quit lurking here and go order your pizzas.
The "japs" are heavily invested in trucks and suv's too dude.
I don't see any asswhopins being too one-sided in the auto industry for some years to come.
The Ford family could have given up control of this company some time ago and saved it.
The only use for any of the US brands is a distribution network for an overseas manufacturer. These are not viable manufacturers anymore. Sad.
A friend in the car business faxed me a letter HSBC sent out stating they would no longer do any car loans. Ouch!
The SEC filing is old hat. Oil is down, the Dow is up.
Breakout the suds - it's Miller Time.
*that was effective immediately (as in Aug 6)
OT
Wachovia To Exit Retail Mortgages in 19 States: Report : HousingWire || financial news for the mortgage market
Wachovia To Exit Retail Mortgages in 19 States: Report
Wachovia is exiting retail mortgages in 19 states including Illinois, according to a published report Friday in the Chicago Tribune. Citing a company spokesperson, the Tribune reports that the exit from branch-based mortgage origination will cost roughly 125 workers their jobs, 20 of them in Illinois.
The moves comes as the company is looking to refocus its operations in locations where it has a meaningful retail branch presence, according to the report, and is effective Sept. 30.
Wachovia CEO Richard Steel reiterated last week that the bank will not look to equity markets to raise additional capital, although he did acknowledge the fresh capital was needed. Instead, the Journal reported, he said that Wachovia would meet its capital needs through asset sales and cost savings measures.
Exiting a chunk of retail mortgage lending certainly qualifies as a cost saving measure.
Wachovia holds $122 billion in option ARMs, a substantial part of the banks $488.2 billion in total loans; no other U.S. bank has as much exposure to option ARMs in real-dollar terms. The North Carolina-based bank yanked its option ARM lending program earlier in the year, as mounting losses and continuing home price declines made the product unprofitable.
It's Miller Coors Molsen Time.
All these stories today and this year are about JOBS and EMPOYMENT!
King Bush 1 lost to Clinton because of JOBS:
"Employment statistics from the US Department of Labor show what most IT people have already realized: IT jobs are getting harder to come by. According to the Bureau of Labor Statistics, 13,000 jobs in the information industry were cut in July, bringing the total to 44,000 year over year. An additional 5,000 jobs were lost in telecom this past month. The statistics reinforce a recent survey of top CIOs who indicated that they will be reducing their IT staff over the coming year. According to a staffing research firm, some jobs have gone to outsourcers, while other jobs are simply going away, either due to cost-oriented automation efforts or due to increasing the remaining staff's workload."
This is a global PROBLEM:
Canada's labour market shed 55,000 jobs in July to post the worst monthly decline in 17 years, Statistics Canada reported on Friday. The drop amounted to the steepest one-month net loss in jobs since the 1991 recession.
"Try as we might to find them, there was no silver lining to this report as all the details were bad," wrote Scotia economist Derek Holt in a morning research note.
I can already hear Cramer celebrating and pontificating...
o more leases?
what's the payment on a 37k lincoln mks?
try over $700 on a 60month buy.
good luck ford....
What this says to me, without saying it directly, is that Ford Credit could soon be insolvent. It has to pay back 25% of the money it has borrowed before the end of the year. It isn't saying that it will be able to (or will) borrow any more money to replace it. And it isn't saying that it expects the lease recovery amounts to equal the debt owed.
Will Ford make the lenders whole? Probably, at some cost. But how can Ford function without a viable dealer financing arm, at a time when banks are pulling back from car lending?
How many could or would pay cash on the barrel for a new car?
Ford Credit Vehicle Financing
they are plenty of dumb little banks still willing to lend on new cars.
what they won't do is give you zero percent for a term of your choice...which is exactly what ford is doing now on their trucks.
you think f150's are hard to move now?
How long before we see ads hyping the current decline in fuel? Time to jump back in and get yourself a Hummer since oil is heading back down to $40 a barrel.
Leasing was always a poor option for these gas guzzlers. They were the ultimate sign of conspicuous consumption and laughed in the face of any sort of conservation. Now as the leases are ending, people are just taking back these cars and letting the dealers handle the mess.
Russian forces battle Georgians
BBC NEWS | Europe | Russian forces battle Georgians
Fewer ugly guzzling lethal stupidmobiles on the road?
Greedy pigs forced to downsize?
Sounds like Commyoonism!
All Quiet on the Failed Front:
FDIC: Failed Bank List
The US way of life is not negotiable. Get me a pigman on the phone now with my free money.
Thiers so many incredible deals on used 05-08 large car, suv's and truck
in great condition that used will eat into new sales going forward 2-4 years...
funny to note that a 40-50K car loan in 06 was normal, repos in 08,09 car value now 15K or less at auction...huge loss when you add reserve to dealer..
more bank charge offs in the pipeline
no disrespect for Hawaiian Bonzai Pipeline
Aug. 8 (Bloomberg) -- ACA Capital Holdings Inc., the bond insurer that lost its investment-grade credit ratings in December, terminated $65 billion in credit-default swap contracts and turned over most of the company to creditors
ACA Terminates $65 Billion of Credit-Default Swaps (Update2) - Bloomberg.com
"All Quiet on the Failed Front"
It ain't even 6:00 on the east coast yet. And it's almost 3.5 hours to quittin' time out here in leftcoastland. Patience. if you order the Pizza too soon, it gets cold and rubbery before the real fun begins.
C & c Some activity in banking
HOUSTON, Aug 8, 2008 (PrimeNewswire via COMTEX) -- The Board of Directors of Franklin Bank Corp. has resolved not to declare or pay the dividend on Franklin's Series A Non-Cumulative Perpetual Preferred Stock (the "Preferred Stock") scheduled for September 15, 2008.
MarketWatch.com
OT, two articles that suggest household formation might be going the wrong direction:
From the "Lansner on Real Estate" blog:
O.C. renters seek more roommates
O.C. renters seek more roommates - Lansner on Real Estate : The Orange County Register
and another article in the NY Times (linked to inside of the above article):
A Glut of One-Bedroom Apartments (in Manhattan)
A Glut Of One-Bedroom Apartments - NY Times
Short Courage: when the 2BR apts run out, the 1BRs will nicely hold two folks (or more).
Charges by Massachusetts against Merrill Lynch & Co Inc are more serious than those against Swiss bank UBS because they involved the manipulation of research of auction-rate securities, the state's top securities regulator said on Friday.
Mass. official plans serious charges against Merrill
| Reuters
When they get done with these fools credit is going to be so tight you won't be able to borrow and dollar for a candy bar.
"It ain't even 6:00 on the east coast yet. And it's almost 3.5 hours to quittin' time out here in leftcoastland. Patience. if you order the Pizza too soon, it gets cold and rubbery before the real fun begins."
Yah, the likely Ritual Sacrifice of the Week is out here in California. You might be drinking your warm milk and cookies out East before the hammer comes down.
Drinking cookies hurts, Bob.
Ya just gots to wash em down with enough scotch, Elvis!
Here's my obligatory weekly post on the the major index PE ratios (from the WSJ$ Market Data Center, using TTM earnings)... Unfortunately, the Dow and Russel2K are both showing "nil" again, meaning the PE is too large to print...
The S&P 500 is now a very healthy 60% over its historic trend value of 16! Wow! Good times must be coming soon!
Dow = (nil)
Nasdaq = 29.00
Russell 2K = (nil)
S&P 500 = 25.66
I like a Rusty Cookie - Scotch, Drambuie, and Oreos.
Appreciate the weekly posts
Nil, try us print them anyways...
I'm going long flour, mozzarella and tomato sauce.
Don't forget cooking oil of some kind, that can get tight fast I've read...
its good to see gm just released a 71K hybrid escalade.
I have no idea who actually buy one of these given the highway milage of 21 mpg
Forbes.com File Not Found
JimPortlandOR writes:
Short Courage: when the 2BR apts run out, the 1BRs will nicely hold two folks (or more).
Jim, I remember when I was growing up in Orange County (before it was referred to as "The OC"), and gradually the neighborhoods around us started housing 2 or more families per house. These were mostly low-income immigrant families in the most affordable parts of Fullerton.
I think this time we might see the same trend across a much wider demographic.
12.5 million annually must not be low enough for the automakers; 10 million here we come!
Tim, "Nil" is all they show in the WSJ, so who knows how big it is. If earnings go negative, the number doesn't have much meaning, really.
Short Courage: when the 2BR apts run out, the 1BRs will nicely hold two folks (or more).
My dad used to describe our family's RV as "sleeps 6, f***s 12".
BTW, re: PE ratios, here's a link to a great chart on the ComstockFunds.com website showing historic PE ratios...
http://comstockfunds.com/files/NLPP00000/026.pdf
They also have a great series of articles clearing up the confusion about the various measurements of PE that are used, and why they favor 12-month trailing earnings, using GAAP earnings.
In other news, I discovered this:
Airlines to cut 60 million seats for Christmas
The money quote:
"Airlines are set to make the reduction, the equivalent of one in every 14 seats, in response to high oil prices and the global credit crisis, according to the Official Airline Guide (OAG). Reduced availability is almost certain to force up ticket prices.
In all there will be 59.7m fewer tickets available compared to October-December last year. Routes will be scrapped at 275 airports around the world and 3,500 fewer planes will be needed, according to the OAG.
While Europe will suffer the loss of 5.5m seats, America will be worst hit, with a reduction of about 20m. "
That is going to leave a mark.
rs:
its good to see gm just released a 71K hybrid escalade.
I have no idea who actually buy one of these given the highway milage of 21 mpg
Call it bling-bling environmentalism. Cf. huge egotistical houses built "sustainably."
"what they won't do is give you zero percent for a term of your choice...which is exactly what ford is doing now on their trucks."
You can finance a Hummer at 0% for 72 months.
Maybe this is a question for dryfly but how long would it take the car manufacturers to dust off the prints, get suppliers lined up and start producing some of their non-bloated older models? A new 1986 jeep comanchee pickup would suit me just fine. And no, I would not opt for the gold edition with the six-disk CD player.
Re: Increase in boarders. I have long suspected there is quite a bit of elasticity to housing supply.
In a really tough crunch, half the people in the country could move in with friends or relatives. (They just need to have a big yerd sale at the new location to make space in a spare room or garage.) Americans have more housing space than they think - just get rid of some of that "stuff" built up from years of being dutiful consumers.
I was in central Washington (Yakima) last weekend; a local dealer has a TV commercial talking about how SUV's and big pickups are "necessary" for "our lifestyle" (farming, boat-hauling, ATV-hauling) and now is a great time to buy.....
I saw lots of souped-up new big pickups with all the options, sitting in front of trailer homes that needed some upkeep. Quite sad.
other jim,
If Chrysler could dust-off the plans for the late '80s LeBarons that might help them out.
http://en.wikipedia.org/wiki/Image:89_chrysler_lebaron_premium_25i.jpg
Especially a hybrid version...