How does a bill that allows for $25 bn in loans for manufacturing improvements also allow for the government to lend money to help a merger along? Can someone explain that to me?
I think it is necessary to save our domestic auto industry but how will Toyota, VW, etc and their governments
react to GM getting what has to be called government subsidies?
Thought that kind of stuff was prohibited under our trade agreements.
What an amazingly honest statement. It is time Feds realize the obvious: GM and Ford are worth nothing too. That $5 is money flushed down the drain. Borrowed from our unfortunate children. If this is not national sin, I don't know what is.
"How does a bill that allows for $25 bn in loans for manufacturing improvements also allow for the government to lend money to help a merger along? Can someone explain that to me?"
Once you lend AIG 125 billion, there are no rules.
koan0215 - here's how it works. No $5bil, can't do the merger. $5 bil to GM = fail. $5 bil to Chrysler = Fail. Only way to improve manufacturing, is for the firms to not go BK. Only way to avoid BK is merge. It's basically the zombie of the 1980s chrysler bailout.
Chrysler's Jeep brand is ranked 28th, Dodge 30th and the Chrysler namesake brand 32nd on the list with interiors, electrical systems and other issues of concern.
"Their biggest issue is trying to hold the vehicle together inside squeaks, rattles, pieces of trim dropping off, annoying features for the customer," Champion said.
Chrysler had sought to address interiors shortcomings in early 2008 by investing $150 million (Dh551m) on upgrades to more than 260 vehicle features.
"We are not satisfied with our performance, with the report that came out," Chrysler spokeswoman Beverly Thacker said. "We do continue to work aggressively to improve every aspect of customer satisfaction with our vehicles."
British luxury brand Land Rover, owned by Tata Motors, was the least reliable brand, according to the survey. Consumer Reports is published by the Nonprofit Consumers Union.
A spokesperson for General Motors announced today that the federal loans, designed to lead to more fuel efficient vehicles will help the environment after all. 'Think about it this way,' Blake Hole commented, 'We're not going to build or sell any cars for some time. Isn't that good for the environment?'"
This article has more detail, like this tidbit Traffic at stores serving households with income above $65,000 has been growing much faster than at the chain as a whole. People are trading down to Walmart thats not good
As I said here on Sunday, Cerberus didn't hire a bucnh of neCONs for nothing, they will get their bailout before Jan 2009 - GMAC, Chrysler, and all the other crap they bought
Well, I can see why they did it, 'cause here's a fresh sign of the apocalypse:
"New car sales in state plunge
By Dale Kasler dkasler@sacbee.com
Published: Monday, Oct. 27, 2008
Sales of new cars and light trucks in California fell a whopping 19.1 percent in the third quarter from a year ago, according to a report released today.
The California New Car Dealers Association said its industry has been "turned upside down" by the credit crunch and general economic downturn. "Clearly this is not a prescription for a vibrant new vehicle market," the report said.
It was the latest evidence of a significant recession.
The report also shows that California is in rougher shape than most other states. Vehicle sales were down 18.5 percent in California during the first nine months of the year vs. 12.7 percent for the nation."
Give it a rest; we're all comrades now. Peace.
Comrade Vistulian | Homepage | 10.27.08 - 6:10 pm | #
As long as we all agree with are getting screwed by both parties and NO CHANGE will come in January no matter who is elected I will stop...thanks...Peace
Cerberus is the biggest bunch of losers and crooks around (Feinburg, John Snow, Dan Quayle, etc.). These are a bunch of idiot right wing morons who shot spit-balls from the back of the class and now want your money. We need to stop this madness NOW!!!
okay the US will never outright put tariffs on Imports but what they could do is tax certain foreign. Stealth Tariffs on things like A/c compressions (they won't meat some obscure environmental standards) so that the cost to fix foreign cars becomes prohibitive.
Are the going to be making "Bushmobiles"?
You could not believe the navigation system or the speedometer, but you could probably fill them for free anywhere.
If you make $1 per second you can make 1 million dollars in just 12 days working non stop. To make a billion this way takes 36 years! Wow. A trillion would take the entire history of man. The words million, billion, and trillion should not sound so much alike; they are very different.
Bob Dobbs writes:
Well, I can see why they did it, 'cause here's a fresh sign of the apocalypse...
But the point is, GM should be allowed to fail. Why is the current administration so reluctant to let companies fail? It doesn't matter if it's GM, or Citbank, or even Goldman itself. The weak must be allowed to perish, Darwin style. This behaviour is delaying any sort of recovery, which is going to take long enough as it is.
[crispy&cole writes:
Good think we have a capitalist President in office and not some Socalist, otherwise we might be throwing money at a problem....oh wait, nevermind....]
Agree 100 percent. This is a bailout of Cerberus and friends by rolling Chrysler into GM. GM will be bankrupt within 12 months and they will both be gone.
One of my coworkers just asked me for investment advice. I responded with the following. Please critique, or share your own opinions!!!
"Im not expecting a long term stock market bottom for another 1-2 years. That said, there will be many intermediate suckers rallies which will be extremely profitable for traders that can time them correctly. But that isnt my game. I look at the fundamentals of our economy and frankly, I dont see ANYTHING which would tempt me to invest on the long side.
In the short term, Im expecting another wave of panic selling in the next 4-6 weeks. My short term target is between 7,000 and 7,500 on the dow. At which point I will close all of my short positions and sit in cash, expecting a bounce. That bounce could be very sharp in the 20-30+% range. For me personally it isnt worth the risk trying to time the market and get in long. Instead Ill wait, looking for another attractive entry point to short. Id expect the bounce to take the market back to the 8,500 or 9,000. Then it will plunge again, as the next systemic shock or round of negative earnings announcements come out.
In terms of a long term bottom, I dont expect that to happen until late 2009 at the earliest. And the stock market will be lower than many people think possible. Im not sure where that point will be, maybe in the 4,000 to 6,000 range.
Sometime between now and then, it will become a bit more obvious which sector(s) will lead us out of recession/depression. At this point my crystal ball is hazy. My best guess is that emerging markets will recover first, though it is WAY too early to invest in them yet. Tech is cyclical, and just starting its downswing. Internet is dependent on advertising, which will be depressed until companies start selling real products (rather than inflated assets, toxic paper, insurance, and the like). Green energy is only attractive if oil becomes expensive again (uncertain at best).
The largest risk I see is that the US dollar loses its status as the worlds reserve currency. In a worst-case scenario the dollar could collapse as it becomes obvious that our government will never be able to pay off all of its outstanding debts. In that case, youll want to make sure to hedge with some foreign currencies or physical gold. This is a possibility, but the odds arent great enough to justify a large investment in this doomsday scenario.
What should happen is they merge, then file BK. The pension obligations are going to be paid for by taxpayers in any scenario. In BK court we'd get a judge calling the shots instead of the dork GM mgmt and greedheads at Cerberus. Whoever the bondholders are might be willing to cut the duplicate brands and production lines.
UAW has just under 500,000 members. Lets say 400,000 work in the auto industry. Let's say 250,000 of them have mortgages with an average value of $200,000. Now we're looking in the neighborhood of $50 billion in mortgage debt.
If you don't bail their jobs out you are going to bail the banks out that made the loans to them, to say nothing of the communities they live in.
Dean writes:
If Damlier valued their stake at $0, what does Cerberus value their stake at?
Dean | 10.27.08 - 6:24 pm | #
An amount equal to their bailout...they will trade our tax dollars and we will get some bs part of the new company, more ponies (ie Super Supreme Preferreds that pay 5%)
Sorta. The current NA market vehicle is a step back from the last generation, IMHO. But the current gen. Euro/global Focus is pretty hot. The two lines will be unified in 2011 or 2012.
Gm banks etc must be unwound in an orderly way IMO. Suppliers need to find other customers or fold, dealers need to clear out inventories and sell out. The downturn came so fast it would be irresponsible in the eyes of government to let the market crash.
Analogy What it tomorrow all banks shut down tomorrow and you couldn't get your money out?
Great. More loans that have little or no value beyond slowing the fuse as it burns to the bomb. Sort of like loaning money to AIG. Threaten to blow yourself self up and then slow the fuse burn for a bit and make the same threat...again.
How exactly does the taxpayer benefit from a forced redundancy of production technologies and the manufacture of uncompetitive and crappy products?
Let's just draw up a list of other similar losing endeavors with duplicating loss and give them ponies too.
Let's see. How about Toll Brothers and Lennar for a start?
"But the point is, GM should be allowed to fail. Why is the current administration so reluctant to let companies fail? It doesn't matter if it's GM, or Citbank, or even Goldman itself. The weak must be allowed to perish, Darwin style. This behaviour is delaying any sort of recovery, which is going to take long enough as it is."
I actually agree -- I said I can see_why they did it. I don't say that they should have.
I'm a big fan of social Darwinism for large corporations, but am more socialist for the little guy. Unfortunately we've got the exact opposite right now.
Why not just buy up Ford, GM, and Chrysler and put them out of their misery and put their facilities up for auction to the highest bidder whom can, with some kind of performance guarantee and tax incentives, build cars that do not use petroleum.
"The weak must be allowed to perish, Darwin style."
This cannot be allowed...the neocons are against Darwinism in any form. The dinosaurs must live.
If you mention Darwin again, Sarah Palin will have to straighten you out.
"500,000 pensioners x approximately $20,000 a year comes to a Trillion bucks for pensions alone."
Stop spending money on needless wars will have 120 billion a year. If we avoid needless wars for ten years or avoid ten more needless wars next years we will have more than enough.
The whole auto industry has too many brands and too many models. We can have more than Henry Ford's Model T or A (in black) without having dozens of models. This crap of having a Chevy, Buick and Caddy all built on the same basic design is just stupid and guaranteed to lead to low sales per model and poor quality.
A combined GM/Chrysler should have maybe 3 brands, with two or three models per brand at the outside. And one truck line and zero SUVs. Concentrate on quality, efficiency in fuel, efficiency in production, marketing and sales. Eliminate 2/3 of the dealers and get out of the vehicle financing biz.
Back to basics! I'd welcome putting Ford into that combo and one US company vs the ROW's offerings. And then sell "Buy American", when they have earned consumer respect.
"The downturn came so fast it would be irresponsible in the eyes of government to let the market crash. "
BS. Anyone following the housing bubble could see it was unsustainable,and the non-existent lending standards were begging for trouble. It was beyond obvious in 2005. And Buffet among others was warning about a crash in derivatives in 2004.
There is no excuse or surprise involved...just the unlimited greed and recklessness of the republican administration, the Fed, and the failure to enforce existing regulations.
Thing is, when your auto industry dies it is damn near impossible to get it back again.
Look at the UK. Just a few niche auto makers and they are foreign owned now.
That has implications. Trade implications, military implications, employment implications.
I don't oppose saving our auto industry but it might be useful to insist the unions give up some of their benefits. Those 'legacy' costs
need to be pared back. UAW workers retire with pensions in the neighborhood of $2500/month with full medical benefits. I don't think management gets anything quite as generous.
In mexico they have the "chevy" small car and sold them in the trillions. Same car for the maid, the accountant, and the football mom. Lets make one model that every American will want to buy... or else
Maybe this Halloween we'll see middle class whites burning down houses in the Detroit area. Really, the US public has remained surprisingly low key so far.
""But the point is, GM should be allowed to fail. Why is the current administration so reluctant to let companies fail?"
First, I think it's the administration and Congress. All of them.
I believe the reason they will not allow them to fail is that:
1. they are afraid of the short-term collateral damage to their constituents and resultant fallout.
2. They have many long-term relationships with management and large stakeholders of these corporations. It would be difficult to guess who the next generation enterprises would be, so why waste the effort? A politician could spend a great deal of time and never see a donation from the effort.
The federal agency charged with backstopping pension benefits for 44 million Americans lost almost $5 billion from investments in stocks in the budget year that ended Sept. 30, the agency head acknowledged Friday.
The Pension Benefit Guarantee Corp. will lose 6 percent to 7 percent on its entire investment portfolio, PBGC Director Charles Millard told the House Education and Labor Committee. It lost a significantly higher percentage of its investments in equities.
But that won't jeopardize the agency's ability to pay retirees who depend on it, Millard reassured lawmakers.
We need to immediately institute a sky high tax on renting. This will force those penny pinching renters to empty their savings accounts and buy houses.
Exactly what part of the American debt nightmare don't these loser renters like anyway?
Speed...the difference between the old Bug and the new one exactly explains the difference in America between now and then. "great design, inexpensive, durable, good gas mileage, design run of 50 years" vs derivative design, expensive, not really that durable, a toy for rich kids, wannabes, and nostalgic Boomers, and a short design run.
Isn't this just an election year sop to the 20th century unions still hanging on by a thread in rust belt land? Other than corporate conspiracy buffs, how is this different than lowering FFR (nominal or real) to stimluate economy - i.e. jobs? Certainly its not to protect any great vault of intellectual property or know how. That ship sailed many eons ago.
Former Vice President Dan Quayle, who is chairman of Cerberus Global Investments, an international unit of Cerberus. Quayle told a group in Phoenix this week that the company would hold out for a good deal involving Chrysler.
"The analysts are looking at it," Quayle said, according to the Phoenix Business Journal. "We're not going to do the deal unless it's a positive for our investors. We don't buy companies based on growth stories. We do not price our companies that way. ... We're opportunity investors."
"I'd love to see the equivalent of the VW Bug - great design, inexpensive, durable, good gas mileage, design run of 50 years."
Actually designed to run for 100k kilometers and then disintegrate.
I knew an engineer who found a weakness in the original design (lubrication), and sent a suggestion to Germany. The VW engineers thanked him in triplicate, explained that they already knew of the problem, but noted that extending the life of the engine was not worth the pennies it would cost, given the overall MTBF.
Angry Saver writes:
There's only one way out of this financial mess.
We need to immediately institute a sky high tax on renting. This will force those penny pinching renters to empty their savings accounts and buy houses.
Punitive taxes on saved money will be coming soon enough...wealth redistribution.
Speed you know that Hitler commissioned the creation of VW don't you???
Adolf Hitler had a keen interest in cars even though he did not drive. In 1933, shortly after taking over as leader of Germany, he asked Ferdinand Porsche to make changes to his original 1931 design to make it more suited for the working man. Hans Ledwinka discussed his ideas with Ferdinand Porsche, who used many Tatra design features in the 1938 "KdF-Wagen", later known as the VW Käfer - or Volkswagen Beetle. On 22 June 1934, Dr. Ferdinand Porsche agreed to create the "People's Car" for Hitler.
A bail-out for companies that has been designing and making in-efficient dinosaurs since the first Oil Shock in 1973! Who have resisted any change to become efficient for 35 years?? And we haven't even got near to peak oil yet. For the US taxpayers' sake, I hope they all fail soon because they will continue to be poorly run, to produce the wrong products and keep on putting their hand out for more money.
--
Looks more and more like that America's ruling elite, including their agents in the economics profession, believe what I have concluded from my observations Americans are confirmed born-and-bred dopes. Of course, as dopers they are simply confirming the success of their propaganda efforts for decades.
Our ruling elite cannot be more satisfied. They know that they can get away with economic holocaust of tens of millions of American households and hundreds of millions worldwide. It is only a matter of time before demos turn on them beginning in countries like India and spreading globally.
This made me LOL. Every time I see one of those on the road (becoming rarer, thankfully), my first thought is "I wonder which Survivor contestant that is."
(In the first few seasons of the show, they used to give one to one of the final four contestant and then one to the winner. The contestant who won in the final four got to sleep that night in the camper portion as part of his/her prize. I always assumed that was the only time the beast ever got used.)
Unit472 writes:
UAW has just under 500,000 members. Lets say 400,000 work in the auto industry. Let's say 250,000 of them have mortgages with an average value of $200,000. Now we're looking in the neighborhood of $50 billion in mortgage debt.
If you don't bail their jobs out you are going to bail the banks out that made the loans to them, to say nothing of the communities they live in.
Unit472 | 10.27.08 - 6:25 pm | #
Not to mention unemployment benefits--wouldn't we pay those?
I like the idea stated above about cleaning out management and replacing with Honda folks.
Jas, I recall you live in the USSA. If amerikans disgust you so much, why do you live here ? I think, as a purely mentally theraputic measure (something you desperately need), you should go back to where ever it was you came from.
The cynicism, which is growing exponentially, is almost beyond belief. Can't believe that Jas has become an icon of veracity in such a short time. This is tragicomedy of the highest order at a pivotal point in human history. Oh, and by the way, thanks George. Couldn't have done it without you, you POS.
doug, the most profitable car company in the world is Porsche. Little tiny Porsche with its premium gas guzzling two seat sports cars. Just upped its state in giant VW to 43.5%!
I'm even more uncomfortable with Congress dictating what manner of car
our auto industry should build than their using taxpayer dollars to bail them out.
If GM wants to make Cadillac 'the standard for the world' again let them. Cadillac used to mean something. That 1957 El Dorado Biarritz was the most expensive massed
produced car in the world at the time.
Held its value too. Try and buy one today!
--
"...a Totalitarian state whether you like it or not."
Coinz!,
We ARE there except that it is not overt yet.
Dopes have been fully prepared to accept it until the squeeze gets too painful. The game is how far the ruling elite will tighten the vice on born-and-bred dopes necks. It is a very delicate "operation," Are dopes sedated enough or not. Not fun watching the ghastly deed.
Too controversial. Tarrifs on parts is more realistic. Make obscure environmental & safety standards for US made parts so foreing parts can't be imported to fix the BMW's Honda etc.
"Yugo was a Fiat design I believe. Not all Italian designs are stylish with plenty of horsepower. They have their Edsel's too."
If I had to use one word to describe the experience, it would be 'flimsy.' As if the only tools you'd need to take it completely apart would be your bare hands.
A toy, like the Chevette.
The Russian *Zhiguli" was also a Fiat product, made in Togliatti. Zhiguli owners developed expert mechanical skills, and took the windshield wipers with them when they parked.
For country roads you bought a Moskvich and a groin support.
Pavel Chichikov writes:
"Wonder if rights to the Yugo are available - that would be a good standard issue vehicle."
I rode in a Yugo once. Indescribable.
One parked in our dorm parking lot when I was in college. Joking around I tried to pick up the rear of it by grasping under the bumper. I was pretty strong then, I could do partial deadlifts with very hvy wts.
The bumper bent upward in my hands.All I ever needed to know about the yugo.
Punitive taxes on saved money will be coming soon enough...wealth redistribution.
Redistribution is a sideshow. It's credit expansion that is the key to debt peonage of the many for the benefit of the few.
What would happen if debt stopped expanding? Those with less would have more (no debt) and those with more would have less (fewer rent producing assets).
Punitive taxes on saved money will be coming soon enough...wealth redistribution.
Redistribution is a sideshow. It's credit expansion that is the key to debt peonage of the many for the benefit of the few.
What would happen if debt stopped expanding? Those with less would have more (no debt) and those with more would have less (fewer rent producing assets).
DETROIT, Oct 27 (Reuters) - Moody's Investors Service on Monday cut its rating on General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) deeper into junk territory on the expectation that the automaker's liquidity will continue to erode into 2009 despite any benefit from the U.S. government's $25 billion low-cost loan program. UPDATE 4-Moody's cuts GM, Chrysler ratings, may cut Ford
| Reuters
2009 Jetta TDI Vehicles Named in Government Listing of Most Fuel Efficient Vehicles
Volkswagen Makes Annual EPA Top Ten List with All-New Clean Diesel Jettas
HERNDON, Va., Oct. 27 /PRNewswire/ -- The 50-state compliant clean
diesel Volkswagen Jetta TDI sedan and SportWagen TDI have claimed two of
the top positions in the annual EPA and Energy Departments' list of the
most fuel efficient vehicles. The Jetta TDI's are the only clean diesel
vehicles to make the top ten list, which was released last week. 2009 Jetta TDI Vehicles Named in Government Listing of Most Fuel Efficient Vehicles
Would anyone here be interested in forming a corporation and then going to the administration and congress to seek funding.
Maybe ask for enough to buy out McDonalds or something. I would be the Chairman of the Board, and CEO of course. Big bonuses for everyone at the end of the year though.
I'm a big fan of CR and have been reading since 2006. Inspired by a number of the great posters on this site I've started writing a financial comedy blog. I've done a bit of comedy writing for a few big name comedians. Thank you CR for the wonderful material and please take a look at my most recent post:
A Hyundai Santa Fe in South Korea costs almost twice as much in the US.
Also, taxes on imports in South Korea makes owning a foreign vehicle prohibitively expensive.
Does anyone know how much a E-Class Mercedes costs in Germany? Just wondering if its cheaper for a German to own one. I assume the Cheap Class is made here in the US.
I wonder what the pension liability is if both companies fail, probably a million total retirees between both the companies, at 30-40k a year...
At $30 Billion a year, the loan doesn't look too bad. Ultimately the car companies need to shed their pensions to be competitive and be able to innovate.
Redistribution is a sideshow. It's credit expansion that is the key to debt peonage of the many for the benefit of the few.
What would happen if debt stopped expanding? Those with less would have more (no debt) and those with more would have less (fewer rent producing assets).
Our eCONomy is a sham.
Saving is going to be punished, get used to it. Once TBTB figure out that folks aren't going to loan or spend, they will make it pretty painful to "hoard money". (That's how they'll phrase it.)
Does anyone know how much a E-Class Mercedes costs in Germany? Just wondering if its cheaper for a German to own one. I assume the Cheap Class is made here in the US.
I'm not totally up-to-date anymore but I am not aware of any Mercedes non trucks that are manufactured outside of Germany.
Pricing in Germany for a comparable car is higher in Germany. The cars available in the U.S. are very well equipped, i.e. much better than the average in Germany. Also, engines size in Europe is generally much smaller. You can get an E Class with a 2.1 liter 4 banger.
The current administration does not care about the need for us to keep manufacturing capacity in the US. The next gen HUMVEE is going to be a NATO design and manufactured.
The US has 1 ammo manufacturing plant. Most military handgun and rifle ammo is bought overseas. Probably Korean. We do not even make the handguns anymore really.
My guess is the gov will keep or pay for a factory or 3 to stay open to make military vehicles. They will use union labor. Probably keep the factories in States and Districts that turn out the right vote.
Perhaps a couple factories will be sold to some newly created group to create the gov approved eco-mobile. This will be a non-union plant but very, very green.
The Pentagon entrusted a 22-year-old previously arrested for domestic violence and having a forged driving licence to be the main supplier of ammunition to Afghan forces at the height of the battle against the Taliban, it was reported yesterday.
AEY, essentially a one-man operation based in an unmarked office in Miami Beach, Florida, was awarded a contract worth $300m (£150m) to supply the Afghan army and police in January last year. But as the New York Times reported in a lengthy investigation, AEY's president, Efraim Diversoli, 22, supplied stock that was 40 years old and rotting packing material.
It is a sad day to see GM and Chrysler in so much trouble. The iconic American car makers that were responsible for such wonders as the 1969 ZL-1 Corvette, original DZ-302 Camaro Z28, the ZR-1 Corvette, and the 1967 Plymouth Hemi GTX have seen a long slow decline.
Not trying to be sarcastic, but what does a 50% depreciation in a developed country feel like? I've been in Vietnam when it happened (e.g. people only accepting dollars, etc), but there hardly developed.
DaddieMac writes:
[Tarrifs on cars] "Too controversial. Tarrifs on parts is more realistic. Make obscure environmental & safety standards for US made parts so foreing parts can't be imported to fix the BMW's Honda etc."
You already can't buy many parts for Fords that are more than 10 years old. They simply don't make them any more. Or maybe there's a high tariff on exports from Detroit.
sue writes:
"At $30 Billion a year, the loan doesn't look too bad. Ultimately the car companies need to shed their pensions to be competitive and be able to innovate."
Trouble is, they'll shed the liability onto the taxpayer whether we bail them out or not. It's just a question of when.
From the WSJ: "TOKYO -- Finance chiefs from the Group of Seven leading nations on Monday issued an emergency statement warning investors against pushing up the yen too much, suggesting that the U.S. and Europe, in addition to Japan, are uneasy about the yen's broad advances."
Oh, boy, here we go. More currency interventions coming.
I was a long time GM car buyer. i loved my 2000 Pomtiac Grand Prix Daytona 500 Pace Car (with an eaton 9lb supercharger). But when it rained heavy there was a small lake on the passenger side floor. The brake rotors were toast after 25k miles. The car had more squeaks and rattles than a baby toy. On a dare I test drove an Infiniti G35X all wheel drive sedan in 2005. The quality difference was amazing. The performance difference was gran canyonesque. The price dofference between a new Grand Prix and a new G35 was only about 15%! I just got the all new G35X and doubt I will ever buy another model. Until and unless the US car makers can close the quality/performance gap with the Japanese auto makers, all the bailouts in the world cannot stop their fall.
So if there are no assets in the pension fund, do they actually guarantee anything? I recall reading somewhere that GM has been underfunding the pension fund for many years now, and it would not be a surprise to learn that what assets there are may not be worth what they are booked at...
Jaw isn't an icon to me, just a dopey joe who is either too ignorant or too rich to keep his mouth from flapping thoughts I had developed many years ago.
We disagree on the perp's motive. He thinks this is planned, I think these guys are just too ignorant and selfish to understand the outcome of their behavior.
Yen carry is imploding. Not sure you can fix that.
They'll try to isolate the implosion by getting other countries (e.g. China, GCC) to fill the void left as the money leaves the country. Only problem is that it makes debt/deficit financing for the US a tad bit problematic if China's surpluses aren't going to UST.
Kung Fu Panda writes:
What should happen is they merge, then file BK. The pension obligations are going to be paid for by taxpayers in any scenario. In BK court we'd get a judge calling the shots instead of the dork GM mgmt and greedheads at Cerberus. Whoever the bondholders are might be willing to cut the duplicate brands and production lines.
Kung Fu Panda | Homepage | 10.27.08 - 6:25 pm | #
Something like half of the pension is paid out in a bk - not the whole thing. Many of the steel companies went kaput about a decade ago and the pension guarantees were something like half what was 'originally' promised. Realize that they promised the stars & the moon (and funded a bottle rocket to get them there).
That's what has the pols spooked - after next Tuesday it won't be so urgent (until two years from now). GM, Cerberus & UAW understand 'timing isn't everything - it's the only thing'.
PBGC guarantees "basic benefits" earned before your plans termination date (or the date your employers bankruptcy proceeding began, if applicable), which include:
* Pension benefits at normal retirement age
* Most early retirement benefits
* Annuity benefits for survivors of plan participants
* Disability benefits (see exception below)
PBGC does not guarantee:
* Health and welfare benefits
* Vacation pay
* Severance benefits
* Lump-sum death benefits for a death that occurs after the date the plan ended
* Disability benefits for a disability that occurs after the plans termination date (or the date your employers bankruptcy proceeding began, if applicable)
Legal Limits on PBGC's guarantees
* Generally, PBGC does not guarantee any monthly pension amount that is greater than the monthly benefit your plan would have provided if you had retired at your normal retirement age.
* The maximum amount that PBGC guarantees is set each year under provisions of ERISA. For more information, see: Maximum monthly guarantee tables
* Higher limits may apply for people who met their plans requirements for a disability pension (whether they are receiving a disability pension or a non-disability pension) before the plans termination date. For more information, see Guarantees for disabled participants.
* PBGC may not fully guarantee your benefits if your plan was created or amended to increase benefits within five years before its termination date.
* If the plan terminated while your employer was in a bankruptcy proceeding that began on or after September 16, 2006, guarantees are determined as of the date your employers bankruptcy proceeding began.
* Additional limits may apply for certain airline industry plans.
For more information, see PBGC's publication, Your Guaranteed Pension."
Anyone have a good take/read on the repeated calls i have seen for the Gold Comex market to have a black swan event for this December's contracts? Seems like this could be a big deal. Or not.
Can Paulson do anything he wants on this without further approval from congress? What happened to all that "oversight"? I would have thought the unions would fight this very hard unless it had stuff in it they wanted, beyond just the money.
I was just in Detroit and suburbs over the weekend, and even knowing what to expect I was flabbergasted by how many houses for sale. Even in what the Grosse Pointes.
I really don't know how that city survives all this. The 'burbs are in trouble, and within the city itself there are miles and miles that just need to be bulldozed.
Just read the interesting below piece on Brad S. blog.
"
Back in May 08, a prediction/vision was written about the dollar, stocks and commodities. The price action has vindicated that prediction.
What is interesting in that prediction is the WHOLE reasoning of why things would turn the way they did. And they turn exactly as explained in the article below.
So if we fund half the pension obligations of GM and C right now, they could start making money again and in theory fund more of their pension obligations in the future as retirees die.
As of one of the last Fed reports I read a month or two ago, manufacturing was only 9% of the economy. Please don't ask for link, I forgot which one and normally I don't print out those reports, unless it has to do with debt. Anyway, I think we are at less than 10% manufacturing in the USSA!!!!!!!!!!!
I really wonder how they would go about doing that if they decided that was what they wanted to do.
Japan did purchase stocks in the 1990s. So this is nothing new and I have NO doubt that they will do it again if they haven't already started.
The Mainichi Daily News ... Japan also faced a financial crisis after the bursting of the bubble in the early 1990s. At that time, Japan was urged by the U.S. and Europe to adopt all possible counter-measures, so the Japanese government elected to adopt large-scale fiscal mobilization measures, and the Bank of Japan purchased shares of stock and pursued a policy of monetary easing. Now it is the turn of the U.S. and the European countries to attempt all possible remedies. ...
how about my stepdad's Chevy Impala. You could have landed an F-15 on that baby. i think he 0.09 miles to the gallon when gas was what 15 cents a gallon?
Thanks for the detail, Comrade Misean. I read that as they pretty much pay regardless of what they find in the plan when they take it over.
It looks like we taxpayers are going to take a pretty big hit, unless the automakers somehow manage to stay in business for another thirty years or so. So maybe it's worthwhile to keep propping them up and hope for the best.
I wonder if a consolidated automobile industry could carry the current pension load. At least with fewer employees, they would build up fewer dangerous obligations with the taxpayer as the backstop.
Miranda writes:
I was just in Detroit and suburbs over the weekend, and even knowing what to expect I was flabbergasted by how many houses for sale. Even in what the Grosse Pointes.
It's been like that for a long time on & off. My sis moved into GP in one of the 'busts' (early 90s I believe) and bought a very nice house for half what it sold for a few years earlier - then left GP at the peak of one of the auto industry 'revivals'... more than doubled what she paid for it.
She didn't really benefit though - bought again in Cleveland (where prices have now tanked too). Didn't much matter to her - you have to live somewhere and in both cases she had very nice homes in nice neighborhoods in homes she had no problem supporting.
And 'yes' there are very nice neighborhoods around both Detroit & Cleveland. Even now.
It's not just GM and Chrysler. It's all the suppliers, too (mufflers, spark plugs, upholstry mfgr's, you name it). We're talkin' a lotta jobs here. Not to mention the oil companies stake. I apologize if this has already been mentioned. Saying "let'em fail" would be a total disaster.
Along with a few other people on this board, I began advocating about a year ago to go into leveraged inverse ETFs like SRS, EEV and TWM. After a lot of ups and downs, those ships have come home. I don't know where they go from here. They are no longer as attractive.
"COMEX gold is a form of debt. It involves one party promising to produce gold (money) to another at a future date. Like all forms of debt, a COMEX futures contract is only as good as the counterparty behind the contract. Right now, because of low margin requirements, sellers of gold futures only have enough gold to cover 10% of outstanding contracts stored in COMEX warehouses. Considering that the biggest sellers of gold futures contract are insolvent financial institutions, it is obvious that COMEX gold has enormous counterparty risks. If even a quarter of outstanding contracts asked for physical delivery, it would be enough to guarantee a default. Since a financial collapse would actually creates the risk of total default (insolvent banks can't produce the gold or cash), COMEX gold fails miserably as a safe haven . This is why COMEX gold prices are falling, while physical gold is disappearing from the market place
Because of scarcity, physical gold is selling at an enormous premium to gold spot price (which is set by COMEX). How big a premium? Well, on eBay 2008 gold buffalo are trading between 300 to 400 over spot price. That is a 50% premium. The enormous premiums being paid in the physical market means that a large number of December gold contract holders are likely to request delivery. A volume, whether it causes defaults or not, is likely to change the marketplace perception of gold and cause a rush of into a physical gold plagued by shortages. Gold will skyrocket over 2000 in a matter of days."
So, how can you play gold on a leveraged basis? I urge you to look at SLW. This is a company that controls over 250 million ounces of silver, which itself is leveraged to gold's price. It's contractual purchase price for this silver is $3.90 per ounce.
Today, SLW is selling at two bucks and change, down from $20+ a few months ago. The market cap of this company, which has almost zero operational risk, is less than 2X expected 2010 earnings.
I started buying SLW at a buck higher, so I'm really down. But I keep buying as it drops.
All over the world, you have emerging societies in which people are gradually growing richer. For generations, these societies have put their wealth into land, food, minerals, oil and precious metals -- not financial assets. Only in the last five years did they trust financial assets and now they've learned their lesson. They will keep getting richer. They will transfer their financial assets back into what their fathers and grandfathers owned. And keep it there.
Buy some gold, silver, food, minerals or energy. It's going to go through the roof. If you don't want to be leveraged to it, fine. But now's the time to make money in 2009 and 2010.
"It looks like we taxpayers are going to take a pretty big hit, unless the automakers somehow manage to stay in business for another thirty years or so."
The Mediscare presrciption drug thingy was basically unload pensions of this cost onto taxpayers.
My father was in Hr 60's-80's. Union co's basically lathered on pension benefits to get wage concessions. That bird's now coming home to roost. ERISA and failing markets are gonna crucify anyone with a DBP.
For the amount of money we are spending in all this, we could be collecting small countries.
Small? Bah. Go for some nice countries with elbow room. At the 10% convertible share rate Buffett got from Goldman Sachs we could buy the entire country of Ecuador, GNP 61 billion, with 90 billion left over for a couple of very nice resort islands. Ecuador even has some good locations for a space elevator so we'd be thinking ahead!
rich writes:
"I urge you to look at SLW. This is a company that controls over 250 million ounces of silver, which itself is leveraged to gold's price. It's contractual purchase price for this silver is $3.90 per ounce."
Can you explain how silver is leveraged to gold's price? I don't get it...
Thailand on Monday said it planned to barter rice for oil with Iran in the clearest example to date of how the triple financial, fuel and food crisis is reshaping global trade as countries struggle with high commodity prices and a lack of credit.
The United Nations Food and Agriculture Organisation said such government-to-government bartering a system of trade not used for decades was likely to become more common as the private sector was finding it hard to access credit for food imports.
--- This really is an idea whose idea has come around again, don't y'all think?
Here is another way to get out of a pension. Guy works 24 years for the teamsters. Comes to work for us at 43. The employee is now 65 and eligible for full teamsters benefits.
He applies and is denied. Reason...He took a job with the non-union competition. The best part is he phototcopied the letter and sent it to everyone to look at. I am really suprised more people don't just disappear in this country...
Wouldnt it make more sense to buy newly issued common stock in GM, F and C than lend them $25 B. Makes balance sheet look better than debt does, and IF we ever get out of this mess, much more upside for the taxpayer. I mean if they go BK, its not like the UST is going to be at the front of the line.
OCDan writes:
As of one of the last Fed reports I read a month or two ago, manufacturing was only 9% of the economy. Please don't ask for link, I forgot which one and normally I don't print out those reports, unless it has to do with debt. Anyway, I think we are at less than 10% manufacturing in the USSA!!!!!!!!!!!
OCDan | 10.27.08 - 8:26 pm | #
There is a really good book by one of my college advisors:
Manufacturing Works... in it it explains although mfg is a shrinking part of the 'economic pie' it drives a whole lot of NON-MFG classified activity... finance, insurance, logistics, energy, R&D, etc.
And it is one of the last tradables we have to offset deficits. You want to see the dollar remain strong - better hope we maintain some 'tradables'.
The book was written about a decade ago but is still relevant. In fact he predicted a lot of the problems we now face (I class covering 'turn-arounds' where we looked ahead - it's all happening now).
Mfg hires fewer people and can often be run 'lights out' today but still drives a lot of economic activity. More than most 'service providers' could ever imagine. But then most of them have never walked a factory floor in their entire life - have no idea what goes on there.
Despite the lure of Chryslers alleged cash stash of $11.7 billion, there is no way GM could have unwound Chrysler at the rate necessary to achieve even a modicum of efficiency, let alone success. And they would have burned through much of that cash - and consumed much of their time - in trying to jettison Chryslers nonessential assets and on resolving union issues instead of trying to make the whole thing work. In other words, absorption of Chrysler by GM would have been an unmitigated disaster in real-time. Not to mention the obvious fact that GM cant even manage the brands they have now, so the whole idea was a train wreck of Not Good.
This guy is a bit over the top, but he's usually right. Worked in the auto industry for a few decades and generally knows what he's talking about.
sam dimond writes:
If you make $1 per second you can make 1 million dollars in just 12 days working non stop. To make a billion this way takes 36 years! Wow. A trillion would take the entire history of man. The words million, billion, and trillion should not sound so much alike; they are very different.
My old CFO made me read a book when I was a young analyst on his team called "Innumeracy". Can't remember the author but it talked exactly about people's inabaility to comprehend large numbers. Some newspaper reporters can be terrible at it as times.
If GM and Ford go bk, that will set off a ginormous tsunami in the credit default swap market. The amount of CDS written on the automakers dwarfs all the other projections in this thread. A default by any one of them would require massive selling of liquid assets to pay off the claims. Guess what the only liquid market is? That's right, Jas's Scam Market.
If I were GM, I would let C go bankrupt.........lots of assets and customers will become available.
This may happen since someone above stated Cerebus has has already partially gutted the co. Evidence of their style is the 25% salary layoff in 30 days.
Also, some people I know in the industry say C is experiencing major quality issues.
Not that I'm an expert in CDS, but I'm under the impression that most of them are written with a 5 year tenor, so we only have to hang on for a few years.
the way the price of oil is falling is the real tragedy. think of the ruined portfolios.
what we need is subsidized suv's to drive up consumption and create jobs and profits in the oil industry. the multipliers will boost the whole economy...
autoextremist quoted: In other words, absorption of Chrysler by GM would have been an unmitigated disaster in real-time. Not to mention the obvious fact that GM cant even manage the brands they have now, so the whole idea was a train wreck of Not Good.
In other words, you're saying, we'd better get ready for it, because it's GM management's Plan A.
(Hey, I'm from Detroit, I'm allowed to snark at GM. It's the worst-run domestic auto company [if you ignore Ford and Chrysler].)
Ford is just as much garbage as the other two losers....they'll be next with their hand out...they are licensing Toyota first generation hybrid technology for their Ford Escape Hybrid....they don't have any technology of their own...
Auto CEOs and their American oil buddy conspirators just had to try to wring every last cent outta those SUVs while the rest of the world moved on. Now they are too far gone to come back.
Great shame is due the corporations
That have bamboozled me--
So various their depredations
And truth the casualty
Whilst I am counseled, "to have patience"
Lest their demise I see.
"A corporation cannot die"
And yet it is a person!
The riddle leaves no wonder why
Do situations worsen,
Whilst, wounded, I sit idly by,
Malicious anger nursing.
There is no one accountable,
No recourse left at all,
Advantage insurmountable
They hold, while someone Small,
Upon no road to bountiful
A manôs reduced to crawl.
Great shame is theirs, and malice mine
To nurse--how I regret it--
But there were not an anodyne
(Besides, how could one get it!)
Save to the dustbin fate consign
Their lot--if I could let it!
As goes GM, so goes America
Darn!
2nd?
Why don't we just nationalize the car industry now? Why even screw around?
$5 Billion. How quaint.
Sorry, but if the company is worth ZERO dollars, why does GM need 5 bilion to buy it?
I'm also looking forward to nationalizing Subways. My local sandwich artists are a bit cantankerous.
How does a bill that allows for $25 bn in loans for manufacturing improvements also allow for the government to lend money to help a merger along? Can someone explain that to me?
People still buy American?
Just let GM fail.
Last time I got real sick I didn't want to be kept sicker longer.
Thank God
Rick Wagoneer thought that he might have to start looking for a job. This money should last about 1-2 months.
I think it is necessary to save our domestic auto industry but how will Toyota, VW, etc and their governments
react to GM getting what has to be called government subsidies?
Thought that kind of stuff was prohibited under our trade agreements.
"Daimler: Chrysler worth nothing"
What an amazingly honest statement. It is time Feds realize the obvious: GM and Ford are worth nothing too. That $5 is money flushed down the drain. Borrowed from our unfortunate children. If this is not national sin, I don't know what is.
Ugh. Somebody might as well set off a neutron bomb in Detroit. The effect of a GM-C merger will be about the same.
Cross fugly with unreliable, and you get Homer Simpson's dream car.
"Last time I got real sick I didn't want to be kept sicker longer."
You would be if being sick kept checks coming in the mail.
So government sanctioned merger what happens to the pension guarantees.
I remember when the United States was a good country.
Kiss your 401K good-bye, baby.
"How does a bill that allows for $25 bn in loans for manufacturing improvements also allow for the government to lend money to help a merger along? Can someone explain that to me?"
Once you lend AIG 125 billion, there are no rules.
.
koan0215 - here's how it works. No $5bil, can't do the merger. $5 bil to GM = fail. $5 bil to Chrysler = Fail. Only way to improve manufacturing, is for the firms to not go BK. Only way to avoid BK is merge. It's basically the zombie of the 1980s chrysler bailout.
We are incapable of learning in this country.
Would foreign auto companies ever think of buying assets if the labor contracts were taken out of the picture.
Unit472 writes:
I think it is necessary to save our domestic auto industry but how will Toyota, VW, etc and their governments
react to GM getting what has to be called government subsidies?
They'll very quietly count their billions in profit made in the US over the last 20 years and hope the govt doesn't start talking about tariffs.
Chrysler's Jeep brand is ranked 28th, Dodge 30th and the Chrysler namesake brand 32nd on the list with interiors, electrical systems and other issues of concern.
"Their biggest issue is trying to hold the vehicle together inside squeaks, rattles, pieces of trim dropping off, annoying features for the customer," Champion said.
Chrysler had sought to address interiors shortcomings in early 2008 by investing $150 million (Dh551m) on upgrades to more than 260 vehicle features.
"We are not satisfied with our performance, with the report that came out," Chrysler spokeswoman Beverly Thacker said. "We do continue to work aggressively to improve every aspect of customer satisfaction with our vehicles."
British luxury brand Land Rover, owned by Tata Motors, was the least reliable brand, according to the survey. Consumer Reports is published by the Nonprofit Consumers Union.
Asian auto brands dominate Consumer Reports rankings
yes, loan GM the $5B subject to GM agreeing to discharge all of its managers and hiring Honda to perform this task through outside consulting services
"It's basically the zombie of the 1980s chrysler bailout."
Thanks for the heads up Prol! I will now go stock up on shotguns and chainsaws in preparation for the coming war against the zombie menace.
So this is how it ends. The Government pays for everything until it too runs out of money. Then its Thunderdome. A friggin Greek tragedy.
New for 2010, GM/Chrysler 's "The Homer".
So GM is kinda like Terry Schiavo
Now I get how the US government thinks.
Steve Feinberg and Dan Quayle wish to thank the American taxpayers for this generous contributions to their bottom lines.
Because everyone knows that private equity leeches can never have enough.
Capitalism - American Style...
"GM Says Money Will Help Environment
A spokesperson for General Motors announced today that the federal loans, designed to lead to more fuel efficient vehicles will help the environment after all. 'Think about it this way,' Blake Hole commented, 'We're not going to build or sell any cars for some time. Isn't that good for the environment?'"
If Chrysler is nationalized, can I get my tax rebate in the form of a Sebring?
That's hot.
Does anyone understand why a merger would be beneficial (i.e., other than as a way to get $$$ from the government)?
If both of these companies are losers separately, aren't they also a loser together?
This article has more detail, like this tidbit Traffic at stores serving households with income above $65,000 has been growing much faster than at the chain as a whole. People are trading down to Walmart thats not good
Yahoo! 404 - Page Not Found
Won't they have to save Ford too? The police need a sedan with a big enough
back seat to put criminals in.
--
USG on its way to be the Lender of the First, Last and ONLY Resort?
Perfection of the "Free" Market theology?
USG knows the limits on People's power and its unlimited powers in matters economic.
Jas
If both of these companies are losers separately, aren't they also a loser together?
Nope, they just make it up in volume.
And if that doesn't work, then synergy helps somehow.
Don't you know anything?
"So GM is kinda like Terry Schiavo
Now I get how the US government thinks."
Thats mean. Hilarious but mean
"If Chrysler is nationalized, can I get my tax rebate in the form of a Sebring?"
I can see this. You might as well. You're already paying for this anyways.
This is President Obamain. You had better buy American or I will take more of your tax dollars.
Will this impact the Chevy Volt in any way?
Dean writes:
Will this impact the Chevy Volt in any way?
Dean | 10.27.08 - 6:06 pm | #
Yes. We will all be forced to buy one in exchange for the right to vote.
Will this impact the Chevy Volt in any way?
It might actually get built
Good think we have a capitalist President in office and not some Socalist, otherwise we might be throwing money at a problem....oh wait, nevermind....
$1.3 Trillion for the Wall St boys, but only $5B for GM! Boy, shows how stupid the Auto exec's really are, they should be asking for $50B minimum!
As I said here on Sunday, Cerberus didn't hire a bucnh of neCONs for nothing, they will get their bailout before Jan 2009 - GMAC, Chrysler, and all the other crap they bought
they should be asking for $50B minimum!
Wait its only in phase one.
$1.3 Trillion for the Wall St boys, but only $5B for GM! Boy, shows how stupid the Auto exec's really are, they should be asking for $50B minimum!
They should have asked a lot earlier too.
If Senator Stevens is reelected and then pardoned by Bush(count on it) can the senate still vote to expel him?
Crispy:
Give it a rest; we're all comrades now. Peace.
Where's the talk about anti-trust issues?
How can the treasury bless this deal and run the risk of justice nixing it on competitive grounds?
"You had better buy American or I will take more of your tax dollars."
I could care less..I already have my Toyota and its already paid off and you'll pry it from my cold dead hands.
The police need a sedan with a big enough back seat to put criminals in.
We don't arrest criminals.
We send them money!
The treasury runs the country. Government Sachs can do whatever they want.
And the merger still makes no sense. More brands, more dealers, more platforms, more engines, more plants, = EPIC FAIL.
The money would be better spent shutting C down directly.
Well, I can see why they did it, 'cause here's a fresh sign of the apocalypse:
"New car sales in state plunge
By Dale Kasler
dkasler@sacbee.com
Published: Monday, Oct. 27, 2008
Sales of new cars and light trucks in California fell a whopping 19.1 percent in the third quarter from a year ago, according to a report released today.
The California New Car Dealers Association said its industry has been "turned upside down" by the credit crunch and general economic downturn. "Clearly this is not a prescription for a vibrant new vehicle market," the report said.
It was the latest evidence of a significant recession.
The report also shows that California is in rougher shape than most other states. Vehicle sales were down 18.5 percent in California during the first nine months of the year vs. 12.7 percent for the nation."
404 - Not Found - sacbee.com
Comrade Vistulian writes:
Crispy:
Give it a rest; we're all comrades now. Peace.
Comrade Vistulian | Homepage | 10.27.08 - 6:10 pm | #
As long as we all agree with are getting screwed by both parties and NO CHANGE will come in January no matter who is elected I will stop...thanks...Peace
WHoooooooah... Nikkei futures showing a 6 print.
Isn't Buick the most popular foreign car in China?
Cerberus is the biggest bunch of losers and crooks around (Feinburg, John Snow, Dan Quayle, etc.). These are a bunch of idiot right wing morons who shot spit-balls from the back of the class and now want your money. We need to stop this madness NOW!!!
I thought the import quotas from the '70s already solved the problems for GM/Chrysler/Ford.
a writes:
If Senator Stevens is reelected and then pardoned by Bush(count on it) can the senate still vote to expel him?
And if they do, can Governor Palin appoint herself as Senator?
The $5 billion loan is more than GM's market cap of $3.09 billion.
THAT makes a whole lot of sense.
okay the US will never outright put tariffs on Imports but what they could do is tax certain foreign. Stealth Tariffs on things like A/c compressions (they won't meat some obscure environmental standards) so that the cost to fix foreign cars becomes prohibitive.
bearly writes:
WHoooooooah... Nikkei futures showing a 6 print.
bearly | 10.27.08 - 6:15 pm | #
I work for Hank Paulson...what's a 6 print?
Lets just shut down the zombie compaines and move on - C, GM, F, GMAC, etc.. and quit throwing our money away.
Are the going to be making "Bushmobiles"?
You could not believe the navigation system or the speedometer, but you could probably fill them for free anywhere.
And if they do, can Governor Palin appoint herself as Senator?
They don't need to it was election year anyways
Here's a wild idea - how about American car companies build a good car? The Ford Focus is in the right direction. Pontiac Aztek - wrong direction.
It's only 7:15 am in Japan. Are Nikkei futures trading?
We need to socialize cars, we all need to dive the same SUV that gets 10 MPG! This is a crisis, what are they doing?
If you make $1 per second you can make 1 million dollars in just 12 days working non stop. To make a billion this way takes 36 years! Wow. A trillion would take the entire history of man. The words million, billion, and trillion should not sound so much alike; they are very different.
Here's a wild idea - how about American car companies build a good car? The Ford Focus is in the right direction. Pontiac Aztek - wrong direction.
The Chevy malibu is an ok car people just don't trust Detroit anymore.
Bob Dobbs writes:
Well, I can see why they did it, 'cause here's a fresh sign of the apocalypse...
But the point is, GM should be allowed to fail. Why is the current administration so reluctant to let companies fail? It doesn't matter if it's GM, or Citbank, or even Goldman itself. The weak must be allowed to perish, Darwin style. This behaviour is delaying any sort of recovery, which is going to take long enough as it is.
The Chevy malibu is an ok car people just don't trust Detroit anymore.
Why is the Malibu made in Detroit?
That's false advertising.
[crispy&cole writes:
Good think we have a capitalist President in office and not some Socalist, otherwise we might be throwing money at a problem....oh wait, nevermind....]
Agree 100 percent. This is a bailout of Cerberus and friends by rolling Chrysler into GM. GM will be bankrupt within 12 months and they will both be gone.
One of my coworkers just asked me for investment advice. I responded with the following. Please critique, or share your own opinions!!!
"Im not expecting a long term stock market bottom for another 1-2 years. That said, there will be many intermediate suckers rallies which will be extremely profitable for traders that can time them correctly. But that isnt my game. I look at the fundamentals of our economy and frankly, I dont see ANYTHING which would tempt me to invest on the long side.
In the short term, Im expecting another wave of panic selling in the next 4-6 weeks. My short term target is between 7,000 and 7,500 on the dow. At which point I will close all of my short positions and sit in cash, expecting a bounce. That bounce could be very sharp in the 20-30+% range. For me personally it isnt worth the risk trying to time the market and get in long. Instead Ill wait, looking for another attractive entry point to short. Id expect the bounce to take the market back to the 8,500 or 9,000. Then it will plunge again, as the next systemic shock or round of negative earnings announcements come out.
In terms of a long term bottom, I dont expect that to happen until late 2009 at the earliest. And the stock market will be lower than many people think possible. Im not sure where that point will be, maybe in the 4,000 to 6,000 range.
Sometime between now and then, it will become a bit more obvious which sector(s) will lead us out of recession/depression. At this point my crystal ball is hazy. My best guess is that emerging markets will recover first, though it is WAY too early to invest in them yet. Tech is cyclical, and just starting its downswing. Internet is dependent on advertising, which will be depressed until companies start selling real products (rather than inflated assets, toxic paper, insurance, and the like). Green energy is only attractive if oil becomes expensive again (uncertain at best).
The largest risk I see is that the US dollar loses its status as the worlds reserve currency. In a worst-case scenario the dollar could collapse as it becomes obvious that our government will never be able to pay off all of its outstanding debts. In that case, youll want to make sure to hedge with some foreign currencies or physical gold. This is a possibility, but the odds arent great enough to justify a large investment in this doomsday scenario.
Those are my $.02. Use at your own peril."
Cheers,
GH
WAS THERE EVER ANY DOUBT???
If Damlier valued their stake at $0, what does Cerberus value their stake at?
"This is a bailout of Cerberus and friends by rolling Chrysler into GM. GM will be bankrupt within 12 months and they will both be gone."
After Cerberus looted Chrysler.
Nostrovia,
"This is a bailout of Cerberus and friends"
Oh yeah, I'd forgotten about Cerberus.
What should happen is they merge, then file BK. The pension obligations are going to be paid for by taxpayers in any scenario. In BK court we'd get a judge calling the shots instead of the dork GM mgmt and greedheads at Cerberus. Whoever the bondholders are might be willing to cut the duplicate brands and production lines.
UAW has just under 500,000 members. Lets say 400,000 work in the auto industry. Let's say 250,000 of them have mortgages with an average value of $200,000. Now we're looking in the neighborhood of $50 billion in mortgage debt.
If you don't bail their jobs out you are going to bail the banks out that made the loans to them, to say nothing of the communities they live in.
Dean writes:
If Damlier valued their stake at $0, what does Cerberus value their stake at?
Dean | 10.27.08 - 6:24 pm | #
An amount equal to their bailout...they will trade our tax dollars and we will get some bs part of the new company, more ponies (ie Super Supreme Preferreds that pay 5%)
The Ford Focus is in the right direction.
Sorta. The current NA market vehicle is a step back from the last generation, IMHO. But the current gen. Euro/global Focus is pretty hot. The two lines will be unified in 2011 or 2012.
sterlingerl
Gm banks etc must be unwound in an orderly way IMO. Suppliers need to find other customers or fold, dealers need to clear out inventories and sell out. The downturn came so fast it would be irresponsible in the eyes of government to let the market crash.
Analogy What it tomorrow all banks shut down tomorrow and you couldn't get your money out?
Dean writes:
The $5 billion loan is more than GM's market cap of $3.09 billion.
Then for pete's sake - just buy the company, save 2B and nationalize Chrysler - or at least buy those toggle bonds
Perhaps Chrysler threatened to bring back back the Cordova if they don't get their money.
Great. More loans that have little or no value beyond slowing the fuse as it burns to the bomb. Sort of like loaning money to AIG. Threaten to blow yourself self up and then slow the fuse burn for a bit and make the same threat...again.
How exactly does the taxpayer benefit from a forced redundancy of production technologies and the manufacture of uncompetitive and crappy products?
Let's just draw up a list of other similar losing endeavors with duplicating loss and give them ponies too.
Let's see. How about Toll Brothers and Lennar for a start?
Why not just use the TARP money to buy Ford and GM cars?
It would probably lose less money for the taxpayer than what they are doing now.
"If you don't bail their jobs out you are going to bail the banks out that made the loans to them, to say nothing of the communities they live in."
The endgame is a massive socialist welfare state and its inevitable whether you like it or not.
Is my extended warranty (through GM) at risk?
Chrysler bought AMC in the 80's, Anon. They threatened to bring back the Pacer.
shudder.
Nostrovia,
"But the point is, GM should be allowed to fail. Why is the current administration so reluctant to let companies fail? It doesn't matter if it's GM, or Citbank, or even Goldman itself. The weak must be allowed to perish, Darwin style. This behaviour is delaying any sort of recovery, which is going to take long enough as it is."
I actually agree -- I said I can see_why they did it. I don't say that they should have.
I'm a big fan of social Darwinism for large corporations, but am more socialist for the little guy. Unfortunately we've got the exact opposite right now.
The endgame is a massive socialist welfare state and its inevitable whether you like it or not.
Agree 100%
Is my extended warranty (through GM) at risk?
Dean
Nope.
Soon it too will be backstopped by the Fed to increase the liquidity in automotive service centers
Is my extended warranty (through GM) at risk?
No not at all. Mr Goodwrench remains liquid and already has 10 paychecks in the mail that were do to him over the last few months
DaddieMac writes:
The endgame is a massive socialist welfare state and its inevitable whether you like it or not.
A massively poor socialist welfare state.
Why not just buy up Ford, GM, and Chrysler and put them out of their misery and put their facilities up for auction to the highest bidder whom can, with some kind of performance guarantee and tax incentives, build cars that do not use petroleum.
Now that would be change we can believe in.
Soon it too will be backstopped by the Fed to increase the liquidity in automotive service centers
Barley | 10.27.08 - 6:31 pm | #
Kinda like my life insurance through AIG?
LOL @ AIG
Cramer loved energy and materials stocks last week now he hates them. A short term bottom???
"The weak must be allowed to perish, Darwin style."
This cannot be allowed...the neocons are against Darwinism in any form. The dinosaurs must live.
If you mention Darwin again, Sarah Palin will have to straighten you out.
The dinosaurs must live. Well no one has seen one around for at least 1000 years
s.p.
The US is on the hook for the pensions. 500,000 pensioners x approximately $20,000 a year comes to a Trillion bucks for pensions alone.
The endgame is a massive socialist welfare state and its inevitable whether you like it or not
I'm okay with this now as long as I don't have to deal much with other Americans or work much.
"500,000 pensioners x approximately $20,000 a year comes to a Trillion bucks for pensions alone."
Stop spending money on needless wars will have 120 billion a year. If we avoid needless wars for ten years or avoid ten more needless wars next years we will have more than enough.
The whole auto industry has too many brands and too many models. We can have more than Henry Ford's Model T or A (in black) without having dozens of models. This crap of having a Chevy, Buick and Caddy all built on the same basic design is just stupid and guaranteed to lead to low sales per model and poor quality.
A combined GM/Chrysler should have maybe 3 brands, with two or three models per brand at the outside. And one truck line and zero SUVs. Concentrate on quality, efficiency in fuel, efficiency in production, marketing and sales. Eliminate 2/3 of the dealers and get out of the vehicle financing biz.
Back to basics! I'd welcome putting Ford into that combo and one US company vs the ROW's offerings. And then sell "Buy American", when they have earned consumer respect.
I'm okay with this now as long as I don't have to deal much with other Americans or work much.
Get out of my country... capitalist.
Bravo, DaddyMac!
We need stop spending money on needless wars and save our resources for necessary wars. Like preventing China from foreclosing on 5 million houses!
"The downturn came so fast it would be irresponsible in the eyes of government to let the market crash. "
BS. Anyone following the housing bubble could see it was unsustainable,and the non-existent lending standards were begging for trouble. It was beyond obvious in 2005. And Buffet among others was warning about a crash in derivatives in 2004.
There is no excuse or surprise involved...just the unlimited greed and recklessness of the republican administration, the Fed, and the failure to enforce existing regulations.
Thing is, when your auto industry dies it is damn near impossible to get it back again.
Look at the UK. Just a few niche auto makers and they are foreign owned now.
That has implications. Trade implications, military implications, employment implications.
I don't oppose saving our auto industry but it might be useful to insist the unions give up some of their benefits. Those 'legacy' costs
need to be pared back. UAW workers retire with pensions in the neighborhood of $2500/month with full medical benefits. I don't think management gets anything quite as generous.
In mexico they have the "chevy" small car and sold them in the trillions. Same car for the maid, the accountant, and the football mom. Lets make one model that every American will want to buy... or else
I'd love to see the equivalent of the VW Bug - great design, inexpensive, durable, good gas mileage, design run of 50 years.
It's a good thing that the PBGC is a sound corporation.
Is it publicly traded or owned by private equity or something like that?
Maybe this Halloween we'll see middle class whites burning down houses in the Detroit area. Really, the US public has remained surprisingly low key so far.
""But the point is, GM should be allowed to fail. Why is the current administration so reluctant to let companies fail?"
First, I think it's the administration and Congress. All of them.
I believe the reason they will not allow them to fail is that:
1. they are afraid of the short-term collateral damage to their constituents and resultant fallout.
2. They have many long-term relationships with management and large stakeholders of these corporations. It would be difficult to guess who the next generation enterprises would be, so why waste the effort? A politician could spend a great deal of time and never see a donation from the effort.
The federal agency charged with backstopping pension benefits for 44 million Americans lost almost $5 billion from investments in stocks in the budget year that ended Sept. 30, the agency head acknowledged Friday.
The Pension Benefit Guarantee Corp. will lose 6 percent to 7 percent on its entire investment portfolio, PBGC Director Charles Millard told the House Education and Labor Committee. It lost a significantly higher percentage of its investments in equities.
But that won't jeopardize the agency's ability to pay retirees who depend on it, Millard reassured lawmakers.
http://www.mercurynews.com/business/ci_10810150?nclick_check=1
There's only one way out of this financial mess.
We need to immediately institute a sky high tax on renting. This will force those penny pinching renters to empty their savings accounts and buy houses.
Exactly what part of the American debt nightmare don't these loser renters like anyway?
Speed writes:
I'd love to see the equivalent of the VW Bug - great design, inexpensive, durable, good gas mileage, design run of 50 years.
Yeah that was Hitlers plan. You think he was on to something??
Get out of my country... capitalist
Give me my SSN money and I will gladly move on.
I'm coming up on $1 million in taxes in the past 30 years and I didn't get much for it.
I tried several times last year but I couldn't get hired on in Dubai or Egypt. I'm working on Australia right now.
Great idea. A "war on renters"
Angry Saver et all we have real brain trust here.
Speed...the difference between the old Bug and the new one exactly explains the difference in America between now and then. "great design, inexpensive, durable, good gas mileage, design run of 50 years" vs derivative design, expensive, not really that durable, a toy for rich kids, wannabes, and nostalgic Boomers, and a short design run.
We need to immediately institute a sky high tax on renting
Angry Saver, you have to go where the money is. Mature 401K plans and increased property taxes on people who already paid off their homes.
go, socialism!
Kung Fu Panda.
I get you'll see that crap car in for years to come... Unfortunately
"Why is the Malibu made in Detroit? "
Because 'Chevy Detroit' would sound like the brother of a horse player named Nathan Detroit.
Seriously. Instead of making widgets we don't want or need, why don't we just try a 3 day work week.
Isn't this just an election year sop to the 20th century unions still hanging on by a thread in rust belt land? Other than corporate conspiracy buffs, how is this different than lowering FFR (nominal or real) to stimluate economy - i.e. jobs? Certainly its not to protect any great vault of intellectual property or know how. That ship sailed many eons ago.
Wonder if rights to the Yugo are available - that would be a good standard issue vehicle.
I wonder if it allowed given NAFTA
Yeah that was Hitlers plan. You think he was on to something??
What's your point exactly?
Ever hear of the V-2 rocket? That was a terrible idea too.
you have to go where the money is. Mature 401K plans and increased property taxes on people who already paid off their homes.
I see it the other way. It's a war for more poverty (literally).
The wealthy are getting the bailouts. Somebody has to pay. I'm long on increased poverty and lower standards of living for the majority.
"Anoddamoose writes:
Wonder if rights to the Yugo are available - that would be a good standard issue vehicle."
Well, that dates you. Not many people under 25 know what a Yugo was. Especially since most of them self-destructed in short order.
"Wonder if rights to the Yugo are available - that would be a good standard issue vehicle."
I rode in a Yugo once. Indescribable.
why don't we just try a 3 day work week
Comrade Saver et al
How about the "4 hour work week" for all government workers. It would save energy commuting. City services may even improve!
Does "change" include reparations too ? SOunds that way...
YouTube - Obama Bombshell Redistribution of Wealth Audio Uncovered
Danny asked, "Sorry, but if the company is worth ZERO dollars, why does GM need 5 bilion to buy it?"
Dean asked, "If Damlier valued their stake at $0, what does Cerberus value their stake at?"
Good questions. Also, Daimler paid Cerberus $675 million to take 80% of Chrysler off their hands. So is their basis negative?
Former Vice President Dan Quayle, who is chairman of Cerberus Global Investments, an international unit of Cerberus. Quayle told a group in Phoenix this week that the company would hold out for a good deal involving Chrysler.
"The analysts are looking at it," Quayle said, according to the Phoenix Business Journal. "We're not going to do the deal unless it's a positive for our investors. We don't buy companies based on growth stories. We do not price our companies that way. ... We're opportunity investors."
Detnews.com | This article is no longer available online | detnews.com | The Detroit News
"I'd love to see the equivalent of the VW Bug - great design, inexpensive, durable, good gas mileage, design run of 50 years."
Actually designed to run for 100k kilometers and then disintegrate.
I knew an engineer who found a weakness in the original design (lubrication), and sent a suggestion to Germany. The VW engineers thanked him in triplicate, explained that they already knew of the problem, but noted that extending the life of the engine was not worth the pennies it would cost, given the overall MTBF.
Angry Saver writes:
There's only one way out of this financial mess.
We need to immediately institute a sky high tax on renting. This will force those penny pinching renters to empty their savings accounts and buy houses.
Punitive taxes on saved money will be coming soon enough...wealth redistribution.
Speed you know that Hitler commissioned the creation of VW don't you???
Adolf Hitler had a keen interest in cars even though he did not drive. In 1933, shortly after taking over as leader of Germany, he asked Ferdinand Porsche to make changes to his original 1931 design to make it more suited for the working man. Hans Ledwinka discussed his ideas with Ferdinand Porsche, who used many Tatra design features in the 1938 "KdF-Wagen", later known as the VW Käfer - or Volkswagen Beetle. On 22 June 1934, Dr. Ferdinand Porsche agreed to create the "People's Car" for Hitler.
20% percent of the work is necessary. The other 90% is basically done to serve the rentier society.
DaddieMac writes:
The endgame is a massive socialist welfare state and its inevitable whether you like it or not.
Agree 100%
...which means a Totalitarian state whether you like it or not.
Yugo was a Fiat design I believe. Not all Italian designs are stylish with plenty of horsepower. They have their Edsel's too.
A bail-out for companies that has been designing and making in-efficient dinosaurs since the first Oil Shock in 1973! Who have resisted any change to become efficient for 35 years?? And we haven't even got near to peak oil yet. For the US taxpayers' sake, I hope they all fail soon because they will continue to be poorly run, to produce the wrong products and keep on putting their hand out for more money.
--
Looks more and more like that America's ruling elite, including their agents in the economics profession, believe what I have concluded from my observations Americans are confirmed born-and-bred dopes. Of course, as dopers they are simply confirming the success of their propaganda efforts for decades.
Our ruling elite cannot be more satisfied. They know that they can get away with economic holocaust of tens of millions of American households and hundreds of millions worldwide. It is only a matter of time before demos turn on them beginning in countries like India and spreading globally.
Jas
"Pontiac Aztek - wrong direction."
This made me LOL. Every time I see one of those on the road (becoming rarer, thankfully), my first thought is "I wonder which Survivor contestant that is."
(In the first few seasons of the show, they used to give one to one of the final four contestant and then one to the winner. The contestant who won in the final four got to sleep that night in the camper portion as part of his/her prize. I always assumed that was the only time the beast ever got used.)
Yes, I know. Hence my previous post about the V-2 rocket, which he also commissioned. Again, what's your point?
No next generation Tahoe and Suburban
GM Kills Next-Generation Tahoe and Suburban
Unit472 writes:
UAW has just under 500,000 members. Lets say 400,000 work in the auto industry. Let's say 250,000 of them have mortgages with an average value of $200,000. Now we're looking in the neighborhood of $50 billion in mortgage debt.
If you don't bail their jobs out you are going to bail the banks out that made the loans to them, to say nothing of the communities they live in.
Unit472 | 10.27.08 - 6:25 pm | #
Not to mention unemployment benefits--wouldn't we pay those?
I like the idea stated above about cleaning out management and replacing with Honda folks.
Speed writes:
Yes, I know. Hence my previous post about the V-2 rocket, which he also commissioned. Again, what's your point?
A Joke. Tongue in cheek humor. Relax
Jas, I recall you live in the USSA. If amerikans disgust you so much, why do you live here ? I think, as a purely mentally theraputic measure (something you desperately need), you should go back to where ever it was you came from.
It's not just UAW - you also have the IUE-CWA.
The cynicism, which is growing exponentially, is almost beyond belief. Can't believe that Jas has become an icon of veracity in such a short time. This is tragicomedy of the highest order at a pivotal point in human history. Oh, and by the way, thanks George. Couldn't have done it without you, you POS.
I mentioned the Lada to my students the other day - we were talking about centrally planned economies (timely, huh). They stared at me blankly.
Look for tariffs on all cars not made in the US.
That's why the Japanese, Koreans, and Germans are building plants here.
doug, the most profitable car company in the world is Porsche. Little tiny Porsche with its premium gas guzzling two seat sports cars. Just upped its state in giant VW to 43.5%!
I'm even more uncomfortable with Congress dictating what manner of car
our auto industry should build than their using taxpayer dollars to bail them out.
If GM wants to make Cadillac 'the standard for the world' again let them. Cadillac used to mean something. That 1957 El Dorado Biarritz was the most expensive massed
produced car in the world at the time.
Held its value too. Try and buy one today!
Speaking of Ladas, scroll down for a pic of a stretch Lada. A Lada limo, if you will.
Lada - DI Forums Board
--
"...a Totalitarian state whether you like it or not."
Coinz!,
We ARE there except that it is not overt yet.
Dopes have been fully prepared to accept it until the squeeze gets too painful. The game is how far the ruling elite will tighten the vice on born-and-bred dopes necks. It is a very delicate "operation," Are dopes sedated enough or not. Not fun watching the ghastly deed.
Jas
Look for tariffs on all cars not made in the US.
Too controversial. Tarrifs on parts is more realistic. Make obscure environmental & safety standards for US made parts so foreing parts can't be imported to fix the BMW's Honda etc.
Jaz:
We were born here, what's your excuse?
"Yugo was a Fiat design I believe. Not all Italian designs are stylish with plenty of horsepower. They have their Edsel's too."
If I had to use one word to describe the experience, it would be 'flimsy.' As if the only tools you'd need to take it completely apart would be your bare hands.
A toy, like the Chevette.
The Russian *Zhiguli" was also a Fiat product, made in Togliatti. Zhiguli owners developed expert mechanical skills, and took the windshield wipers with them when they parked.
For country roads you bought a Moskvich and a groin support.
Moskvich were built like very small tanks.
Once Obama starts renegotiating our trade agreements, you will see tariffs. They may not
be referred as such but thats what they will be.
What killed the old VW (and old Porches for that matter) was the enormous amount of polution spewed out by its air cooled engine.
Lada - I read in Wiki that Lada is the export version of the Zhiguli.
You could see many in Iceland in the 70s.
Danny writes:
Sorry, but if the company is worth ZERO dollars, why does GM need 5 bilion to buy it?
Same reason why executives are paid tens of millions of dollars they didn't earn doing anything - sales commission.
What a spectacle. We are witnessing a modern day "sacking of Rome".
Pavel Chichikov writes:
"Wonder if rights to the Yugo are available - that would be a good standard issue vehicle."
I rode in a Yugo once. Indescribable.
One parked in our dorm parking lot when I was in college. Joking around I tried to pick up the rear of it by grasping under the bumper. I was pretty strong then, I could do partial deadlifts with very hvy wts.
The bumper bent upward in my hands.All I ever needed to know about the yugo.
... and they all got their bonuses.
Punitive taxes on saved money will be coming soon enough...wealth redistribution.
Redistribution is a sideshow. It's credit expansion that is the key to debt peonage of the many for the benefit of the few.
What would happen if debt stopped expanding? Those with less would have more (no debt) and those with more would have less (fewer rent producing assets).
Our eCONomy is a sham.
Punitive taxes on saved money will be coming soon enough...wealth redistribution.
Redistribution is a sideshow. It's credit expansion that is the key to debt peonage of the many for the benefit of the few.
What would happen if debt stopped expanding? Those with less would have more (no debt) and those with more would have less (fewer rent producing assets).
Our eCONomy is a sham.
jeez -
Volkswagen AG (ADR) \tVLKAY \t
\t+121.60% \t234.05B
GM \t5.45 \t-0.50
(-8.40%) \t3.09B
--
"The cynicism, which is growing exponentially, is almost beyond belief."
YessirreeBob,
It is the realism that is growing out of necessity, "you POS."
Jas
"Pontiac Aztek - wrong direction."
Hoocoodanode that a toaster oven on wheels might not be a good idea?
DETROIT, Oct 27 (Reuters) - Moody's Investors Service on Monday cut its rating on General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) deeper into junk territory on the expectation that the automaker's liquidity will continue to erode into 2009 despite any benefit from the U.S. government's $25 billion low-cost loan program.
UPDATE 4-Moody's cuts GM, Chrysler ratings, may cut Ford
| Reuters
2009 Jetta TDI Vehicles Named in Government Listing of Most Fuel Efficient Vehicles
Volkswagen Makes Annual EPA Top Ten List with All-New Clean Diesel Jettas
HERNDON, Va., Oct. 27 /PRNewswire/ -- The 50-state compliant clean
diesel Volkswagen Jetta TDI sedan and SportWagen TDI have claimed two of
the top positions in the annual EPA and Energy Departments' list of the
most fuel efficient vehicles. The Jetta TDI's are the only clean diesel
vehicles to make the top ten list, which was released last week.
2009 Jetta TDI Vehicles Named in Government Listing of Most Fuel Efficient Vehicles
Gavshire Hathaway-
i agree with you 100% - its kinda freaky actually. your outlook and plan aligns with mine 99% (i might stupidly try and play the upcoming bounce).
OT, but really interesting re: Walmart
An Ethics Lesson from an Unlikely Source
InfoViewer: An ethics lesson from an unlikely quarter
Would anyone here be interested in forming a corporation and then going to the administration and congress to seek funding.
Maybe ask for enough to buy out McDonalds or something. I would be the Chairman of the Board, and CEO of course. Big bonuses for everyone at the end of the year though.
Q? How can the treasury bless this deal and run the risk of justice nixing it on competitive grounds?
A: And just how do you think Justice can prove they are competitive to begin with? Burden of proof is on the prosecutor. Show me proof of competition?
--
"We were born here, what's your excuse?"
Comrade Vistulian,
And what business is it yours? Dopes like to meddle in personal affairs of others.
We need to start Dope Watch!
Jas
I'm a big fan of CR and have been reading since 2006. Inspired by a number of the great posters on this site I've started writing a financial comedy blog. I've done a bit of comedy writing for a few big name comedians. Thank you CR for the wonderful material and please take a look at my most recent post:
http://hobochili.org/chili/?p=82
If there are any funny/witty/evil people out there that would like to contribute I welcome you to contact me via the blog.
The Yugo was a Zastava from Yugoslavia which was based on the very successful (in Europe) Fiat 128 design.
Yugo: shopping cart of death
A Hyundai Santa Fe in South Korea costs almost twice as much in the US.
Also, taxes on imports in South Korea makes owning a foreign vehicle prohibitively expensive.
Does anyone know how much a E-Class Mercedes costs in Germany? Just wondering if its cheaper for a German to own one. I assume the Cheap Class is made here in the US.
I wonder what the pension liability is if both companies fail, probably a million total retirees between both the companies, at 30-40k a year...
At $30 Billion a year, the loan doesn't look too bad. Ultimately the car companies need to shed their pensions to be competitive and be able to innovate.
Angry Saver writes:
Redistribution is a sideshow. It's credit expansion that is the key to debt peonage of the many for the benefit of the few.
What would happen if debt stopped expanding? Those with less would have more (no debt) and those with more would have less (fewer rent producing assets).
Our eCONomy is a sham.
Saving is going to be punished, get used to it. Once TBTB figure out that folks aren't going to loan or spend, they will make it pretty painful to "hoard money". (That's how they'll phrase it.)
"I'd love to see the equivalent of the VW Bug - great design, inexpensive, durable, good gas mileage, design run of 50 years."
Speed, that car is called a Toyota Corolla.
Toyota Corolla - Wikipedia, the free encyclopedia
"their biggest concern is holding the vehicle together"
Wow that makes me want to buy one! Lets give them 5 billio
Does anyone know how much a E-Class Mercedes costs in Germany? Just wondering if its cheaper for a German to own one. I assume the Cheap Class is made here in the US.
I'm not totally up-to-date anymore but I am not aware of any Mercedes non trucks that are manufactured outside of Germany.
Pricing in Germany for a comparable car is higher in Germany. The cars available in the U.S. are very well equipped, i.e. much better than the average in Germany. Also, engines size in Europe is generally much smaller. You can get an E Class with a 2.1 liter 4 banger.
Maybe if they started using Corintian Leather again.
The current administration does not care about the need for us to keep manufacturing capacity in the US. The next gen HUMVEE is going to be a NATO design and manufactured.
The US has 1 ammo manufacturing plant. Most military handgun and rifle ammo is bought overseas. Probably Korean. We do not even make the handguns anymore really.
My guess is the gov will keep or pay for a factory or 3 to stay open to make military vehicles. They will use union labor. Probably keep the factories in States and Districts that turn out the right vote.
Perhaps a couple factories will be sold to some newly created group to create the gov approved eco-mobile. This will be a non-union plant but very, very green.
Pitchforks,Torches&Pikes World writes:
Maybe if they started using Corintian Leather again.
Timeless. That stuff was pretty durable though
The Pentagon entrusted a 22-year-old previously arrested for domestic violence and having a forged driving licence to be the main supplier of ammunition to Afghan forces at the height of the battle against the Taliban, it was reported yesterday.
AEY, essentially a one-man operation based in an unmarked office in Miami Beach, Florida, was awarded a contract worth $300m (£150m) to supply the Afghan army and police in January last year. But as the New York Times reported in a lengthy investigation, AEY's president, Efraim Diversoli, 22, supplied stock that was 40 years old and rotting packing material.
From March of this year
Pitchforks,Torches&Pikes World --
Maybe if they started using Corintian Leather again.
Now THAT is old school.
YouTube - 1975 Chrysler Cordoba
Awesome.
God Bless Ricardo Montoban. The man who put the accent in Suave
It is a sad day to see GM and Chrysler in so much trouble. The iconic American car makers that were responsible for such wonders as the 1969 ZL-1 Corvette, original DZ-302 Camaro Z28, the ZR-1 Corvette, and the 1967 Plymouth Hemi GTX have seen a long slow decline.
andy in nz:
any word on how soon the imf visit's wellington?
Not trying to be sarcastic, but what does a 50% depreciation in a developed country feel like? I've been in Vietnam when it happened (e.g. people only accepting dollars, etc), but there hardly developed.
Nemo,
Ricardo calls that land yatch a small car.
ROFL.
Glod, that thing is ugly.
Nost5rovia,
DaddieMac writes:
[Tarrifs on cars] "Too controversial. Tarrifs on parts is more realistic. Make obscure environmental & safety standards for US made parts so foreing parts can't be imported to fix the BMW's Honda etc."
You already can't buy many parts for Fords that are more than 10 years old. They simply don't make them any more. Or maybe there's a high tariff on exports from Detroit.
sue writes:
"At $30 Billion a year, the loan doesn't look too bad. Ultimately the car companies need to shed their pensions to be competitive and be able to innovate."
Trouble is, they'll shed the liability onto the taxpayer whether we bail them out or not. It's just a question of when.
Nikkei opened steady ... down 15 pts or so
sm_landlord,
IIRC the PBGC assess the assets in the Pension Fund and adjusts payments accordingly.
Nostrovia,
From the WSJ: "TOKYO -- Finance chiefs from the Group of Seven leading nations on Monday issued an emergency statement warning investors against pushing up the yen too much, suggesting that the U.S. and Europe, in addition to Japan, are uneasy about the yen's broad advances."
Oh, boy, here we go. More currency interventions coming.
I was a long time GM car buyer. i loved my 2000 Pomtiac Grand Prix Daytona 500 Pace Car (with an eaton 9lb supercharger). But when it rained heavy there was a small lake on the passenger side floor. The brake rotors were toast after 25k miles. The car had more squeaks and rattles than a baby toy. On a dare I test drove an Infiniti G35X all wheel drive sedan in 2005. The quality difference was amazing. The performance difference was gran canyonesque. The price dofference between a new Grand Prix and a new G35 was only about 15%! I just got the all new G35X and doubt I will ever buy another model. Until and unless the US car makers can close the quality/performance gap with the Japanese auto makers, all the bailouts in the world cannot stop their fall.
sm_landlord,
"Oh, boy, here we go. More currency interventions coming."
Yen carry is imploding. Not sure you can fix that.
Nostrovia,
But they will probably try.
Comrade Misean,
So if there are no assets in the pension fund, do they actually guarantee anything? I recall reading somewhere that GM has been underfunding the pension fund for many years now, and it would not be a surprise to learn that what assets there are may not be worth what they are booked at...
Japan is definitely going to ban short sales. Whether they will outright purchase equities remains to be seen.
Bond Girl,
Aye. That's just going to compound the problem.
Kick the can is the only policy option these asshats try.
Nostrovia,
Seoul off 4% out of the gate.
Jaw isn't an icon to me, just a dopey joe who is either too ignorant or too rich to keep his mouth from flapping thoughts I had developed many years ago.
We disagree on the perp's motive. He thinks this is planned, I think these guys are just too ignorant and selfish to understand the outcome of their behavior.
DaddieMac writes:
The dinosaurs must live. Well no one has seen one around for at least 1000 years
s.p.
DaddieMac | 10.27.08 - 6:36 pm | #
Dont you know they all just missed Noah's boat and drowned, even the aquatic ones
Yen carry is imploding. Not sure you can fix that.
They'll try to isolate the implosion by getting other countries (e.g. China, GCC) to fill the void left as the money leaves the country. Only problem is that it makes debt/deficit financing for the US a tad bit problematic if China's surpluses aren't going to UST.
Kung Fu Panda writes:
What should happen is they merge, then file BK. The pension obligations are going to be paid for by taxpayers in any scenario. In BK court we'd get a judge calling the shots instead of the dork GM mgmt and greedheads at Cerberus. Whoever the bondholders are might be willing to cut the duplicate brands and production lines.
Kung Fu Panda | Homepage | 10.27.08 - 6:25 pm | #
Something like half of the pension is paid out in a bk - not the whole thing. Many of the steel companies went kaput about a decade ago and the pension guarantees were something like half what was 'originally' promised. Realize that they promised the stars & the moon (and funded a bottle rocket to get them there).
That's what has the pols spooked - after next Tuesday it won't be so urgent (until two years from now). GM, Cerberus & UAW understand 'timing isn't everything - it's the only thing'.
sm_landlord,
Straight from the horse's mouth:
"
PBGC guarantees "basic benefits" earned before your plans termination date (or the date your employers bankruptcy proceeding began, if applicable), which include:
* Pension benefits at normal retirement age
* Most early retirement benefits
* Annuity benefits for survivors of plan participants
* Disability benefits (see exception below)
PBGC does not guarantee:
* Health and welfare benefits
* Vacation pay
* Severance benefits
* Lump-sum death benefits for a death that occurs after the date the plan ended
* Disability benefits for a disability that occurs after the plans termination date (or the date your employers bankruptcy proceeding began, if applicable)
Legal Limits on PBGC's guarantees
* Generally, PBGC does not guarantee any monthly pension amount that is greater than the monthly benefit your plan would have provided if you had retired at your normal retirement age.
* The maximum amount that PBGC guarantees is set each year under provisions of ERISA. For more information, see: Maximum monthly guarantee tables
* Higher limits may apply for people who met their plans requirements for a disability pension (whether they are receiving a disability pension or a non-disability pension) before the plans termination date. For more information, see Guarantees for disabled participants.
* PBGC may not fully guarantee your benefits if your plan was created or amended to increase benefits within five years before its termination date.
* If the plan terminated while your employer was in a bankruptcy proceeding that began on or after September 16, 2006, guarantees are determined as of the date your employers bankruptcy proceeding began.
* Additional limits may apply for certain airline industry plans.
For more information, see PBGC's publication, Your Guaranteed Pension."
What PBGC guarantees (PBGC.gov)
So they will pay, but the retiree will likely take a hit.
The maximum's seem fairly generous, but those exemptions seem pretty vague.
Nostrovia,
Anyone have a good take/read on the repeated calls i have seen for the Gold Comex market to have a black swan event for this December's contracts? Seems like this could be a big deal. Or not.
Nemo writes:
Japan is definitely going to ban short sales. Whether they will outright purchase equities remains to be seen.
I really wonder how they would go about doing that if they decided that was what they wanted to do.
Can Paulson do anything he wants on this without further approval from congress? What happened to all that "oversight"? I would have thought the unions would fight this very hard unless it had stuff in it they wanted, beyond just the money.
I was just in Detroit and suburbs over the weekend, and even knowing what to expect I was flabbergasted by how many houses for sale. Even in what the Grosse Pointes.
I really don't know how that city survives all this. The 'burbs are in trouble, and within the city itself there are miles and miles that just need to be bulldozed.
Will this mean the return of the K Car?
Just read the interesting below piece on Brad S. blog.
"
Back in May 08, a prediction/vision was written about the dollar, stocks and commodities. The price action has vindicated that prediction.
What is interesting in that prediction is the WHOLE reasoning of why things would turn the way they did. And they turn exactly as explained in the article below.
A FASCINATING and a MUST read.
Stock Trading | Forex | Financial Markets: Dollar, Equities (stocks), and Commodities May 2008 to today August 08
So if we fund half the pension obligations of GM and C right now, they could start making money again and in theory fund more of their pension obligations in the future as retirees die.
El Rider,
"Will this mean the return of the K Car?"
They'll call it the KO car. We're commatose but still building.
Nostrovia,
You people are forgetting something about that leather...
IIRC, it was FINE Corinthian Leather!
Bring back the Corvair, Nova, and the Edsel and we have a market rally on the way!
We do not even make the handguns anymore really.
Why fight a country when you can just get them to buy some US-manufactured securities?
What about the Tucker?
how about Nash and Studebaker.
don't forget the Pinto. Or the Gremlin. Both fine automobiles.
As of one of the last Fed reports I read a month or two ago, manufacturing was only 9% of the economy. Please don't ask for link, I forgot which one and normally I don't print out those reports, unless it has to do with debt. Anyway, I think we are at less than 10% manufacturing in the USSA!!!!!!!!!!!
Bond Girl and Nemo,
I really wonder how they would go about doing that if they decided that was what they wanted to do.
Japan did purchase stocks in the 1990s. So this is nothing new and I have NO doubt that they will do it again if they haven't already started.
The Mainichi Daily News
... Japan also faced a financial crisis after the bursting of the bubble in the early 1990s. At that time, Japan was urged by the U.S. and Europe to adopt all possible counter-measures, so the Japanese government elected to adopt large-scale fiscal mobilization measures, and the Bank of Japan purchased shares of stock and pursued a policy of monetary easing. Now it is the turn of the U.S. and the European countries to attempt all possible remedies. ...
This economy needs the Gremlin.
1970 AMC Gremlin - The 50 Worst Cars of All Time - TIME
Nostrovia,
Basel Too
Been here with our dollar in 2002...
IMF may have a xmas BBQ on the beach planned down here, hope they have an account at lefty's
Been on the brink of collapse in 1984, yawn, same old, same old.
But seriously, we have a general election on Nov 8th so IMF will stay quiet till the
Ford Pintos for everyone.
OOHHH! AMC gremlin with simulated wood panel siding! Too sweet!
For the amount of money we are spending in all this, we could be collecting small countries.
Wood paneling.
Ah, give me a Station Wagon.
Or,...
how about my stepdad's Chevy Impala. You could have landed an F-15 on that baby. i think he 0.09 miles to the gallon when gas was what 15 cents a gallon?
how bout just add all the Proshare Double Inverse to the DJIA, that'll put a floor under this baby.
Thanks for the detail, Comrade Misean. I read that as they pretty much pay regardless of what they find in the plan when they take it over.
It looks like we taxpayers are going to take a pretty big hit, unless the automakers somehow manage to stay in business for another thirty years or so. So maybe it's worthwhile to keep propping them up and hope for the best.
I wonder if a consolidated automobile industry could carry the current pension load. At least with fewer employees, they would build up fewer dangerous obligations with the taxpayer as the backstop.
Bond Girl,
I understand that Iceland is for sale.
Nostrovia,
I wonder if a consolidated automobile industry could carry the current pension load.
It might be able to carry the pensions alone, given some other help. Pensions AND healthcare - no way. I'm sure GM/F/C would prefer to unload both.
Miranda writes:
I was just in Detroit and suburbs over the weekend, and even knowing what to expect I was flabbergasted by how many houses for sale. Even in what the Grosse Pointes.
It's been like that for a long time on & off. My sis moved into GP in one of the 'busts' (early 90s I believe) and bought a very nice house for half what it sold for a few years earlier - then left GP at the peak of one of the auto industry 'revivals'... more than doubled what she paid for it.
She didn't really benefit though - bought again in Cleveland (where prices have now tanked too). Didn't much matter to her - you have to live somewhere and in both cases she had very nice homes in nice neighborhoods in homes she had no problem supporting.
And 'yes' there are very nice neighborhoods around both Detroit & Cleveland. Even now.
It's not just GM and Chrysler. It's all the suppliers, too (mufflers, spark plugs, upholstry mfgr's, you name it). We're talkin' a lotta jobs here. Not to mention the oil companies stake. I apologize if this has already been mentioned. Saying "let'em fail" would be a total disaster.
Speed writes: Cross fugly with unreliable, and you get Homer Simpson's dream car.
Canyonero!
Along with a few other people on this board, I began advocating about a year ago to go into leveraged inverse ETFs like SRS, EEV and TWM. After a lot of ups and downs, those ships have come home. I don't know where they go from here. They are no longer as attractive.
I urge you to read this:
U.S. Dollar Currency Collapse Within 30 Days :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website
"COMEX gold is a form of debt. It involves one party promising to produce gold (money) to another at a future date. Like all forms of debt, a COMEX futures contract is only as good as the counterparty behind the contract. Right now, because of low margin requirements, sellers of gold futures only have enough gold to cover 10% of outstanding contracts stored in COMEX warehouses. Considering that the biggest sellers of gold futures contract are insolvent financial institutions, it is obvious that COMEX gold has enormous counterparty risks. If even a quarter of outstanding contracts asked for physical delivery, it would be enough to guarantee a default. Since a financial collapse would actually creates the risk of total default (insolvent banks can't produce the gold or cash), COMEX gold fails miserably as a safe haven . This is why COMEX gold prices are falling, while physical gold is disappearing from the market place
Because of scarcity, physical gold is selling at an enormous premium to gold spot price (which is set by COMEX). How big a premium? Well, on eBay 2008 gold buffalo are trading between 300 to 400 over spot price. That is a 50% premium. The enormous premiums being paid in the physical market means that a large number of December gold contract holders are likely to request delivery. A volume, whether it causes defaults or not, is likely to change the marketplace perception of gold and cause a rush of into a physical gold plagued by shortages. Gold will skyrocket over 2000 in a matter of days."
So, how can you play gold on a leveraged basis? I urge you to look at SLW. This is a company that controls over 250 million ounces of silver, which itself is leveraged to gold's price. It's contractual purchase price for this silver is $3.90 per ounce.
Today, SLW is selling at two bucks and change, down from $20+ a few months ago. The market cap of this company, which has almost zero operational risk, is less than 2X expected 2010 earnings.
I started buying SLW at a buck higher, so I'm really down. But I keep buying as it drops.
All over the world, you have emerging societies in which people are gradually growing richer. For generations, these societies have put their wealth into land, food, minerals, oil and precious metals -- not financial assets. Only in the last five years did they trust financial assets and now they've learned their lesson. They will keep getting richer. They will transfer their financial assets back into what their fathers and grandfathers owned. And keep it there.
Buy some gold, silver, food, minerals or energy. It's going to go through the roof. If you don't want to be leveraged to it, fine. But now's the time to make money in 2009 and 2010.
sm_landlord,
"It looks like we taxpayers are going to take a pretty big hit, unless the automakers somehow manage to stay in business for another thirty years or so."
The Mediscare presrciption drug thingy was basically unload pensions of this cost onto taxpayers.
My father was in Hr 60's-80's. Union co's basically lathered on pension benefits to get wage concessions. That bird's now coming home to roost. ERISA and failing markets are gonna crucify anyone with a DBP.
Nostrovia,
For the amount of money we are spending in all this, we could be collecting small countries.
Small? Bah. Go for some nice countries with elbow room. At the 10% convertible share rate Buffett got from Goldman Sachs we could buy the entire country of Ecuador, GNP 61 billion, with 90 billion left over for a couple of very nice resort islands. Ecuador even has some good locations for a space elevator so we'd be thinking ahead!
rich writes:
"I urge you to look at SLW. This is a company that controls over 250 million ounces of silver, which itself is leveraged to gold's price. It's contractual purchase price for this silver is $3.90 per ounce."
Can you explain how silver is leveraged to gold's price? I don't get it...
dryfly:
thanks for your insight on my query yesterday re: intrade.
jr
From the Financial Times (via NakedCap):
Thailand on Monday said it planned to barter rice for oil with Iran in the clearest example to date of how the triple financial, fuel and food crisis is reshaping global trade as countries struggle with high commodity prices and a lack of credit.
The United Nations Food and Agriculture Organisation said such government-to-government bartering a system of trade not used for decades was likely to become more common as the private sector was finding it hard to access credit for food imports.
--- This really is an idea whose idea has come around again, don't y'all think?
The weather in Ecuador is more tolerable then the weather in Iceland as well... but all of those bugs!
rich,
"It's contractual purchase price for this silver is $3.90 per ounce."
No way counter party can deliver.
Nostrovia,
yeah, the US should start trading credit for stuff..
oh, wait....we tried that, not working out so well.... how bout fake tits for oil?
This really is an idea whose idea has come around again, don't y'all think?
This is the shortest ticket to GD2 and starving...
landlord- that's why we have DuPont
Yeah but Ecuador's financial system is better managed than Icelands.
Did I just type that?
Nostrovia,
OK, I'm sold. Let's buy Ecuador!
I've always wanted a space elevator...
ew thread
Banana republics are looking good these days.
Comrade Misean is Dope | Homepage | 10.27.08 - 8:17 pm |
Misean,
Here is another way to get out of a pension. Guy works 24 years for the teamsters. Comes to work for us at 43. The employee is now 65 and eligible for full teamsters benefits.
He applies and is denied. Reason...He took a job with the non-union competition. The best part is he phototcopied the letter and sent it to everyone to look at. I am really suprised more people don't just disappear in this country...
Chris
sterlingerl writes: GM should be allowed to fail. Why is the current administration so reluctant to let companies fail?
Nominal $1 trillion of credit default swaps written on GM bonds? That would leave a mark!
Wouldnt it make more sense to buy newly issued common stock in GM, F and C than lend them $25 B. Makes balance sheet look better than debt does, and IF we ever get out of this mess, much more upside for the taxpayer. I mean if they go BK, its not like the UST is going to be at the front of the line.
OCDan writes:
As of one of the last Fed reports I read a month or two ago, manufacturing was only 9% of the economy. Please don't ask for link, I forgot which one and normally I don't print out those reports, unless it has to do with debt. Anyway, I think we are at less than 10% manufacturing in the USSA!!!!!!!!!!!
OCDan | 10.27.08 - 8:26 pm | #
There is a really good book by one of my college advisors:
Manufacturing Works... in it it explains although mfg is a shrinking part of the 'economic pie' it drives a whole lot of NON-MFG classified activity... finance, insurance, logistics, energy, R&D, etc.
And it is one of the last tradables we have to offset deficits. You want to see the dollar remain strong - better hope we maintain some 'tradables'.
The book was written about a decade ago but is still relevant. In fact he predicted a lot of the problems we now face (I class covering 'turn-arounds' where we looked ahead - it's all happening now).
Mfg hires fewer people and can often be run 'lights out' today but still drives a lot of economic activity. More than most 'service providers' could ever imagine. But then most of them have never walked a factory floor in their entire life - have no idea what goes on there.
"Ford Pintos for everyone."
OCDan | 10.27.08 - 8:28 pm |
Great cars...after a 302/351 is installed. Nothing like high horsepower/short wheelbase cars.
Chris
Dirk writes:
Wouldnt it make more sense to buy newly issued common stock in GM, F and C than lend them $25 B.
Amen - then vote out the current managers... which explains why the current mgrs wouldn't favor a 'hostile take over' by Uncle Sam.
I apologize if someone has made this point already, but how is this not a bailout of Cerberus?
I see crispy&cole was on it.
Yeah but Ecuador's financial system is better managed than Icelands.
Did I just type that?
LOL. We have a candidate for thread win.
RANTS #468 - Rants - Autoextremist.com ~ the bare-knuckled, unvarnished, high octane truth...
Despite the lure of Chryslers alleged cash stash of $11.7 billion, there is no way GM could have unwound Chrysler at the rate necessary to achieve even a modicum of efficiency, let alone success. And they would have burned through much of that cash - and consumed much of their time - in trying to jettison Chryslers nonessential assets and on resolving union issues instead of trying to make the whole thing work. In other words, absorption of Chrysler by GM would have been an unmitigated disaster in real-time. Not to mention the obvious fact that GM cant even manage the brands they have now, so the whole idea was a train wreck of Not Good.
This guy is a bit over the top, but he's usually right. Worked in the auto industry for a few decades and generally knows what he's talking about.
sam dimond writes:
If you make $1 per second you can make 1 million dollars in just 12 days working non stop. To make a billion this way takes 36 years! Wow. A trillion would take the entire history of man. The words million, billion, and trillion should not sound so much alike; they are very different.
My old CFO made me read a book when I was a young analyst on his team called "Innumeracy". Can't remember the author but it talked exactly about people's inabaility to comprehend large numbers. Some newspaper reporters can be terrible at it as times.
I apologize if someone has made this point already, but how is this not a bailout of Cerberus?
Well, you see.... um ..... err..... well if you consider.... um .... errr ....
Let me get back to you on that, OK?
"IIRC, it was FINE Corinthian Leather!"
I think Ricardo said rich corinthian leather.
All the best.
.
sm_landlord writes:
OK, I'm sold. Let's buy Ecuador!
But when the Ecuadorians become Americans and want mcmansion, hummer, medicare and social security, the game will be over.
So this doesn't mean that people can buy more cars....
Maybe the theory is to use government pay assembly line workers to sit around and play cards.
So if 200,000 workers each 2 cars per month GM/Chrysler sales would be about 5 million per year...
Man those workers are going to need a bigger yard to park all that metal in...
A 30 year veteran will retire with 720 cars!!! Whoo Hoo!!
Hey, team!
If GM and Ford go bk, that will set off a ginormous tsunami in the credit default swap market. The amount of CDS written on the automakers dwarfs all the other projections in this thread. A default by any one of them would require massive selling of liquid assets to pay off the claims. Guess what the only liquid market is? That's right, Jas's Scam Market.
jkinthewoods
Thats why they must be slowly unwound...Over years.
C'mon Rich, stock touting is SOOOO 2007.
If I were GM, I would let C go bankrupt.........lots of assets and customers will become available.
This may happen since someone above stated Cerebus has has already partially gutted the co. Evidence of their style is the 25% salary layoff in 30 days.
Also, some people I know in the industry say C is experiencing major quality issues.
.
Not that I'm an expert in CDS, but I'm under the impression that most of them are written with a 5 year tenor, so we only have to hang on for a few years.
Corinthian leather:
YouTube
- 1975 Chrysler Cordoba
Nemo writes:
Why not just use the TARP money to buy Ford and GM cars?
It would probably lose less money for the taxpayer than what they are doing now.
Nemo | Homepage | 10.27.08 - 6:28 pm | #
Agreed. we need to be making something of real tangible value, not funny paper or more funny paper traders and funny paper salesmen.
the way the price of oil is falling is the real tragedy. think of the ruined portfolios.
what we need is subsidized suv's to drive up consumption and create jobs and profits in the oil industry. the multipliers will boost the whole economy...
oh, wait... hmmmm.
autoextremist quoted: In other words, absorption of Chrysler by GM would have been an unmitigated disaster in real-time. Not to mention the obvious fact that GM cant even manage the brands they have now, so the whole idea was a train wreck of Not Good.
In other words, you're saying, we'd better get ready for it, because it's GM management's Plan A.
(Hey, I'm from Detroit, I'm allowed to snark at GM. It's the worst-run domestic auto company [if you ignore Ford and Chrysler].)
Ford must be loving this...their competitor takes the hit to remove another competitor from the field.
Take a good look around and the next time someone tries to tell you a CEO for President is a good thing, kick him in the nutz.
CEO = good for me, shit for thee.
Ford is just as much garbage as the other two losers....they'll be next with their hand out...they are licensing Toyota first generation hybrid technology for their Ford Escape Hybrid....they don't have any technology of their own...
Auto CEOs and their American oil buddy conspirators just had to try to wring every last cent outta those SUVs while the rest of the world moved on. Now they are too far gone to come back.
MALICIOUSNESS AND ANGER: A REDUCTION
Great shame is due the corporations
That have bamboozled me--
So various their depredations
And truth the casualty
Whilst I am counseled, "to have patience"
Lest their demise I see.
"A corporation cannot die"
And yet it is a person!
The riddle leaves no wonder why
Do situations worsen,
Whilst, wounded, I sit idly by,
Malicious anger nursing.
There is no one accountable,
No recourse left at all,
Advantage insurmountable
They hold, while someone Small,
Upon no road to bountiful
A manôs reduced to crawl.
Great shame is theirs, and malice mine
To nurse--how I regret it--
But there were not an anodyne
(Besides, how could one get it!)
Save to the dustbin fate consign
Their lot--if I could let it!
.