On our journey to the Volt, we have to check in regularly on the financials, as we know the Volt depends on GMs survival. Things have been very tough for automakers this year with sales down through the end of August an average of 11%. This from high oil prices and slowing economy, matters are only made worse now by the tightened credit markets and the teetering of the US economy. People with good credit who want to buy a car are now having trouble just getting the loans. And forget about leasing.
GM was expected to announce a sales decline of 24%. Ford reported a decline of 35%, with their expected rate being 25%. Chrysler dropped 33%, Honda dropped 24%, Toyota dropped 32%, and Nissan dropped 37%.
It turns out GM beat the expectations and sales only dropped 15.6%. This was less than the industry overall where sales slumped 20%. As well, GM market share overall increased to 27% which they noted was their highest monthly market share of 2008. Per GM North American VP Mark LaNeve, “September marked the second consecutive month where GM performed extremely well in tough market conditions.”
GM noted particularly that Malibu sales were up 200 percent, and that a total of 1957 hybrid were sold in the month. That hybrid sales numbers included 91 of those 70K + 2-Mode Escalades.
GM mentioned the good publicity that the Volt unveiling has given them as LaNeve noted “the public reveal of the production version of the Chevrolet Volt E-REV as the highlight of our GMnext celebration last month showcases GM’s leadership in advanced propulsion technology and fuel efficiency.”
On a related note, President Bush formally signed $25 billion in loans to US automakers last night, after the provision was passed by Congress.
Source (GM)
[UPDATE: other automakers sales numbers added]
This entry was posted on Wednesday, October 1st, 2008 at 2:12 pm and is filed under Financial. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Oct 1st, 2008 (2:26 pm)I would like to see a break down of the 1957 hybrids sold. Although it is an advance, the BAS system on the Saturn’s and Malibu isn’t really much of a hybrid. The 2 mode Yukon however is an awesome hybrid.
Oct 1st, 2008 (2:30 pm)As my dear ex-wife always used to say, “Thank God for little favors”.
May He or She grant that GM is able to survive until the Volt rides to the rescue.
Oct 1st, 2008 (2:34 pm)Repost from last thread…makes more sense here:
GM off 15.8%
Ford off 35%
Toyota off 32.3%
Hyundai off 25.4%
Honda off 20.9%
Chrysler off 33%
Nissan off 37%
It looks like everyone is taking a bath. It makes the GM numbers really confusing…to the point of not adding up. By all rights the number should have been 5-10% higher. GM did nothing special in the month….how can this be?
So naturally, I spend some time digging around, trying to figure out how they did it. Then I stumbled upon this nuggest. GM started NEW dealer incentives on August 23rd, 2008…and the world makes sense again.
Here is how it works:
For every car your local dealership sold in August (with the super-duper rebates– it was US$4,214 per vehicle in July as FYI) they also got a $250 ‘credit’ on their books. Now that same dealer can take up to 4 of those credits ($1000) to put against SEPTEMBER sales. That should be good for another 5-10% I figure.
/mystery solved
…and GM doesn’t have to show how bad its bleeding for another month, (thats 3 fancy step months in a row adding a new ‘twist’) until the Q3 quarterly report November 3rd, 6PM, when GM can’t hide the cost of these ’sales’
http://www.banknet360.com/news/NewsAbstract.do?na_id=9710
——————–
Here is a breakdown by brand and car of September sales at GM:
http://media.corporate-ir.net/media_files/irol/84/84530/sales_production/Deliveries_September_08.pdf
You might notice that all the ‘non-disaster sales’ came from the cars with the most to gain from this discount…the low price/no margin cars, they call all the incentives plus another $1,000 slapped on the hood.
Buick – 29
Cadillac – 30
Chev +13.4
Thanks…have a good night…and tip your waiter on the way out.
Oct 1st, 2008 (2:34 pm)TTAC is now reporting that ToMoCo’s year-over-year drop was “32.3 percent overall, with the Toyota brand falling 28.9 percent and Lexus down 33.4 percent compared to September 2007.”
Wow, DOUBLE the drop GM experienced. Way to go GM!
Linkage:
http://www.thetruthaboutcars.com/toyota-september-sales-fall-323/
Can’t say I’m too impressed with the sale of a whopping 91 2-mode Escalades, though… yargh!
EDIT: I concede that Statik’s analysis might be spot-on. September was “Employee pricing for Everybody Month,” and the low drop does seem a little too good to be true. No doubt, though, the truth is somewhere in between, and with luck, it’s biased toward the ‘good news’ end of the spectrum.
Oct 1st, 2008 (2:43 pm)Sorry to change the subject but I just stumbled across an animation of the Volt power flow ….
http://www.autobloggreen.com/2008/10/01/video-animation-showing-the-power-flow-in-the-chevy-volt/
If you’ve already seen this…..nevermind.
Oct 1st, 2008 (2:55 pm)#3 Statik
Also re-posted from last thread: LOL
Your point that big incentives will affect sales is well taken, but I’d think the sales numbers are far more influenced by the “employee pricing” than the dealer incentives.
Ike and the gas shortage couldn’t have helped these numbers (for any of the manufacturers). If you are having trouble getting gas you’re not going to be thinking about buying a new vehicle. Nor does the financial meltdown help at all. I actually know people who are pulling their money out of banks. They and others worried about their houses and pensions and money market accounts are not buying cars.
Oct 1st, 2008 (2:59 pm)Yea I saw this as the biggest killer of the Volt. If the company cannot survive until it is made then we may lose our best hope for an all-electric car.
Oct 1st, 2008 (3:05 pm)#6 DonC
Your point that big incentives will affect sales is well taken, but I’d think the sales numbers are far more influenced by the “employee pricing” than the dealer incentives.
—————–
Oh, I agree with you 100%…again.
If not for the massive deep cuts, GM would probably be off north of 40%. Same for alot of the other auto manufacturers.
I was just trying to figure why when compared to its peers did GM fare better. How did they come in 5-10% better? What did they do ‘on top’ to achieve it, and at what cost?
—————
By favoUrite quote from Gm’s offical press release:
Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. “We again gained retail share and our total market share looks to be above 27 percent for the month without an increase in incentives.
—yupe, ‘no direct, measurable apparent incentive to the customer’ Mark. The marketing departments are virtual wizards.
+3 mystical autosales improvements
You notice they don’t ‘toot’ there horn too much, because they know the even more powerful ‘Accounting Wizards’ will -out- the cost of their little plans next month….and now they have to turn off the incentive tap
Oct 1st, 2008 (3:16 pm)Any legitimate money in GMs pocket can only be a good thing for the Volt at this point.. how did everyone else (specifically Chrysler!) do over this same period vs their expected? Are the unstated expectation numbers assumed to be quite close?
NPNS! =D~~
Oct 1st, 2008 (3:18 pm)Even with the “hidden sales” as Statik was talking about, these are good numbers for such hard times. I am still betting GM will be OK. In fact GM stock is now at $9.41 per share……I think I might as well pick some up, with the $25B signed and all. Safe to say it might double in the next 3 years. Good luck to all playing the market.
Oct 1st, 2008 (3:29 pm)#10 Jim Rowland
Just a word of caution…not about GM (everyone knows how I feel there, lol). But I wouldn’t invest in something you care about (assuming you do indeed care about GM/the Volt program because you are here). It is hard enough playing the market without having to tame personal bias (good or bad) as well.
Alot of other fish out there to play.
(Side note: GM only gets about 6.5 billion of that 25 billion…and they do have to show some receipts, it’s not all going bottom line)
Oct 1st, 2008 (3:39 pm)Side, side note:
GM wasn’t turning a profit before all these incentives, now sales are off about 20% this quarter (even less margin) -AND- they are giving away $4,300 extra per car…on 828,000 total vehicle sales.
Napkin math:
828,000 vehicles Q3 x $4,200 (blended average) = $3,477,600,000 extra lost direct from bottom line…before you account for the ‘regularly scheduled’ loss for the quarter.
Is there a flaw in my napkin math? It seems simple, but perhaps I am missing something.
Oct 1st, 2008 (3:53 pm)Other financial news for GM
Employee pricing is done…replaced with, zero percent financing…ro up to $7,000 off. What, did they already have this? Is it possible to keep this stuff straight?
“You need to keep changing the offers to give buyers the opportunity to find the most value,” said McDonald (GM spokesperson) in an interview. “With the tightening of credit out there in the market, we think this helps consumers get in a vehicle.”
The offers begin today and run to Nov. 3 (suspiciously the same day GM reports their quarterly results).
http://www.bloomberg.com/apps/news?pid=20601209&sid=aRZ66eC5SSrA&refer=transportation
I wonder what your credit score has to be to qualify for the 0%? I’m guess most will take the ‘up to…’ cash.
————————————————————
GM suspends stock purchases by employee 401(k) plans.
Why? They just ran out, because the price went so low. How do these employees sleep at night?
http://biz.yahoo.com/ap/080930/gm_employee_stock.html?.v=1
Oct 1st, 2008 (3:55 pm)Statik,
I agree on your thoughts. I also want some stock in allergan… is that because I love……. um, well, they do make things look good don’t they!! Alot of people like augmentations………..
I guess I got off topic. Back to GM. Bias aside- it is worth a small risk, not the farm. I know better than to put it all in one basket. Both battery makers are also a good risk, still a risk, as is GM. The right choices now will pay off big, not only in the auto industry. In dangerous times the bet risk is large, but so is the payoff on a well placed bet. These times are not for the faint of heart.
Oct 1st, 2008 (4:04 pm)Staik,
so there dealers get credit for 4 cars sold in aug (in 6 selling days) towards their Sept. numbers and it affects their numbers by 5-10%???
They sold 284,300 cars a 10% flux would be 28,400.
I think it was probably more like a 3-5% boost.
Your thoughts?
Did you see my message from the last topic?
Get it all out tomorrow!
Oct 1st, 2008 (4:06 pm)Statik is doing what he does best. Being negative.
Oct 1st, 2008 (4:12 pm)I am not sure I understood Statik’s point, but if I did, then if we look not at number of vehicles, but amount of money lost, GM probably did not do that much better than the other car makers in Sept, because money went out the discount hole rather than the low volume hole.
Oct 1st, 2008 (4:16 pm)I just looked deeper at the GM car sales breakdown:
Really shows the shift away from gas guzzlers:
Monte Carlo & Grand Prix down 90%+
Did notice the Full size silverado sales picked up, barely off from last Sept. Guess employee pricing brought the buisness that needed trucks out from under their beds.
Oct 1st, 2008 (4:32 pm)Telsa announced they will soon be producing a 5-passenger sedan with 240 mile range for $60k
Full production will begin in 2010 and plant will crank out 30,000 of them running on two shifts.
This car will be much bigger and faster than the Volt.
And maybe even cheaper.
GO TESLA GO
Oct 1st, 2008 (4:32 pm)#15 JonP
Staik,
so there dealers get credit for 4 cars sold in aug (in 6 selling days) towards their Sept. numbers and it affects their numbers by 5-10%???
They sold 284,300 cars a 10% flux would be 28,400.
I think it was probably more like a 3-5% boost.
Your thoughts?
——————————-
Sorry maybe I didn’t explain the system well enough.
They announced the plan in late August, but they get the rebate on every car sold in August.
So for every car a dealer sells in August, they get a $250 rebate they can put towards a new sale in September. On top of that they can combine up to 4 on one sale. ie) take $1,000 off the price to close the sale of a Mailbu in September.
This is a unrestrictive rebate plan, meaning they can take the lowest priced or best selling vehicle and take another $1,000 off. Means little to nothing on a Escalade, but means alot on a already deep discounted Malibu…or no margin base price Vibe.
/I think thats clearer?
————————–
#15 Gary
Statik is doing what he does best. Being negative.
—-
It is kind of my thing.
(=
Oct 1st, 2008 (4:35 pm)The only reason why GM suspended the employee stock purchase program was becase they ran out of shares. They have to file with the SEC inorder to purchase more shares. Once this is done and the amount is determined they will continue the program.
Oct 1st, 2008 (4:37 pm)By cheaper, I mean the Tesla sedan will be much cheaper to maintain over its lifespan.
Oct 1st, 2008 (4:55 pm)How can this super tiny company called Tesla release a brand new electric sedan BEFORE the Volt and produce 3 TIMES THE VOLUME of the Volt ?
GM is moving too cautiously with the Volt program and they are going to lose untold thousands of potential sales by dragging their behinds on this one.
They need to see that Tesla, Nissan, Chrysler, Mercedes and others are right on their tail. If anything they need to accelerate their efforts to keep what tiny lead they may have. 2010 is going to be an interesting year with all these players jockeying for position.
Oct 1st, 2008 (5:09 pm)#20 Statik (Me)
JonP, check that last post of mine …. I went back and checked, there is multiple links on this, and you are right.
It officially ran from the 23 thru the 31st of August… 9 days of the month, so my timeline is off. I’m trying to figure out when the release of this info was to the dealer, to allow for delayed sales or not.
So we can only allow for about 30% of the month’s sales generating further rebates…or about 84,000 additional rebates were given total to indice September sales. How many sales does that translate to? I honestly can’t say.
Thanks for pointing that out. I appreciate the heads up.
Oct 1st, 2008 (5:16 pm)>> I would like to see a break down of the 1957 hybrids sold.
GM hybrids:
636 Tahoe
374 Yukon
91 Escalade
443 Vue
382 Malibu
31 Aura
TOYOTA hybrids:
10,873 Prius
2,785 Camry
921 Highlander
820 Lexus (3 models)
Oct 1st, 2008 (5:25 pm)This looks pretty positive to me. Malibu sales up 192% is great. Maybe this car will finally start gaining a little ground on the TOYO Camry (still far behind). The big crossover sales up 10% is also good. These things start around 30K and are 40K with some options.
I am surprised they did not show list numbers for the Cobalt XFE in their release. This thing is pretty cheap and has best in class mpg. According to other things I have read, they have had to add shifts out in Ohio to keep the Cobalt line running round the clock.
As far as investing in GM goes, I think it is probably a smart gamble whether you are a fan boy or not. They are not a “normal” company in the sense that some people have a certain pride in GM and look at them as some sort of US institution. They are the flagship car maker for the US. This buys them some brownie points with our Congress. For this reason, there will be pressure to keep them afloat in bad times (Think lots of votes). Our congress spends money like drunken sailors after a six month cruise on a routine basis. For them to stick a few more $B into some black hole spending bill to keep GM rolling for the next couple of years will probably happen if needed. This makes them a “safer” investment risk than some other lower visibility companies that under the same financial conditions might be left to fail.
Using my 10 cents worth of financial analysis above, I would say that GM limps through the next two years with some ups and a lot of downs but is ultimately able to deliver the Volt, Cruze, Plug in Vue, and a few other cool cars which will enhance GM’s image and at the very least, drive up the stock price for some time.
Oct 1st, 2008 (5:33 pm)#25 john1701a
Something is wrong with the Escalade number of 91. Not that it would be a barn burner, but GM is running full page ads all over the place in national publications. Spending $91M in advertising to sell 91 cars doesn’t smell right.
Oct 1st, 2008 (5:44 pm)I did my part and bought a new Suburban LTZ. The employee pricing plus the rebate + the exceptionally good trade-in on my 2001 made it an amazing deal. I would have had to pay someone to take that 2001 these days.
I’m not sure they made money.
Oct 1st, 2008 (5:58 pm)#10 Jim Rowland said “……I think I might as well pick some up, with the $25B signed and all. Safe to say it might double in the next 3 years. Good luck to all playing the market.”
=========================================
Here is a true story. Last week people I know, smart people who either work at Wachovia or are close to Wachovia, saw how beaten down Wachovia shares were. So they said to themselves, we know Wachovia is a great bank with a great future (what the Wachovia CEO said on TV too), so here is our chance to get some big blocks at low prices. So they did.
And now, this week, those shares are virtually worthless. Each of the people I know has lost thousands and some tens of thousands of dollars. It is a very painful loss to them.
The loss of Wachovia is a big loss for NC in many ways, but I owned no Wachovia shares. Also, I am not forecasting a similar outcome for GM. But “a ship on the beach is a lighthouse to the sea”, and from the Wachovia lighthouse we see that shares that have fallen to low levels can still go down from there to zero. And, last week, my friends here thought the likelihood that GM would fail was much greater than the liklihood of a failure (fire sale) of Wachovia.
Oct 1st, 2008 (6:05 pm)Here I am in China right now, and the Japanese beat GM once again. Honda and Toyota are sold above MSRP. GM also lacks lng-term lanning, one example is the Buick brand (once considered premium) extended to poor quality/flimsy Buick Sail. almost everyne complains that GM vehicles are gas hogs. Maybe GM sales still going up, but private buyers much prefer Japanese cars. Most old cars here are Volkswagen junk, but 50% new cars (only foreign brand taken into consideration) are Japanese.
I’m not lying, maybe I will come back later with a Youtube video.
Oh, please, please, get a GM guy and deny this fact and clam GM to be the top vendor to the average Chinse buyer.
Oct 1st, 2008 (6:29 pm)Maybe a positive note – a couple of old techies got a ride in a Tesla. First hand account and video:
http://electronicdesign.com/Articles/Index.cfm?AD=1&ArticleID=19842&bypass=1
Mentions 100% torque at 0 mph more than once
Oct 1st, 2008 (6:31 pm)My glass is still half full, or at least a quarter full, or… at least I have a glass!!
Oct 1st, 2008 (6:39 pm)Haven’t heard from Tagamet since back from holiday, is he ok? Has statik finally, scared him off? Is he in a que in Alanta waiting to fill up, wishing he had a Volt, hehehe?
LJGTVWOTR
NPNS
Oct 1st, 2008 (6:59 pm)#33 NZDavid
Haven’t heard from Tagamet since back from holiday, is he ok? Has statik finally, scared him off? Is he in a que in Alanta waiting to fill up, wishing he had a Volt, hehehe?
LJGTVWOTR
NPNS
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Yeah, I broke him…there was alot of crying, it was a bad scene.
I was just thinking about that myself when Rashiid came back…Tag disappeared.
Oct 1st, 2008 (7:09 pm)Let’s not toot too much here for GM…these are still horrible figures. Moreover, none of the sales included vehicles with plugs. I am not impressed.
Oct 1st, 2008 (7:22 pm)Statik.
Where the heck do you keep pulling all these numbers from?
Are utilizing the DRE method or a more disciplined method?
Oct 1st, 2008 (7:40 pm)#27 DonC Says: “Something is wrong with the Escalade number of 91. Not that it would be a barn burner, but GM is running full page ads all over the place in national publications. Spending $91M in advertising to sell 91 cars doesn’t smell right.”
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Can you say “green washing?”
People who are interested in saving gas generally don’t buy Escalades.
Oct 1st, 2008 (7:45 pm)#12 statik says “Napkin math:
828,000 vehicles Q3 x $4,200 (blended average) = $3,477,600,000 extra lost direct from bottom line…before you account for the ‘regularly scheduled’ loss for the quarter.
Is there a flaw in my napkin math? It seems simple, but perhaps I am missing something.”
======================================
Trying to argue more positively:
Perhaps, if GM had no sales decline and sold all vehicles at MSRP, they would have had a $3B net income. This outcome is what they wished to be true.
If GM had sold the same number of vehicles at MSRP, GM would have broken even. This is the same as saying their planned profit margin was about 16%.
So, as it is, they lost about $3.5B, due to discounts. Not good, but not as bad as $3.5B additional loss.
So your math is right but the conclusion may be wrong.
Oct 1st, 2008 (7:52 pm)Unrelated, but some might be interested:
I was looking at the chevy website and noticed that the commercial from the olympics (the “timeline”) has been updated to reflect the new volt:
http://www.chevrolet.com/electriccar/
Now if they’d just air that version…
Oct 1st, 2008 (7:56 pm)Keep an eye on this.
http://greenlight.greentechmedia.com/2008/10/01/toshibas-batteries-for-electric-cars-and-bikes-scib-620/
Take Care
Arch
Oct 1st, 2008 (8:04 pm)RE: Nikki #!9
Tesla vaporware plans are just that; Pure unadulterated vaporware. The Tesla sports car has been in “mass production” for 3 years!. They have produced NINE, n-i-n-e, 9, the number after 8, and before 10, cars.
And probably nine hundred press releases and articles in the car mags. I would say they should double production to 3 cars a year first; and then double again to 6; and then double again to 12; and double again to 24 in the next 18 months and that would be a lot of massive growth.
Dream on about thousands of these cars. Tesla is the biggest hype job since the Tucker …
At least DeLorean actually produced some cars …
Oct 1st, 2008 (8:38 pm)#38 RB
#12 statik …
Trying to argue more positively:
Perhaps, if GM had no sales decline and sold all vehicles at MSRP, they would have had a $3B net income. This outcome is what they wished to be true.
If GM had sold the same number of vehicles at MSRP, GM would have broken even. This is the same as saying their planned profit margin was about 16%.
So, as it is, they lost about $3.5B, due to discounts. Not good, but not as bad as $3.5B additional loss.
So your math is right but the conclusion may be wrong.
————————————–
Your right, of course, it may have been better to deep discount than to hold the line.
…although to be fair, I didn’t make any conclusion on which is/was the better route for GM to take. I generally don’t draw a conculsion about the merit of one plan over another.
I’m a investor at my base, so I come at all earnings releases/press statements from the angle of attempting to assertain, (or suss out through discussion with my peers), a company’s future situation based current situation and on the impact of how recent decisions will affect future earnings/health ahead of the market…and then, ‘theoretically profit’ from being accurate.
Oct 1st, 2008 (8:50 pm)Perhaps the most compelling reason of all to buy a Chevy Volt is that it still works when there is no gasoline! And this is happening frequently down here in the southeast. My friends in Atlanta said it was very bad last weekend — my friend drove around Atlanta at 11pm looking for 1) an open station, 2) one that had gas, and 3) one that didn’t have a 40 minute wait.
I am sure if GM had 10,000 Chevy Volts, they could have sold all of them in Atlanta in 48-hours weekend for $40K.
Oct 1st, 2008 (8:55 pm)GM press release ;
Our Sales Suck Less!
Oct 1st, 2008 (8:59 pm)For all of you railing against the “Wall Street Bailout”, here is how financial paralysis plays out on Main Street. GM and the rest of the automakers are getting killed in two ways. First the dealers can’t get financing to hold inventory. Second customers can’t get financing to buy cars.
http://www.nytimes.com/2008/10/01/business/01auto.html?ref=automobiles
No car sales, no jobs for autoworkers. No jobs for autoworkers no sales for retailers. No sales for retailers …. you get the picture.
Oct 1st, 2008 (9:13 pm)I know how GM can boost their Sales figures in 4th quarter 2008.
Start selling a car or suv (hint VUE) with a plug !
I have $32K cash earmarked for the fist plug-in from an American car company.
NPNS !!!!
Oct 1st, 2008 (9:21 pm)Gee, I wonder if Toshiba still makes a 4head VCR.
I guess at some point they said let’s stop production on VHS and go full speed ahead with DVDs.
Wonder when the GM BRASS will make that obvious simple decision.
Oct 1st, 2008 (9:44 pm)Nelson – when in doubt, go with the 80/20 rule. For every quarterly-compounding 80% of the market that competitors snatch from GM’s slow hands (come on, grasshopper), GM will devote an additional 20 manhours per week toward getting the Volt wheels on the road. They should be just about caught up by the time fusion gets here.
Oct 1st, 2008 (10:53 pm)Stas Peterson #41
“At least DeLorean actually produced some cars …”
*** *** ***
And I’m told that of the few that still exist….NO RUST!
Oct 1st, 2008 (11:23 pm)GMNext.com is all new and exciting now, lol.
The Volt has its own site now.
http://media.gm.com/volt/
Some new stuff…videos etc. Enjoy.
Oct 1st, 2008 (11:29 pm)#45 DonC
For all of you railing against the “Wall Street Bailout”, here is how financial paralysis plays out on Main Street. GM and the rest of the automakers are getting killed in two ways. First the dealers can’t get financing to hold inventory. Second customers can’t get financing to buy cars.
http://www.nytimes.com/2008/10/01/business/01auto.html?ref=automobiles
No car sales, no jobs for autoworkers. No jobs for autoworkers no sales for retailers. No sales for retailers …. you get the picture.
——————————————————–
….and don’t forget if GMAC doesn’t qualify for the ‘bigger bailout’ package, thats a whole other kettle of fish (at least 49% of a kettle)
Oct 1st, 2008 (11:37 pm)Off topic, and out of place for this forum. Still, stumbled across this and had to share.
For those of you that think a $700B bailout is necessary to save GM/ the country, etc. I urge voters and congressmen to think about how we got in this hole and and who’s leading us out.
From the Miami Herald:
Is it safe to trust a Wall Street veteran with a Wall Street bailout?
http://www.miamiherald.com/news/politics/AP/story/695796.html
Those bonds, called mortgage-backed securities, are precisely the bad assets taxpayers will now be buying back from Paulson’s colleagues on Wall Street.
During Paulson’s tenure, Goldman was not as big a player in issuing mortgage bonds as two other investment banks that have gone under this year, Bear Stearns and Lehman Brothers.
But the 2005 annual report shows that Goldman was still a significant player. Its trading division, which included the mortgage bonds and complex financial instruments called derivatives, reported pre-tax earnings of more than $6.2 billion, up sharply from $3.5 billion in 2003.
From July, 2002:
“Goldman Sachs Releases New Mortgage-Backed Securities Valuation Framework; New model offers clients cutting edge tool for MBS pricing and relative value analytics.”
http://www.thefreelibrary.com/Goldman+Sachs+Releases+New+Mortgage-Backed+Securities+Valuation…-a089485874
Really makes you wonder why there is such an urgent press (aka martial law) in congress to get this thing passed.
Oct 1st, 2008 (11:58 pm)Not to mention the $500 million in GS stock Paulson cashed in on before taking the Treasury position. (Plus his pittance of a salary) . . . you get the picture.
Oct 2nd, 2008 (12:56 am)Junk Mortgages Under the Microscope
http://money.cnn.com/2007/10/15/markets/junk_mortgages.fortune/index.htm
Oct 2nd, 2008 (1:41 am)statik #12,
I think the “mistake” in your napkin math was assuming that the ~$3.5 billion loss due to incentives is “extra”. GM has been giving large incentives for a long time (although perhaps not this large). Therefore GM’s previous quarterly losses would also have included similar losses.
But it is more evidence that GM can’t seem to make money on cars.
Oct 2nd, 2008 (2:15 am)That article that GM was being surpassed in China and GM vehicles are cheap in China was another Toyota PR event
Toyota puts its people out there on there internet and on line to bash or to make it seem not in style to buy american.
Its funny how toyota does this because toyota cars are junk and people think they are good because toyota pr is so strong.
Trust me from a family who has owned many toyota cars they are not that good. We have had several transmissions fail engine cam shafts strip and shocks blow out.
The american cars in our family have been just as good or better and one thing with american cars is they are buit so much stronger in accidents so you dont have to pay a millon dollars to fix them when they are hit by a shopping cart.
Oct 2nd, 2008 (8:44 am)That’s great news that the Malibu’s are selling so well, and that the hybrid SUV’s are starting to move out the door as well.
The one thing the post doesn’t mention is the impact that making the GM discount available to everyone had. I suspect that had a lot to do with people diving on all vehicles, especially the high priced ones.
Oct 2nd, 2008 (12:10 pm)I have to agree with greg #56.
My 82 Supra : cracked cylinder head.
My 95 Rav4 : Complete oil starvation via cracked oil pressure sensor. Funny how it could piss out oil yet not register the non existent pressure.
Toyota’s are far from perfect.
Oct 2nd, 2008 (2:36 pm)NZDavid
“Haven’t heard from Tagamet … Is he in a que in Alanta waiting to fill up…?”
oJeff:
“I am sure if GM had 10,000 Chevy Volts, they could have sold all of them in Atlanta in 48-hours weekend for $40K.”
The gas situation in Atlanta is much better today, thanks. Why, I just drove right up to a pump without waiting in line, today! (3 out of 4 stations still out, though).
o.Jeff@original.com is correct: I’m still wishing for a Volt!
!
Oct 2nd, 2008 (4:37 pm)This is like an old joke. Is it better to have your head cut off or head cut off, shot fifty times and heart cut out?
Hai Rasta, you dead mun? lol Just as we thought it was safe to buy again, bang, hit by a BUS.