"The biggest writer of these abominations of housing finance vehicles was Golden West, which was bought by Wachovia, which was then absorbed into WFC."
I would check on that. Maybe Inside Mortgage Finance has some data, but I am pretty sure WM was always the biggest writer, even during the Golden West heyday. But I may be wrong.
Golden West was certainly one of the biggest, but maybe not THE biggest.
The American taxpayers con plan is working well so far with jerk off Geithner on point...the too big to fail banks that got trillions in TARP are miraculously pumping up great chunks of the Big Shitpile while getting to flush away this pesky toxic assets.
Given the rumors of tension between the Fed and the FDIC about whether pressure should be used to force out underperforming bank executives (yes, yes -- a phrase that cries out for either a joke or a curse), and given the FDIC is being anointed the ultimate bagholder in this PPIC three-card-monte game, are there any rumors that it may not just head quietly to the gallows? Sheila, open thine mouth and tell the boys "no"!
For LL and others musing about California, we're about to see major pain pushed down to local governments. The State will try to balance its own budget by borrowing funds that normally go to county and city governments. Borrowing compounds the problem, as everyone here knows. The domino effect will take a long time to play out but expect to hear about cuts in vital local services including public safety, which is the lion's share of any local government budget.
btw - California's M.O. in "forecasting" budget gaps is not credible, at least as far as what's made public. The current $21 billion shortfall is a snapshot in time - a reflection of immediate cash needs based on current (yesterday's) conditions. It is not forward-looking and does not anticipate the inevitability of worsening conditions. The "more adverse" scenario isn't recognized until it's a lagging indicator.
It could work and they get enough green shooters to buy in to get the securitizaton/ponzi engine going again? Or fail and gift billions more to banks set to die.
"a reflection of immediate cash needs based on current (yesterday's) conditions."
Thats why the voters shot down the props. My thoughts, what are they going to do to fund their future spending? They need to cut back on all these hand-out programs, pronto! Its downhill from here, if they don't cut the fat!
MS,
How are you positioning yourself right now? Do you think insurers are out of the woods? I think all this talk of the financial system recovering is VERY premature. Looking at default rates and the chart of resets, along with job losses and crappy corporate earnings. Well, it's just starting to get interesting.
“Leverage has declined, the most vulnerable parts of the non-bank financial system no longer pose the same risk and banks are funding themselves more conservatively,” Geithner said.
Relax. All of that leverage has been safely transferred to taxpayers.
Agree. Very premature. Going to be real bad for morale when it turns out the taxpayer is still tied to the tracks and that glimmer ahead is not hope, but a fast moving inflation train.
That being said, there's one class of people happily gaming the system to their benefit, one class of people employed and hoping that things are getting better, and one class of people who know that things are not getting better for them, and in fact are just getting worse. There is of course that 4th class of people knowing that things are not getting better, and only getting worse, and pretty much helpless outside of their own little bubble to do anything about it.
Class 2 moving to class 3 continues to increase and become dangerous, class one moves profits and themselves off-shore.
Actually I have very little in the markets right now.......comms., FAZ, and some long dated put options on DIS, SYY. The reason(s) are very simple....we don't have a market at this point all we have is one big "trust me it'll be just fine".....and the system continues to trot out "hold and hope".... That's not a parameter I'm used to using....
Duke of Con Dao
I guess the voters in CA rejected the Governator
They rejected new taxes, state senate and business as usual over the last 10 years. Legislators will shudder that they cannot pay for all the promises to their campaign contributors.
trying to figure out a vid mash for Geithner and crew... (something that might grab beyond the Beltway or CR)
this vid mash-up has nothing to do with DC except maybe as a nod in an Ozymandias sort of way... Angkor Wat, the remnants of a once great empire, YouTube -
does have a nice dance beat - California Dreamin' (disco version) and a bunch of cute kids running around, the 2 young boys jumping in the lake at
the end could get me in hot water if either turned towards the camera... Here's to you Arnhold!
Calif is not the only place there will be furloughs
NEW YORK (Fortune) -- Welcome to the summer of the furlough. Manufacturing workers have long suffered from these "temporary layoffs," but the white-collar world is feeling them now, too: During this recession, everyone from universities to technology companies are using furloughs as a way to cut payroll without further trimming their staffs.
And while furloughs are already underway around the nation, human resources specialists say that required unpaid days off are only going to heat up as we head into the summer months, when employees are more amenable to time off -- albeit unpaid.
We have also taken a number of steps to better measure whether our programs are increasing the flow of credit through Monthly Lending and Intermediation Surveys. Treasury undertook this important initiative to better understand the effects the program is having and to help the public easily assess the lending and intermediation activities of banks participating in the Capital Purchase Program (CPP)."
The public can easily assess bank activities because Treasury has a monthly survey.GS: 'we lent a trillion to the FED, BAC, C, WFC, MS,JPM.
C: we lent a trillion to GS, BAC, the FED, WFC, MS, JPM
JPM: we lent a trillion (88 trillion in derivates),.to GS, C...WFC: we lent a trillion to BRK. It might get reset. FED: we a trillion to everybody, thanks Sheila.
MS -- agree. I'm sometimes wrong on the timing of my predictions. But I've never been wrong about the final outcome. And I agree that these markets are either A) Completely Irrational right now, and operating on hope, B) Manipulated, or C) Both.
But I don't have the discipline to walk away. For better or worse I'll stick to my guns, with a few hedges here and there.
"Geithner said the government did not have the authority to negotiate a reduction in the value of those claims."
Selective enforcement of contractual obligations.....it's ok to tell GM and Chrysler to pare down it's debt exposure (i.e. tell the note holder's to take a loss) but anything related to looting in plain sight is just fine if not sanctioned by them.
Does anyone believe Timmy is not running everything by O before its leaked.
MSM is acting as if nothing was said by the voters in California yesterday, while O and what's his name was having a love feast on the WH Lawn. Wonder what he was promised to stand by O and grin.
Cerberus got special treatment of their Chrysler stake not counting the "loan" we gave them back in November. I think they received 50 cents on the dollar while the bondholders got less then 30. I am pretty sure that Nardelli walked off with no less than 50 million.
Now the source of this is not my normal route for news but seeing how it's something to do with guns it's not a coincidence that it's reported from "rupert's rag".
Loaded guns in National Parks...yes we need more of that......PFFFFFFT!
Who would be giving these zombies this amount of money? The FED???
Geithner says 10 major banks deemed in need of capital have raised $48 billion
WASHINGTON (AP) -- Treasury Secretary Timothy Geithner says banks identified in stress tests as having capital shortfalls have raised $48 billion of the $75 billion that the government said they needed to get through an adverse turn in the economy.
[That was on topic, but this is more fun:]
rejoinder to overnight debate on banning municipal unions, especially police, Fire, and Court System.]
Byz:"Beat cops don't need guns except in their fantasies and press releases. "
Yogi: You can carry but they can't. I trust you with your convoluted logic and "meat-axe" macho drivel? Go fuck yourself.
Byz :"your trade[legal/judicial] and its practices are killing our society so you'll have to go. The question is, will the reform be voluntary,"
Yogi:That qualifies you as a fascist pig, who is not a lawyer and has yet to propose a single intelligent reform, but is confident he can bullshit his way into sounding wise. 'Trust me, I can pull broad historical generalizations out of my ass and am fluent in high school debate tactics.'
--[Yogi: re the value of technical police training]"Is that hippie allowed to say that? My boss said crack his skull."]
Byz:"And it'll get settled out more sooner than later when you make it clear with a couple of prominent examples to them they're liable for thier actions and don't operate outside the law like the modern police. They'll be extremely hesitatnt to use force due to fear of judicial reprisal and that'll be fine and dandy."
Yogi: [Byz in quotes]Who's this all-knowing "you", you? Maybe the hippie said "We must kill the judges and lawyers right now, and any professional who thinks like them, as Pol Pot commands, I have the remote detonator wired up."
"Fear of judicial reprisal." Life-appointed rich white male judges are going to carry out reprisals for King Byz? Or does BYZLaw allow the "idiocracy" to elect judges from their ranks? Who's on crack? Can't they at least get a jury trial? Oh, sorry we need "wholesale changes in the judicial code, judicial practice, ..."mid-Dynastic reform". But it would also be "operating outside the law" to deny the officer due process and enforcement of his employment contract. Byz law is supreme."
Sad to say but as a liberal I support your right to call for violent overthrow of the government in general terms. I know you could care less about my Constitutional rights, they're killing our society.
Which is why I want an atm at my house. I know lots of newly converted gold bugs who don't look at how much they are paying for their security. 30% is nice. Have gold parties, sell it like avon.
Who would be giving these zombies this amount of money?
Yes, there must be a backstory here. Somehow I suspect it's gov't money in some form, laundered so that only the losses remain the responsibility of the taxpayer. I can't imagine any sane investment advisor thinking throwing billions into US banks would be good for their clients otherwise...
Has anyone else noticed the increase in casual people wielding metal detectors? I swear I took my kids to the playground yesterday afternoon and there were three people looking for change in the sand boxes. Was not a fun day at the playground. Lost my temper on a senior, hope the police don't come knocking on my door later. Had just cause though.
"Schapiro says: "I question pretty profoundly any model that would try to move investor protection functions out of the Securities and Exchange Commission."
That couldn't be done "without really damaging the fabric of the entire investor protection regime," she says.
Because they did such a good job, up until this point, with the regs. they already had...
It's very simple...really....enforce what you already have/had and the need to offload any more power onto the fed is moot.
"Has anyone else noticed the increase in casual people wielding metal detectors? "
Weird you mention that. I noticed someone with a metal detector the other day, walking along the sidewalk (next to it, in the grass). I wasn't sure what it was at first.
Victory! Our bill, the Credit Card Accountability, Responsibility, and Disclosure Act, passed the Senate yesterday by an overwhelming vote of 90-5.
Why such a huge margin? Because of a huge display of grassroots support. Through petitions, calls, and letters to the Senate, posts on blogs and Facebook, and more, people across the country made it clear that they demanded change. Believe me, that support was essential as I pushed this bill forward.
This margin of victory is even more impressive when you consider who was fighting this legislation. This was not a victory over weak opposition. Some of the most powerful and well financed special interests in Washington lined up against this bill. They tried everything they could to win votes and water down this legislation. There is no way the Senate would have passed a bill this tough without such vocal support by people like you. We took on the credit card companies and won. Thank you.
The House of Representatives will now pass our version of the bill -- the stronger version -- and send it to the President to be signed into law.
Metal dectectors in desert or on if you can find ancient river bed deposits actually make profit.....faster way to find gold deposit source...should be an interesting year in sierras this year.....
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory
With these furloughs, people are getting Euro-style workweeks essentially, although involuntarily. Two days a month mandatory unpaid days off equals a 36 hour work week...
Why such a huge margin? Because of a huge display of grassroots support. Through petitions, calls, and letters to the Senate, posts on blogs and Facebook, and more, people across the country made it clear that they demanded change. "
Does he really believe Ct voters are going to forgive and forget TARP with this shit? Oh, forgot, he doesn't really believe anything he says.
"my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service."
That's bull, they can sell the parts to service customers that aren't warranty claims. Some repairs might only be approved by a customer if warranty was paying for it, but too bad.
Treasury Secretary Timothy Geithner said he expects a pair of government programs to help banks remove their distressed assets will start by early July ...
Kung fu-
Some parts are only for warranty claims and if not mandated by chrysler previously to purchase them, he could have bought aftermarket and thus made more revenue on service work....relax...he's not the enemy here....
This is OT, but does anyone here have an idea of what happens to my state of CA now? What happens if we can't balance our budget? Does someone repo Ahnold's hummers?
Mr. "Sunshine Dodge" had his head up his ass the last 8 years. I appreciate the feeling..I'm sure all of us have been in that sort of predicament.....but I refuse to feel bad for him because of the very obvious warning signs he chose to ignore. Seriously.....the day Cerebrus took control should have been his "oh shit" moment. The only reason Cerebrus took control of it was that it could "tidy it up" and offload to Tata. Chrysler was executed in plain sight for all to see when that deal never happened. And we're supposed to feel bad for a dealer who failed to see this coming?
dum luk,
I hear you on the unpaid furlough. Spouse works in a highly cyclical industry. Many times in the past decade there has been a quarter or two with every other friday off unpaid, or extended holidays at Christmas/New Year or 4th of July. But this year, it is a week off unpaid EVERY MONTH! (Started in February after a 3 week holiday shutdown).
In June one American site of this company where mostly manufacturing occurs is taking the entire month off, unpaid. Ouch!
We are out of vacation time after next week's furlough. Luckily, we refinanced our house and the reduction in payment will help make up the difference in lost pay. There does not seem to be an end in sight. Needless to say we have discovered the local library and Folgers coffee! Inferior goods abound!
When a county goes bankrupt or a school district totally fails in my state (MA), the state takes them over, cleans them up, and then releases them again.
Would catch and release work for CA? You'd lose your elected officials in the process.
Your comments head is up your ass right now........sure and he was supposed to see his dealership told to shut down by the federal govt after making improvements to store, being successful and treating his customers fair....
ms, Macke was on cnbc earlier and appears to be babbling gibberish...He must be massively short and about to go under. There really is no way to describe it. He is visibly angry at what I can only surmise is the market going up for no reason at all...
DMB, thanks for the reply. I guess the Feds could offer a bailout contingent on a heavy restructure of state finances and possibly our constitution (God knows we need it). I don't think there is any precedent for this so I doubt there is any mechanism in place to handle it.
creditcriminalslovetarp (profile) wrote on Wed, 5/20/2009 - 1:26 pm reply Ignore user MS,
Your comments head is up your ass right now........sure and he was supposed to see his dealership told to shut down by the federal govt after making improvements to store, being successful and treating his customers fair....
On a business he bought and paid for..... and given to another chosen dealer with no compensation form Chrysler or the gaining dealer.....
But selling a product that no one wants is a reason to keep it open? Success is a loosely defined term in this case.......this is a classic case of over-capacity nothing more or less.
See SBUX for a wonderful example.
"treating his customer's fair"...sure that's a great rationale...so let's subsidize everyone who is perceived as "fair". No opportunity to game that type of system.... Since we've all seen how "fair" the banks are.
MS (profile) wrote on Wed, 5/20/2009 - 1:32 pm reply Ignore user credit-
But selling a product that no one wants is a reason to keep it open? Success is a loosely defined term in this case.......this is a classic case of over-capacity nothing more or less.
See SBUX for a wonderful example.
"treating his customer's fair"...sure that's a great rationale...so let's subsidize everyone who is perceived as "fair". No opportunity to game that type of system.... Since we've all seen how "fair" the banks are.
So being around as a dealer able to keep 70 on a payroll he had to have had some customers that were satidfied, revenue had to come in, they were around 2 generations....
Again, private market would determine if he was crooked dealer..
Christ, i cant stand dealers, and have vowed to never buy another new car again, and then never from a dealer. I cant stand t what the UAW has done, cant stand the service departments, cant stand the finance guys at dealers... hate em all...
but one day come in and your life is given to another , hell i never would have conceived that, never....
Do we give the inventory of McDonalds franchises, etc to others..... i mean to think i own a TV appliance and store and the govt could come in and say your closed and stuff going over to freds store...
i know it was Chryslers picks, and not sure what stress test they used... maybe there is a difference between dealerships, maybe some are wholly owned and some are franchise..
Remember, Starbucks closed company stores, and left franchiseees to fend the economy themselves...
this way seems to stink ..... the no compensation clauses...
I usually agree with you...but alas on this one I don't....He was selling cars, he was profitable, he was 5 star which mandates service quality, retention and profit likewise sales end of equation...Having worked with him and many dcx dealers I can tell you that the govt..had no right to shut him down and leave him hanging....
now if he wasn't selling vehicles and increasing his service rentention thats another thing....
Car sales dont make a dealer..Fixed operations and finance are the profit makers for every dealer I have worked with..they pay the bills....
Straw man argument....owning a business with a product no one wants because of inferior quality is not what I'd call a great model moving forward. That he didn't see the declining market share (over a large period of time) to take a new approach to his business is not an excuse. Plain and simple it's his fault for not seeing the forest through the tree's.
and yes I own a business......and I don't whine and bitch about things I should have seen. I adapt....this fellow clearly has not. Does it suck that he gets no remuneration? yes I agree....but it's not like this has been a secret.
"On a business he bought and paid for..... and given to another chosen dealer with no compensation form Chrysler or the gaining dealer....."
This is BS. They terminated his franchise, he's stuck with inventory and property. Nobody is giving his bought and paid for business to someone else. He's not happy, but this whole "controversy" is blown way out of proportion.
dum luk (profile) wrote on Wed, 5/20/2009 - 5:05 pm
With Initial Claims coming out tomorrow, I assume you all caught this statement by President Obama during the live meeting CR posted.
"The concern that we have is that even in a stabilized situation there is the prospect of higher unemployment for some time to come."
General Motors' plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.
The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans.
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
But when it comes to the unions, UAW president Ron Gettelfinger says that he plans to sell the union's stake in Chrysler and GM in order to raise cash to cover retiree healthcare costs.
FD-I have worked with 1000's of chrysler dealers on DMS, ASP software and advertising fronts..
trust me if he was 5 star he was one of good dealers.....Tell me how lithia with 31 chrysler dealers lose 1 dealer or Autonation with similar number lose 1 and this is in small markets too....
its bullshit....nothing more nothing less...MS doesn't get it because his view is everyone should have been nostradamus..hard to do when your running a dealership....trust me it's a job....
NEW YORK (CNNMoney.com) -- The current plans to restructure General Motors and Chrysler LLC will leave the United Auto Workers union in the driver's seat at both companies. But it appears that the union would rather be in the back seat.
Experts say union leaders are worried about being in an uncomfortable position of being blamed by membership if management of the automakers needs to make additional plant closings or layoffs down the road to be competitive. Both GM and Chrysler have already signaled plans to do.
Let somebody else take the stock. Give us the money," Gettelfinger said at a recent press conference. "We are trading debt for equity, and what is the value of the equity? Let's be honest, it's zero today."
Maybe they can sell it back to the secure first tiered creditors.....
I saw an interview with some dealership in Maryland and at the end of it the argument for keeping it open (it was on the "list") was that people won't go to another 8 miles , or so, to a different dealer to buy a car.....
Trader Joe's italian espresso & french vanilla brands coffee is the best taste adjusted per dollar value out there.
I wonder if taste adjusted per dollar value is built into the BLS hedonics calculations of GDP. Umm, this coffee is so good, it adds $1 trillion to GDP even though you only sold $1 million of it. Our GDP might see a 10% increase next year in taste adjusted dollars.
My only real issue is how does he "change his business model or practice", besides getting away from Chrysler?
I cant belive they chose some very successful 5 star Jeep only dealers. Hell i'd buy a jeep product, even a dodge product but never buy a chrysler....nope....
Well he still has his Izuzu business...woops, wait thats GM now isnt it?
"MS doesn't get it because his view is everyone should have been nostradamus..hard to do when your running a dealership....trust me it's a job...."
My effing cat could have seen that coming.....How long has Chrysler's market share been declining?? This was not an overnight development. Your rationale supposes that it was. Running a dealership means keeping track of macro trends....the trend has been against Chrysler for a very long time. This dealership was on the Titanic year's ago....it's his own fault for not recognizing it.
Now part of me agrees with that last sentiment....market share delclining and all..... maybe he had the too big to fail mentality.... I saw a dealer on FBN the day of or the day after and his wife had bought their jeep dealership 15 years ago.... they asked if he was going to fight it and he said no he would move on, but was unsure about all the employees...
Asked if he was upset he said yeah their life was in that dealership, but what could you do....
I wonder if taste adjusted per dollar value is built into the BLS hedonics calculations of GDP. Umm, this coffee is so good, it adds $1 trillion to GDP even though you only sold $1 million of it. Our GDP might see a 10% increase next year in taste adjusted dollars.
Bravo, Comrade. I guffawed.
Though, now that frugality and "trading down" are the new black, the challenge for the BLS will be to spin that as representative of GDP growth.
"Sure, you're buying Maxwell House at $6 per pound* now instead of Starbucks Organic Fair Trade Local Cooperative Taste of Cinnamon Half-Caf Blend at $18 a pound*, but hey, I've tasted 'em both and that Maxwell House is at least half as good! So it's really worth $9 a pound in the GDP calculations. Quant boy! Make it so!"
* - I don't drink coffee - never have. So I have absolutely no idea what a pound of coffee costs. Illustrative purposes only. Do not attempt.
If I was in that business I would have done two things: The day that Daimler bought into it I would have found a way...ANY way...to become a dealer in it's products. Second (many year's later) the day that Cerebrus took control I would have sold it out and walked away. I really think the problem is that this fellow got sucked into the "it's all going to be just fine" mantra.....and really believed it.
The dealership in MD?? I don't recall the name however it looked like the building was in pretty poor shape...something out of the 60's, big glass-fronted older building
"my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service."
That's bull, they can sell the parts to service customers that aren't warranty claims. Some repairs might only be approved by a customer if warranty was paying for it, but too bad."
You like most have no clue as to what he is really saying. New car dealers are required to stock OE parts to maintain the Franchise. Yes their is a market but the warranty traffic is GONE. The inventory is also a dealer warehouse to support other local dealers. Full Chrysler customer warranty will not exist with out a franchise. Parts value drops due to need to liquidate immediately. Independent auto repair is far less reliant on in house parts warranty. It cost money to finance parts sitting on a shelf. Bottom line these guys are being screwed big time.
What could go wrong?
friends of geithner get 100% matching funds to buy cheap assets.
sick
If it starts in July, the financial institutions won't get any taxpayer pass through payments in CYQ2. What will they do for earnings?
Repaired link to Geithner's prepared statement
TG-139: Statement byTimothy F. GeithnerU. S. Secretary of the Treasurybefore theSenate Banking CommitteeMay 20, 2009
I wonder if they will start a Pension Private Public Investment Partnership
PPPIP
or perhaps RIPPBGC would be a better acronym?
Dirk, from last thread:
"The biggest writer of these abominations of housing finance vehicles was Golden West, which was bought by Wachovia, which was then absorbed into WFC."
I would check on that. Maybe Inside Mortgage Finance has some data, but I am pretty sure WM was always the biggest writer, even during the Golden West heyday. But I may be wrong.
Golden West was certainly one of the biggest, but maybe not THE biggest.
Wazzup CR?
The last three times I post something appropriate and pithy, I hit save and Bingo!, new post pig erupts on the page. You stalking me?
"NateTG (profile) wrote (in reply to...) on Wed, 5/20/2009 - 8:49 am
*
"SPX up 1.2% dollar down 1.15%"
I'm not disputing this, but what's your measuring stick?""""
SP500 vs EUROS
currently SPX up .7%
dollar down 1%
so, net loss for stocks.
more loss if you compare to oil (up 2.3%) as ghostface said.
The American taxpayers con plan is working well so far with jerk off Geithner on point...the too big to fail banks that got trillions in TARP are miraculously pumping up great chunks of the Big Shitpile while getting to flush away this pesky toxic assets.
Wash
Rinse
Repeat cycle
I thought we all found out previously that the "private" part of PPIP was a joke!
It is the Public Pig Investment Ponzi scheme..let us be clear on this from now on!
So is Geithner the PIMP of the PPIP?
Ummmm, if these assets are distressed shouldn't the Federal government get PAID to take them? Why are we paying?
Given the rumors of tension between the Fed and the FDIC about whether pressure should be used to force out underperforming bank executives (yes, yes -- a phrase that cries out for either a joke or a curse), and given the FDIC is being anointed the ultimate bagholder in this PPIC three-card-monte game, are there any rumors that it may not just head quietly to the gallows? Sheila, open thine mouth and tell the boys "no"!
"will use $75 billion to $100 billion of government funds to finance sales of as much as $1 trillion"
leveraging on up, there is a pony in that shitpile somewhere
BB bought 10 yrs today, and all he accomplished is to keep yields level?
More dollars printed in vain.
erm, isn't that overpaying?
For LL and others musing about California, we're about to see major pain pushed down to local governments. The State will try to balance its own budget by borrowing funds that normally go to county and city governments. Borrowing compounds the problem, as everyone here knows. The domino effect will take a long time to play out but expect to hear about cuts in vital local services including public safety, which is the lion's share of any local government budget.
btw - California's M.O. in "forecasting" budget gaps is not credible, at least as far as what's made public. The current $21 billion shortfall is a snapshot in time - a reflection of immediate cash needs based on current (yesterday's) conditions. It is not forward-looking and does not anticipate the inevitability of worsening conditions. The "more adverse" scenario isn't recognized until it's a lagging indicator.
@8:50am
Spot on...
Essentially that is how it works. More Pee Pee in the Potty for us......
Ciao
MS
"What could go wrong?"
It could work and they get enough green shooters to buy in to get the securitizaton/ponzi engine going again? Or fail and gift billions more to banks set to die.
Lose - lose.
ppip
powerful people increasing power...
"a reflection of immediate cash needs based on current (yesterday's) conditions."
Thats why the voters shot down the props. My thoughts, what are they going to do to fund their future spending? They need to cut back on all these hand-out programs, pronto! Its downhill from here, if they don't cut the fat!
MS,
How are you positioning yourself right now? Do you think insurers are out of the woods? I think all this talk of the financial system recovering is VERY premature. Looking at default rates and the chart of resets, along with job losses and crappy corporate earnings. Well, it's just starting to get interesting.
"The Treasury’s Public-Private Investment Program will use $75 billion to $100 billion of government funds to finance sales of as much as $1 trillion"
10 to 1 leverage. Sounds about right.
probably be more accurate to compare SPX to US dollar index
3-day chart
SPX up .58%
DX down .93% (june fut)
Gavshire:
I'm with you on 'just starting to get interesting'.
It's remarkable how well the Titanic references work, and how often. It's too cold on the boat deck, and most have gone back inside.
PISS on PPIP
California, the only proposition that passed was the one preventing the legislature from getting pay increases if there is a budget deficit.
Some odd observations that I had this morning (I'm in Boston, we have a budget issue of our own, so I was comparing it to the problems in California):
California budget deficit, 21 billion. Massachusetts budget deficit, 1 billion. Ratio of California population to MA population: 5.65:1.
A new bull market? No more Financial Crisis? Does Buy & Hold Work?
very compelling
as written in more detail http://www.wallstreetjournal.com/story/market_implode_or_rally?
Taxpayer says, Sir I am tired of the daily beatings, Fed, No problem the guillotine is almost done!
Is PPIP related to the PPT?
Less Leverage
“Leverage has declined, the most vulnerable parts of the non-bank financial system no longer pose the same risk and banks are funding themselves more conservatively,” Geithner said.
Relax. All of that leverage has been safely transferred to taxpayers.
I guess the voters in CA rejected the Governator
Here is Geithner's prepared statement.
"Prepared" and "Geithner" do not seem to match.
Sheila Bair wants Tim's job (his whole department actually, and her own). I'm thinking she might get it before long.
GH & burnside,
Agree. Very premature. Going to be real bad for morale when it turns out the taxpayer is still tied to the tracks and that glimmer ahead is not hope, but a fast moving inflation train.
That being said, there's one class of people happily gaming the system to their benefit, one class of people employed and hoping that things are getting better, and one class of people who know that things are not getting better for them, and in fact are just getting worse. There is of course that 4th class of people knowing that things are not getting better, and only getting worse, and pretty much helpless outside of their own little bubble to do anything about it.
Class 2 moving to class 3 continues to increase and become dangerous, class one moves profits and themselves off-shore.
--bh
Will taxpayers get PPIP-slapped?
Did anyone see this?
"German firm plans gold ATMs to meet growing demand"
Sorry if this was discussed last night. I want a gold atm in my house.
burnside
remember most of the people in the Titanic who survived where the rich. i hope all of you have an inflatable raft or at least a door to float on.
Must be nice, another $7.5 bln from Treasury to GMAC, expansive shipping a whole company to China isn't it.
tim-i have couple longboards...I'll rent the shortboards to the bankers...sharks seem to like them....
Vonbeck777: And with good reason, there will not be any silver dispensing ATM''s.
I guess this means there's a new thread about to pop up.
Those will do
GH-
Actually I have very little in the markets right now.......comms., FAZ, and some long dated put options on DIS, SYY. The reason(s) are very simple....we don't have a market at this point all we have is one big "trust me it'll be just fine".....and the system continues to trot out "hold and hope".... That's not a parameter I'm used to using....
Literally am disgusted by it......
Ciao
MS
Ron Paul's Federal Reserve Transparency Act HR 1207 has 166 co-sponsors!
5/19/09 Darrell Delamaide on Fox Business: HR1207 Audit the Fed Bill Gaining Momentum!
YouTube - 5/19/09 Darrell Delamaide on Fox Business: HR1207 Audit the Fed Bill Gaining Momentum!
5/19/09 Walter Jones discusses Ron Paul's HR1207 on Fox Business
YouTube - 5/19/09 Walter Jones discusses Ron Paul's HR1207 on Fox Business
Duke of Con Dao
I guess the voters in CA rejected the Governator
They rejected new taxes, state senate and business as usual over the last 10 years. Legislators will shudder that they cannot pay for all the promises to their campaign contributors.
trying to figure out a vid mash for Geithner and crew... (something that might grab beyond the Beltway or CR)
this vid mash-up has nothing to do with DC except maybe as a nod in an Ozymandias sort of way... Angkor Wat, the remnants of a once great empire,
YouTube -
does have a nice dance beat - California Dreamin' (disco version) and a bunch of cute kids running around, the 2 young boys jumping in the lake at
the end could get me in hot water if either turned towards the camera... Here's to you Arnhold!
Calif is not the only place there will be furloughs
NEW YORK (Fortune) -- Welcome to the summer of the furlough. Manufacturing workers have long suffered from these "temporary layoffs," but the white-collar world is feeling them now, too: During this recession, everyone from universities to technology companies are using furloughs as a way to cut payroll without further trimming their staffs.
And while furloughs are already underway around the nation, human resources specialists say that required unpaid days off are only going to heat up as we head into the summer months, when employees are more amenable to time off -- albeit unpaid.
Expect job furloughs to heat up in the summer months - May. 20, 2009
Vonbek77,
Thanks for the link - that is very interesting.
It would also be interesting to what the POG looks like overlaid with the current "bad bear".
Micheal
Thanks I'll write to Congressman to support this bill. Hopefully it gains traction and won't be watered down.
"Transparency, Accountability and Oversight
We have also taken a number of steps to better measure whether our programs are increasing the flow of credit through Monthly Lending and Intermediation Surveys. Treasury undertook this important initiative to better understand the effects the program is having and to help the public easily assess the lending and intermediation activities of banks participating in the Capital Purchase Program (CPP)."
The public can easily assess bank activities because Treasury has a monthly survey.GS: 'we lent a trillion to the FED, BAC, C, WFC, MS,JPM.
C: we lent a trillion to GS, BAC, the FED, WFC, MS, JPM
JPM: we lent a trillion (88 trillion in derivates),.to GS, C...WFC: we lent a trillion to BRK. It might get reset. FED: we a trillion to everybody, thanks Sheila.
"Sorry if this was discussed last night. I want a gold atm in my house."
At spot +30%, I'm sure you can find people willing to do courier delivery.
MS -- agree. I'm sometimes wrong on the timing of my predictions. But I've never been wrong about the final outcome. And I agree that these markets are either A) Completely Irrational right now, and operating on hope, B) Manipulated, or C) Both.
But I don't have the discipline to walk away. For better or worse I'll stick to my guns, with a few hedges here and there.
This gets better and better...
"Geithner said the government did not have the authority to negotiate a reduction in the value of those claims."
Selective enforcement of contractual obligations.....it's ok to tell GM and Chrysler to pare down it's debt exposure (i.e. tell the note holder's to take a loss) but anything related to looting in plain sight is just fine if not sanctioned by them.
*uck you Timmay!!!
POS
Ciao
MS
The gold ATM charges a 30% premium over spot price.
Perhaps more suited to the previous thread, but very interesting:
A Portrait of the Mortgage Ax, Not Falling -- Seeking Alpha
S&P really underperforming oil now.
Oil, the new gold.
Just gotta remember to get out before that bubble bursts... Tight stops needed.
Does anyone believe Timmy is not running everything by O before its leaked.
MSM is acting as if nothing was said by the voters in California yesterday, while O and what's his name was having a love feast on the WH Lawn. Wonder what he was promised to stand by O and grin.
MS
Cerberus got special treatment of their Chrysler stake not counting the "loan" we gave them back in November. I think they received 50 cents on the dollar while the bondholders got less then 30. I am pretty sure that Nardelli walked off with no less than 50 million.
"Transparency, Accountability and Oversight
Continuing bubble glossary:
"transparency"=opacity
"accountability"=CDS
"oversight"=zzz
did any of you see the item that was slipped into the credit card bill yesterday?
FOXNews.com - Congress Approves Bill Restricting Credit Card Industry, Allowing Guns in Parks
Nice way to play eh?
Now the source of this is not my normal route for news but seeing how it's something to do with guns it's not a coincidence that it's reported from "rupert's rag".
Loaded guns in National Parks...yes we need more of that......PFFFFFFT!
Ciao
MS
Who would be giving these zombies this amount of money? The FED???
Geithner says 10 major banks deemed in need of capital have raised $48 billion
WASHINGTON (AP) -- Treasury Secretary Timothy Geithner says banks identified in stress tests as having capital shortfalls have raised $48 billion of the $75 billion that the government said they needed to get through an adverse turn in the economy.
Yahoo! 404 - Page Not Found
[That was on topic, but this is more fun:]
rejoinder to overnight debate on banning municipal unions, especially police, Fire, and Court System.]
Byz:"Beat cops don't need guns except in their fantasies and press releases. "
Yogi: You can carry but they can't. I trust you with your convoluted logic and "meat-axe" macho drivel? Go fuck yourself.
Byz :"your trade[legal/judicial] and its practices are killing our society so you'll have to go. The question is, will the reform be voluntary,"
Yogi:That qualifies you as a fascist pig, who is not a lawyer and has yet to propose a single intelligent reform, but is confident he can bullshit his way into sounding wise. 'Trust me, I can pull broad historical generalizations out of my ass and am fluent in high school debate tactics.'
--[Yogi: re the value of technical police training]"Is that hippie allowed to say that? My boss said crack his skull."]
Byz:"And it'll get settled out more sooner than later when you make it clear with a couple of prominent examples to them they're liable for thier actions and don't operate outside the law like the modern police. They'll be extremely hesitatnt to use force due to fear of judicial reprisal and that'll be fine and dandy."
Yogi: [Byz in quotes]Who's this all-knowing "you", you? Maybe the hippie said "We must kill the judges and lawyers right now, and any professional who thinks like them, as Pol Pot commands, I have the remote detonator wired up."
"Fear of judicial reprisal." Life-appointed rich white male judges are going to carry out reprisals for King Byz? Or does BYZLaw allow the "idiocracy" to elect judges from their ranks? Who's on crack? Can't they at least get a jury trial? Oh, sorry we need "wholesale changes in the judicial code, judicial practice, ..."mid-Dynastic reform". But it would also be "operating outside the law" to deny the officer due process and enforcement of his employment contract. Byz law is supreme."
Sad to say but as a liberal I support your right to call for violent overthrow of the government in general terms. I know you could care less about my Constitutional rights, they're killing our society.
"Oil, the new gold."
No Gold bars are the new gold. Jewelry will all get smelted down you'll see
Which is why I want an atm at my house. I know lots of newly converted gold bugs who don't look at how much they are paying for their security. 30% is nice. Have gold parties, sell it like avon.
Interesting RSI theory: SPX Chart: Expect job furloughs to heat up in the summer months - May. 20, 2009
dum luk-
the third paragraph (more of a sentence) from the bottom sort of sums it all up doesn't it?
Entitlement generation
Ciao
MS
Who would be giving these zombies this amount of money?
Yes, there must be a backstory here. Somehow I suspect it's gov't money in some form, laundered so that only the losses remain the responsibility of the taxpayer. I can't imagine any sane investment advisor thinking throwing billions into US banks would be good for their clients otherwise...
From Megan McArdle at the Atlantic:
Is California Too Big to Fail?
She doesn't think so...
Has anyone else noticed the increase in casual people wielding metal detectors? I swear I took my kids to the playground yesterday afternoon and there were three people looking for change in the sand boxes. Was not a fun day at the playground. Lost my temper on a senior, hope the police don't come knocking on my door later. Had just cause though.
How can we furlough Geithner?
PPIP - Politicians Perpetuating "Investment" Ponzi
~miser
Effing quote of the day:
"Schapiro says: "I question pretty profoundly any model that would try to move investor protection functions out of the Securities and Exchange Commission."
That couldn't be done "without really damaging the fabric of the entire investor protection regime," she says.
Because they did such a good job, up until this point, with the regs. they already had...
It's very simple...really....enforce what you already have/had and the need to offload any more power onto the fed is moot.
Ciao
MS
"Has anyone else noticed the increase in casual people wielding metal detectors? "
Weird you mention that. I noticed someone with a metal detector the other day, walking along the sidewalk (next to it, in the grass). I wasn't sure what it was at first.
MS,
I liked the next line:
"Find a free place to stay on your furcation" cuz that's all you can afford.
Dodd feeling some heat?
Dear Take a name asswipe,
Victory! Our bill, the Credit Card Accountability, Responsibility, and Disclosure Act, passed the Senate yesterday by an overwhelming vote of 90-5.
Why such a huge margin? Because of a huge display of grassroots support. Through petitions, calls, and letters to the Senate, posts on blogs and Facebook, and more, people across the country made it clear that they demanded change. Believe me, that support was essential as I pushed this bill forward.
This margin of victory is even more impressive when you consider who was fighting this legislation. This was not a victory over weak opposition. Some of the most powerful and well financed special interests in Washington lined up against this bill. They tried everything they could to win votes and water down this legislation. There is no way the Senate would have passed a bill this tough without such vocal support by people like you. We took on the credit card companies and won. Thank you.
The House of Representatives will now pass our version of the bill -- the stronger version -- and send it to the President to be signed into law.
Again, thank you so much for your help.
Sincerely,
Chris Dodd
Damned irresponsible California voters! Adding to the deficit by not being willing to pony up.
"Voters yesterday added $6 billion to a budget deficit when they defeated five measures backed by Governor Arnold Schwarzenegger."
California Confronts Growing Cash Crisis After Defeat (Update1) - Bloomberg.com
Re: Dodd
Chris Dodd: Campaign Finance/Money - Top Donors - Career | OpenSecrets
Yes let's also make this about gun control too....
Ciao
MS
Fck Geithner. Fck PPIP. I thought the banks were well capitalized. F*cking LIARS.
Metal dectectors in desert or on if you can find ancient river bed deposits actually make profit.....faster way to find gold deposit source...should be an interesting year in sierras this year.....
public private my ass...see what a Dodge dealer owner is saying in his open letter...
American Thinker Blog: Letter from a Dodge dealer
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory
With Initial Claims coming out tomorrow, I assume you all caught this statement by President Obama during the live meeting CR posted.
"The concern that we have is that even in a stabilized situation there is the prospect of higher unemployment for some time to come."
Obama voices concern about long-term joblessness - May. 20, 2009
With these furloughs, people are getting Euro-style workweeks essentially, although involuntarily. Two days a month mandatory unpaid days off equals a 36 hour work week...
TCA,
"States: It's taxes, taxes and more taxes
Desperate to balance budgets, states are hiking income and sales taxes on people and businesses."
Numerous states, facing revenue shortfalls, raise taxes - May. 20, 2009
Dodd:
"90-5.
Why such a huge margin? Because of a huge display of grassroots support. Through petitions, calls, and letters to the Senate, posts on blogs and Facebook, and more, people across the country made it clear that they demanded change. "
Does he really believe Ct voters are going to forgive and forget TARP with this shit? Oh, forgot, he doesn't really believe anything he says.
"my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service."
That's bull, they can sell the parts to service customers that aren't warranty claims. Some repairs might only be approved by a customer if warranty was paying for it, but too bad.
Treasury Secretary Timothy Geithner said he expects a pair of government programs to help banks remove their distressed assets will start by early July ...
Sweet... now they can load up on oil futures.
With Initial Claims coming out tomorrow, I assume you all caught this statement by President Obama during the live meeting CR posted.
"The concern that we have is that even in a stabilized situation there is the prospect of higher unemployment for some time to come."
The housing starts numbers alone tell us we're going to be bleeding jobs for at least 6 more months...
"World Bank Says China Recovery Hopes May Be Premature"
Bloomberg.com:
News
"China, Brazil Yuan Trade Will Take Years, Bank of China Says"
Bloomberg.com:
News
I want some of what Macke is smoking...He's lost it...justifiably so, but he's lost it.
Video - CNBC.com
"enforce what you already have/had and the need to offload any more power onto the fed is moot."
Enforce what you have and you might find out the Fed is in bad shape. They may have been doing a little bit too much for their banker shareholders.
Kung fu-
Some parts are only for warranty claims and if not mandated by chrysler previously to purchase them, he could have bought aftermarket and thus made more revenue on service work....relax...he's not the enemy here....
This is OT, but does anyone here have an idea of what happens to my state of CA now? What happens if we can't balance our budget? Does someone repo Ahnold's hummers?
Mr. "Sunshine Dodge" had his head up his ass the last 8 years. I appreciate the feeling..I'm sure all of us have been in that sort of predicament.....but I refuse to feel bad for him because of the very obvious warning signs he chose to ignore. Seriously.....the day Cerebrus took control should have been his "oh shit" moment. The only reason Cerebrus took control of it was that it could "tidy it up" and offload to Tata. Chrysler was executed in plain sight for all to see when that deal never happened. And we're supposed to feel bad for a dealer who failed to see this coming?
Sorry...no pity from me.
Ciao
MS
Ciao
MS
@CK,
Haha, that made no sense to me. I must have missed the joke, or something.
Mr.Geithner sir...if I may.
Casey's Charts - Delay and Pray
With the initial claims tommorow expect the myth of adverse scenario to be debunked
dum luk,
I hear you on the unpaid furlough. Spouse works in a highly cyclical industry. Many times in the past decade there has been a quarter or two with every other friday off unpaid, or extended holidays at Christmas/New Year or 4th of July. But this year, it is a week off unpaid EVERY MONTH! (Started in February after a 3 week holiday shutdown).
In June one American site of this company where mostly manufacturing occurs is taking the entire month off, unpaid. Ouch!
We are out of vacation time after next week's furlough. Luckily, we refinanced our house and the reduction in payment will help make up the difference in lost pay. There does not seem to be an end in sight. Needless to say we have discovered the local library and Folgers coffee! Inferior goods abound!
RATM, I couldn't make much sense of it and I think the host was getting a tad uneasy...
koan, that's a really good question.
When a county goes bankrupt or a school district totally fails in my state (MA), the state takes them over, cleans them up, and then releases them again.
Would catch and release work for CA? You'd lose your elected officials in the process.
kristina-
DK leads in? Sorry won't waste my time with that...
Summary maybe?
Ciao
MS
Folgers is way better than it was. Maxwell House as well, they've really stepped up their game.
King of all coffee roasters is New England Coffee though
MS,
Your comments head is up your ass right now........sure and he was supposed to see his dealership told to shut down by the federal govt after making improvements to store, being successful and treating his customers fair....
ms, Macke was on cnbc earlier and appears to be babbling gibberish...He must be massively short and about to go under. There really is no way to describe it. He is visibly angry at what I can only surmise is the market going up for no reason at all...
DMB, thanks for the reply. I guess the Feds could offer a bailout contingent on a heavy restructure of state finances and possibly our constitution (God knows we need it). I don't think there is any precedent for this so I doubt there is any mechanism in place to handle it.
creditcriminalslovetarp (profile) wrote on Wed, 5/20/2009 - 1:26 pm reply Ignore user MS,
Your comments head is up your ass right now........sure and he was supposed to see his dealership told to shut down by the federal govt after making improvements to store, being successful and treating his customers fair....
On a business he bought and paid for..... and given to another chosen dealer with no compensation form Chrysler or the gaining dealer.....
You must not have a business MS...
How did Dodd vote on the previous credit card bill aka the bankruptcy bill from a few years ago? I bet he was all for it then.
credit-
But selling a product that no one wants is a reason to keep it open? Success is a loosely defined term in this case.......this is a classic case of over-capacity nothing more or less.
See SBUX for a wonderful example.
"treating his customer's fair"...sure that's a great rationale...so let's subsidize everyone who is perceived as "fair". No opportunity to game that type of system....
Since we've all seen how "fair" the banks are.
Nice try!
Ciao
MS
jeeesh I use store brand coffee - you folks are livin in the lap of luxury.
Trader Joe's italian espresso & french vanilla brands coffee is the best taste adjusted per dollar value out there.
hi yo all. I'll take coffe shots to green shots anytime, anyday!
Dodd voted against it.
U.S. Senate: Legislation & Records Home > Votes > Roll Call Vote
jeeesh I use store brand coffee - you folks are livin in the lap of luxury.
I'm making some of this right now.
Much better than the SBUX stuff.
From Megan McArdle at the Atlantic:
Is California Too Big to Fail?
She doesn't think so...
Of course not. But if the magazine was called 'Pacific' it might have had a different take. See New Yorker cover 'New York View of the World'...
Dunkin Brand is New England Coffee, roasted at the same plant in Malden, but costs twice as much on the store shelf.
MS,
WADR,
MS (profile) wrote on Wed, 5/20/2009 - 1:32 pm reply Ignore user credit-
But selling a product that no one wants is a reason to keep it open? Success is a loosely defined term in this case.......this is a classic case of over-capacity nothing more or less.
See SBUX for a wonderful example.
"treating his customer's fair"...sure that's a great rationale...so let's subsidize everyone who is perceived as "fair". No opportunity to game that type of system.... Since we've all seen how "fair" the banks are.
So being around as a dealer able to keep 70 on a payroll he had to have had some customers that were satidfied, revenue had to come in, they were around 2 generations....
Again, private market would determine if he was crooked dealer..
Christ, i cant stand dealers, and have vowed to never buy another new car again, and then never from a dealer. I cant stand t what the UAW has done, cant stand the service departments, cant stand the finance guys at dealers... hate em all...
but one day come in and your life is given to another , hell i never would have conceived that, never....
Do we give the inventory of McDonalds franchises, etc to others..... i mean to think i own a TV appliance and store and the govt could come in and say your closed and stuff going over to freds store...
i know it was Chryslers picks, and not sure what stress test they used... maybe there is a difference between dealerships, maybe some are wholly owned and some are franchise..
Remember, Starbucks closed company stores, and left franchiseees to fend the economy themselves...
this way seems to stink ..... the no compensation clauses...
MS,
I usually agree with you...but alas on this one I don't....He was selling cars, he was profitable, he was 5 star which mandates service quality, retention and profit likewise sales end of equation...Having worked with him and many dcx dealers I can tell you that the govt..had no right to shut him down and leave him hanging....
now if he wasn't selling vehicles and increasing his service rentention thats another thing....
Car sales dont make a dealer..Fixed operations and finance are the profit makers for every dealer I have worked with..they pay the bills....
FD-
Straw man argument....owning a business with a product no one wants because of inferior quality is not what I'd call a great model moving forward. That he didn't see the declining market share (over a large period of time) to take a new approach to his business is not an excuse. Plain and simple it's his fault for not seeing the forest through the tree's.
and yes I own a business......and I don't whine and bitch about things I should have seen. I adapt....this fellow clearly has not. Does it suck that he gets no remuneration? yes I agree....but it's not like this has been a secret.
May be it has been for some.
Ciao
MS
And expect the market to be up 5% anyways.
"On a business he bought and paid for..... and given to another chosen dealer with no compensation form Chrysler or the gaining dealer....."
This is BS. They terminated his franchise, he's stuck with inventory and property. Nobody is giving his bought and paid for business to someone else. He's not happy, but this whole "controversy" is blown way out of proportion.
dum luk (profile) wrote on Wed, 5/20/2009 - 5:05 pm
With Initial Claims coming out tomorrow, I assume you all caught this statement by President Obama during the live meeting CR posted.
"The concern that we have is that even in a stabilized situation there is the prospect of higher unemployment for some time to come."
There is that unstable stabilization again.
According to Reuters: CORRECTED - UPDATE 1-GM bankruptcy plan eyes quick sale to gov't
| Reuters
General Motors' plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.
The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.
The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.
The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans.
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
But when it comes to the unions, UAW president Ron Gettelfinger says that he plans to sell the union's stake in Chrysler and GM in order to raise cash to cover retiree healthcare costs.
UAW reluctant to grab wheel at GM and Chrysler - May. 19, 2009
FD-I have worked with 1000's of chrysler dealers on DMS, ASP software and advertising fronts..
trust me if he was 5 star he was one of good dealers.....Tell me how lithia with 31 chrysler dealers lose 1 dealer or Autonation with similar number lose 1 and this is in small markets too....
its bullshit....nothing more nothing less...MS doesn't get it because his view is everyone should have been nostradamus..hard to do when your running a dealership....trust me it's a job....
The Scary Question Of The Day (which I first asked myself about fifteen years ago) -
How much do real estate prices have to fall to accommodate a standard 32-hour workweek?
Answer? A lot more.
Saul Steinberg, "View of the World":
http://www.artinfo.com/media/image/13718/002_SaulSteinberg_ViewOfTheWorld.jpg
NEW YORK (CNNMoney.com) -- The current plans to restructure General Motors and Chrysler LLC will leave the United Auto Workers union in the driver's seat at both companies. But it appears that the union would rather be in the back seat.
Experts say union leaders are worried about being in an uncomfortable position of being blamed by membership if management of the automakers needs to make additional plant closings or layoffs down the road to be competitive. Both GM and Chrysler have already signaled plans to do.
Let somebody else take the stock. Give us the money," Gettelfinger said at a recent press conference. "We are trading debt for equity, and what is the value of the equity? Let's be honest, it's zero today."
Maybe they can sell it back to the secure first tiered creditors.....
MS
unless you speak Italian would you do me a favor and jettison that 'Ciao' part in your missives, please?
dCD
JBR-
I saw an interview with some dealership in Maryland and at the end of it the argument for keeping it open (it was on the "list") was that people won't go to another 8 miles , or so, to a different dealer to buy a car.....
Gotta Love it....
Ciao
MS
Saul Steinberg, "View of the World":
http://www.artinfo.com/media/image/13718/002_SaulSteinberg_ViewOfTheWorl...
I realize calling it a "NEW YORK View of The World" was a tad redundant... but that was for all those Left Coasters out there... somewhere.
Trader Joe's italian espresso & french vanilla brands coffee is the best taste adjusted per dollar value out there.
I wonder if taste adjusted per dollar value is built into the BLS hedonics calculations of GDP. Umm, this coffee is so good, it adds $1 trillion to GDP even though you only sold $1 million of it. Our GDP might see a 10% increase next year in taste adjusted dollars.
MS,
My only real issue is how does he "change his business model or practice", besides getting away from Chrysler?
I cant belive they chose some very successful 5 star Jeep only dealers. Hell i'd buy a jeep product, even a dodge product but never buy a chrysler....nope....
Well he still has his Izuzu business...woops, wait thats GM now isnt it?
MS,
Im in MD...was that Dar cars, or Pohanka or Fitzgeralds?
"MS doesn't get it because his view is everyone should have been nostradamus..hard to do when your running a dealership....trust me it's a job...."
My effing cat could have seen that coming.....How long has Chrysler's market share been declining?? This was not an overnight development. Your rationale supposes that it was. Running a dealership means keeping track of macro trends....the trend has been against Chrysler for a very long time. This dealership was on the Titanic year's ago....it's his own fault for not recognizing it.
Ciao*
MS
* Appena per voi DCD
MS,
Now part of me agrees with that last sentiment....market share delclining and all..... maybe he had the too big to fail mentality.... I saw a dealer on FBN the day of or the day after and his wife had bought their jeep dealership 15 years ago.... they asked if he was going to fight it and he said no he would move on, but was unsure about all the employees...
Asked if he was upset he said yeah their life was in that dealership, but what could you do....
dryfly:
Actually, you have to love the embedded assumption.
heh.
I wonder if taste adjusted per dollar value is built into the BLS hedonics calculations of GDP. Umm, this coffee is so good, it adds $1 trillion to GDP even though you only sold $1 million of it. Our GDP might see a 10% increase next year in taste adjusted dollars.
Bravo, Comrade. I guffawed.
Though, now that frugality and "trading down" are the new black, the challenge for the BLS will be to spin that as representative of GDP growth.
"Sure, you're buying Maxwell House at $6 per pound* now instead of Starbucks Organic Fair Trade Local Cooperative Taste of Cinnamon Half-Caf Blend at $18 a pound*, but hey, I've tasted 'em both and that Maxwell House is at least half as good! So it's really worth $9 a pound in the GDP calculations. Quant boy! Make it so!"
* - I don't drink coffee - never have. So I have absolutely no idea what a pound of coffee costs. Illustrative purposes only. Do not attempt.
FD-
If I was in that business I would have done two things: The day that Daimler bought into it I would have found a way...ANY way...to become a dealer in it's products. Second (many year's later) the day that Cerebrus took control I would have sold it out and walked away. I really think the problem is that this fellow got sucked into the "it's all going to be just fine" mantra.....and really believed it.
The dealership in MD?? I don't recall the name however it looked like the building was in pretty poor shape...something out of the 60's, big glass-fronted older building
Ciao
MS
"
"my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service."
That's bull, they can sell the parts to service customers that aren't warranty claims. Some repairs might only be approved by a customer if warranty was paying for it, but too bad."
You like most have no clue as to what he is really saying. New car dealers are required to stock OE parts to maintain the Franchise. Yes their is a market but the warranty traffic is GONE. The inventory is also a dealer warehouse to support other local dealers. Full Chrysler customer warranty will not exist with out a franchise. Parts value drops due to need to liquidate immediately. Independent auto repair is far less reliant on in house parts warranty. It cost money to finance parts sitting on a shelf. Bottom line these guys are being screwed big time.