MH writes:
We've got two Jeeps, so I hope somebody keeps making parts.
MH | 11.02.08 - 9:44 pm | #
They will - won't even cost more. Replacement parts are good business and very hard to 'offshore' due to the low and erratic volumes. Completely different game than 'production'...
I do some of that - for ag equipment guys not autos though.
lucifer writes:
As crappy as they are- they create more jobs directly and indirectly than GS.
Yes. I can also remember when they made a product worth buying. My grandfather had a Caddie that held up for decades. My Mom's Oldsmobile drove us to Honda.
At this point there are too many different cars for sale in the USA. Let Chrysler fail (with Jeep being the only line unique enough to be bought out). But then again... Jeep and Hummer are tougher sells right now...
I agree with the above comments that this will have repercussions through many a pension fund.
The problem with going BK is: who will buy a car from a BK maker? A filing kills hundreds of thousands of sales instantly and cripples a brand forever.
If the Big 3 thought they could pull through a BK they would have done it already, if for nothing else than to rid themselves of dealers. IMHO.
Bond Girl,
I thought that except it wasn't actually 0% chance a week ago. In any event, that was the chart that Bloomberg was describing in words.
Interesting to note that it's either a 1% or a 0.5% outcome, with little chance of .75%.
lucifer,
Most readers here already know about your sour attitude. But in the small chance that you do believe in meritocracy as you have implied, then I suggest you better yourself by reading "City of Words by Alberto Manguel" -- it comes in audio format too
Would UAW pensions/health care have any claim if BK happens? If so in theory, any real-world chance there would be anything left for them after bondholders?
.
How can the government possibly worry about automakers, production jobs, and the creation of tangible goods when bankers are in trouble! My god, how will they get their year-end bonuses and put yachts in the harbors!!!
.
Maybe you did not read what I wrote. If you had you would realize that the tone and direction of your response was predictable.
lucifer | 11.02.08 - 9:59 pm | #
BK might not mean as much job loss as you think - think airlines. Likely reorganize, rewrite contracts, wipe out equity (what little is left) and clip the hair of the bond holders & other creditors - be some cuts in headcount but not shut down a lot of production.
Remove some of the fixed cost (contracts & debt) and they should be more competitive - moves their break even down a lot.
On the other hand a merger could be quite painful 'job loss' wise... so I don't see our pols falling all over themselves to speed that along.
Welcome to Crony Capitalism. If Halliburton made cars they would be drowning in Government Cheese, same with Goldman Sucks.
Amazing that nobody seems to care about the in your face hillbilly corruption that has defined the Cheney/Bush disaster.
Take a look into any urban ghetto...that is your future without high paying union jobs. We can't all be derivatives traders!
PeakVT writes:
The problem with going BK is: who will buy a car from a BK maker? A filing kills hundreds of thousands of sales instantly and cripples a brand forever.
If the Big 3 thought they could pull through a BK they would have done it already, if for nothing else than to rid themselves of dealers. IMHO.
PeakVT | 11.02.08 - 9:52 pm | #
Not if reorged - see airlines - big ones like United & American. Depends on the reorg but isn't necessarily the end of the world.
Delusional Canuck writes:
The economy of canada will not be affected by the GM / Chrysler bankruptcy. We will keep those jobs through magic...
Delusional Canuck | 11.02.08 - 10:06 pm | #
If GM were to enter BK,
- gets to forego payment of fixed interest rate debt
- gets to borrow against unencumbered assets in a special type of super senior debt
- BK judge gets to modify debt and pension obligations, often negotiated
If GM could hide in BK for 2 years it would slow the cash burn, and also give the government an opening for favourable lending (first in line) and might make economic sense
Any way you cut it there will need to be plant closures. 17mn annual sales are not in the near future. 12mn is sustainable and doesn't depend on people junking 4 year old cars.
Will be interesting to see what happens with South Korea. Their citizens don't like the FTA at all, yet they still get to have effectively one way trade in autos (and some other sectors) which has a good chance of being changed
Delusional Canuck writes:
The economy of canada will not be affected by the GM / Chrysler bankruptcy. We will keep those jobs through magic...
Delusional Canuck | 11.02.08 - 10:06 pm | #
lucifer | 11.02.08 - 10:11 pm
I'm not wearing pants, and I'm playing with myself!
i know it is totally un-American to think this way, but i have long had a suspicion that the need to have a new car in every garage on a three year schedule would eventually break the automakers. who can keep up?
i have a 2002 volkswagen, and the amount of trash mail i get from VWOA practically begging me to come look at the new models is astounding. OTOH the 84 benz sits quietly in the garage, and never fails to start.
The economy of British Columbia is not a giant ponzi scheme. Tourism will be unaffected by a severe global recession. Construction will be unaffected, because the building boom was not based on speculation. The number of government jobs will keep on increasing even if the tax revenue drops, which it will not. Our forest industry is going strong, demand is increasing..
Folks are going to learn real quick how bad this whole mess really is besides the ones that open their 401-K statements soon enough. I talk with people who still think this will just be a moderate recession. I dont bother trying to explain because they are mostly clueless!
Delusional Canuck writes:
The economy of British Columbia is not a giant ponzi scheme. Tourism
will be unaffected by a severe global recession. Construction will be unaffected, because the building boom was not based on speculation. The number of government jobs will keep on increasing even if the tax revenue drops, which it will not. Our forest industry is going strong, demand is increasing..
Delusional Canuck | 11.02.08 - 10:15 pm | #
Outsider,
The autos will be bailed out. Bush is basically telling them to finish spending that first $25bn loan so that they can come back to the next president
Even if they aren't bailed out, someone will buy the plants/brands and the factory jobs will stay (although I won't speak to the CAW/UAW pensions)
I hope that you are right, d-, that it is a given that Cerberus goes under.
The Duke Dummy CEO has got to go. That he could not see this downturn coming -- there has got to be a decent staff economist at GM who said, 'Hey, boss, big problem ahead' -- and did not work the problems -- e.g., bloated union structure -- hard during good times is a travesty.
Comrade-Dope jg,
There have been a few articles about the flaws in company board structure.
Basically this is one more example of, "be the one to speak up and lose your bonus, be quiet and you'll get the bonus and then some before passing it off to your successor"
Too bad Icahn has lost most of his money, he's now trying to beef up shareholder rights (don't know his specifics, but can't be bad in general)
Wow, a decision by the Bush administration I approve of. If there are any benefits to a merger GM can buy the relevant assets from BK. Time to start the PBGF bailout though - I expect they can't even handle Chrysler going under.
REBear,
Despite diversifying their factory locations over the last 30 years, the Japanese automakers are still significantly exposed to the Yen.
All the dies for the big panels are produced in Japan and then shipped out. A good number of parts or completed cars are exported from there as well.
Even with that exposure, they have really nice supply chains. They'll be fine (well they are conglomerates, Yamaha's music division was depending on continued piano sales to China for example)
Yep, EHP, the eternal agency problem: owner-managers run companies different (and better, more often than not) than hired guns/hired managers run companies.
Yep, when it is someone else's money on the line, folks are a lot looser with it than if their own money was on the line.
That is the great thing about a private Swiss bank: the family owns 100% of the stock, or it is an unlimited partnership. The owners are in the same boat as my money is.
For those who are advocating bankruptcy for GM, may I humbly point out that the 2005 bankruptcy reforms have not been good for large companies in bankruptcy. Liquidations are more likely now, and I am not so sure that GM would survive attempts to reorganize under this draconian law. It certainly has been bad for large retailers and Lehman. See <a href="http://www.ft.com/cms/s/0/85790440-a6c3-11dd-95be-000077b07658.html>Financial Times for some background on how the law precipitated some of this crisis.
Doc at the Radar Station writes: Maybe this will be the big "credit event" test case, that will bring out the government's long worked on plan to regulate CDS.
Yeah, with an estimated $1T of CDSs written against a GM default, getting to a point where GM could take advantage of the benefits of BK without wrecking the rest of the economy will be quite a challenge.
(Yet another nasty little side-effect of CDSs -- they neutralize the effectiveness of proven techniques, such as BKs, in dealing with insolvencies during a downturn.)
Comrade Dope jg,
Private Swiss bank owned by a family.... well maybe so long as you don't depend on them to run your tax avoiding trust companies like LGT Group run by a certain Lichenstein royal family
I know the Swiss have a great reputation, but I cannot get past the threat UBS or CS poses
Comrade-Dope jg (jg) writes:
Topher, I'm sending my money to Switzerland, where it will be safe and grow tax-free. I'll wire in money stateside as needed.
Think about Switzerland carefully; they may be Iceland writ large.
WSJ writes that sales of SUVs are up now that gas prices are down. We really like our big rigs.
Well, they've already been built. We may as well use them. For short trips, like the iconic soccer practice, the mileage is of no significant consequence. Also, if they're full they're reasonably efficient - and that does happen; you should have seen my mom's SUV when we went for Christmas at my brother's place!
Not if reorged - see airlines - big ones like United & American. Depends on the reorg but isn't necessarily the end of the world.
It's unwise to disagree with you, dryfly, but I will. The airlines are more like a utility. Nobody gets judged by what airline they use, and you can always use a different one next time if you don't like your experience.
Auto owners have a much longer relationship with their vehicles, and the perceived image of the brand is very important to most drivers. Resale value and warranty backing are also important. All three would suffer substantially in a BK. Remember that the American brands already have rather negative image outside the Midwest, and non-fleet sales of foreign brands are already over 50% in many areas.
A BK and re-orged GM or C would continue and could come back. But they would be much smaller than their current size for years and would have to start at the value end of the food chain, like the Japanese and Koreans did. JMHO.
Anyway, I'm out. Sockpuppetry is rather boring to read.
No President, R or D will allow any US automakers to go bankrupt. Reduction or loss of pensions, Tier suppliers wiped out, stocks and bonds zeroed out. Whatever party had the White House when that happened, their party would lose Mi., Oh., Pa. voters for a generation
EH, soory bout that eh, didn't mean to disturb ya!!! We'll be goin now..
Conjure's Bodyguard
I do enjoy Canadian/white-guy jokes. No problem with substantiated criticism either. But a certain unnamed poster decided to go nuts after I suggested he/she read a book, so I will go back to ignoring the noise. My apologies to everyone for that nutbar earlier
7] Unwillingness to take criticism. Strong feminine passive-aggressive tendencies.
Now go away troll.
EvilHenryPaulson writes:
I do enjoy Canadian/white-guy jokes. No problem with substantiated criticism either. But a certain unnamed poster decided to go nuts after I suggested he/she read a book, so I will go back to ignoring the noise. My apologies to everyone for that nutbar earlier
If GM debt really has 1 trillion in CDS contracts, there's a staggering market manipulation opportunity, becauuse it only has 43 B in debt. Issue a big pile of CDS and if the company goes under buy the bonds at par. Anybody got Porsche's number?
It's unwise to disagree with you, dryfly, but I will.
That's fine - I'm often wrong (probably colossally wrong on Tuesday night but what can ya say)...
My take on a Big Three BK is the judge would be keenly aware of all the issues you described and have them very quickly into reorg & strong hands afterward. Like in DAYS to reorg.
Secondly if I understand 'warranty' correctly - most of those were sold off too - sort of like MBS. So that shouldn't be a huge issue IF there is a viable company to service the vehicles (warranty being handled like it was an insurance or reinsurance claim).
BK judge would wade through all of that pretty quick I think - but day one would be get reorg up and running.
I would say that continental European banks, up until recently have had a more solid balance sheet on the asset side but disastrous leverage and borrowed deposits. ...although they also have that little AIG insured assets problem...
Whereas American (non-investment) banks have good leverage levels, but overvalued assets
That only holds until summer 2008, since then the whole world has abolished accounting standards
EvilHenryPaulson writes: I believe the Texas plant for the Suburban platform added another shift, or something to that effect to increase production. They're just following their nose right now
Why can't we toss these Cerberus vultures aside using any number of tactics and take control of Chrysler for little or no expense. Then sell pieces of it off. The sale proceeds would go to tide laid-off Chrysler workers until the industry recovers. Cerberus vultures would be roughed up and told to get lost.
Fair Economist writes:
If GM debt really has 1 trillion in CDS contracts, there's a staggering market manipulation opportunity, becauuse it only has 43 B in debt. Issue a big pile of CDS and if the company goes under buy the bonds at par....
I imagine that the BK creditor negotiations will be a lot like checking into the hospital for major surgery and discovering that ALL of the staff have taken out life insurance policies on you betting that you will expire.
Anonymous 10:47, that is mostly what will happen if Chrysler BKs, except that there's not going to be any money to help current workers - the past workers will need every drop of blood left in the corpse, and more.
Endless discussion of the fire burning around the US. By the time we get around to putting it out there will be nothing worth saving. Just as well. See ya'll in the soup line. Be fun talking to everyone in person.
NorkaWest - No kidding on the moral hazard issues with CDS. I expect we'll see some interesting indictments out of the current mess in a year or so when the investigations are done.
Fubar & Wass Llc writes: Someone posted on their blog an analysis on that they did for the Iceland government last spring. I'll try to find it.
Nice linky. But I was really pissed off to read from the article:
It is this version of the paper that is now being made available as CEPR Policy Insight No 26. In April and July 2008, our Icelandic interlocutors considered our paper to be too market-sensitive to be put in the public domain and we agreed to keep it confidential. Because the worst possible outcome has now materialised, both for the banks and for Iceland, there is no reason not to circulate the paper more widely, as some of its lessons have wider relevance.
So, back when it could have helped a lot of people get their money out of Iceland, they hid the results; but now that the losses are here, it's "safe" to release? Feh. Thanks for nothing, stinking academics. Didn't want to sully your "academic exercise" with actually "helping" anyone, huh? Jerks.
The banks are going to continue to mail their bills so to arrive after the due date and then hit you up for late fees. (thank you formerly san francisco bank now run by white trash tarheels)
In case you missed it, the cc companies are going to write off some of the debt, in hoping that it doesnt have to incur massive charge offs. Then it will realize its moral hazard error, and run crying to the US gov for relief.
Honestly, I dont think the problem was with the suv's.
I think the problem is with the $50,000 suv's.
People could afford lower gas mileage, the diff isnt all that great anyway, but they were stretched to limit already on payments, existing on HELOC, and the gas price spike pushed them over.
18 or 22 mpg hwy, isnt that big of a difference, unless $1000 - 2000 /yr is a lot of money to you.
I think the consumers pretending to be rich, wanting vehicles with heated leather seats. CD changers, DVD screens, etc just eventually found out they couldnt afford it.
The real problem is we need a $20,000 tahoe that gets 18 mpg, not a $50,000 one.
My old Z71 truck gets 16 mpg on hwy, doesnt bother me. Its 14 yrs old, and I havent had a car note of any kind in 8 yrs. Wont buy a new one at the prices they want either.
the problem with the SUVs is that they were increasingly being purchased by people who could not afford them. If you have access, you can look at the buyer profiles of the expensive SUVS, and you'll see over the past few years that low income buyers became prevalent. The only way that worked was with ridiculous financing terms, and or HELOC/cash out action. Game over for a huge chunk of that market, and it aint coming back. The gas prices issue really killed it, but even when gas prices go back down a but further, it still isnt the operating costs that sink those vehicles.
Don't the jobs have to go anyway? The industry suffers from over capacity. Whether or not there is a merger, the industry needs to consolidate which means fewer jobs. Any government action to preserve them is just kicking the can.
It's been a long time since the Bush Administration has stood on principle. If they are doing that now and recognizing the reality of the automobile business then they deserve a pat on the back.
I think the gov's refusal on the $ is for a few reasons. 1) they need to conserve it for banking 2) giving it isnt going to change the insolvency issue, but merely postpone it 3) doing nothing insures the blame goes to the next administration 4) avoids the appearance (and more) that they are doing political friends favors (see Cerberus) 5) guarantees that the next administration will do said favors for them, otherwise get the charge of letting a too big to fail go bankrupt 6) could potentially score points in the election.
Mexico has open warfare in many of their states. Mainly drug related. What happens when US drug users can't afford drugs? Does Mexico's real economy crumble? Are we watching a consolidation of power? Petras oil fields are in depletion and will have diminishing returns, drugs will be nationalized? What happens when the US has reduced law enforcement and Yankee ingenuity turns even more towards the criminal?
mb writes:
Honestly, I dont think the problem was with the suv's.
I think the problem is with the $50,000 suv's.
Really.
When we were kids & somebody got a 'new' truck - those were the SUVs of the day - you'd go out to a quarry or sand pit and get drunk & dent it all up. Throw big rocks in the back - drive around like maniacs... generally have a good time.
Wouldn't destroy the thing just put enough nicks in it that forever after it would be treated like a 'truck'.
Now how many forks are going to do that with a $50K SUV on a seven year 'mortgage' or worse yet - a lease?
You won't even drive the thing on a dirt road let alone off road - why own one?
I got the ear of a Detroit SUV designer a few years ago and really let him have it... told him I wanted the 'old jeeps' where there were holes in the floor so you could 'pull the plug' and hose them out. No carpets, no cloth, no leather - sealed electronics like a boat - want to be able to spray the whole thing down.
I wanted racks on top that that hold more than 90 lbs - aim for 500 lbs. And no more plastic bumpers - I want bumpers I can weld on and bump into stuff with.
And big effing skid plates under the tranny. I've trashed trannies hitting rocks - they have eyes.
And not be some stoopid Hummer off-road pimp mobile - just basic & solid and affordable & reliable - sell the bells and whistles to some suburban soccer mom.
Poor guy - we were on a ferry to the outer banks and I just followed him around ranting like he had control over what his masters told him to design.
But it was a once in a lifetime chance to tell designers what I really wanted & I wasn't going to miss it even if it wrecked his vacation.
For those looking for an overseas bank but leery of Switzerland, you might be well served by giving some close attention to Singapore banking laws. And the relationship that some of the foreign banks in Singapore have with their "mother" bank. Citi now has an entity incorporated in Sing. but I do not know the details.
I hear you dp - 50k car 4 years at 6%, runs you 1200/mo with nothing down. OUCH! The funny thing is, that is the same monthly payment nearly exactly of a median priced US home on a 30 yr fixed.
dryfly-A few years ago NYT's Keith Bradsher wrote about the rise of the SUV. Be assured that the engineers making these things don't like the customers at all. They know the customer is mean and cowardly.
barnard, it is just a part of their trying to prop the yen directly, thereby propping Japanese exporters indirectly, and doubly indirectly buoying stocks on Nikkei. Which in turn helps the next day futures for US stocks, and so on and so on...
Just bought a Subaru Forester XT, Motor Trend's SUV of the Year for $25K and gets 20-24 mpg. That's the Suburban of the future. A great crossover vehicle.
Cars that don't exist burn no fuel at all, so I assume this loan will not be spent on actually building cars. It doesn't get more fuel-efficient than that.
Just bought a Subaru Forester XT, Motor Trend's SUV of the Year for $25K and gets 20-24 mpg. That's the Suburban of the future. A great crossover vehicle.
Lone Ranger | 11.02.08 - 11:39 pm | #
My in-laws have one... clearance is low & the oil pan & tranny are exposed. You can get a skid plate I guess but I'd wreck one pretty fast if I had one & really went off road.
They work pretty well as a 'station wagon' though. Drive in snow well too.
Personally - any place I'd drive a Forester I'd also drive my 50 MPG Jetta so again ask the question - why own the Forester?
I still believe that local inventories of vital commodities will have to rise significantly because of the huge disruption to the supply chain. Combined with bankruptcies of producers or simply much lower production, I expect it to get interesting within 6 month to a year.
... A collapse in the trade of raw materials such as grain and iron ore, after years of frantic activity, is causing havoc. The Baltic Exchange Dry Index, which measures the price of voyages and the cost of chartering vessels, has plummeted. Rates for the largest transporters, known as Capesize, peaked in May at $230,000 a day. It is estimated that the daily cost of running the ships, including depreciation, is about $15,000 but at the end of last week, rates had fallen to $5,982 a day. ...
Volumes traded in the credit derivatives market have fallen by $25 trillion in 2008 as banks and investors simplified their positions by cutting down on contracts that offset each other, according to the International Swaps and Derivatives Association.
The effect of the reduction likely reduces total volumes to $46.95 trillion, before accounting for new trades made since July 1.
ISDA said last month that volumes had dropped 12 percent in the first half of 2008 to $54.6 trillion, from $62.3 trillion at the end of 2007.
How come nobody can explain whether these CDS will all cancel each other out, or whether they will turn into a financial weapon of mass destruction? I haven't yet found anything solid. Is it because ya'll are secretly part of the racket? Just sayin.
In his presentation to investors, held at New York's Metropolitan Club, Mr Sullivan praised the unit's models as "very reliable" in analysing many mortgages, saying they had helped give AIG "a very high level of comfort".
Mr Gorton was introduced. "The models are all extremely simple," he said. "They're highly data intensive." He said he didn't rely on the default-risk predictions of credit-rating services, and instead came up with his own estimates of what was safe enough for AIG to insure.
Mr Cassano, the unit's head, told investors: "We believe this is a money-good portfolio....As Gary said, the models we use are simple, they're specific and they're highly conservative."
Forgive me a late-night, off-topic, trading-related post.
The S&P 500 enters this week sporting a PE ratio (ttm) of over 21, according to the WSJ Market Data Center.
That's 30% over the long-term average of about 16. More importantly, it's more than double the PE ratio that bear markets usually sink to at their bottom (usually below 10, and as low as 6).
I'm noticing complacency, and bottom calling in the press.
Good time to make money on the short side, no? Thoughts?
I'd make writing or buying CDS illegal, like the gambling that is. Gambling belongs in casinos and betting parlors, not in banks, insurance companies, or any other financial institutions.
Good time to make money on the short side, no? Thoughts?
Bear-market rallies generally last more than a few days. Late December or early January strikes me as a much more reasonable time to reload for the downside.
fyi: I haven't had a post in a couple of hours or so, just checked in before bed. I guess I don't have much to say, it seems satan/lucifer once got splashed by a car with Canadian plates at some formative point in their life.
Night all, can't wait for registered posts
Thanks barnard, I do try to make lemonade out of a lemon by interpreting satan's attention as either a kind of jealousy, or opinion that he/she thinks Canada is really really important.
I will just be glad when the threads are easier to catch up o
But AIG didn't anticipate how market forces and contract terms not weighed by the models would turn the swaps, over the short term, into huge financial liabilities.
He presented a 92-page paper, "The Panic of 2007," which explained how the financial markets came unglued after a series of unexpected events, such as when clients of financial firms suddenly sought to reclaim assets put up as collateral.
Regardless of the field, math models are always only as good as the inherent assumptions. It floors me to no end to read about smart people that don't ascertain the fundamental assumptions the models are based on.
When reviewing a colleague's spacecraft thermal analysis, that's the first question that has to be addressed. Reviewing model fidelity and solution methods (analytical, finite difference, blablabla) comes next since there are plenty of ways to screw that up. And usually a good thermal engineer will keep the limitations of the analysis results front and center.
When I was a co-op student, my lead engineer hammered into me that all math models are wrong until proven correct. That was reinforced almost 15 years later while working on my msme by my computational fluid dynamics course professor. I unfortunately missed the class where his phd student presented their work, which was modeling blood flow through the heart and heat pumps. I would have loved to know how they validated their models.
OK but I haven't lost very many bets this year going back to my Giants in January. Don't underestimate the system. The trend is toward more independents every election.
ShortCourage, when the "risk-free" return available is so low like it is right now, a lot of people are willing to pay a higher premium for equities. If you can hold onto it long enough for interest rates to go back up it would probably pay off, or if you expect earnings to collapse that would do it also. How likely either of those two outcomes are or on what timescale, I couldn't begin to guess.
Applying mathematical models to future human behavior is wrong to begin with.
I can appreciate trying to develop a model that explains a dataset and using it to guide your investments and bets. But like the safety range officer, you better have your finger on the button in case the trajectory goes out of limits.
dryfly, your description of SUVs reminds me of Jason Kelly's book Neatest Little Guide to Personal Finance. He describes a real SUV as something that can pull stumps out of the ground. I always remembered that description.
Anyway, hardly what today's soccer moms think of as SUVs.
Better pay attention to the Daewoo tale, if you are making payments on a Chrysler product!
When that Daewoo deal folded, there were no more body parts available (fenders, bumpers, and such). Sounds like no big deal, right?
Here's the problem; there you were financed, with requirement for full coverage insurance. When the insurance company couldn't get parts to fix your car, they canceled you. Then your note became "due and payable" because you breached the contract.
No one would write insurance (that was affordable) and NO car dealer, of any brand, would accept your Daewoo as a trade-in. Believe me; if you were a salesman, and screwed up and wrote an appraisal on a Daewoo trade-in, your job was HISTORY!
The consumer gets screwed big time, when something like this happens. Hopefully, the banks will be more tolerant this time.
hiker90,
Thanks for adding value! Recently I've had to sit through way too much CFD and thermal/structural analysis, way over my head. Mostly I just sit in the meetings and try to figure out wtf the main point is... but sometime's it's very hard as its always the CFD folks talking about their stupid boundary layers and how their assumptions of a turbulent boundary layer might not be right... and how we need to go from 2d to 3d analysis to understand what's going on... all based on a limited amount of data... so let's figure out how we can run a test to verify the analysis... oh yeah... very expensive hardware...
Of all the stuff I've worked on picking up in the real world (ie. out of college) I think CFD is the hardest thing to understand. Of course I've never taken a course in CFD... nor was I a math major... just a circuit/computer engineer.... and mostly that's the title on my degree... mildly practiced it outside of school.
barnard writes:
Mexico has open warfare in many of their states. Mainly drug related. What happens when US drug users can't afford drugs? Does Mexico's real economy crumble? Are we watching a consolidation of power? Petras oil fields are in depletion and will have diminishing returns, drugs will be nationalized? What happens when the US has reduced law enforcement and Yankee ingenuity turns even more towards the criminal?
As an expat living in Mexico, let me give you my view on this:
What happens when US drug users can't afford drugs? If there's a market, someone will figure out how to supply it. Most of the fighting is between rival gangs that want to control a particular territory.
Does Mexico's real economy crumble? I doubt it. Drug transportation is not the only industry here. After emerging from the 1994 peso crisis, Mexico diversified its economy, and put in place a number of economic and political measures to stabilize the country. Although still too dependant on oil, maquiladoras, and expat remissions the domestic economy is reasonibly sound.
Are we watching a consolidation of power? No I don't think so. Corruption has been a part of the way of life here since the Spanish ruled the country. The drug gangs may have politicians and police on their payrolls, but there are plenty of other interests as well that have them on their payrolls.
Petras oil fields are in depletion and will have diminishing returns, drugs will be nationalized? ¿WTF? I don't see any correlation here.
What happens when the US has reduced law enforcement and Yankee ingenuity turns even more towards the criminal? In my view, the problems in Mexico will diminish considerably once the US can no longer afford to finance the police state. Mexico drug lords are basically trafficers rather than producers. The wars between gangs are over a limited number of ports of entry (Laredo, El Paso, Tijuana, Nogales Matamoros). The problems here started when the Mexican police began taking out the top gang leaders, leaving a power vacuum that other gangs tried to move into. Having a stable leadership structure in the cartels with defined areas of control will end the fighting. I think they really would rather focus on their business rather than killing the competition.
From what I have seen in the MSM, both American and British, is a tendancy to sensationalize the situation with the drug gangs. I have lived in both Cuidad Juarez and in Monterrey. The cities do not revolve around the drug gangs. Most economic activity is based on manufacturing and commerce and not on drug trafficing.
its always the CFD folks talking about their stupid boundary layers
LOL. Plenty of times I've been that PITA trying to communicate the root cause (our ignorance, lack of modeling expertise, uncertainties with known solution methods, uncertainties with values of input parameters) of the analysis uncertainties.
Hopefully you are working with cfd/thermal/stress analysts who can think like a designer and keep the focus on wtf the main point is. Sometimes analysts get wrapped up in their world of math and forget the math is only a tool to help design good hardware.
No doubt you are aware, but testing expensive hardware is loaded with risk and has to be done oh so carefully. That in turn jacks up project costs.
I hope it turns out for the better. Good luck.
Best,
Outsider writes: Forgive my ignorance here, but does this mean we're NOT bailing out the auto industry?
Don't know. But, what prevents any bank from lending GM whatever it wants? Extract fees and bonuses. Then, the bank just shuffles the note on over to a handy Fed window.
At Moosehall: three Fords, no mortgage debt, all paid, insignificant consumer debt, and a lot of cash in the bank. I don't want to tell you, and you don't wanna know, how much.
And everybody told us we were making all the wrong choices!
America's largest ungulate, the one the French trappers called l'orignal will endure! Hell, he might even prevail.
At any rate, my wife will be able to enjoy herself after I throw those final antlers, and my dewlap quivers no more.
What happens when US drug users can't afford drugs?
From my extensive experience with Mexican drug sellers, I really doubt that will happen. They will reduce the price. They are, as a rule, quite reasonable.
There are some huge problems with the make-up of Mexican heroin (it is not a pure product, and is not injectable but Americans will do that, and burn big holes in themselves, called abcesses) but price is not one.
Nemo
2nd
time for a rally I guess then right?
Why not?
But bailing out GS was a good idea!!
I think GM and Chrysler both might go bankrupt.
save some bailout money for the states
does a few hundred thousand layoffs have trickle down effects.? When we need 250,000 new jobs per month just to keep up?
Market is ignoring all the bad news now,k but not for long.
As crappy as they are- they create more jobs directly and indirectly than GS.
We've got two Jeeps, so I hope somebody keeps making parts.
Sheila has dibs to spend the money on loan modifications. Apparently distressed home owners get in line before distressed auto makers.
I still think everything is up in the air at least until Wednesday.
Well, this should get very interesting....
EHP,
I do not think they are contradicting that chart. I think they were refering to the chances versus the 24th (?)
Who is Nemo???
All you guys seem to want to kiss his ass or suck his you know what.
Hold on for Tuesday, here comes Government with a capital G. O is the new W. It's gonna be a looong winter...
we're freaking doomed...but futures are up. Nice.
they should go bankrupt.wipe out debt and equity holders.
Wait, a lot of pensions hold GM im sure. OOh unintended consequences.
damned if they do or dont. Govmt doesnt want to facilitate massive layoffs, coming either way though.
Problem is, GM + shit = GM shit.
Where is Nemo? He has missed many opportunities to be first of late....
Speaking of MIAs...where the hell is Conjure?!
I think GM and Chrysler both might go bankrupt.
sue | 11.02.08 - 9:43 pm |
I think so too.
Good stuff here
New Car Reviews, Ratings & Pricing, Auto News for New Models
GM to big to fail, million pensioners on the public dole, still probably be cheaper than the AIG loans maybe on par with the IRag war.
MH writes:
We've got two Jeeps, so I hope somebody keeps making parts.
MH | 11.02.08 - 9:44 pm | #
They will - won't even cost more. Replacement parts are good business and very hard to 'offshore' due to the low and erratic volumes. Completely different game than 'production'...
I do some of that - for ag equipment guys not autos though.
President-elect Obama. Will he be transformational leader or embrace corporatist values?
lucifer writes:
As crappy as they are- they create more jobs directly and indirectly than GS.
Yes. I can also remember when they made a product worth buying. My grandfather had a Caddie that held up for decades. My Mom's Oldsmobile drove us to Honda.
At this point there are too many different cars for sale in the USA. Let Chrysler fail (with Jeep being the only line unique enough to be bought out). But then again... Jeep and Hummer are tougher sells right now...
I agree with the above comments that this will have repercussions through many a pension fund.
Got Popcorn?
Neil
Obama will definitely step in to save GM ... way too many union jobs would go down with that sucker.
The problem with going BK is: who will buy a car from a BK maker? A filing kills hundreds of thousands of sales instantly and cripples a brand forever.
If the Big 3 thought they could pull through a BK they would have done it already, if for nothing else than to rid themselves of dealers. IMHO.
The thing about GM (and Chrysler) is you gotta have a union wage or better to buy one. That's what's killin' 'em.
Bond Girl,
I thought that except it wasn't actually 0% chance a week ago. In any event, that was the chart that Bloomberg was describing in words.
Interesting to note that it's either a 1% or a 0.5% outcome, with little chance of .75%.
lucifer,
Most readers here already know about your sour attitude. But in the small chance that you do believe in meritocracy as you have implied, then I suggest you better yourself by reading "City of Words by Alberto Manguel" -- it comes in audio format too
Obummer or MacCaddie aint gonna save GM!
As I said..
7] Unwillingness to take criticism. Strong feminine passive-aggressive tendencies.
lucifer writes:
Go away jackass, you stink.
I just hope Chrysler takes damn Cerberus down with them.
As I said..
lucifer writes:
As I said..
7] I am unwilling to take criticism. Strong feminine passive-aggressive tendencies.
Would UAW pensions/health care have any claim if BK happens? If so in theory, any real-world chance there would be anything left for them after bondholders?
Lucifer Chinese interest rate is 6.66. Hmm what ya think?
China will become a world power, but India is the world's next super power. America will grow to serve them both
Topher writes:
Lucifer Chinese interest rate is 6.66. Hmm what ya think?
That is high for Chinese type rate settings
Topher writes:
Lucifer Chinese interest rate is 6.66. Hmm what ya think?
Topher | 11.02.08 - 9:56 pm | #
Go away you troll
lucifer writes:
China will become a world power, but India is the world's next super power. America will grow to serve them both
Topher writes:
Lucifer Chinese interest rate is 6.66. Hmm what ya think?
lucifer | 11.02.08 - 9:57 pm | #
China already is a world power. 666
EHP,
Maybe you did not read what I wrote. If you had you would realize that the tone and direction of your response was predictable.
.
How can the government possibly worry about automakers, production jobs, and the creation of tangible goods when bankers are in trouble! My god, how will they get their year-end bonuses and put yachts in the harbors!!!
.
lucifer writes:
EHP,
Maybe you did not read what I wrote. If you had you would realize that the tone and direction of your response was predictable.
lucifer | 11.02.08 - 9:59 pm | #
You did not read what you wrote?
lucifer - nobody has time for your crap. Grow up or go away.
The only way to break their franchise agreements is bankruptcy.
BK might not mean as much job loss as you think - think airlines. Likely reorganize, rewrite contracts, wipe out equity (what little is left) and clip the hair of the bond holders & other creditors - be some cuts in headcount but not shut down a lot of production.
Remove some of the fixed cost (contracts & debt) and they should be more competitive - moves their break even down a lot.
On the other hand a merger could be quite painful 'job loss' wise... so I don't see our pols falling all over themselves to speed that along.
I'm thinking Capital One, anyone else?
Well the Chinese have an interest rate of 6.66, but the US treasury is run by Hank Paulson and his minions.
Not sure where this is coming from?
eco-nut writes:
lucifer - nobody has time for your crap. Grow up or go away.
eco-nut | 11.02.08 - 10:01 pm | #
.
Hey, isn't this the part where Sir Larry Wildman steps in and saves GM?
.
Comrade-Dope jg (jg) writes:
I just hope Chrysler takes damn Cerberus down with them.
Comrade-Dope jg (jg) | 11.02.08 - 9:56 pm | #
I think that is a given.
Either in actuality or bloodies them so badly their 'principals' want out. Result is the same - dead dog.
The US has the flu and the rest of the world is catching pneumonia. Not a good thing.
Maybe this will be the big "credit event" test case, that will bring out the government's long worked on plan to regulate CDS.
The state of the canadian economy is strong. Our banks are responsible. Our economy has decouple from the USA. All is well..
time for our daily banning...
Welcome to Crony Capitalism. If Halliburton made cars they would be drowning in Government Cheese, same with Goldman Sucks.
Amazing that nobody seems to care about the in your face hillbilly corruption that has defined the Cheney/Bush disaster.
Take a look into any urban ghetto...that is your future without high paying union jobs. We can't all be derivatives traders!
PeakVT writes:
The problem with going BK is: who will buy a car from a BK maker? A filing kills hundreds of thousands of sales instantly and cripples a brand forever.
If the Big 3 thought they could pull through a BK they would have done it already, if for nothing else than to rid themselves of dealers. IMHO.
PeakVT | 11.02.08 - 9:52 pm | #
Not if reorged - see airlines - big ones like United & American. Depends on the reorg but isn't necessarily the end of the world.
I always got the impression the primary reason for concern was the swaps written against GM debt.
Anyone have any idea what the notional value might be?
The economy of canada will not be affected by the GM / Chrysler bankruptcy. We will keep those jobs through magic...
The economy of Ontario is not dependent on automobile production. It is also not dependent on making stuff for the US.
....I know Packards, Studebakers, and Hudsons are a REAL good buy nowadays........
What the f**k happened to the number of visitors online counter?
The name says it all folks.
Delusional Canuck writes:
The economy of canada will not be affected by the GM / Chrysler bankruptcy. We will keep those jobs through magic...
Delusional Canuck | 11.02.08 - 10:06 pm | #
I'm not wearing pants, and I'm playing with myself!
What the hell is going on with Lucifer?
CC
GIVE ME BACK MY SON!!!!
If GM were to enter BK,
- gets to forego payment of fixed interest rate debt
- gets to borrow against unencumbered assets in a special type of super senior debt
- BK judge gets to modify debt and pension obligations, often negotiated
If GM could hide in BK for 2 years it would slow the cash burn, and also give the government an opening for favourable lending (first in line) and might make economic sense
Any way you cut it there will need to be plant closures. 17mn annual sales are not in the near future. 12mn is sustainable and doesn't depend on people junking 4 year old cars.
Will be interesting to see what happens with South Korea. Their citizens don't like the FTA at all, yet they still get to have effectively one way trade in autos (and some other sectors) which has a good chance of being changed
ucifer writes:
The name says it all folks.
Delusional Canuck writes:
The economy of canada will not be affected by the GM / Chrysler bankruptcy. We will keep those jobs through magic...
Delusional Canuck | 11.02.08 - 10:06 pm | #
lucifer | 11.02.08 - 10:11 pm
I'm not wearing pants, and I'm playing with myself!
someone is impersonating Lucifer. That's not right
i know it is totally un-American to think this way, but i have long had a suspicion that the need to have a new car in every garage on a three year schedule would eventually break the automakers. who can keep up?
i have a 2002 volkswagen, and the amount of trash mail i get from VWOA practically begging me to come look at the new models is astounding. OTOH the 84 benz sits quietly in the garage, and never fails to start.
auto leasing was the final
nail in the coffin of GM
The economy of British Columbia is not a giant ponzi scheme. Tourism will be unaffected by a severe global recession. Construction will be unaffected, because the building boom was not based on speculation. The number of government jobs will keep on increasing even if the tax revenue drops, which it will not. Our forest industry is going strong, demand is increasing..
Folks are going to learn real quick how bad this whole mess really is besides the ones that open their 401-K statements soon enough. I talk with people who still think this will just be a moderate recession. I dont bother trying to explain because they are mostly clueless!
lucifer: you have been hit by the GreaseMonkey.
Everyone else, please let me know when or if he has anything constructive to say.
Eater-Honda does the same. Periodically send a letter how they will pay top dollar for my car if I come into the showroom
Born and bred Canadian dope
Delusional Canuck writes:
The economy of British Columbia is not a giant ponzi scheme. Tourism
will be unaffected by a severe global recession. Construction will be unaffected, because the building boom was not based on speculation. The number of government jobs will keep on increasing even if the tax revenue drops, which it will not. Our forest industry is going strong, demand is increasing..
Delusional Canuck | 11.02.08 - 10:15 pm | #
The Canadian economy is not going down like the Titanic, it is soaring like the Hindenburg.
Stop it you racist pigs, you think you're better than me but you're not
Now you see why I hate white people and their sense of superiority. It doesn't matter if they're canuck or american, they are good for nothing
Just on local news @ 10 .Airlines are going to charge more for window seat
The economy of Quebec is not based on government handouts. It is based on the hard work and competence of the québécois.
Forgive my ignorance here, but does this mean we're NOT bailing out the auto industry?
That's a relief. At least we're not bailing out someone.
Outsider,
The autos will be bailed out. Bush is basically telling them to finish spending that first $25bn loan so that they can come back to the next president
Even if they aren't bailed out, someone will buy the plants/brands and the factory jobs will stay (although I won't speak to the CAW/UAW pensions)
I hope that you are right, d-, that it is a given that Cerberus goes under.
The Duke Dummy CEO has got to go. That he could not see this downturn coming -- there has got to be a decent staff economist at GM who said, 'Hey, boss, big problem ahead' -- and did not work the problems -- e.g., bloated union structure -- hard during good times is a travesty.
Im going to bail. Just havent figured out where to go yet.
If GM tosses their pensions onto the PBGC, goodbye PBGC.
WSJ writes that sales of SUVs are up now that gas prices are down. We really like our big rigs.
I sure as hell dont want to pay for all this.
Comrade-Dope jg,
There have been a few articles about the flaws in company board structure.
Basically this is one more example of, "be the one to speak up and lose your bonus, be quiet and you'll get the bonus and then some before passing it off to your successor"
Too bad Icahn has lost most of his money, he's now trying to beef up shareholder rights (don't know his specifics, but can't be bad in general)
Topher, have you not heard about Canada?
You can't upset the Japanese, can you?
The thought of it and all the chocolate I ate this weekend makes me sick.
Topher, I'm sending my money to Switzerland, where it will be safe and grow tax-free. I'll wire in money stateside as needed.
If you don't have the $1 million minimum for a good private Swiss bank, I'd do the same via GoldMoney.com.
REBear writes:
You can't upset the Japanese, can you?
REBear | 11.02.08 - 10:24 pm | #
My wife will tell you differently
Wow, a decision by the Bush administration I approve of. If there are any benefits to a merger GM can buy the relevant assets from BK. Time to start the PBGF bailout though - I expect they can't even handle Chrysler going under.
Oh, re a certain poster - Do Not Feed the Trolls.
REBear,
Despite diversifying their factory locations over the last 30 years, the Japanese automakers are still significantly exposed to the Yen.
All the dies for the big panels are produced in Japan and then shipped out. A good number of parts or completed cars are exported from there as well.
Even with that exposure, they have really nice supply chains. They'll be fine (well they are conglomerates, Yamaha's music division was depending on continued piano sales to China for example)
The demographic profile and future job opportunities in Canada will protect us from collapse.
Comrade-Dope jg (jg)
Ill look into it. We have a nice amount in japan and a place there. I do like to ski. TY
I sure as hell dont want to pay for all this.
Topher
You can't always get what you want,
But if you try sometimes well you might find
You'll get what you need....
YouTube -
doubling my long position in cat food.
Moms gonna have to eat!!
Yep, EHP, the eternal agency problem: owner-managers run companies different (and better, more often than not) than hired guns/hired managers run companies.
Yep, when it is someone else's money on the line, folks are a lot looser with it than if their own money was on the line.
That is the great thing about a private Swiss bank: the family owns 100% of the stock, or it is an unlimited partnership. The owners are in the same boat as my money is.
For those who are advocating bankruptcy for GM, may I humbly point out that the 2005 bankruptcy reforms have not been good for large companies in bankruptcy. Liquidations are more likely now, and I am not so sure that GM would survive attempts to reorganize under this draconian law. It certainly has been bad for large retailers and Lehman. See <a href="http://www.ft.com/cms/s/0/85790440-a6c3-11dd-95be-000077b07658.html>Financial Times for some background on how the law precipitated some of this crisis.
how do you get 5 drunk canucks out of your pool?/
Ask them to leave.
EH, soory bout that eh, didn't mean to disturb ya!!! We'll be goin now..
The real question is- Do unemployed or scared people buy cars?
Doc at the Radar Station writes: Maybe this will be the big "credit event" test case, that will bring out the government's long worked on plan to regulate CDS.
Yeah, with an estimated $1T of CDSs written against a GM default, getting to a point where GM could take advantage of the benefits of BK without wrecking the rest of the economy will be quite a challenge.
(Yet another nasty little side-effect of CDSs -- they neutralize the effectiveness of proven techniques, such as BKs, in dealing with insolvencies during a downturn.)
Dang., i better go get some spare parts for my 14 yr old, 220,000 mi gm truck.
before they quit making them.
Comrade Dope jg,
Private Swiss bank owned by a family.... well maybe so long as you don't depend on them to run your tax avoiding trust companies like LGT Group run by a certain Lichenstein royal family
I know the Swiss have a great reputation, but I cannot get past the threat UBS or CS poses
Comrade-Dope jg (jg) writes:
Topher, I'm sending my money to Switzerland, where it will be safe and grow tax-free. I'll wire in money stateside as needed.
Think about Switzerland carefully; they may be Iceland writ large.
WSJ writes that sales of SUVs are up now that gas prices are down. We really like our big rigs.
Well, they've already been built. We may as well use them. For short trips, like the iconic soccer practice, the mileage is of no significant consequence. Also, if they're full they're reasonably efficient - and that does happen; you should have seen my mom's SUV when we went for Christmas at my brother's place!
Nice datapoint, DCR-.
Wow. Bigger mess than LEH, which almost sank the system.
Not if reorged - see airlines - big ones like United & American. Depends on the reorg but isn't necessarily the end of the world.
It's unwise to disagree with you, dryfly, but I will. The airlines are more like a utility. Nobody gets judged by what airline they use, and you can always use a different one next time if you don't like your experience.
Auto owners have a much longer relationship with their vehicles, and the perceived image of the brand is very important to most drivers. Resale value and warranty backing are also important. All three would suffer substantially in a BK. Remember that the American brands already have rather negative image outside the Midwest, and non-fleet sales of foreign brands are already over 50% in many areas.
A BK and re-orged GM or C would continue and could come back. But they would be much smaller than their current size for years and would have to start at the value end of the food chain, like the Japanese and Koreans did. JMHO.
Anyway, I'm out. Sockpuppetry is rather boring to read.
No President, R or D will allow any US automakers to go bankrupt. Reduction or loss of pensions, Tier suppliers wiped out, stocks and bonds zeroed out. Whatever party had the White House when that happened, their party would lose Mi., Oh., Pa. voters for a generation
before they quit making them.
mb | 11.02.08 - 10:33 pm | #
'They' won't stop making them anytime soon - good biz aftermarket parts are. 'Course you knew that already if you have had to buy any.
. I know the Swiss have a great reputation, but I cannot get past the threat UBS or CS poses
EvilHenryPaulson | 11.02.08 - 10:33 pm | #
That is a scary thought.
I like Japan better, Ill look into the Swiss thing also
Could we just put all CDS creators and holders in a tall building and demolish it.
hasn't the lowered debt rating on GM triggered any CDS collateral payoffs yet?
EH, soory bout that eh, didn't mean to disturb ya!!! We'll be goin now..
Conjure's Bodyguard
I do enjoy Canadian/white-guy jokes. No problem with substantiated criticism either. But a certain unnamed poster decided to go nuts after I suggested he/she read a book, so I will go back to ignoring the noise. My apologies to everyone for that nutbar earlier
EHP and F&W, I intend to spend a lot of my time, post stock market crash and retirement, monitoring Switzerland.
I agree that UBS and CS are big messes whose unwinding and failure has just begun.
.
I have a solution: have all the bankers use their bonuses to buy lots of US cars.
See, this liquidity bailout can work!
.
Fair Economist writes:
Well, they've already been built.
I believe the Texas plant for the Suburban platform added another shift, or something to that effect to increase production
They're just following their nose right now
More on Switzerland and Iceland
Is Switzerland the next Iceland? -
Business Analysis & Features, Business - The Independent
Someone posted on their blog an analysis on that they did for the Iceland government last spring. I'll try to find it.
Comrade-Dope,
Did you not know that only Americans are greedy and stupid.. Continental Europeans are very responsible and smart...
As I said..
7] Unwillingness to take criticism. Strong feminine passive-aggressive tendencies.
Now go away troll.
EvilHenryPaulson writes:
I do enjoy Canadian/white-guy jokes. No problem with substantiated criticism either. But a certain unnamed poster decided to go nuts after I suggested he/she read a book, so I will go back to ignoring the noise. My apologies to everyone for that nutbar earlier
Ford increased production of trucks and hired back some workers. Maybe the govt believes the market will give a solution their ideology is comfy with
If GM debt really has 1 trillion in CDS contracts, there's a staggering market manipulation opportunity, becauuse it only has 43 B in debt. Issue a big pile of CDS and if the company goes under buy the bonds at par. Anybody got Porsche's number?
Chevy ramping up Caddy production planning for an Obama presidency
It's unwise to disagree with you, dryfly, but I will.
That's fine - I'm often wrong (probably colossally wrong on Tuesday night but what can ya say)...
My take on a Big Three BK is the judge would be keenly aware of all the issues you described and have them very quickly into reorg & strong hands afterward. Like in DAYS to reorg.
Secondly if I understand 'warranty' correctly - most of those were sold off too - sort of like MBS. So that shouldn't be a huge issue IF there is a viable company to service the vehicles (warranty being handled like it was an insurance or reinsurance claim).
BK judge would wade through all of that pretty quick I think - but day one would be get reorg up and running.
JMHO.
found it.
Iceland’s banking collapse: Predicable end and lessons for other vulnerable nations | vox - Research-based policy analysis and commentary from leading economists
I hope that our favorite troll, Conjure Bag, hasn't left his money with his gnome second cousins.
Thanks for the link, F&W.
Another 'whoocoodanode':
Effectiveness of AIG's $143 Billion Rescue Questioned - washingtonpost.com
Amazing. Criminal, how these schmucks are pissing away our money.
Mephistopheles,
I would say that continental European banks, up until recently have had a more solid balance sheet on the asset side but disastrous leverage and borrowed deposits. ...although they also have that little AIG insured assets problem...
Whereas American (non-investment) banks have good leverage levels, but overvalued assets
That only holds until summer 2008, since then the whole world has abolished accounting standards
I believe the Texas plant for the Suburban platform added another shift, or something to that effect to increase production
Good Grief. A bankruptcy would be a mercy killing.
Futures up. Is this why ?
"Under my plan of a cap and trade system, electricity rates would necessarily skyrocket"
Obama Promises To Raise Your Electric Bill - Skyrocket In Fact | Red County
Lucifer you are too predictable and you can't hide that easily.
bearly writes:
Futures up. Is this why ?
The calves are always fattened before they are slaughtered
Good Grief. A bankruptcy would be a mercy killing.
Fair Economist | Homepage | 11.02.08 - 10:45 pm | #
LOL. Stop me before I kill again.
EvilHenryPaulson writes: I believe the Texas plant for the Suburban platform added another shift, or something to that effect to increase production. They're just following their nose right now
Well, they'd better enjoy the harvest while it lasts, because they've eaten the seed corn: GM Kills Next-Generation Tahoe and Suburban
Why can't we toss these Cerberus vultures aside using any number of tactics and take control of Chrysler for little or no expense. Then sell pieces of it off. The sale proceeds would go to tide laid-off Chrysler workers until the industry recovers. Cerberus vultures would be roughed up and told to get lost.
so one aircraft had engine failure and the other ran out of fuel. But they both crashed!!
New thread up
Anonymous writes:
Why can't we toss these Cerberus vultures aside
Because it ain't what you know, it's who you blow
Fair Economist writes:
If GM debt really has 1 trillion in CDS contracts, there's a staggering market manipulation opportunity, becauuse it only has 43 B in debt. Issue a big pile of CDS and if the company goes under buy the bonds at par....
I imagine that the BK creditor negotiations will be a lot like checking into the hospital for major surgery and discovering that ALL of the staff have taken out life insurance policies on you betting that you will expire.
CDS are evil.
Anonymous 10:47, that is mostly what will happen if Chrysler BKs, except that there's not going to be any money to help current workers - the past workers will need every drop of blood left in the corpse, and more.
ever give away your identity.
Endless discussion of the fire burning around the US. By the time we get around to putting it out there will be nothing worth saving. Just as well. See ya'll in the soup line. Be fun talking to everyone in person.
Just on local news @ 10 .Airlines are going to charge more for window seat
Credit enima is coming..... | 11.02.08 - 10:18 pm | #
...as Southwest Airlines shrugs once again.
satan, lucifer, Mephistopheles
My names, now go find your ow
NorkaWest - No kidding on the moral hazard issues with CDS. I expect we'll see some interesting indictments out of the current mess in a year or so when the investigations are done.
hey, does anyone have any insight into the brewing credit card write downs with banks ?
ppl are broke obviously, how are banks gonna collect their dues ?
Fubar & Wass Llc writes: Someone posted on their blog an analysis on that they did for the Iceland government last spring. I'll try to find it.
Nice linky
. But I was really pissed off to read from the article:
It is this version of the paper that is now being made available as CEPR Policy Insight No 26. In April and July 2008, our Icelandic interlocutors considered our paper to be too market-sensitive to be put in the public domain and we agreed to keep it confidential. Because the worst possible outcome has now materialised, both for the banks and for Iceland, there is no reason not to circulate the paper more widely, as some of its lessons have wider relevance.
So, back when it could have helped a lot of people get their money out of Iceland, they hid the results; but now that the losses are here, it's "safe" to release? Feh. Thanks for nothing, stinking academics. Didn't want to sully your "academic exercise" with actually "helping" anyone, huh? Jerks.
I can see Belgium from my house.
Well.. Lowly Canuck, you don't fully appreciate how my mind works. S
mephistopholes is in some parallel future world of CR.
The banks are going to continue to mail their bills so to arrive after the due date and then hit you up for late fees. (thank you formerly san francisco bank now run by white trash tarheels)
In case you missed it, the cc companies are going to write off some of the debt, in hoping that it doesnt have to incur massive charge offs. Then it will realize its moral hazard error, and run crying to the US gov for relief.
Honestly, I dont think the problem was with the suv's.
I think the problem is with the $50,000 suv's.
People could afford lower gas mileage, the diff isnt all that great anyway, but they were stretched to limit already on payments, existing on HELOC, and the gas price spike pushed them over.
18 or 22 mpg hwy, isnt that big of a difference, unless $1000 - 2000 /yr is a lot of money to you.
I think the consumers pretending to be rich, wanting vehicles with heated leather seats. CD changers, DVD screens, etc just eventually found out they couldnt afford it.
The real problem is we need a $20,000 tahoe that gets 18 mpg, not a $50,000 one.
My old Z71 truck gets 16 mpg on hwy, doesnt bother me. Its 14 yrs old, and I havent had a car note of any kind in 8 yrs. Wont buy a new one at the prices they want either.
DCRodgers - That is the kind of report that just guarranties cynicism. Outrageous!
mb-I asked the service manager at my Chevy dealer why people buy SUVs. He said it was a status buy.
Also SUVs have to be expensive bc that's where all the profits are. It's losses on cars for big3
the problem with the SUVs is that they were increasingly being purchased by people who could not afford them. If you have access, you can look at the buyer profiles of the expensive SUVS, and you'll see over the past few years that low income buyers became prevalent. The only way that worked was with ridiculous financing terms, and or HELOC/cash out action. Game over for a huge chunk of that market, and it aint coming back. The gas prices issue really killed it, but even when gas prices go back down a but further, it still isnt the operating costs that sink those vehicles.
Don't the jobs have to go anyway? The industry suffers from over capacity. Whether or not there is a merger, the industry needs to consolidate which means fewer jobs. Any government action to preserve them is just kicking the can.
It's been a long time since the Bush Administration has stood on principle. If they are doing that now and recognizing the reality of the automobile business then they deserve a pat on the back.
I think the gov's refusal on the $ is for a few reasons. 1) they need to conserve it for banking 2) giving it isnt going to change the insolvency issue, but merely postpone it 3) doing nothing insures the blame goes to the next administration 4) avoids the appearance (and more) that they are doing political friends favors (see Cerberus) 5) guarantees that the next administration will do said favors for them, otherwise get the charge of letting a too big to fail go bankrupt 6) could potentially score points in the election.
And that's probably just a short list.
hopefully GMAC goes belly up too!
Ceberus and the neo-CON's will all be wiped out in the business world and in govt!
Mexico has open warfare in many of their states. Mainly drug related. What happens when US drug users can't afford drugs? Does Mexico's real economy crumble? Are we watching a consolidation of power? Petras oil fields are in depletion and will have diminishing returns, drugs will be nationalized? What happens when the US has reduced law enforcement and Yankee ingenuity turns even more towards the criminal?
Very interesting times.
BBC NEWS | Americas | Policemen gunned down in Mexico
GMAC will be stripped off like a $2 hooker and p3wned by the gov.
The real problem is we need a $20,000 tahoe that gets 18 mpg, not a $50,000 one.
It is not rare for one of my short sale candidates to have a car payment higher than their real estate P/I payment.
mb writes:
Honestly, I dont think the problem was with the suv's.
I think the problem is with the $50,000 suv's.
Really.
When we were kids & somebody got a 'new' truck - those were the SUVs of the day - you'd go out to a quarry or sand pit and get drunk & dent it all up. Throw big rocks in the back - drive around like maniacs... generally have a good time.
Wouldn't destroy the thing just put enough nicks in it that forever after it would be treated like a 'truck'.
Now how many forks are going to do that with a $50K SUV on a seven year 'mortgage' or worse yet - a lease?
You won't even drive the thing on a dirt road let alone off road - why own one?
I got the ear of a Detroit SUV designer a few years ago and really let him have it... told him I wanted the 'old jeeps' where there were holes in the floor so you could 'pull the plug' and hose them out. No carpets, no cloth, no leather - sealed electronics like a boat - want to be able to spray the whole thing down.
I wanted racks on top that that hold more than 90 lbs - aim for 500 lbs. And no more plastic bumpers - I want bumpers I can weld on and bump into stuff with.
And big effing skid plates under the tranny. I've trashed trannies hitting rocks - they have eyes.
And not be some stoopid Hummer off-road pimp mobile - just basic & solid and affordable & reliable - sell the bells and whistles to some suburban soccer mom.
Poor guy - we were on a ferry to the outer banks and I just followed him around ranting like he had control over what his masters told him to design.
But it was a once in a lifetime chance to tell designers what I really wanted & I wasn't going to miss it even if it wrecked his vacation.
The Bank of Japan has cut its main interest rate from 0.5% to 0.3% - its first reduction for seven years.
How can this make any difference? A vote for the US FED showing support?
BBC NEWS | Business | Bank of Japan makes rare rate cut
For those looking for an overseas bank but leery of Switzerland, you might be well served by giving some close attention to Singapore banking laws. And the relationship that some of the foreign banks in Singapore have with their "mother" bank. Citi now has an entity incorporated in Sing. but I do not know the details.
I hear you dp - 50k car 4 years at 6%, runs you 1200/mo with nothing down. OUCH! The funny thing is, that is the same monthly payment nearly exactly of a median priced US home on a 30 yr fixed.
dryfly-A few years ago NYT's Keith Bradsher wrote about the rise of the SUV. Be assured that the engineers making these things don't like the customers at all. They know the customer is mean and cowardly.
Maybe that's why it's a stick up.
barnard, it is just a part of their trying to prop the yen directly, thereby propping Japanese exporters indirectly, and doubly indirectly buoying stocks on Nikkei. Which in turn helps the next day futures for US stocks, and so on and so on...
Geoff-read those articles in the post about people torching their big babies?
dryfly - you tickle me no end
anon - had not seen that, but would not be surprised. Only so many ways to get rid of an albatross.
Topher, you will pay for impersonating me. Mark my words, you do not understand how I think
This guy is getting downright creepy-
Hedgies want that carry bad. Yen getting clobbered vs dollah...
DP:
Just bought a Subaru Forester XT, Motor Trend's SUV of the Year for $25K and gets 20-24 mpg. That's the Suburban of the future. A great crossover vehicle.
Cars that don't exist burn no fuel at all, so I assume this loan will not be spent on actually building cars. It doesn't get more fuel-efficient than that.
South Korea Plans 14 Trillion Won Stimulus in 2009 (Update3) - Bloomberg.com
About $142bn in new stimulus spending in recent days (Germany, Japan, and now South Korea)
I wish I had invested in politicians before this, record government spending bull market and all
Just bought a Subaru Forester XT, Motor Trend's SUV of the Year for $25K and gets 20-24 mpg. That's the Suburban of the future. A great crossover vehicle.
Lone Ranger | 11.02.08 - 11:39 pm | #
My in-laws have one... clearance is low & the oil pan & tranny are exposed. You can get a skid plate I guess but I'd wreck one pretty fast if I had one & really went off road.
They work pretty well as a 'station wagon' though. Drive in snow well too.
Personally - any place I'd drive a Forester I'd also drive my 50 MPG Jetta so again ask the question - why own the Forester?
tough love at the same time as the bankers use the bailout for personal gain by paying out large bonuses in the face of sinking revenues.
http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html
Very irresponsible and invites regulation, particularly risky because the Democrats look to sweep on Tuesday.
Building sector to lose 40,000 jobs next year -
National News, Frontpage - Independent.ie
Ireland expecting to lose 40,000 jobs in building sector next year. Total population is 4.1mn, so that probably represents about 2% of the labour pool
Construction firms have been moving on to Dubai and Iran where there is still too much work
So the Celtic Tiger that never was...
Via NakeCapitalism:
I still believe that local inventories of vital commodities will have to rise significantly because of the huge disruption to the supply chain. Combined with bankruptcies of producers or simply much lower production, I expect it to get interesting within 6 month to a year.
Trade, Letter of Credit Woes Finally Go Mainstream « naked capitalism
... A collapse in the trade of raw materials such as grain and iron ore, after years of frantic activity, is causing havoc. The Baltic Exchange Dry Index, which measures the price of voyages and the cost of chartering vessels, has plummeted. Rates for the largest transporters, known as Capesize, peaked in May at $230,000 a day. It is estimated that the daily cost of running the ships, including depreciation, is about $15,000 but at the end of last week, rates had fallen to $5,982 a day. ...
Volumes traded in the credit derivatives market have fallen by $25 trillion in 2008 as banks and investors simplified their positions by cutting down on contracts that offset each other, according to the International Swaps and Derivatives Association.
The effect of the reduction likely reduces total volumes to $46.95 trillion, before accounting for new trades made since July 1.
ISDA said last month that volumes had dropped 12 percent in the first half of 2008 to $54.6 trillion, from $62.3 trillion at the end of 2007.
Save banksters lose industry. Safe to say we know who is in charge.
How come nobody can explain whether these CDS will all cancel each other out, or whether they will turn into a financial weapon of mass destruction? I haven't yet found anything solid. Is it because ya'll are secretly part of the racket? Just sayin.
How come nobody can explain whether these CDS will all cancel each other out
because they re bilateral trades and the parties don't want to disclose the terms of the coin tosses.
Whoever elected Lautenberg to senate...
Guitars last night, what about trumpets tonight?
Louis Armstrong - Hello Dolly Live
YouTube - Louis Armstrong - Hello Dolly Live
Did a computer flaw nearly wreck AIG?
Did a computer flaw nearly wreck AIG? | The Australian
In his presentation to investors, held at New York's Metropolitan Club, Mr Sullivan praised the unit's models as "very reliable" in analysing many mortgages, saying they had helped give AIG "a very high level of comfort".
Mr Gorton was introduced. "The models are all extremely simple," he said. "They're highly data intensive." He said he didn't rely on the default-risk predictions of credit-rating services, and instead came up with his own estimates of what was safe enough for AIG to insure.
Mr Cassano, the unit's head, told investors: "We believe this is a money-good portfolio....As Gary said, the models we use are simple, they're specific and they're highly conservative."
la.. la..
Rogue traders and sloppy programmers!
Forgive me a late-night, off-topic, trading-related post.
The S&P 500 enters this week sporting a PE ratio (ttm) of over 21, according to the WSJ Market Data Center.
That's 30% over the long-term average of about 16. More importantly, it's more than double the PE ratio that bear markets usually sink to at their bottom (usually below 10, and as low as 6).
I'm noticing complacency, and bottom calling in the press.
Good time to make money on the short side, no? Thoughts?
Sobering images.
BBC NEWS | Entertainment | Audio Slideshow: Photos compete for the Prix Pictet
Hi RE:
Last time we spoke you claimed Pelosi would beat Sheehan by 20 points. I asked how much you wanted to bet.
F*ck Pelosi and her betrayal of the Democratic base. Go Shehann! How awesome would that be and a wake up call to congress.
oh.. the games
I'd make writing or buying CDS illegal, like the gambling that is. Gambling belongs in casinos and betting parlors, not in banks, insurance companies, or any other financial institutions.
20 to life....
............
blah.. blah.. blah..
I will gamble on Sheehan.
./././././././././././././
I'm not wearing any pants. I'm just a stupid canuck.
Canadian banks are solvent.. wheeee!!!!!!!!!
Its late, think I'll go FaceBooking.
Technology is a double edged sword..
EvilHenryPaulson better watch his back
Greasemonkey is about being clever...
EvilHenryPaulson writes:
Canadian banks are solvent.. wheeee!!!!!!!!!
EvilHenryPaulson | 11.03.08 - 12:45 am | #
CR will go to registered commenting soon. For the best.
EvilHenryPaulson should be the one to go read a book
I suggested some type of pay site, with waivers available.
So the thread dies. Good work.
Never start a pattern of attacks on a posting where all posters can be identified and compared
CR will go to registered commenting soon. For the best.
I hope so. This is degrading by the hour.
Yes, I know S
CR will go to registered commenting soon. For the best.
barnard | 11.03.08 - 12:47 am |
Canucks are just a bunch of feminised passive aggressive types, who think they are clever.
You asked for it..
Good time to make money on the short side, no? Thoughts?
Bear-market rallies generally last more than a few days. Late December or early January strikes me as a much more reasonable time to reload for the downside.
yogi,
Last time we spoke you claimed Pelosi would beat Sheehan by 20 points. I asked how much you wanted to bet.
No bet but we will watch the results Tuesday night. I believe I'll win.
#
fyi: I haven't had a post in a couple of hours or so, just checked in before bed. I guess I don't have much to say, it seems satan/lucifer once got splashed by a car with Canadian plates at some formative point in their life.
Night all, can't wait for registered posts
#
The problem is Evil Henry Paulson adds tremendous value to CR. Attacking him for his reasoned responses is ludicrous.
Meh, wasted words.
well.. i took a look at the pattern of spoofing and who was online and when.. and i use more than one non-demonic name..
Thanks barnard, I do try to make lemonade out of a lemon by interpreting satan's attention as either a kind of jealousy, or opinion that he/she thinks Canada is really really important.
I will just be glad when the threads are easier to catch up o
barnard,
There are only 3 posters whose writing styles come up every time I was being spoofed.
from the aig article:
But AIG didn't anticipate how market forces and contract terms not weighed by the models would turn the swaps, over the short term, into huge financial liabilities.
He presented a 92-page paper, "The Panic of 2007," which explained how the financial markets came unglued after a series of unexpected events, such as when clients of financial firms suddenly sought to reclaim assets put up as collateral.
Regardless of the field, math models are always only as good as the inherent assumptions. It floors me to no end to read about smart people that don't ascertain the fundamental assumptions the models are based on.
When reviewing a colleague's spacecraft thermal analysis, that's the first question that has to be addressed. Reviewing model fidelity and solution methods (analytical, finite difference, blablabla) comes next since there are plenty of ways to screw that up. And usually a good thermal engineer will keep the limitations of the analysis results front and center.
When I was a co-op student, my lead engineer hammered into me that all math models are wrong until proven correct. That was reinforced almost 15 years later while working on my msme by my computational fluid dynamics course professor. I unfortunately missed the class where his phd student presented their work, which was modeling blood flow through the heart and heat pumps. I would have loved to know how they validated their models.
It's really amazing to read this stuff.
lucifer, would you please shut up. CR hates to ban people but this going too far.
I prefer to read the REAL EvilHenryPaulson.
Since I was spoofed when I offered my opinions on canucks, i have to assume that I am dealing with one (maybe even someone in california)
OK but I haven't lost very many bets this year going back to my Giants in January. Don't underestimate the system. The trend is toward more independents every election.
And try not to feed trolls.
So much for Chrysler's "Lifetime Warrantee" I Guess.
IP addresses and many other identifiers can be spoofed..
PS- If nobody spoofed me, I would not be doing this. I warned about this on more than 4 occasions.
You had adequate warning, but you thought you could get away with this.. you know- just like canucks think they can.. reality suggests otherwise.
RE writes:
lucifer, would you please shut up. CR hates to ban people but this going too far.
San Francisco is as safe a seat as there is for democrats. Very, very difficult to make inroads.
Applying mathematical models to future human behavior is wrong to begin with.
Of course you can.. don't you know about the wonderful canuck electrical engineers with their concepts..
oneworldcurrency yogi writes:
Applying mathematical models to future human behavior is wrong to begin with.
But they are smarter than the average bear, no?
ShortCourage, when the "risk-free" return available is so low like it is right now, a lot of people are willing to pay a higher premium for equities. If you can hold onto it long enough for interest rates to go back up it would probably pay off, or if you expect earnings to collapse that would do it also. How likely either of those two outcomes are or on what timescale, I couldn't begin to guess.
Hi,
I am loser who changed my handle..
remember what i said about giving away your behavior patterns..
yogi,
Did you check out recent results in the 8th district? You still think that you might win?
Nancy Pelosi - Wikipedia, the free encyclopedia
The US is ill served by either Obama or McCain.
Applying mathematical models to future human behavior is wrong to begin with.
I can appreciate trying to develop a model that explains a dataset and using it to guide your investments and bets. But like the safety range officer, you better have your finger on the button in case the trajectory goes out of limits.
Trashed thread, see you all tomorrow.
holy hell! took a break for some FPS release and CR turned into 4chan. yuck
maybe tomorrow
Give me 15%, and put up some greenbacks.
dryfly, your description of SUVs reminds me of Jason Kelly's book Neatest Little Guide to Personal Finance. He describes a real SUV as something that can pull stumps out of the ground. I always remembered that description.
Anyway, hardly what today's soccer moms think of as SUVs.
Better pay attention to the Daewoo tale, if you are making payments on a Chrysler product!
When that Daewoo deal folded, there were no more body parts available (fenders, bumpers, and such). Sounds like no big deal, right?
Here's the problem; there you were financed, with requirement for full coverage insurance. When the insurance company couldn't get parts to fix your car, they canceled you. Then your note became "due and payable" because you breached the contract.
No one would write insurance (that was affordable) and NO car dealer, of any brand, would accept your Daewoo as a trade-in. Believe me; if you were a salesman, and screwed up and wrote an appraisal on a Daewoo trade-in, your job was HISTORY!
The consumer gets screwed big time, when something like this happens. Hopefully, the banks will be more tolerant this time.
Not a friend of Paulson I see.
hiker90,
Thanks for adding value! Recently I've had to sit through way too much CFD and thermal/structural analysis, way over my head. Mostly I just sit in the meetings and try to figure out wtf the main point is... but sometime's it's very hard as its always the CFD folks talking about their stupid boundary layers and how their assumptions of a turbulent boundary layer might not be right... and how we need to go from 2d to 3d analysis to understand what's going on... all based on a limited amount of data... so let's figure out how we can run a test to verify the analysis... oh yeah... very expensive hardware...
Of all the stuff I've worked on picking up in the real world (ie. out of college) I think CFD is the hardest thing to understand. Of course I've never taken a course in CFD... nor was I a math major... just a circuit/computer engineer.... and mostly that's the title on my degree... mildly practiced it outside of school.
barnard writes:
Mexico has open warfare in many of their states. Mainly drug related. What happens when US drug users can't afford drugs? Does Mexico's real economy crumble? Are we watching a consolidation of power? Petras oil fields are in depletion and will have diminishing returns, drugs will be nationalized? What happens when the US has reduced law enforcement and Yankee ingenuity turns even more towards the criminal?
As an expat living in Mexico, let me give you my view on this:
What happens when US drug users can't afford drugs? If there's a market, someone will figure out how to supply it. Most of the fighting is between rival gangs that want to control a particular territory.
Does Mexico's real economy crumble? I doubt it. Drug transportation is not the only industry here. After emerging from the 1994 peso crisis, Mexico diversified its economy, and put in place a number of economic and political measures to stabilize the country. Although still too dependant on oil, maquiladoras, and expat remissions the domestic economy is reasonibly sound.
Are we watching a consolidation of power? No I don't think so. Corruption has been a part of the way of life here since the Spanish ruled the country. The drug gangs may have politicians and police on their payrolls, but there are plenty of other interests as well that have them on their payrolls.
Petras oil fields are in depletion and will have diminishing returns, drugs will be nationalized? ¿WTF? I don't see any correlation here.
What happens when the US has reduced law enforcement and Yankee ingenuity turns even more towards the criminal? In my view, the problems in Mexico will diminish considerably once the US can no longer afford to finance the police state. Mexico drug lords are basically trafficers rather than producers. The wars between gangs are over a limited number of ports of entry (Laredo, El Paso, Tijuana, Nogales Matamoros). The problems here started when the Mexican police began taking out the top gang leaders, leaving a power vacuum that other gangs tried to move into. Having a stable leadership structure in the cartels with defined areas of control will end the fighting. I think they really would rather focus on their business rather than killing the competition.
From what I have seen in the MSM, both American and British, is a tendancy to sensationalize the situation with the drug gangs. I have lived in both Cuidad Juarez and in Monterrey. The cities do not revolve around the drug gangs. Most economic activity is based on manufacturing and commerce and not on drug trafficing.
"Having a stable leadership structure in the cartels with defined areas of control will end the fighting."
I know nothing about Mexico but the above sentence reeks of self-delusion.
YLSP,
its always the CFD folks talking about their stupid boundary layers
LOL. Plenty of times I've been that PITA trying to communicate the root cause (our ignorance, lack of modeling expertise, uncertainties with known solution methods, uncertainties with values of input parameters) of the analysis uncertainties.
Hopefully you are working with cfd/thermal/stress analysts who can think like a designer and keep the focus on wtf the main point is. Sometimes analysts get wrapped up in their world of math and forget the math is only a tool to help design good hardware.
No doubt you are aware, but testing expensive hardware is loaded with risk and has to be done oh so carefully. That in turn jacks up project costs.
I hope it turns out for the better. Good luck.
Best,
lucifer writes: But bailing out GS was a good idea!!
lucifer, I think we're soul mates.
You may kiss my sacred Harvard ring.
Outsider writes: Forgive my ignorance here, but does this mean we're NOT bailing out the auto industry?
Don't know. But, what prevents any bank from lending GM whatever it wants? Extract fees and bonuses. Then, the bank just shuffles the note on over to a handy Fed window.
I could have been a contender.
MH writes:
We've got two Jeeps, so I hope somebody keeps making parts.
I thought that was why you bought two jeeps.
At Moosehall: three Fords, no mortgage debt, all paid, insignificant consumer debt, and a lot of cash in the bank. I don't want to tell you, and you don't wanna know, how much.
And everybody told us we were making all the wrong choices!
America's largest ungulate, the one the French trappers called l'orignal will endure! Hell, he might even prevail.
At any rate, my wife will be able to enjoy herself after I throw those final antlers, and my dewlap quivers no more.
What happens when US drug users can't afford drugs?
From my extensive experience with Mexican drug sellers, I really doubt that will happen. They will reduce the price. They are, as a rule, quite reasonable.
There are some huge problems with the make-up of Mexican heroin (it is not a pure product, and is not injectable but Americans will do that, and burn big holes in themselves, called abcesses) but price is not one.