As GM Goes So Goes the Nation
Thursday was a very sobering day indeed. As the Dow plunged to below 9000, GM shares continued their very dramatic slide.
When the Volt was first introduced, GM stock was around $30 per share, eventually reaching $40, at the close of today’s session it had dropped 31%, reaching a staggering $4.76 which dropped its market capitalization to 1929 levels.
Before the current financial crisis really took hold, GM was already struggling, having lost $15.5 billion through the first half of this year, and $70 billion over the past 3-1/2 year.
As low as auto sales have been getting, 2008 being at the lowest levels in 17 years, due to high oil prices, the drop in credit, leasing, and consumer confidence, things could get much worse. Even GM’s safe havens of sales growth like Europe and China are shrinking. In fact, JD Power and Associates has even stated “the global (auto) market in 2009 may experience an outright collapse.”
Another problem is cash flow. GM has to spend about $1 billion per month. They are believed to have access to $21 billion, but need a cushion of $9 to $10 billion to operate.
The Chevy Volt is well along in its development, production intent, and slated for production 2010. Its what this site has been all about and what we are all waiting for. But is it possible GM could fail to make it there?
The dramatic story of the Chevy Volt has certainly gotten more intense these past few days.
GM financial spokesperson Renee Rashid-Merem stated “we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets. But bankruptcy is not an option GM is considering.”
No matter what happens, I believe the Volt will arrive, even if radical changes have to happen to make it so. Its that important. We must get off of oil.
Also, considering how integral GM is to the US economy, in terms of sheer number of employees, revenue, and the myriad other industries, companies, and employees who are tied to GM, the US government is likely to help if needed. Indeed $25 billion in loans to automakers has already been approved.
And no matter what, this site shall continue on undaunted to witness, discuss, experience and influence the world’s first mass-produced electric car, the Chevy Volt.
Source (Bloomberg)
Popularity: 2%
Related posts:
- The Race is On: GM Chrysler Merger Accelerating
- GMs September Auto Sales Only Down 15.6% Beating Admittedly Low Expectations and all the Other Major Automakers
- GM Buys Out 19,000 Workers, Time to Get Lean and Green
- GM and Chrysler in Merger Talks
- Could Recession Crash the Volt?
(8 votes, average: 4.88 out of 5) 
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October 9th, 2008 at 8:51 pm
ahem… Statik?
October 9th, 2008 at 8:53 pm
Tough times, this may lead to some weight loss on their part but overall build a stronger company and better product.
October 9th, 2008 at 8:58 pm
amen
October 9th, 2008 at 9:02 pm
I love the game being played.
Take Care
Arch
October 9th, 2008 at 9:03 pm
The 25 Billion for the automakers pales in comparison to the 700+ billion for the financial sector. There is NO way the government should let GM fall. Perhaps the gov should start thinking about expanding the funds available to the automakers, maybe 100+ billion? Don’t tell me they don’t have the money for it, they spend about 7 billion a month on wars…. Maybe its time the US took a look at its priorities… Now that the Iraqi’s have been “freed” from a “horrible dictator” they seem to be killing alot more Americans then there were with a dictator.
October 9th, 2008 at 9:13 pm
GM cannot fail. I’m still disgusted with the $700B crook bailout, that should have been handled differently so that tax payers aren’t burdened with it. GM, actually the big 3, are going to need quite a bit of help.
October 9th, 2008 at 9:18 pm
GM took a huge hit today, true, and is down a significant amount from last year. I guess it’s time to start asking.. what does GM’s cash position look like?
October 9th, 2008 at 9:24 pm
Thank you, Lyle, for both your update and your realistic yet optimistic approach. Regardless of if GM pulls through or not, I still think you should go down in history as one o the main voices that brought the plug in hybrid concept into reality. It WILL be built, because the demand was demonstrated. All we can do now is see what happens.
October 9th, 2008 at 9:26 pm
Is the Volt the future? Put up or shut up. Now is the time to buy GM shares and propel GM back into contention. GM is building the car we want and by god they are American made. Let’s show some pride and support them. These are hard times but these things go in cycles. We need American cars and we need the American companies to make the cars we want. GM is working on it.
October 9th, 2008 at 9:27 pm
The US cannot afford to let GM fail.
RIght or wrong, the US still clings to the notion that we are a manufacturing nation. To loose GM, even to a bankruptcy they might emerge from, would exact a political and pyscological toll on the country that I don’t think we could imagine. Detroit is on the brink as it is, and the failure of GM and/or Ford/Chrysler would push it into anarchy. Too many cities in the midwest depend on the factories to provide jobs and fatten the tax base.
Worse, letting GM go under would show once and for all that the US is not based on what it makes in a factory anymore. Too many people in this country are not prepared for a future other than in manufacturing. If for no other reason, GM will be propped up to ensure the industrial base of the country exists for the national security and national pride.
October 9th, 2008 at 9:29 pm
If the price of GM drops low enough, somebody will buy them. That’s just how the market works. There are places in the world that have been accruing U.S. dollars to the tune of hundreds of billions of dollars.
October 9th, 2008 at 9:34 pm
Upcoming positives:
1>A new president in office. The second year of a presidents first term (2010) is an ‘up’ market.
2>Clean coal technology and additional nuclear plants will restrain electric utility price hikes.
3>Federal and state bills are being passed to rebate the cost of clean fuel vehicles.
4>Incoming political leadership have a diligent and positive policy toward American made products and alternative fuel vehicles.
5>Savings of billions of dollars in diverted cost of current Arab war.
Current negatives:
1>A “Can’t do” attitude of a public who is beat down by the relentlessly careless government spending program. This will soon change.
2>Perceived “fear” concerning the “take-and-take more” activity in the stock market. Another 10%-15% drop is needed to reach the bedrock. This new “real” level needs to be cared for and protected for the good of the general public. And lets not use words like “correction” and “liquidity”… it’s “drop” and “money” we’re talking about.
We’ll get through this tough period and eventually reach the point of having 25% of all vehicles on the road being driven by battery power.
Don’t panic, trust in the future. Because this is where we are all going.
=D~
October 9th, 2008 at 9:37 pm
#6 Grizzly - “I’m still disgusted with the $700B crook bailout, that should have been handled differently so that tax payers aren’t burdened with it.”
Your anger about having to save the financial system is understandable, but it’s highly unlikely it will turn out as a burden on taxpayers. Today I saw a segment on CNN that was talking about direct investment in the banks in return for stock. This is the Swedish and Japanese solution, but what was interesting was that the commentator was pitching it as being better for the taxpayers because the taxpayers would benefit from the stock when (if) the banks recovered.
This is crazy since the basic plan is just about guaranteed to make money so long as the Treasury pays market prices for the loans. The Treasury can borrow at less than one percent. The loans will carry double digit interest rates (because they’ll sell at a discount from their face value). Borrowing at low short term rates and loaning at higher long term rates is a very good recipe for making money. Actually it’s called banking. But no one has ever had such great borrowing capacity or payed such low interest rates. Over the longer term buying the loans will not burden the taxpayers. It will make them pretty good returns.
This is not like Defense or Entitlements where the money just gets tossed down the toilet so that in year two you have to just do it all over again. More investment than anything, it’s fundamentally different than most government spending.
October 9th, 2008 at 9:39 pm
GM’s image in China is that they produced decent cars with low MPGs, then extended the brand to low quality Korean junks (I could not believe the low quality of Buick Sail on HuNing Expressway on Sep 27th), and then destroyed their brand image (Buick was considered to be chic in China 3 years ago). Today, the vehicles sold above MSRP in China are exclusively Japanese and that tells you something.
GM volt will NOT save GM, instead, it is a project filled with risks and unattainable goals, the best scenario is that Volt can improve GM’s image, provided that the battery is robust for 100,000 miles, but even that is something GM would not bet on currently. There are plenty of people who cast doubt on GM’s ability to have commercially viable battery for the Volt (Toyota, Honda, Dr. Menahem Anderman, GM battery experts, etc).
To be fair, GM should NOT be 100% liable for their downfall, the American public, who were used to corrupted, irresponsible lifestyle (V8 SUV) is also to blame.
There are plenty foolish rednecks on this blog, if you want to find out how GM is doing, travel to China and talk to the local people, they will tell you GM vehicles are gas hogs and far less refined than Toyota/Honda. Also if you think GM Volt is surely a success, go and test the battery pack yourself, not the single cell. Actually A123 has great difficulty in manufacturing in consistent quality, a must for the battery pack.
I’m not Toyota employee, and in fact, I was a Japanese hater, but at the same time, I want to be factual. Ask yourself this question: Why I want to believe what GM/Lutz have to say when their credibility in the past 30 years is not impressive?
October 9th, 2008 at 9:40 pm
I’m buying now. This is a great opportunity to grab some bargins! This financial mess WILL PASS. I don’t often quote FDR but “…the only thing we have to fear is fear itself…”
I’m saving up and investing. With the profit I make in this downturn and eventual upturn I might be able to buy a VOLT cash!
P.S.
YSF you are a fool.
Fear not!
October 9th, 2008 at 9:41 pm
Might be a good time to buy stock…… In a few months…
Maybe….
Didn’t it take something like a little over 2 years for the 1929
crash to finally impact bottom in 1932???
We may have a LONG way to go……
Hopefully, Doctors and ISP’s will still be needed if/when we all start living like the “WALTONS” did on Walton’s mountain…
Lyle, Stay the course with this web site.
Hopefully the ads are more than covering the cost of upkeep.
We know your time is another matter…
I look forward to re pointing volt-nation.com to whatever site is
developed after the VOLT’s release. :o)
Paul
October 9th, 2008 at 9:42 pm
Oh, I forget one thing, if GM is gone, Chrysler may also follow, then the market will allow Ford, Toyota, Honda to thrive. To most people (>90%) outside Rust belt, we could not care a tiny bit about the fate of GM, as a matter of fact, I was impressed with Chevy Malibu, but bought Toyota instead due to unproven reliability record and possible belly-up of GM in 2 years.
October 9th, 2008 at 9:54 pm
hi ysf #13,
I haven’t been called a “redneck” in awhile. At least I pronounce the “g” at the end of my “ing” words.
And FYI, I don’t own a gun. Do you?
=D~
October 9th, 2008 at 9:54 pm
YFS
You say A123 have not been tested.
Not true!!!!
http://www.youtube.com/watch?v=3dRpAZci9m0
Also read any thread of you choice here
http://www.rcgroups.com/batteries-and-chargers-129/
Test score =A
October 9th, 2008 at 9:56 pm
Anyone with a spare $250-$500 million to play with could take control of GM right now.
There are a lot of players out there with that amount of cash sitting around at the moment. (Sovereign wealth funds, pension funds, etc…) Just sit and think about the implications of that for a bit…
October 9th, 2008 at 10:01 pm
#9 Belloc - “Now is the time to buy GM shares and propel GM back into contention.”
Doing your civic duty isn’t a good prescription for financial success.
Dave K - “Another 10%-15% drop is needed to reach the bedrock.”
Actually I’d argue we’re already overdone. The big issue is with financials. Historically they’ve been about 5% of the market. Then they started a thirty year climb to over 20%. If you assume the overvaluation of the market is roughly correlated to the above normal value of the financials, then the market was overpriced by about 15 - 20%%. We’ve corrected for that quite a long time ago. (A couple of points: one is that this doesn’t mean it won’t continue to drop, fear and greed are not strictly rational; and two, this is solely my back of the napkin approach so take it for what’s it worth).
FWIW we don’t have to look far to see sectors with big rises as a percentage of the S&P 500 crash. This was the pattern in the 80s in energy stocks and in the 90s with tech stocks. Unfortunately the bursting of the bubble usually results in a fairly nasty crash that takes other sectors into the crapper for a while.
October 9th, 2008 at 10:05 pm
#6 Grizzly
“GM cannot fail. I’m still disgusted with the $700B crook bailout, that should have been handled differently so that tax payers aren’t burdened with it.”
Absolutely! GM cannot fail. That $700B is a HUGE number. Coincidentally, it’s the same amount that we send overseas for foreign oil, Each Year! That’s $700B going last year, going this year, going next year, etc.!
That’s why GM cannot fail. The Volt is the 1st nail in that $700B coffin. And E-Flex is the next set of nails.
October 9th, 2008 at 10:06 pm
Tomorrows going to be interesting to say the least…
As of this typing…
At 10:30PM ET: 8,183.37 Down 974.12 (10.64%)
Japan’s Nikkei.. That’s 10.64%
It was at 38,900 a few (ok, many) years ago..
This evening it’s at 8,183 and change?
I need a different game to play…
October 9th, 2008 at 10:10 pm
WRT #13 P.D.F.T.T.
October 9th, 2008 at 10:19 pm
Technology can lead us out of oil dependence.
Spending too much, running up the deficit, and monetizing the debt can NOT lead us out of too much spending, too much deficit, and increased debt.
Consumers, voters, Americans — please wake up soon.
October 9th, 2008 at 10:30 pm
I don’t know lyle, first you write a pretty negative article on GM then this ignorant chinese redneck ysf who hates the Japanese writes a nasty comment. I have to vote this as the worst blog yet on here, I say delete the whole thing.
October 9th, 2008 at 10:30 pm
BTW, looks like slowly but surely Treasury is coming around to the view that Swedish/UK plan of partial nationalization is better. We may still avoid a depression …
40-7=32K in 2010 would still be a pipedream for most if depression does set in ….
October 9th, 2008 at 10:31 pm
Maybe the government can take over GM after it takes over the banks, it won’t matter much anyway after the elections we’ll have Reid, Pelosi and Obama if that’s not socialism I don’t know what is, and this isn’t political its fact
October 9th, 2008 at 10:46 pm
From “THEAUTOCHANNEL.COM”
“Washington DC October 7, 2008; The AIADA newsletter reported that for the auto industry, September could be the start of a really bad stretch.
Last month, U.S. light-vehicle sales declined 26.6 percent, and industry executives glumly predict that a turnaround won’t occur until 2010.
According to Automotive News, some analysts expect that U.S. sales this year could be as low as 13.0 million cars and trucks, a precipitous downturn from last year’s 16.2 million. ”
I expect there will be some huge consolidation in the automobile industry in 2009. I hate to say it but I would bet Toyota and Honda will buy out the big 2 (Chrysler is semi privately owned) in the next 12 to 24 months at fire sale prices. I hope I’m wrong because I hate to see the last of the American Industrial complex vanish.
A lot of people think this is the beginning of the next great depression. I hope they are wrong too. I’m glad I don’t have children that will have to live through the next generation. Any thoughts?????
October 9th, 2008 at 11:03 pm
OK, this is MY thread. I take no joy in it, but it has been coming along time, if you are caught in it, then you have to deal with it. And you need to deal with it right now. Hope is not a option, believing in other people to help you is not a option.
I was here pounding the table on the economy and GM for well over a year, and I have taken, well…a pantload of grief willingly. I said GM was done when I first got here. I said it was a dog at $30, at $25, at $20, at $15, at $10, and now…today…at $4.76.
How can I be clear on this. GM is done, it is over. There is no ‘out’ situation, there is no ‘win’ scenario. Do not put your money in this thing. They are going Chapter 11 and ‘may’ be viable if they come out…the Volt’s hope for survive is in the restructure of GM (provided of course the economy doesn’t make it go Chapter 7).
Alot of really good, strong companies will NOT survive this, GM is not one of these companies.
I’ll leave you with my post from June 23rd, 2008, (post #83), just read it, because today I really don’t care about GM at all, but I care about many people here. This thing has gone past ‘How does the economy affect GM, and how does that affect the Volt’ It is now, how does this thing affect real people.
http://gm-volt.com/2008/06/23/gm-requests-7000-tax-credit-to-chevy-volt-buyers-mccain-offers-gm-5000/
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———————————
#83 Statik Says:
June 23rd, 2008 at 7:13 pm
Ok, back to my story on the economy and how it is affecting me. (Side note: Dinner was lovely, I had the sirloin, with 3 cheese baked potato and a side of mushrooms–love those with my steak)
As many of you know, I’m not all that positive on the economy, or GM’s representational portion of that pie. To that end I have adjusted my portfolio to a mostly cash with a small portion of high yield guaranteed papers (about 95%), with 5% still in equities. I’ve stated this position before…also not news.
However, as I examined my position the last month or so, I have come to realize that the asset I have worked most at, the one I have feverishly pay off, my home, is under considerable risk.
I live in Canada, so up until this point we have not shared in the downtown like our neighbours to the south. As a matter of fact we have had high single digit to double digit growth for the last 6-7 years…until recently, for May the housing market was only up 5% (average Canadian house was $314,000 vs $299,000), still not bad right? The curve however is dropping quickly.
I live within 50 miles of the GM Oshawa Truck plant, so maybe I can see the wave coming quicker than most. So this week I put my house on the market. Now let me be clear, I love my house, I could very well stay where I am am not be affected by the downturn (except for the depreciateing value on my property). I have flipped in and out of houses all along the way…but this one was to be ‘the last one,’ sadly the pressure to ‘cash’ out and put my equity into something with a nice guaranteed yield has become greater than staying in my house.
My neighbour down the road was not so lucky, he bought the most expensive house in the most expensive subdivision, then proceeded to drop 150K in options into it…just to find out his job had been transferred away. Now he has left, but too bad for him, he still owns it, it is now available to be rented for about double in what I pay in taxes.
I guess the moral of the story is, regardless of your opinion of myself, or where you think the economy is going, it is always worth taking a second look at where you are right now, and where you are headed.
Do you have cash in the bank? Do you have equities? How secure are they? Do they have a good currency asset mix? Do you have equity in your home now? If so, how much? If the economy continues like this for another year how much will it be? Or two years? Are you OK with that?
Everyone will have different answers and solutions to this economy. Some will change their investments, some will get out of the housing market. Some will try to ride it out where they are. Some will take a major hit, some are taking one now. Unfortunately for others, they will lose it all…some already have.
Hopefully in a few weeks I will be 100% liquid, and having my equity working for me as hard as it can, as safely as it can. That is my solution, that is my comfort zone.
At first I was bummed to sell, I won’t lie, putting the sign on the lawn was tough, this was where I was going to spend the next 30 years. But now, I couldn’t be more excited to be 100% bulletproof. Maybe in 5 years, I’ll buy it back for half price.
Cheers, and good luck.
—————————————-
So thats what I did…and I got lucky/observant enough to be right and avoid this thing. But the same principals go for today. Protect yourself…your the only one who can.
/Cheers…and good luck.
October 9th, 2008 at 11:06 pm
It may be bad news right now, BUT….. You can now buy GM stock for $4.75 a share. It may be well worth to plunk down $500 and get a 100 shares of GM stock.
October 9th, 2008 at 11:08 pm
THE PERFECT STORM.
Over three dollar gallon gas! (killing SUV & Truck sells causing billions in retooling plants to meet new demand)
Credit Crunch (leasing cars & trucks killed vie gmac)
UAW disputes 1 qt this year
700 billion dollar bailout further tighting of credit lending
In your life times you will never see this again.
BUY , SELL or Hold the markets always rebound (its just how much time it will take)!
October 9th, 2008 at 11:10 pm
My Best guess is that it is all up from here .
God Bless
Edwin Mang Jr.
October 9th, 2008 at 11:13 pm
How will Lutz fuel his helicopters and jets without a job? I see the end for GM I’m sorry to say as I have owned nothing but GM over the last 25 years from my first car, the Pontiac J2000 to the Bonneville, Impala, Trailblazer and Corvette sitting in my garage right now. I feel the Volt is a little too little, a little too late. With oil prices sinking, gas will follow and there will be no need for a $40k electric car. I pray that I’m wrong.
Dave
October 9th, 2008 at 11:19 pm
Frank B I have bought 2,000 shares today. I do believe in GM and I have 100 years of history backing me up. I don’t recommend buying GM, this stock is not for the faint of heart. On the other hand this could be the Buy of a life time . Good luck & I hope you make Millions
October 9th, 2008 at 11:21 pm
#27 Statik
I’ve enjoyed your blogs and hope things go good for you, your a good guy
NO PLUG NO SALE —=D—-$00.00 (I think, not so sure anymore)
October 9th, 2008 at 11:37 pm
Side note to Lyle,
Look who is using Yahoo interactive charts now, hehe.
October 9th, 2008 at 11:45 pm
Statik I too have enjoyed your posts and your insights have always been thought full and respect full. Your feelings on GM Corp could be right on the money and you have many pros backing you up . But there is no way in hell that GM is going down at the worst the US Gov. will lend GM 400 Billion to keep afloat just like they did with dodge/chrysler in the 80’s. Again Gm effects 25 million US workers, the below to the market would be earth shattering !
October 9th, 2008 at 11:56 pm
Statik #27
Take a deep breath pal. If our economy as a whole embraced your attitude we would be done. The reality is we’ve faced much greater challenges and we’ve come through, just like we will this time. Nice try.
October 10th, 2008 at 12:11 am
There is a probability the Volt will not see the light of the day in 2011 if the current financial turmoil turns real ugly.
October 10th, 2008 at 12:16 am
I believe I got knocked for using the word “catastrophic” in reference to the developing economic chaos raging on Wall St. in a different post. Well, for those of us who didn’t clearly see this coming or were unable to liquidate their assets and now must ride it out…it’s starting to feel pretty darn catastrophic.
If anyone thinks now is the time to buy GM stock, you better wait to see if they file for Bankruptcy…
The Volt is still a great idea…so, hopefully someone will produce it. Whether that’s GM, or some corporate raider that snaps up potentially profitable peices of GM remains to be seen.
October 10th, 2008 at 12:25 am
Good post, Statik.
Grizzly #35 I think his point was just reminding everyone that YOU are in control of your financial future. I couldn’t agree more with that!
October 10th, 2008 at 12:25 am
Of course GM is considering bankruptcy. I want them to succeed, I really do, but they must be suffering at the edge of delusion if they expect us to believe that bankruptcy isn’t even discussed within GM at some level. It would be grossly irresponsible to not have a plan in that direction should the situation continue to worsen or some outside factor forces the issue.
October 10th, 2008 at 12:26 am
More interesting to me than the share price is the market cap. Which I think is about $3 billion. To me this means that if GM has another loss of $3 billion more than what is already “priced in” to the share price, then it is near done for bar a bail out. They are already trying to sell off their head quarters buildings, but unlike Statik (who recently sold his house) are doing so to generate liquidity.
This quarter of car sales is likely to be crazy low, consumers who hear nothing except that the economy is falling rapidly into the toilet are unlikely to buy a new car. This alone could increase losses by $3,000,000,000 in the 4th quarter, but I guess that’s already priced in with the current share price.
Having a great product does not mean having a good business.
Volt is / will be a great product, but GM’s business sucks.
I have a huge amount of solar tiles by openenergycorp.com
http://tinyurl.com/4h3sm7
I have followed their stock and business model.
Like GM they have a good product, but business sucks (stock from $2.50 to $0.06 within two years).
Earlier in the year at Volt Nation I tried to give Ed Peper (GM exec) a $10K deposit for a Volt. Since about mid year, I wouldn’t hand over a deposit much in advance without some sort of guarantee, something that would survive bankruptcy.
Q> How do you know that a company is going to go broke? ….
A> The CEO claims that it won’t.
October 10th, 2008 at 12:27 am
If GM goes bust maybe A123 will buy the Volt from the ashes?
October 10th, 2008 at 1:09 am
I had a guy from the auto business discuss GM. His opinion (yes they are free) was that all the suppliers that are with GM and want to be with them when things get better…and depend on GM for survival have deep ties with GM. That these firms will do all they can to help GM with cash flow by supplying goods and extending lines of internal credit helping them get through this.
I also think “as GM goes so does the nation”… the nation is not even close to what it was financially…meaning creative financing and in terms of international complexity when this quote held some truth.
And it’s not just a US issue. look at the rest of the world pouring money into the banks.
Opinions?
Also I think GM will make it and we all will get through this mess.
The hedge fund black magic I still don’t understand…can anyone explain this other universe?
October 10th, 2008 at 1:35 am
“the world’s first mass-produced electric car”
Nice try, but other manufacturers are launching their electrics as soon as 2009 and 2010.
October 10th, 2008 at 1:39 am
GM is in the tank. As GM goes so does America.
I hope some small euro/asian company buys them soon and shakes up current incompetent management. This would be a better option than bankruptcy. Whatever happens there will be a New World Order taking shape and GM will not be a player. Actually most U.S. companies will no longer have global impact they once had. Obama or McCain will not be able to fix this. Americans better get ready to move down a few notches in status. History has shown that ALL great countries declined from within and were not defeated by an outside force. Your time has come America. Get on your knees. The rest of the world is enjoying your pain. LMAO
October 10th, 2008 at 1:42 am
Vincent #42
Tom Clancy has good and clear pages on hedge funds and international financial linkages in”Debt of Honor”.
Well, the book is a little too nationalist … but the story is good also.
October 10th, 2008 at 1:46 am
From The Truth About Cars blog:
So, we now hear that a major, overseas GM supplier has put its foot down. I can’t tell you who, what, when or where. But there’s a deadline for payment approaching, and GM can’t take the hit. Never mind the hits that follow. More info as and when.
October 10th, 2008 at 1:51 am
______________________________________________________
I wonder what it will be like driving my VOLT in the Peoples Republic of America.
The consequence of the legislative orgy witnessed over the last 20 days to seek control of that which our politicians rigged to fail is beyond understanding to most. Our illustrious politicians on both sides of the isle have officially legislated central planning Communism into America society ironically under the banner to save the free market.
A quit revolution born out of ignorance has taken place before our eyes in favor of communism.
Think of all the brave American lives that have been spent in battle over the past 100 years to fight against communism…and the many lives of our ancestors before then consumed in the fight against government tyranny for which inspired our American independence.
______________________________________________________
October 10th, 2008 at 1:54 am
Gas is at $2.95 in Oklahoma. Sales of SUVs and Pickups have increased this week. We don’t need a Volt around here, this is Slim Picken’s oil patch country. OKC is the largest city in the USA, that’s more than 660 square miles to you outsiders. The Volt’s range is not enough to get around this town. Maybe in NYC but not in Oklahoma City fellas.
Keep working at it GM, you boys will get it right eventually, but for now nothing beats a V8 in America’s heartland. I’ll be in Texas this week watching my Sooners beat the hell outa those Longhorns (its what’s for dinner).
October 10th, 2008 at 2:05 am
______________________________________________________
Ignore my #47 post…I’m delirious…tomorrow will be a better day.
______________________________________________________
October 10th, 2008 at 2:06 am
Let me run GM for one week and watch it turn around. Here is what I would do with the North American operation:
Shut down ALL factories that are NOT producing one of the following vehicles:
Malibu
CTS
Cobalt
Silverado
That’s It. All remaining vehicles sold in the USA will be immediately halted. Done. End of Story.
Massive Layoffs but Instant Profitability. This is the kind of drastic planning and execution that needs to be done NOW !!! Action Not Words. Is anybody listening in Detroit ????????
October 10th, 2008 at 2:11 am
You can stick a fork in this one. GM is DONE.
October 10th, 2008 at 2:12 am
Lyle, Thanks for hanging in there! This sure is an interesting time we are living in.
I’m not worried about GM going into bankruptcy for protection and to get re-organized. I still think the Volt will get built. The government will be there to help out and I’m sure we won’t let Dubai buy GM.
What I am worried about is that the global recession is going to reduce the demand for oil and that will keep the price low for quite some time. If it remains low and credit remains tight how big will the market be for the new $40,000 - tax rebate Volt?
In two years people may be thinking about how they are going to eat and not about expensive hybrids. That would suck.
October 10th, 2008 at 2:14 am
This GM dog don’t hunt no more.
October 10th, 2008 at 2:29 am
Its like people want GM to fail.
I hope they dont fail.
Then I wlll be forced to by cheap Foreign crap.
There was a time American people would supprt american products.
I think the new Chevy Malbu was rated the best quality mid size car by JD so what excuse do people have now not to buy american.
ITs funny the Europeans think american people are really stupid as we have great products but we bash our own products.
They think we are not logical. I agree with the Europeans.
October 10th, 2008 at 2:34 am
I hope NOT for the sake of GM but if
GM falls, please send plans care of:
GMH Australia
or
Opel
They will make it happen!
Old Rule not followed at all x3 American Auto companies:
In Good times (Past) SHOULD have planned for the bad times.
In Bad times plan for the good times.
Otherwise your cactus /toast.
October 10th, 2008 at 2:42 am
GM needs to get back to Basics.
Start by moving HQ to Hooterville. This is a small town near Green Acres just past Petticoat Junction.
Next, those GM engineers need to get some more edjamacation.
October 10th, 2008 at 2:56 am
It might as well be the Peoples Rep of America as lobisits have with greed and self interest wrecked the only Capitalisitc nation other nations looked up to. It certainly not for the people any more and that’s the main issue.
October 10th, 2008 at 3:01 am
Less than five bucks a share.
Wow, that is less than some penny stock that I used to own. GM investors are big time losers after this.
Time to start selling some factories and closing shop.
I guess the executives at GM will blame everyone but themselves just like the rest of the CEOs in America. Overpaid, underworked and totally worthless corporate executives. You can blame American Business Colleges like Harvard and the like for pumping out this kind of trash.
October 10th, 2008 at 3:14 am
I fear for GM and the country. when they start saying bankruptsy is not an option look out. This is global and will last a decade or more. unless we monitize the debt like Germany and Argentina did.
October 10th, 2008 at 3:16 am
I can’t wait for China to take over this country. They will do a far better job than those Stupid American CEO that get their degree from a bubble gum machine or a cracker jack box. In China we execute CEO for less damage than you American Executive cause. American Corporate Empire is built on a House of Lies. Your executives are thieves.
October 10th, 2008 at 3:46 am
Sound’s like some people on here are being real asse’s with there coments. Gm will survive.
October 10th, 2008 at 4:36 am
hedge fund is just what it says, it is a hedge against being wrong. Similar to the “insurance” AIG was selling on the mortgages. You buy something risky, but to lower the risk you buy something else that will pay you if you are wrong. This will minimize your downside risk. The problem is if everyone is wrong and AIG has to cover the losses which are greater than anticipated because the paper was given a AAA rating when maybe it should have been B.
Check the wiki on Paulson. I don’t know how much of this is fact but:
————–
There is increasing evidence that Paulson was influential with two U.S. Securities and Exchange Commission Chairmen, William H. Donaldson and Christopher Cox, in receiving restraint in the Commission’s exercise of oversight requirements.
In 2004, at the request of the major Wall Street investment houses, including Goldman Sachs, then headed by Paulson, the Commission agreed unanimously to release the major investment houses from the net capital rule, the requirement that their brokerages hold reserve capital that limited their leverage and risk exposure. The complaint that was put forth by the investment banks was of increasingly onerous regulatory requirements — in this case, not U.S. regulator oversight, but European Union regulation of the foreign operations of US investment groups. In the immediate lead-up to the decision, EU regulators also acceded to US pressure, and agreed not to scrutinize foreign firms’ reserve holdings if the SEC agreed to do so instead. The 1999 Gramm-Leach-Bliley Act, however, put the parent holding company of each of the big American brokerages beyond SEC oversight. In order for the agreement to go ahead, the investment banks lobbied for a decision that would allow “voluntary” inspection of their parent and subsidiary holdings by the SEC.
During this repeal of the net capital rule, SEC Chairman Donaldson agreed to the establishment of a risk management office that would monitor signs of future problems. This office was eventually dismantled by Chairman Cox, after discussions with Paulson. According to the New York Times, “While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the [new] Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency.”[11]
In late September 2008, Chairman Cox and the other Commissioners agreed to end the 2004 program of voluntary regulation.
——————-
October 10th, 2008 at 4:41 am
Things are going to get really bad, guys. We worry about whether or not we can afford the Volt. If things continue like they are, for many of us, it’s going to come down to whether or not we can afford bread or the electricity bill.
Nothing short of total war (total mobilization of all manufacturing for a war effort) will rescue GM if things continue like they are. And that’s a rather disturbing thought.
I have a very grim outlook on our future. But I suppose the benefit of being a pessimist is that I am never disappointed.
October 10th, 2008 at 5:22 am
#52 Texas
“….how big will the market be for the new $40,000 - tax rebate Volt?”
With what I’ve lost in my “retirement” accounts last quarter I could have bought a new Volt without the tax rebate. I’m sure many others here are in the same boat. I blame congress for this mess. I intend to vote against the incumbents this election which means I will be voting the democratic ticket when it comes to the House and Senate reps from my state. If enough people across the country did this then we could put the fear into the career politicians that got us into this. Our elected officials need to start doing their job instead of seeing how much face time they can get on the 5:00 o’clock news.
October 10th, 2008 at 6:34 am
#31 Dave Says: “How will Lutz fuel his helicopters and jets without a job?”
————————————————————————————-
He has enough money saved to last the rest of his days. This includes gassing up his helicopter.
The point is that this economic downturn will affect some people MUCH more than others…
October 10th, 2008 at 6:42 am
#48 Gas Me Up Says: “Gas is at $2.95 in Oklahoma. Sales of SUVs and Pickups have increased this week.”
————————————————————————————–
Bad news indeed. Those SUVs and Pickups will be worthless when gas goes up over $4/gallon (or more). The people that bought them won’t be able to sell them, so the’ll be forced to guzzle gas for the next 3-4 years. If they bought a house with an ARM, and if both interest rates and gas prices go up together, they may not be able to make the mortgage payments.
How can people have such short memories? Fool me once, shame on you. Fool me twice, shame on me…
October 10th, 2008 at 6:52 am
#57 ausmartin Says: “It might as well be the Peoples Rep of America as lobbyists have with greed and self interest wrecked the only Capitalistic nation other nations looked up to.”
————————————————————————————–
Maybe we should vote for politicians that don’t take money from Washington lobbyists.
October 10th, 2008 at 7:00 am
Lyle said
“No matter what happens, I believe the Volt will arrive, even if radical changes have to happen to make it so. Its that important.
And no matter what, this site shall continue on undaunted to witness, discuss, experience and influence the world’s first mass-produced electric car, the Chevy Volt.”
=============================================
We plan to be here with you.
October 10th, 2008 at 7:09 am
#27 Statik
Thank you. Your posts woke me up and I looked around and said “Oh My God!” and got out back in June.
Thanks.
Just how does chapter 12 work? I am thinking GM has too many obligations right now to be attractive at any price, but once they go bankrupt, a company like GE, who has been teaming with A123, could buy them up. That is a big manufacturing company. They even make a lot in the US.
October 10th, 2008 at 7:20 am
Panic selling occurs in free markets. We are in one now. When folks are no longer willing to sell at the current price, prices will stop falling.
The Great depression ended not when Government stepped in to “fix” the problem, but when the American people decided they could alter the future by working together to defend themselves. We should be building nuke plants, Volts, windmills, and battery production facilities. But the nation is divided.
October 10th, 2008 at 7:25 am
As GM goes so does America.
One word & a chart
Depression
http://bp3.blogger.com/_pMscxxELHEg/RxzD0s_7EYI/AAAAAAAABB4/ljDSXZhMG3o/s1600-h/IMFresets.jpg
As GM goes chapter 11, this site, will once again, have to to the hard work of convincing the receivers, new owners, that the Volt is a MUST complete project.
As Statik, wisely, has been saying for sometime, there is NO possible way GM can pay its debt. It must go chapter 11 and shed it.
NO plug, NO sale.
October 10th, 2008 at 7:35 am
#73 Len
Thanks, thats about the nicest post I’ve heard…today is going to be a good day. I appreciate it.
I think you mean Chapter 11? And yes, GM is virtually worthless now because of the ‘obligations’ hanging around their neck. GE/outside companies are not likely to gain a controlling interesting in a Chapter 11 scenario….that is not really the intention of the vehicle. If GM goes one step worse and we see Chapter 7, then basically it is cut up for its assets and sold off to the highest bidder. In that case ‘GM’ could be acquired, well its name anyway and its viable pieces. As for GE taking it, I doubt it….you would be more likely to see somebody like Exxon in the game, or another high cash, steady profit related type compnay. (Just a guess)
October 10th, 2008 at 7:40 am
#71 Dave G says,
Maybe we should vote for politicians that don’t take money from Washington lobbyists.
——
Ya, if we could find one.
October 10th, 2008 at 7:41 am
The new UAW contract, CAFE standards, energy legislation and government co-signed loans will shore up GM for the next couple years.
At some point, the values of real wealth creating assets will be realized, and our economy will rebuild upon them - water, food, clothing, shelter, energy, transportation, communications, etc.
October 10th, 2008 at 7:42 am
GM owes a lot of people a lot of money, a major long-term problem for them. Even if they balance current income and expenses, it is hard to see how they will cover their debts as they come due.
That said, in the short-term they may actually benefit from the national financial situation, in that the Feds may be unwilling to see them go into bankruptcy for a while. And, while most of us cannot do anything about who does or does not go into bankruptcy, the Feds operate from a different value scale and can readily extend credit to GM, whether or not there is an logical expectation of repayment.
A year ago I think the Feds would have just let GM file for Chapter 11. Right now, maybe the Feds would rather extend a cushion to GM. That’s really not a long-term benefit, but in the short term it can make all the difference, if the Feds want to do it.
October 10th, 2008 at 7:45 am
#76 Statik, says,
As for GE taking it, I doubt it….you would be more likely to see somebody like Exxon in the game, or another high cash, steady profit related type company.
————-
Statik, my friend. I read everything you post.
This statement just made me sick. It is by far the most depressing statement you have made here. This is a nightmare scenario of biblical proportion. If an oil company starts producing cars, ……….gosh I hate to think of the consequences. The environment will go to hell. Gas guzzlers will be the norm. Cars like the Volt will be dead. This scenario will so so suck. I hope it never comes true.
October 10th, 2008 at 8:00 am
#39 Grizzly
Statik #27, Take a deep breath pal. If our economy as a whole embraced your attitude we would be done. The reality is we’ve faced much greater challenges and we’ve come through, just like we will this time. Nice try
===========================================
I understand you are frustrated, but I have nothing to gain. I can assure you I am not trying anything. I realize I’m a pretty calculating and cold type of person when it comes to stuff like this…and perhaps I do need more of a filter.
I really don’t think you or America has seen anything like this in your lifetime. The fact is you don’t know where we are right now…and I don’t know either. Are we approaching the end? Are we in the middle? Or it is just the beginning. Personally, if I see even a hint trouble coming, I get out of the way (And I did). If I don’t understand a thing…I avoid it (which I am).
Anyway, we’ve had some ‘moments’ in the past, but I do wish you the best and success. At some point we will all need to put this thing back together.
October 10th, 2008 at 8:06 am
http://www.cnbc.com/id/27100742/site/14081545
“S&P said Thursday afternoon that it was putting GM on its “creditwatch,” with negative implications. The ratings agency said the move reflected the rapid weakening of most of the world’s auto markets. It added that capital conditions in the sector would remain challenging for the “foreseeable future.”
——————————————————
Here is the start of ‘the run’ on GM. This is from TAC who got this letter from GM HQ to its suppliers:
They are basically saying we no longer pay your invoices in a month, it is two months now. They are basically taking a months worth of expenses and pushing them out, (and never going to repay them).
You’ll notice the letter is dated September 26, 2008 and takes effect OCTOBER 1st, 2008. If your a supplier you really got the squeeze. Will some fold losing this revenue? Will some push back? Don’t know. I know it is the beginning of the end though, this is how the process starts.
http://www.thetruthaboutcars.com/wp-content/uploads/2008/10/right-size.jpg
October 10th, 2008 at 8:10 am
My biggest grip is about the dumb American media who keeps harping at how bad American cars are and how the Japanese cars are so much better. Consumers Report is one of the major culprit. For example, the Pontiac Vibe and Toyota Matrix are both the same basic vehicles built by the same plant and same workers, but the media gives the Vibe a lower rating. Last year in DC, all the government employees got emails urging them to buy Japanese cars. Can you believe that? Our own government urging Americans to buy Japanese cars. They were force to apologized. What a joke!!! The list could goes on and on. We Americans are our biggest enemy and we think that we are so smart. I suspect they are many on this web site who really don’t hold any love for GM. But, I give you credit for being here and promoting the Volt.
Let’s buy American, as much as we can, so our kids can have jobs like we older Americans have had!!!
October 10th, 2008 at 8:19 am
I still have my health. I guess I can walk to my destination. That emits only a little CO2.
FYI - GM is getting ready to buy a ton of equipment from us (or our competitor) to retool a bunch of plants. Seem’s like business as usual. Same with Ford & Chrysler. I forget the post(s) above about plant closings etc. Yes, the big-3 does that, a lot, and changes work loads, shifts manpower, etc. Expect more of the same regarding that. Also, we have a lot of foundry equipment on the books too. Foundry is usually ahead of the curve in the economy. And the orders not on the books yet, a lot of our customer’s are just holding their checks till the election is over. I guess my point is, i’m not toooo worried about the economy, (only a little).
October 10th, 2008 at 8:49 am
Hi Lyle and All,
Please pass these humble thoughts onto your connections at GM.
I think the Volt is Great, and GM should continue with it full steam, but maybe as well, GM should team up with the likes of Andy Grove from Intel and work on their Volt technology to start retrofitting existing P/U Trucks and SUV’s.
I know it would be a radical change, but simultaneous to doing the Volt they could start to restore the lost asset value we have all experienced in our Pick-ups and SUVs. They could convert some space in existing dealership repair facilities to do the retrofitting. As well they could use their finance arm to finance the retrofits and garage solar panels and the fuel savings, people would experience, could pay the monthly payments for the retrofits. We would have a new financial institution based on a real economy, the $700 Billion we spend on foreign oil, not the bogus subprime market we just experienced in Real Estate.
This Business model will than filter done to main street and small entrepreneurs will duplicate the process with “Electric and Go” shops instead of “Lube and Go”
We need to bring scale to electric transportation and who better can do scale, than GM. And it would all be paid for with Dubai dollars.
The political climate is such the next president and congress is going to be scrambling for answers and they will be more than willing to give tax credits for electric and retrofitting.
This would be no different than when my father worked in the war effort in world war ll, they converted auto plants in Detroit and Flint to war machine plants, overnight. Drastic times require drastic measures and I think GM should join T. Boone’s Army to fight the war on Foreign Oil. The beauty of this war is, there doesn’t have to be bloodshed and everyone is a winner.
As well, GM heavy truck plants need to work on CNG conversion and new trucks to dovetail with T. Boone. We need to get all the Best minds on these issues and restore the USA to position of greatness or soon we will become a third rate nation.
Thanks
Tim
October 10th, 2008 at 8:49 am
Nothing like a little good old-fashioned irrational fear to make
prophesies of doom come true. One old hand on Wall Street summed it up perfectly - we’re dealing with human emotions and
there’s not much to do except let it travel its course. We’ve gone from irrational exuberance to irrational fear, with the emphasis on irrational. The hordes are frightened (and ignorant, as usual) and are redeeming mutual funds, which forces largescale selling (of anything and everything) by those funds. That’s why yesterday
practically every stock out that got hammered. Fundamentals are totally absent. There is no logic here - just fear. Concerns about money will do that. Meanwhiel, the pros are licking their chops, seeing a bunch of amateurs giivng away some very good companies for nothing. Read Warren Buffet’s
advice to investors : to make a lot of money, pretty fast, you have to
be there when the blood is running heavy - that’s when the smart
folks throw all their money into the market. That old pro said he’s seeing signs that the pros are getting their ducks lined up and sitting there waiting, a big smile on their face.
October 10th, 2008 at 8:58 am
@83 Joe
I can’t pin-point the year, but at some point it became unfashionable to be proud of your own country (or its products). Maybe people think they will resemble the French too much?
I like US products & foreign products. Depends on the product.
October 10th, 2008 at 9:02 am
GM’s value has dropped 59.28% since 9/11/08 and it is still dropping.
October 10th, 2008 at 9:05 am
For some reason this did not post late last night. Begins to make me think of conspiracy theories. So I will try again.
As for the Volt. I would love to have one and hope that GM can still pull it off. As for us here in American. You can point to the Federal Reserve as the cause of our economic demise.
http://www.youtube.com/watch?v=iYZM58dulPE
And for more information
http://www.apfn.org/apfn/reserve.htm
October 10th, 2008 at 9:22 am
and sadly you can buy a share of Ford for less than a gallon of gas…
October 10th, 2008 at 9:25 am
At this moment the Dow is at 8470 it got really close to 7000. Hang in there. If I had 40K to buy stock right now GM would be a great deal!
October 10th, 2008 at 9:34 am
It has almost gotten to a point when all you can say is “WTF?” On more than a few accounts, Statik is right. But as someone else pointed out, the real problem with America IS America. The things I’m about to say may not be too well received but understand this-the best way of getting through a problem is to first admit there is one…
Greed, plain and simple has destroyed our country. It is taking the maximun toll on the average american citizen like nothing before, save 1929. The politicians we’ve elected and to which we’ve engendered our trust have failed us on a massive scale. I’ll tell them that to their faces. They’ve gotten into office and have forgotten where they’ve come from and who got them there. Now in an election year, I can say that I hope 99% of them get replaced for doing a grand job of f***ing up my homeland.
Wall St.? Karma is a b*tch, isn’t it? For years they’ve been playing with the credit markets like that was their own personal money. It wasn’t. It was our futures, our 401k’s and our divestitures. We’ve put into the economy and all we got was speculators profiteering the crap out of our financial markets to feed their own egoes. Now that they’re getting back what they put in they want to start jumping out of windows…I say let them get what they deserve and clean up the roadkill later.
The government is a failure. Bloated, pork-barrel spending and earmarks on things that the average american could give a care less about. In just 8 years the government has managed to take taxpayer dollars and do everything from fix up their $4 million houses, buy Escalades and take all the private trips they want all at our expense. There is dreadful mismanagement of tax funds to the degree that a 7 year old could do better. They allowed changes in the bankruptcy code that actually screwed over the people that they told should have the privilage to buy everything their heart desired.
The Unions-don’t get me started. If they didn’t demand $60 per hour for $15 and hour work, then the quality of the domestic automobile would not have garnered the garbage reputation that it has. Quality is making a significant return in America, but we have damaged our own reputation so badly, Honda could come out with a car that looks like crap, it will still best our ratings. So entrenched is the reputed quality of the imports that Americans have turned to bashing our own stuff.
The American people-for years you have convinced yourself that American products paled in comparison to imported ones. So what do we do? We send ALL of our revenue to other countries. It’s our collective faults-for electing politicians that ain’t worth a grain of sh*t, for fiscally raping our won people and for not investing in our infrastructure. Yes, I blame us. Then so many people want to jump down the government saying “they send $7 billion per month to Iraq for the war.” Tell me this-how much do we send every month to China when we buy chinese made products? Been to Wal-Mart lately? We send trillions in revenue to everyone else buying everything else other than oil. We have brought this upon ourselves.
For 8 years have I served the US military and for once I pity that choice, everyday asking myself “is THIS what I nearly gave my life to defend?” I feel the fool. I almost regret doing it. As GM goes, so goes the country? Maybe we should look at who put them there. Maybe we should look at who put this country in the garbage. Maybe we should look at who sent money to every other counrty except here. Maybe we should look at who messed up everything…
…but I doubt there are that many mirrors in North America.
Of the people, by the people, for the people (biggest load of bullsh*t I’ve ever heard)
…now get mad…
October 10th, 2008 at 9:52 am
Tony Nelson #64 Quote:
” In China we execute CEO for less damage than you American Executive cause”
Yes in China you also execute regular people for not agreeing with the government.
If the western world collapses, so will the chinese economy that is based on our money!
October 10th, 2008 at 9:53 am
I love it how China is used as a reference to the quality of GM cars, this is a country that poisons it own children with tainted milk products, that is just the place I would go to find out about quality control in manufacturing.
As far as the quality and reliability of japanese cars, it is not difficult to sell cars in the United States with few defects when you market them in Japan for two years before you allow them to be sold in ther US. I have two daughters that have Toyota Sennia vans, one had to replace the radiator two months after she got it and the other daughter has the power sliding door dump the drive belt on the garage floor after a few months. So much for reliability.
Many of the people that seem to be so in love with foreign cars could have the engine jump out of the car and land on their foot and the reaction would be, “WOW american cars can’t do that”, but havs the slightest squeek come from the american car and it’s, “What a pile of junk”,
October 10th, 2008 at 9:54 am
Market Fundamentals 101
Buy Low, Sell High
GM = $4.76 = 1929 levels–nothing is a guarantee, but if you’re in the market long term…BUY!!!
Keep the big picture in mind, along with the fundamentals for future success (making profit) when valuing any stock price — the future of GM looks bright because of the Volt and the E-Flex drivetrain. I’ve never wanted to purchase a GM product before the Volt. People are going to want to buy this car, so GM just has to weather this financial storm, as do all companies. Lastly, The US government will not allow GM to close…period.
So take a deep breath, fasten your seat beat belt and enjoy the ride. There’s going to be some turbulence before we reach smooth air.
October 10th, 2008 at 9:58 am
Daryl,
Very informative video!
October 10th, 2008 at 10:02 am
The problem with most U.S. companies is that they were looking at how much money they can make NOW and not how much money they will make next year. Incentives were geared heavily towards profits instead of “profits and sustainability.”
The biggest issue the U.S. has to watch out for is that China might buy GM and remove it from America. The Chinese have lots of power over us right now. We may be speaking Chinese before you know it. See Below:
“For example, General Motors stock was off 31% to $4.76 a share yesterday. The Bush administration has turned the budget surpluses inherited from Bill Clinton into massive deficits financed by borrowing money from foreigners, especially in Asia. This means that Asian countries, especially China, own hundreds of billions of dollars worth of treasury bills. Now suppose the Chinese government decides it wants to get into the car manufacturing business so it makes a deal with Toyota, now the world’s largest car manufacturer, to buy GM outright for a song and move its factories to China to be operated by Toyota but employing Chinese workers. All they keep is the U.S. dealer network and millions of American jobs are lost. If the next President nixes the purchase of GM, the Chinese sell their treasury bills and the dollar collapses. This is not science fiction any more. Which candidate is better prepared to deal with stuff like this could determine the election.”
from electoral-vote.com
October 10th, 2008 at 10:07 am
Firefly:
I feel you, brother.
I am considering a write-in candidacy in my district for house of Reps. My rep (Larson, CT District 1) voted for the $700b bailout on Monday when it was a bare-bones grab for centralized power to socialized the losses of wall-street’s private gains. Then EVERYONE voted for the bill on Thursday when it had so much ridiculous pork on it, adding insult to injury. They clearly went against their marching orders, made VERY CLEAR on Monday by the people, basically BRIBED by pork.
This clear LACK of integrity and leadership in the US is certainly part of the reason the market is dropping faster AFTER the bill passed than BEFORE. People do not trust our institutions…and they have the reasonm and evidence right in front of them. Other countries (and all banks) feel this and they pull out, no suprise, crushing things worse.
I’ve been in countries where being a politician means wearing heavy body-armour and driving bullet-proof vehicles in convoys. These folks are going to have a taste of that very soon. Pitch-forks and Torches…Vote for Nader.
October 10th, 2008 at 10:16 am
Dick Cheney said “the American way of life is non-negotiable”.
I beg to differ, the American way of life is changing right before our eyes, and not only that, but its a change that’s coming from within.
Its time to vote them all out & replace them with green, still wet-behind-the-ears people with no political experience whatsoever.
I honestly believe that they would actually be able to provide better governance than what we have now.
What we have now is nothing but a bunch of corporate shills, who acting with Wall Street & the Federal Reserve, have engineered the largest transfer of wealth in the history of mankind.
Man this really is a great time to be alive….
_-=
October 10th, 2008 at 10:21 am
#48 Gas Me Up Says: “Gas is at $2.95 in Oklahoma. Sales of SUVs and Pickups have increased this week.”
————————————————————————————–
Bad news indeed. Those SUVs and Pickups will be worthless when gas goes up over $4/gallon (or more). The people that bought them won’t be able to sell them, so the’ll be forced to guzzle gas for the next 3-4 years. If they bought a house with an ARM, and if both interest rates and gas prices go up together, they may not be able to make the mortgage payments.
How can people have such short memories? Fool me once, shame on you. Fool me twice, shame on me…
————————————————————————————–
This is exactly why we need a floor (NOT A CAP) on the price of a barrel of oil (and the price of a gallon of refined gas) sold in the United States if we are serious about getting off oil. Until that happens, we are not serious.
Demand for oil is forecasted to decrease some 5-6 % due to the current recession, and oil has already dropped to near $80/barrel. What do you think is going to happen when PHEVs penetrate the market and US demand for oil decreases by 10%, 20%, 30% — 70%? This doesn’t take a rocket scientist. Cheap oil will kill the alternative fuel start-ups at prices below $60-$70 a barrel – just look at history. We need alternative fuels to have a true market in refined energy. We don’t have a true market now. OPEC is going to hold an emergency session in NOV to reduce supply in an attempt to jack up the price. (Oligopolies can do that).
October 10th, 2008 at 10:21 am
#92 Firefly
You got alot of ‘verve’ working there. I’m not going to comment specifically on individual points, some I agree with, some maybe I don’t…but you are out there now. You have moved past the believe the system is inherently viable…and fair.
In situations such as this, the once in a lifetime moments, the market doesn’t go down and you hold on, eat your vitamins and say your prayers (nod to Hulkamania) and then it comes back. Essentially what happens is it gets obliterated, deconstructed and then rebuilt anew.
Companies that live in the past have to be closed, people who believe in the system have to be obliterated. It is a change or die scenario.
You can measure it happening even right here…on this thread. “Back in the day,” I would say something like I did in post #30 and the general consensus was that I was a)wrong b) dellusional c) a idiot. The ratio would probalby be 5 to 1. Now on this thread it is about even, 1 to 1. That is the tide of change, those who can accept their losses, draw a line in the sand and say, ‘no more’ and move on are the ones who will come out the other side.
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I would like to touch on your post a little after all. At this point nationalism is not really the root of the problem, so I don’t think you have to devalue your service to your country.
It is still something you should be proud of. You are a vital piece to the puzzle, and you are making the right move now by saying ‘enough already.’ This thing will bottom out (somewhere) and the ‘reset’ button will be hit, and the ‘core’ of America will once again take the reins, which will something you can be proud of.
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Today’s issues are larger than America, or any other country specifically…and one the ‘common investor’ will only now start to understand now and more in the future.
For example, today is the auction to settle $400 billion in credit default swaps on Lehman Brothers, and the market is spooked. It is the ‘tip of the sword’ of you will. If anyone is thinking, ‘what the heck is that?’ You should take the time to find out. If you don’t, you don’t give yourself the ability to form a valid opinion.
October 10th, 2008 at 10:27 am
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What go us here?
Answer:
The following is a true tale of Davy Crockett in which the Old Tennessee bear hunter meets up with the Constitution of the United States:
[Source: Borrowed from a pamphlet distributed by the Virginia Commission on Constitutional Government c. 1960, taken from an article appearing earlier in the Freeman magazine, in turn condensed from the 1884 The Life of Colonel David Crockett by Edward S. Ellis.]
…Crockett was then the lion of Washington. I was a great admirer of his character, and, having several friends who were intimate with him, I found no difficulty in making his acquaintance. I was fascinated with him, and he seemed to take a fancy to me.
I was one day in the lobby of the House of Representatives when a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support, rather, as I thought, because it afforded the speakers a fine opportunity for display than from the necessity of convincing anybody, for it seemed to me that everybody favored it. The Speaker was just about to put the question when Crockett arose. Everybody expected, of course, that he was going to make one of his characteristic speeches in support of the bill. He commenced:
“Mr. Speaker–I have as much respect for the memory of the deceased, and as much sympathy for the sufferings of the living, if suffering there be, as any man in this House, but we must not permit our respect for the dead or our sympathy for a part of the living to lead us into an act of injustice to the balance of the living. I will not go into an argument to prove that Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money.
“Some eloquent appeals have been made to us upon the ground that it is a debt due the deceased. Mr. Speaker, the deceased lived long after the close of the war; he was in office to the day of his death, and I have never heard that the government was in arrears to him. This government can owe no debts but for services rendered, and at a stipulated price. If it is a debt, how much is it? Has it been audited, and the amount due ascertained? If it is a debt, this is not the place to present it for payment, or to have its merits examined. If it is a debt, we owe more than we can ever hope to pay, for we owe the widow of every soldier who fought in the War of 1812, precisely the same amount.
“There is a woman in my neighborhood, the widow of as gallant a man as ever shouldered a musket. He fell in battle. She is as good in every respect as this lady, and is as poor. She is earning her daily bread by her daily labor; but if I were to introduce a bill to appropriate five or ten thousand dollars for her benefit, I should be laughed at, and my bill would not get five votes in this House. There are thousands of widows in the country just such as the one I have spoken of, but we never hear of any of these large debts to them. Sir, this is no debt. The government did not owe it to the deceased when he was alive; it could not contract it after he died.
“I do not wish to be rude, but I must be plain. Every man in this House knows it is not a debt. We cannot, without the grossest corruption, appropriate this money as the payment of a debt. We have not the semblance of authority to appropriate it as a charity. Mr. Speaker, I have said we have the right to give as much of our own money as we please. I am the poorest man on this floor. I cannot vote for this bill, but I will give one week’s pay to the object, and if every member of Congress will do the same, it will amount to more than the bill asks.”
He took his seat. Nobody replied. The bill was put upon its passage, and, instead of passing unanimously, as was generally supposed, and as, no doubt, it would, but for that speech, it received but few votes, and, of course, was lost.
Like many other young men, and old ones too, for that matter, who had not thought upon the subject, I desired the passage of the bill, and felt outraged at its defeat. I determined that I would persuade my friend Crockett to move a reconsideration the next day.
Previous engagements preventing me from seeing Crockett that night, I went early to his room the next morning and found him engaged in addressing and franking letters, a large pile of which lay upon his table.
I broke in upon him rather abruptly, by asking him what devil had possessed him to make that speech and defeat that bill yesterday. Without turning his head or looking up from his work, he replied:
“You see that I am very busy now; take a seat and cool yourself. I will be through in a few minutes, and then I will tell you all about it.”
He continued his employment for about ten minutes, and when he had finished he turned to me and said:
Now, sir, I will answer your question. But thereby hangs a tale, and one of considerable length, to which you will have to listen.”
I listened, and this is the tale which I heard:
“Several years ago I was one evening standing on the steps of the Capitol with some other members of Congress, when our attention was attracted by a great light over in Georgetown. It was evidently a large fire. We jumped into a hack and drove over as fast as we could. When we got there, I went to work, and I never worked as hard in my life as I did there for several hours. But in spite of all that could be done, many houses were burned and many families made homeless, and, besides, some of them had lost all but the clothes they had had on. The weather was very cold, and when I saw so many women and children suffering, I felt that something ought to be done for them, and everybody else seemed to feel the same way.
“The next morning a bill was introduced appropriating $20,000 for their relief. We put aside all other business and rushed it through as soon as it could be done. I said everybody felt as I did. That was not quite so; for, though they perhaps sympathized as deeply with the sufferers as I did, there were a few of the members who did not think we had the right to indulge our sympathy or excite our charity at the expense of anybody but ourselves. They opposed the bill, and upon its passage demanded the yeas and nays. There were not enough of them to sustain the call, but many of us wanted our names to appear in favor of what we considered a praiseworthy measure, and we voted with them to sustain it. So the yeas and nays were recorded, and my name appeared on the journals in favor of the bill.
“The next summer, when it began to be time to think about the election, I concluded I would take a scout around among the boys of my district. I had no opposition there, but, as the election was some time off, I did not know what might turn up, and I thought it was best to let the boys know that I had not forgot them, and that going to Congress had not made me too proud to go to see them.
“So I put a couple of shirts and a few twists of tobacco into my saddlebags, and put out. I had been out about a week and had found things going very smoothly, when, riding one day in a part of my district in which I was more of a stranger than any other, I saw a man in a field plowing and coming toward the road. I gauged my gait so that we should meet as he came to the fence. As he came up I spoke to the man. He replied politely, but, as I thought, rather coldly, and was about turning his horse for another furrow when I said to him: ‘Don’t be in such a hurry, my friend; I want to have a little talk with you, and get better acquainted.’ He replied:
” ‘I am very busy, and have but little time to talk, but if it does not take too long, I will listen to what you have to say.’
“I began: ‘Well, friend, I am one of those unfortunate beings called candidates, and–’
” ‘Yes, I know you; you are Colonel Crockett. I have seen you once before, and voted for you the last time you were elected. I suppose you are out electioneering now, but you had better not waste your time or mine. I shall not vote for you again.’
“This was a sockdolager. . . . . I begged him to tell me what was the matter.
” ‘Well, Colonel, it is hardly worth-while to waste time or words upon it. I do not see how it can be mended, but you gave a vote last winter which shows that either you have not capacity to understand the Constitution, or that you are wanting in the honesty and firmness to be guided by it. In either case, you are not the man to represent me. But I beg your pardon for expressing it in that way. I did not intend to avail myself of the privilege of the constituent to speak plainly to a candidate for the purpose of insulting or wounding you. I intend by it only to say that your understanding of the Constitution is very different from mine; and I will say to you what, but for my rudeness, I should not have said, that I believe you to be honest. . . . But an understanding of the Constitution different from mine I cannot overlook, because the Constitution, to be worth anything, must be held sacred, and rigidly observed in all its provisions. The man who wields power and misinterprets it is more dangerous the more honest he is.’
” ‘I admit the truth of all you say, but there must be some mistake about it, for I do not remember that I gave any vote last winter upon any constitutional question.’
” ‘No, Colonel, there’s no mistake. Though I live here in the backwoods and seldom go from home, I take the papers from Washington and read very carefully all the proceedings of Congress. My papers say that last winter, you voted for a bill to appropriate $20,000 to some sufferers by a fire in Georgetown. Is that true?’
” ‘Certainly it is, and I thought that was the last vote which anybody in the world would have found fault with.’
” ‘Well, Colonel, where do you find in the Constitution any authority to give away the public money in charity?’
“Here was another sockdolager; for, when I began to think about it, I could not remember a thing in the Constitution that authorized it. I found I must take another tack, so I said:
” ‘Well, my friend; I may as well own up. You have got me there. But certainly nobody will complain that a great and rich country like ours should give the insignificant sum of $20,000 to relieve its suffering women and children, particularly with a full and overflowing Treasury, and I am sure, if you had been there, you would have done just as I did.’
” ‘It is not the amount, Colonel, that I complain of; it is the principle. In the first place, the government ought to have in the Treasury no more than enough for its legitimate purposes. But that has nothing to do with the question. The power of collecting and disbursing money at pleasure is the most dangerous power that can be intrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer he is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government.
” ‘So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. If you had the right to give anything, the amount was simply a matter of discretion with you, and you had as much right to give $20,000,000 as $20,000. If you have the right to give to one, you have the right to give to all; and, as the Constitution neither defines charity nor stipulates the amount, you are at liberty to give to any and everything which you may believe, or profess to believe, is charity, and to any amount you may think proper. You will very easily perceive what a wide door this would open for fraud and corruption and favoritism, on the one hand, and for robbing the people on the other.
” ‘No, Colonel, Congress has no right to give charity. Individual members may give as much of their own money as they please, but they have no right to touch a dollar of the public money for that purpose. If twice as many houses had been burned in this county as in Georgetown, neither you nor any other member of Congress would have thought of appropriating a dollar for our relief. There are about two hundred and forty members of Congress. If they had shown their sympathy for the sufferers by contributing each one week’s pay, it would have made over $13,000. There are plenty of wealthy men in and around Washington who could have given $20,000 without depriving themselves of even a luxury of life. The congressmen chose to keep their own money, which, if reports be true, some of them spend not very creditably; and the people about Washington, no doubt applauded you for relieving them from the necessity of giving by giving what was not yours to give. The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution.’ ”
“I have given you,” continued Crockett, “an imperfect account of what he said. Long before he was through, I was convinced that I had done wrong. He wound up by saying:
” ‘So you see, Colonel, you have violated the Constitution in what I consider a vital point. It is a precedent fraught with danger to the country, for when Congress once begins to stretch its power beyond the limits of the Constitution, there is no limit to it, and no security for the people. I have no doubt you acted honestly, but that does not make it any better, except as far as you are personally concerned, and you see t