eternitus

The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

Lots of people with credit scores in the 600s want loans. Most of that group (unfortunately) is not exceptionally good at paying the loans back.

GMAC: Three Key Questions

Just say it... GMAC is a subprime lender. Is there now going to be a movement to "keep people in their cars" when they default and the repo men come? Is Barney Frank going to stand up for the little guys who were tricked? They thought the money was a gift and only found out later that it was a "loan" and the money had to be "paid back" with "interest."

As a culture, we have gone totally insane. Who are we? What have we become?

Bail Out Capitalism, Not Detroit

By the way $73.20 per hour is a bit more than a decent wage ($150k per year). Can't you make due in Detroit with $100k per year per worker?

Bail Out Capitalism, Not Detroit

Here, here. Time to stop wasting money propping up broken industries and start stimulating what works and will provide some return on investment... Tax cut and infrastructure spending plan!

GM: Buyout Better than Bailout

Pension funds should buy the companies if there is such great value. Truth is there is no value. Too much debt and labor is too expensive. Also, PE is really just a leveraged arbitrage play. Buy at low valuations, wait until markets get bubbly and ipo, rinse and repeat. What they are good at is eliminating corporate waste do to poor governance (every company wastes millions- corp boards are foxes guarding henhouses... esp when the chair is also the CEO.) But mainly its a huge arb play.

GM Bailout Would Be Agony for Taxpayers

That's about right. GM is an awful bastion of value destruction.

A Solution for General Motors

Seems very reasonable. Since I have no faith in congress, such an outcome will never happen. They are more interested in placating the special interest groups that helped them get elected (UAW, etc) at the taxpayer's expense than putting our dollars to productive use.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

My thoughts exactly. Unlike with the financials, where one large company's failure, if left unchecked, can bring down the whole system, completely destroy all our access to credit, and ruin our lives for a generation, GM's failure will simply eliminate a poorly-run, noncompetitive company that overpays its employees. Even healthy companies with good management are destroyed in a financial panic as confidence evaporates... not true with the auto industry.

General Motors: Beginning the Endgame?

If GM wants to prosper, management only needs to do one thing:

Crush the cancerous union that has insidiously eroded GM's competitive position over the years. GM's labor cost structure is far too high to compete effectively in a global market. The company is broken. Giving it another loan is like giving blood to an emergency room patient whose leg has been ripped off.... it just flows right out. GM needs a tourniquet instead.