Watched the GM news conference today

[cardude]

• Saturn is officially history by 2011. They will try to sell the distribution network to someone. I bet dealers are pissed, since they all had to build new stores to get the franchise. Wow. Sad for the dealers. Who is going to buy a Saturn vehicle now that they know they are being phased out?
• Got the extra 4B today. May need a total of 30 billion by 2012.
• 2100 fewer dealers forcasted by 2014. Wow. Big number. No big GM funding to speak of to help dealers as they go away.
• Bankruptcy could cost the federal government a total of 100B vs an estimated 30B in loans out of bankruptcy, mostly due to demand falling off a cliff.
• Still working on trying to sell Hummer, and if it does not happen by March they will just chunk it.
• Saab will either be sold to the Sweeds, or go into some kind of bankruptcy, but in Sweeden not here in the US.

That's it for now. Another slow day with no sales. Going home to kick the dog................

 

[samclem]

• Saturn is officially history by 2011. They will try to sell the distribution network to someone. I bet dealers are pissed, since they all had to build new stores to get the franchise. Wow. Sad for the dealers. Who is going to buy a Saturn vehicle now that they know they are being phased out?

Saturn had such a loyal following, but GM blew them off. I liked the plastic body panel idea, but GM ditched it. If they'd been able to build tight, high-quality cars, they could have been a contender. Sorry to see them go, but the brand was just a shell of its former self.

• Bankruptcy could cost the federal government a total of 100B vs an estimated 30B in loans out of bankruptcy, mostly due to demand falling off a cliff.

I guess I should feel like I'm getting a bargain. Instead, I feel like I just put a down payment on a Saturn SUV --with a on a ten year note -- financed at 15%.

That's it for now. Another slow day with no sales. Going home to kick the dog................

I hope things get brighter. Ease up on that pooch!

 

[JOHNNIE36]

I'm a GM salaried retiree and leased a Saturn Vue in March 2008. I think it's a great car. It's really my wifes. Heard through the grape vine that GMAC, in harmony with GM, that they will not be wanting any vehicles back at the end of the lease and that they will be offering them at about a third off the Kelly Blue Book value. If that's the case I'm going to buy it. It's a year old, only 4000 miles and no problems so far. Think I'll see how it goes for another two years and what happens in the market, but this sounds like a great deal if it all comes about. From what I hear, it's not just Saturn, but any leased vehicle. The finance companies don't want them back.

 

[mark500]

Seems like the auto companies are toast. Only a structured bankruptcy will save them. These "loans" are akin to using a ventilator on a brain dead patient. Delays the inevitable.

 

[tsturbo]

Seems like the auto companies are toast. Only a structured bankruptcy will save them. These "loans" are akin to using a ventilator on a brain dead patient. Delays the inevitable.

Yes, agreed. The government should have never gone down this slippery slope of bailing out anyone. Let them fail. I am so sick of bailout after bailout, no one will bail me out but my tax dollars go to bailout corporate greed and poor products many people do not want to buy. And for all those companies who have outsourced all the jobs out of the US, they should be forced to pay an import tax.

We are in for bad times it seems for a long long time with no end in sight.

 

[Texarkandy]

The whole bailout thing kind of reminds me of Cleavon Little holding a gun to his own head in Blazing Saddles.

 

[ziggy29]

The whole bailout thing kind of reminds me of Cleavon Little holding a gun to his own head in Blazing Saddles.

That's a pretty good comparison, actually, now that I think about it...

 

[W2R]

Another slow day with no sales. Going home to kick the dog................

Sorry to hear that. Are prices coming down? I guess dealers are caught in the middle and can only lower prices so far.

Since kicking the dog seems to be an unpopular choice, I'd suggest an extra-hard workout at the gym instead.

 

[Leonidas]

The bailouts do seem to be helping everyone who was fiscally irresponsible. It comes down to are we being stupid and helping the wrong people, or are we being smart by keeping them afloat so they don't drag us down with them?

Harriet Johnson: Isn't anybody going to help that poor man?

Dr. Sam Johnson: Hush, Harriet! That's a sure way to get him killed!

Bart: [high-pitched voice] Oooh! He'p me, he'p me! Somebody he'p me! He'p me! He'p me! He'p me!

Whatever it is I think it is out of our hands. But I can't help thinking of that old saying that if you can't identify the sucker at the card table it means you're the mark.

[Bart places his hand over his own mouth, then drags himself through the door into his office]

Bart: Ooh, baby, you are so talented!

[looks into the camera]

Bart: And they are so *dumb*!

 

[Jeb-NY]

I knew several people that had Saturns the first few years they were built and loved them. It was almost like they belonged to a cult. Birthday parties for the company and all. One still has his as a second car with a ton of miles on it.

Then they just became another car company.

Jeb

 

[cardude]

Going home to kick the dog................

That was a joke. Sorry. I have a great dog-- a black Lab mix. She is 14 years old and still kicking, or at least walking around. Her name is Daisy.

 

[OAG]

IMHO this is the biggest "transfer of wealth" this country has ever seen and it seems to be getting worse as time goes by. Seems that the prudent, thrifty, financially sensible, and LBYM in this country are only going to get a larger tax bill and higher prices to pay for all of the idiots that think money "grows on trees"; it does not - it is shipped in from Washington.

Even Mark Haines on CNBC (I know) was really ranting about the latest "housing rescue plan" this morning - IMO he is about the only "smart" guy/gal on that show. The rest just "go with the flow".

 

[cardude]

Even Mark Haines on CNBC (I know) was really ranting about the latest "housing rescue plan" this morning - IMO he is about the only "smart" guy/gal on that show. The rest just "go with the flow".

I heard that on my way into w**k this morning as well. He was really mad about the whole housing relief deal, and I can see his point. I feel like he does. I bought a home recently, and I'm in the process of doing a refi, and now I'm wondering if I can get in on some of that money (especially the principle reduction money). However, my current loan is not in trouble (yet, lol) and I've got a little money so I'm sure I don't qualify.

I really suported the initial emergency GM bailout because I have a vested interest being a GM dealer, but now that I'm almost out of business here at the dealership I'm thinking like a regular consumer/tax payer, and I think it's a stupid idea. The government seems to be digging us (and our kids and grandkids) a big financial hole.

Did anyone hear the Rupublican(!) Senator (can't remember the name) talking yesterday about how we need to start think about nationalizing the banks? How scary is that? Supposedly that's why financials sold off so much. Disclosure-- I own a decent bit of Wells Fargo in my taxable portfolio, and also through my Berkshire holdings.

 

[FinanceDude]

Did anyone hear the Rupublican(!) Senator (can't remember the name) talking yesterday about how we need to start think about nationalizing the banks? How scary is that? Supposedly that's why financials sold off so much. Disclosure-- I own a decent bit of Wells Fargo in my taxable portfolio, and also through my Berkshire holdings.

Don't worry, Warren will get you out of that happens, and/or he'll start lending the Fed money at HIGH interest rates.........

 

[ziggy29]

Don't worry, Warren will get you out of that happens, and/or he'll start lending the Fed money at HIGH interest rates.........

Maybe, but his own stock seems to be going to zero, so maybe he should be buying it back instead...

 

[Zathras]

The reasoning is, even though it isn't fair (and this goes for any of the bailouts) that if you can help the economy it helps everyone.
However, that is a big IF. I don't believe the auto bailouts will work, just put off the need for bankruptcy and drain the goverment (e.g. our) pockets.

 

[ziggy29]

The reasoning is, even though it isn't fair (and this goes for any of the bailouts) that if you can help the economy it helps everyone.
However, that is a big IF. I don't believe the auto bailouts will work, just put off the need for bankruptcy and drain the goverment (e.g. our) pockets.

I think it's all more of the same: continue trying to prop up today's more mature generations by burying their kids and grandkids in an insurmountable mountain of debt. The problem is that I think we've been doing this for 30-40 years -- pretending the "deal" working people were getting was sustainable when it wasn't -- and it's getting harder and harder, and more and more costly, to continue to prevent the house of cards from collapsing and continuing the denial that things have changed and not for the better.

 

[cardude]

Don't worry, Warren will get you out of that happens, and/or he'll start lending the Fed money at HIGH interest rates.........

I'm so glad I've got Warren making these hard decisions for me. I really feel like he is setting the shareholders up for quite a few years of nice gains with his latest moves. This is the perfect time for someone like Buffett, who really has a knack of exploiting uncertainty like we have now.

Maybe, but his own stock seems to be going to zero, so maybe he should be buying it back instead...

The stock will come back. Come on, Ziggy, drink the Kool Aid with me! Seriously, in 2-5 years we are going to look very smart when the returns from all these recent investments start hitting the income statement and when the derivitives get priced correctly and when some of the struggling operating companies start to recover.. ....Of course, I may be totally wrong and we may all be broke in a few years!

 

[FinanceDude]

I think it's all more of the same: continue trying to prop up today's more mature generations by burying their kids and grandkids in an insurmountable mountain of debt. The problem is that I think we've been doing this for 30-40 years -- pretending the "deal" working people were getting was sustainable when it wasn't -- and it's getting harder and harder, and more and more costly, to continue to prevent the house of cards from collapsing and continuing the denial that things have changed and not for the better.

Hopefully we are not headed for a 20 year recession like Japan......

 

[cardude]

Hopefully we are not headed for a 20 year recession like Japan......

Has anyone back tested the 3-4% SWR idea in an environment like Japan's 20 year recession? Will it work? Are we doomed?

 

[Bimmerbill]

I am worried about the debt load on future generations. I don't understand the gov't increasing spending and cutting taxes.

Now I hate paying taxes. But, I certainly don't think we should be cutting them right now.

Soon it will be mathimatically inpossible to pay back the debt!

 

[clifp]

Has anyone back tested the 3-4% SWR idea in an environment like Japan's 20 year recession? Will it work? Are we doomed?

Interesting question, I haven't seen any SWR studies for countries outside of the US. My gut level tells me that with the declining stock market and 0 interest rates since the early 90, a Japanese who retired in 1989 would be in a world of hurt with Nikki dropping from 39K to 7,500. The slightly better news is a 30 year retiree would have seen the Nikki raise from 5K to 7500.
I am not sure how a bond portfolio would have performed during the same time period but I suspect it isn't great since interest rates were down.

I think the only hope for a Japanese retiree was to switch from an aggressive 80/20 equities portfolio and than switch to 50/50 portfolio in 89 or 90. I.e. perfect market timing is the remedy for all bear markets

 

[jIMOh]

Seems like the auto companies are toast. Only a structured bankruptcy will save them. These "loans" are akin to using a ventilator on a brain dead patient. Delays the inevitable.

what he said.

 

[ziggy29]

I'm hearing details of a pending deal between Detroit and the UAW. As usual, tinkering around the edges and not addressing the legacy costs that are killing them. Another band-aid over a bleeding amputation.

 

[samclem]

I think the only hope for a Japanese retiree was to switch from an aggressive 80/20 equities portfolio and than switch to 50/50 portfolio in 89 or 90. I.e. perfect market timing is the remedy for all bear markets

Or heavy diversification out of his home market. Which would be a little easier for a citizen of Japan than a US citizen. Foreign diversification helps more when the problems are largely restricted to your home island, but less useful when the whole developed world gets hit (as it is now).