Monday Open Thread (2010-05-17)

Here is your open thread for Monday May 17th, 2010. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

71 comments:

  1. 1
    Dawn Glover says:

    Reading the headlines from the paper’s back home – Auto Town – GM is bragging about how they paid off the loans they took from the Canadian and US Governments 5 years ahead of schedule. Of coarse the media fails to explain how they magically managed to come up with the funds with a first time profit only a fraction of the payment. The funny thing about this is when I talk to friends and family they will celebrate the “great” auto news without questioning the obvious. I find the same situation here in Seattle in Real Estate, most folks I encounter are holding out for a couple of years until the market goes back to peak. Meanwhile, even mainstream media are acknowledging that the peak was unsustainable and fueled by irresponsible lending. Even my children can understand the basic logic of both of these examples, it seems that even very intelligent adults can’t (or don’t want to)

  2. 2
    pfft says:

    By Dawn Glover @ 1:

    Reading the headlines from the paper’s back home – Auto Town – GM is bragging about how they paid off the loans they took from the Canadian and US Governments 5 years ahead of schedule. Of coarse the media fails to explain how they magically managed to come up with the funds with a first time profit only a fraction of the payment. The funny thing about this is when I talk to friends and family they will celebrate the “great” auto news without questioning the obvious.

    it is great news. good news is that they exist. great news is that they have any cash at all- $35 billion of it right now. that’s great, slowly working their way back.

    GM swings to first profit in three years
    http://www.marketwatch.com/story/gm-swings-to-first-profit-in-three-years-2010-05-17

    nobody saw this coming. GM was written off. give them credit where credit is due.

  3. 3
    Pegasus says:

    Dawn

    The payoff is just a shell game and not from profits. GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. The U.S. considered as a loan $6.7 billion of the aid, while the Canadian governments held $1.4 billion in loans.

    How did they pay it? The answer is a $16.4 billion escrow account set up by the Obama administration during GM’s bankruptcy. Those funds are in exchange for the GM shares that make up part of the government’s stake in the company.

    The Treasury Department had to figure out how much of a cushion the company would need after emerging from bankruptcy. The escrow account was set up when the government bought a 61% stake in the company, but there was a string attached: GM had to get the Treasury Department’s OK before spending the money.

    So……they took government(taxpayer) funds held in escrow to pay off the government(taxpayer) loans. Its all good! At least in the minds of the recovery cheerleaders.

  4. 4
    pfft says:

    By Pegasus @ 3:

    So……they took government(taxpayer) funds held in escrow to pay off the government(taxpayer) loans. Its all good! At least in the minds of the recovery cheerleaders.

    An alternate scenario is that the company needed a lot less money than they thought because the economy and the restructuring is going better than thought.

    GM just posted a profit by the way. I know among the bears will downplay but they certainly didn’t predict it, so take their opinion with a grain of salt.

  5. 5
    Pegasus says:

    Pfft …Senator Grassley has written a nice letter expressing my feelings about GM misrepresenting repayment terms to the public.

    “The bottom line seems to be that the TARP loans were “repaid” with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the Administration have claimed in their speeches, press releases and television commercials. When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:
    Question: Are you just paying the government back with government money?
    Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d
    be able to pay this back.”

    http://grassley.senate.gov/about/upload/2010-04-22-Letter-to-Treasury-Department.pdf

    Pfft.. read the facts and weep or don’t. Keep telling everyone that the Emperor has a great new outfit on. You remind me very much of David Lereah. I bet you go bearish again after the market falls back to 8000.

  6. 6
    Dirty_Renter says:

    I have good news on the failed bank front.
    The FDIC estimated loss on the 4 closings last Friday was only 10% of assets.
    That’s a whopping improvement over the 50% losses previously being reported.
    They’re just barely dying now, as opposed to being blown to smithereens. hahaha
    Dirty Renter

  7. 7
    TheHulk says:

    End the mortgage interest deduction!!!

    http://curiouscapitalist.blogs.time.com/2010/05/17/are-we-going-to-get-rid-of-the-mortgage-interest-deduction/

    Tim, this might make an interesting blog post on its own.

  8. 8

    RE: Pegasus @ 3

    I Agree Pfft

    But let’s keep quiet about GM quality and prices; or they’ll go the way of Hyundai, up through the roof when they get too many quality awards and the used ones start holding excessive value. LOL

    Let the buffoons pay 80% new for a used Pink Pony car with a 100K on the odometer that keeps it’s value and I’ll pay 20% with one with 20K on the odometer with a better [free] warranty [and real safety defect recalls systems in place….LOL]

  9. 9
    pfft says:

    By Pegasus @ 5:

    Pfft …Senator Grassley has written a nice letter expressing my feelings about GM misrepresenting repayment terms to the public.

    “The bottom line seems to be that the TARP loans were â��repaidâ�� with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the Administration have claimed in their speeches, press releases and television commercials. When these criticisms were put to GMâ��s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:
    Question: Are you just paying the government back with government money?
    Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we�d
    be able to pay this back.”

    http://grassley.senate.gov/about/upload/2010-04-22-Letter-to-Treasury-Department.pdf

    Pfft.. read the facts and weep or don’t. Keep telling everyone that the Emperor has a great new outfit on. You remind me very much of David Lereah. I bet you go bearish again after the market falls back to 8000.

    it is true that nobody thought they’d pay it back. GM got money in case. they don’t need it so they used it to pay off the loan. the government let them because business was turning around. now they just posted a profit. all you bears can’t talk because you probably were extremly bearish on GM. you were wrong. I think everyone was probably wrong.

    “Pfft.. read the facts and weep or don’t. Keep telling everyone that the Emperor has a great new outfit on.”

    I have no idea as to the viability of GM long-term. this is good news though. bad news is GM not being able to repay this at all.

    “You remind me very much of David Lereah.”

    no, I listen to the data.

    “I bet you go bearish again after the market falls back to 8000.”

    so what? I bet you’ll never go bullish. not at 10000, 110000 or 12000. I bet you weren’t bullish at 7000, 8000, 9000, 10000 or if we get to 11000. I’ll go bearish when the technicals and fundamentals say so.

  10. 10
    pfft says:

    By Dirty_Renter @ 6:

    I have good news on the failed bank front.
    The FDIC estimated loss on the 4 closings last Friday was only 10% of assets.
    That’s a whopping improvement over the 50% losses previously being reported.
    They’re just barely dying now, as opposed to being blown to smithereens. hahaha
    Dirty Renter

    less bad is good!

  11. 11
    Dawn Glover says:

    RE: Pegasus @ 3 – Thanks for breaking down so clearly what actually happened with GM…the point I was making was that people reading the headlines do not want to know the full story….pretend and extend

  12. 12
    David Losh says:

    http://www.reuters.com/article/idUSTRE6422F720100503

    Hey, what a coincidence, GMAC also posted a profit, right along with all the other banks and financial institutions the government gave money to.

    We bailed out the financials of GM. The car company can go rot, and no one would care. Also, was the Chevy Suburban gas hog a car of choice for the government? So weren’t we subsidizing them all along anyway?

  13. 13
    David Losh says:

    On reflection it is a little unfair to just point out the errors in the recovery argument, because I am a firm believer that we are in a recovery. What I contradict is this constant use of the stock market, or grand economic gestures as proof of a recovery.

    Our world changed dramatically during the Bush Administration. The guy invaded two countries. We occupy two countries of Islamic leanings. We are engaged in wars we can never win, for extremely questionable motives.

    While we did that Bush also asked for, and got, tax cuts. It looked like we were going to grow, or inflate, our way out of economic trouble. The entire world looked at our actions as a call to arms and joined in what looked like a global economic expansion. We were all going to share in the spoils of world peace the way we did when Reagan defeated the Evil Empire of the USSR.

    I honestly think Bush thought he would go down in history as the great economic equalizer. All boats were going to rise. Well, now we know, they didn’t.

    Energy, Education, and Health Care were the Obama promises. He might as well have added Financial Market corrections.

    The recovery will come from micro economic expansion of local economies, on a global scale. We here in Seattle Washington USA are probably in one of the best places. China has more growth to do, Africa can find it’s feet, South America can continue to stabilize. The problems will be in the Financial Market dependent sectors. The trading is unwinding from way too many middle men.

    Real growth will be easily tangible. It’s the small victories that will lead us out of the recession.

  14. 14
    Scotsman says:

    RE: David Losh @ 12RE: pfft @ 9

    “I have no idea as to the viability of GM long-term.”

    And that’s part of the problem- why get all excited about the short term when the long term still looks bad. GM’s problem was and still is it’s cost structure, especially the long term benefits it offers it’s employees. They still pay about $20/hr. more in total compensation than the other non Union plants located here in the U.S. They have some good products, they’ve cut costs and show a short term profit, but they still won’t be able to compete with other companies around the world because their labor costs are almost 40% higher. That’s not a “bearish” perspective- those are facts.

    Also, GMAC/GM have been able to accomplish much of what has happened over the last year by essentially offering sub-prime lending on their purchases. Now they (GMAC) want to borrow another $14B or something, I’m not completely sure of the numbers. How do you think that will end?

  15. 15
    pfft says:

    By Scotsman @ 14:

    RE: David Losh @ 12RE: pfft @ 9

    “I have no idea as to the viability of GM long-term.”

    And that’s part of the problem- why get all excited about the short term when the long term still looks bad. GM’s problem was and still is it’s cost structure, especially the long term benefits it offers it’s employees. They still pay about $20/hr. more in total compensation than the other non Union plants located here in the U.S. They have some good products, they’ve cut costs and show a short term profit, but they still won’t be able to compete with other companies around the world because their labor costs are almost 40% higher. That’s not a “bearish” perspective- those are facts.

    Also, GMAC/GM have been able to accomplish much of what has happened over the last year by essentially offering sub-prime lending on their purchases. Now they (GMAC) want to borrow another $14B or something, I’m not completely sure of the numbers. How do you think that will end?

    “They still pay about $20/hr. more in total compensation than the other non Union plants located here in the U.S.”

    please provide a source.

    “Also, GMAC/GM have been able to accomplish much of what has happened over the last year by essentially offering sub-prime lending on their purchases. Now they (GMAC) want to borrow another $14B or something, I’m not completely sure of the numbers. How do you think that will end?”

    I don’t know. I don’t know their business. I don’t know why they needed help.

  16. 16
    Pegasus says:

    scotsman @ 14

    “They still pay about $20/hr. more in total compensation than the other non Union plants located here in the U.S.”

    Is that why they call them Goverment Motors? The government certainly overpays their employees compared to private industry. Any shortage can be paid by the taxpayers.

    pfft @ 15

    “I don’t know their business. I don’t know why they needed help.”

    Are you the talking dog?

  17. 17
    LUC says:

    RE: pfft @ 15

    http://www.manufacturing.net/News-GM-Vs-Toyota-Wages-And-Benefits.aspx

    “GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.”

  18. 18
    One Eyed Man says:

    RE: Pegasus @ 16
    “Are you the talking dog?”
    Say Wfft?

    In GM’s (and Pfft’s) defense, they did have a billion of free cash flow after capital expenses and a billion of profit for the 1st Q on 30 billion of revenue, and that’s in a weak economy. (I didn’t post the link but you can Google GM cash flow to see it.) If we have a continuing recovery, their profits may well improve. And with a $20/hr wage differential they may have the ability to decrease comparative labor costs and increase their margin in the future. If they can get profits to 2 billion per Q, the Treasury should be able to get back its remaining 40 billion investment even with an assumed P/E as low as 9. Perhaps not a sure thing in todays economy, but not totally unreasonable either.

  19. 19
    One Eyed Man says:

    RE: LUC @ 17

    LUC, that link says its from 2008. Didn’t GM get any reduction in labor expenses out of the bkrcy? Is the differential still $20/hr post bkrcy as Scotsman claims? I know they eliminated some retiree medical expense by setting up a VEBA that was funded, but I didn’t follow the bkrcy to see the total anticipated reduction in labor expenses that they achieved.

  20. 20
    pfft says:

    By Pegasus @ 16:

    scotsman @ 14

    �They still pay about $20/hr. more in total compensation than the other non Union plants located here in the U.S.�

    Is that why they call them Goverment Motors? The government certainly overpays their employees compared to private industry. Any shortage can be paid by the taxpayers.

    pfft @ 15

    “I donâ��t know their business. I donâ��t know why they needed help.”

    Are you the talking dog?

    there are a million different reasons why GMAC got into trouble. I have no idea whether in the next recession those same reasons will be in play. did they have bad underwriting? did they have too many mortgage loans? too many car loans? did they not have enough cash? was it a liquidity problem? will all those factors be present during the next crisis? I don’t know! in 2000 tech companies dropped like flies. in the last recession tech companies were cash rich.

    “Is that why they call them Goverment Motors? The government certainly overpays their employees compared to private industry. Any shortage can be paid by the taxpayers.”

    I request a source please.

  21. 21
    pfft says:

    By LUC @ 17:

    RE: pfft @ 15

    http://www.manufacturing.net/News-GM-Vs-Toyota-Wages-And-Benefits.aspx

    “GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.”

    that’s not the real number.

  22. 22
    Scotsman says:

    RE: One Eyed Man @ 18

    “with a $20/hr wage differential they may have the ability to decrease comparative labor costs and increase their margin in the future”

    Yup, just as soon as hell freezes over. Let’s see, left-leaning government elected by/with the support of unions suddenly sees the light and busts said unions in order to save taxpayers money. Nah, isn’t going to happen. I want some of what you’re smoking- ummm hmm.

    When GM finally does go bankrupt the unions and their benefits, both for workers and retires, will be reset. Then and only then will GM have a shot at sustainable profitability.

  23. 23
    Scotsman says:

    RE: pfft @ 21

    “that’s not the real number.”

    Source please.

  24. 24
    wreckingbull says:

    RE: pfft @ 21 – Actually it is pretty darn close You must be confusing it with the 2007 concessions that the UAW made, but the problem is that there are so many loopholes, it is impossible (and will be for a long time) to even consider hiring workers at the lower negotiated wages. The UAW is tricky, tricky, tricky that way.

  25. 25
    One Eyed Man says:

    This is just a Wiki link with no footnotes so its not necessarily reliable, but it says the labor cost differential should be cut by 70%.

    “A new labor contract was ratified by UAW members exactly one week after the tentative agreement was reached, passing by a majority 62% vote. In the contract are several product and employment guarantees stretching well into the next decade. One of GM’s key future products, the Chevy Volt, was promised to the GM Poletown/Detroit-Hamtramck plant in 2010. Also included is a VEBA (Voluntary Employee Beneficiary Association) which will transfer retiree health care obligations to the UAW by 2010. This eliminates more than $50 billion from GM’s healthcare tab. It will be funded by $30 billion in cash and $1.4 billion in GM stock paid to the UAW over the next four years of the contract. It also eliminates 70% of the labor cost gap with GM’s Japanese rivals.”

    http://en.wikipedia.org/wiki/General_Motors

  26. 26
    One Eyed Man says:

    http://www.ohio.com/business/93556724.html

    “McAlinden said wages and benefits now cost GM around $58 an hour, just $2 more than Toyota.
    But he said Toyota’s advantage won’t hold as GM hires more workers at the lower wage and it hires fewer skilled-trades workers, who make more money than other factory workers. GM has already hired 2,300 workers at the lower wage, he said.
    McAlinden predicted that between 2013 and 2015, Toyota could even be paying $10 more per hour than GM unless the Japanese company reacts and lowers wages.”

  27. 27
    Mikal says:

    RE: One Eyed Man @ 26 – You and Deejayoh are the only posters here that makes it worth reading.

  28. 28
    Pegasus says:

    pfft @ 20
    Ask yourself why the unemployment figures for government employees is about 3 percent compared to 10 to 24 percent for the rest of us. Sounds like a “talking dog” recovery. Keep barking.

    Here is your wage discrepancy as requested. Read figure 2 for the real picture, it’s even worse than even “talking dogs” can imagine or spin.

    http://www.cato-at-liberty.org/2009/08/24/federal-pay-continues-rapid-ascent/

  29. 29
    Pegasus says:

    one eye @ 26

    The pension benefits were transferred off balance sheet to the union. The liabilities still exist. The union was spared at the expense to the investors….Obama style(stolen). Guess who will end up paying the unions. The taxpayers. Sounds like an Acorn deal.

  30. 30
    Scotsman says:

    RE: One Eyed Man @ 26

    The issue isn’t current wages so much as pension liabilities for retired workers. Those debts are spread out over the currnt workers to get the $68 number. As part of the settlement they were shuffled around, but still exist.

    Edit- just saw Pegasus’ post- the old “off blance sheet” transfer trick, eh? Kind of like the banks and all their non-performing loans- great! What a f#ck@d up country this has become. I’m almost praying for reset just to clear out all the crap.

  31. 31
    Pegasus says:

    pfft and one eye

    “The Treasury Department said Monday it will lose $1.6 billion on a loan made to Chrysler in early 2009. Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 BILLION, congressional auditors have said.”

    “The Congressional Budget Office estimated in March that the government’s $85 billion bailout of the automakers would cost taxpayers $34 billion.”

    Who’s money is that 34 BILLION?…….TAXPAYERS!!!!!!!

    The only reason taxpayers are on the hook for something they rejected……fraud, unions and Obama politics.

    http://finance.yahoo.com/news/Treasury-takes-16-billion-apf-581812658.html?x=0&sec=topStories&pos=main&asset=&ccode=

    Keep barking pfft……woof woof

  32. 32
    Herman says:

    By Scotsman @ 22:

    RE: One Eyed Man @ 18

    “with a $20/hr wage differential they may have the ability to decrease comparative labor costs and increase their margin in the future”

    Yup, just as soon as hell freezes over.

    Not true, GM just has to externalize part of those benefits costs. The GM health plan can be offloaded to the taxpayer, for example. As long as uncle sam guarantees health and medical services as a backstop, GM can eliminate its insurance and let their members roll over to the government, without a backlash from the UAW.

  33. 33
    One Eyed Man says:

    RE: Pegasus @ 29

    “The union was spared at the expense to the investors”

    That’s true, but I think the union had some barganing power through mutually assured destruction. If GM went chapt 7 rather than chapt 11, the unions would have lost their jobs but the plant, equipment and other GM assets (which is all the bond holders could recover from) would have been next to worthless in this economy once GM ceased operations.

    “Guess who will end up paying the unions. The taxpayers.”

    You may end up being right, expecially if the auto unions remain on hard times. If the pension and/or the healthcare VEBA end up underfunded, I think the PBGA will end up covering the pension shortfall up to the approx 42K/yr limit , and Obamacare will probably end up covering at least some of the healthcare benefits.

  34. 34
    Scotsman says:

    But wait- there’s more! Just like the banks, they may be able to continue making a profit if we give them free money- it’s the Amerikan way!

    Chrysler, GM line up for more government loans
    05/14/2010, 8:47 AM
    By Andrew Ganz

    Chrysler and General Motors are reportedly set to receive up to $16 billion in low-interest federal loans to be used toward retooling aging factories. This round of loans comes from a 2008 allotment granted to the United States Department of Energy.

    A senior adviser to the DoE says that the department has been “quite engaged” with groups representing both automakers. The loans are part of a $25 million program funded by Congress back in 2008; just $9 billion has been handed out so far, leaving about $16 billion remaining.

    Of that $16 billion, GM has applied for $14.4 billion and Chrysler has asked for $8.55 billion.

    http://www.leftlanenews.com/chrysler-gm-line-up-for-more-government-loans.html#comments

  35. 35
    Scotsman says:

    Oh, and that “global recovery” we keep hearing about?

    “It seems that fear is coming back to financial markets in a big way and financial conditions are turning bad again, isn’t it?

    There is a real doubt on whether or not the private sector is truly on the move after what’s happened in the last 18 months. The figures show that certainly there is not very much appetite in the private sector for increased investment and that’s what we need to increase employment. So I think the fear is right back and global growth – I am afraid – is deteriorating again, it’s not improving.”

    http://economictimes.indiatimes.com/Fear-is-back-global-growth-deteriorating-Jim-Walker-Asianomics/articleshow/5939769.cms

  36. 36
    pfft says:

    By Scotsman @ 22:

    RE: One Eyed Man @ 18

    “with a $20/hr wage differential they may have the ability to decrease comparative labor costs and increase their margin in the future”

    Yup, just as soon as hell freezes over. Let’s see, left-leaning government elected by/with the support of unions suddenly sees the light and busts said unions in order to save taxpayers money. Nah, isn’t going to happen. I want some of what you’re smoking- ummm hmm.

    When GM finally does go bankrupt the unions and their benefits, both for workers and retires, will be reset. Then and only then will GM have a shot at sustainable profitability.

    the unions have been making concessions for years and years.

  37. 37
    pfft says:

    By Scotsman @ 23:

    RE: pfft @ 21

    “thatâ��s not the real number.”

    Source please.

    the paragraph above the one LUC quoted from the article.

  38. 38
    pfft says:

    By One Eyed Man @ 26:

    http://www.ohio.com/business/93556724.html

    “McAlinden said wages and benefits now cost GM around $58 an hour, just $2 more than Toyota.
    But he said Toyota’s advantage won’t hold as GM hires more workers at the lower wage and it hires fewer skilled-trades workers, who make more money than other factory workers. GM has already hired 2,300 workers at the lower wage, he said.
    McAlinden predicted that between 2013 and 2015, Toyota could even be paying $10 more per hour than GM unless the Japanese company reacts and lowers wages.”

    this of course means that toyota must make cuts to keep wages inline? right all you union bashers?

  39. 39
    pfft says:

    By Pegasus @ 29:

    one eye @ 26

    The pension benefits were transferred off balance sheet to the union. The liabilities still exist. The union was spared at the expense to the investors….Obama style(stolen). Guess who will end up paying the unions. The taxpayers. Sounds like an Acorn deal.

    thanks for the tea party cliches. I found them enjoyable!

  40. 40
    pfft says:

    By Pegasus @ 28:

    pfft @ 20
    Ask yourself why the unemployment figures for government employees is about 3 percent compared to 10 to 24 percent for the rest of us.

    because government work can be countercyclical? demand for government services can go up during a recession. we also have 2 wars and major security issues.

  41. 41
    pfft says:

    By Pegasus @ 31:

    pfft and one eye

    “The Treasury Department said Monday it will lose $1.6 billion on a loan made to Chrysler in early 2009. Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 BILLION, congressional auditors have said.”

    “The Congressional Budget Office estimated in March that the government’s $85 billion bailout of the automakers would cost taxpayers $34 billion.”

    Who’s money is that 34 BILLION?…….TAXPAYERS!!!!!!!

    The only reason taxpayers are on the hook for something they rejected……fraud, unions and Obama politics.

    http://finance.yahoo.com/news/Treasury-takes-16-billion-apf-581812658.html?x=0&sec=topStories&pos=main&asset=&ccode=

    Keep barking pfft……woof woof

    bush would have done the same thing. he just pushed the problem forward to the obama administration. the car companies were saved because there were massive amounts of jobs on the line.

  42. 42
    pfft says:

    By Scotsman @ 35:

    Oh, and that “global recovery” we keep hearing about?

    “It seems that fear is coming back to financial markets in a big way and financial conditions are turning bad again, isnâ��t it?

    There is a real doubt on whether or not the private sector is truly on the move after whatâ��s happened in the last 18 months. The figures show that certainly there is not very much appetite in the private sector for increased investment and thatâ��s what we need to increase employment. So I think the fear is right back and global growth – I am afraid – is deteriorating again, itâ��s not improving.”

    http://economictimes.indiatimes.com/Fear-is-back-global-growth-deteriorating-Jim-Walker-Asianomics/articleshow/5939769.cms

    this is what I”m talking about. the market goes up for over a year and not a word out of you of good news. the market tanks for a week or so and you’re touting it. something is wrong here.

  43. 43
    Mikal says:

    RE: pfft @ 42 – They are morons.

  44. 44
    David Losh says:

    It all comes down to the Pensions, and Institutional Investments. Yes, I have always felt the Health Care Bill was put in place to alleviate benefits to retirees, and pensioners. Yes, if we lose Union jobs we lose a big part of our consumer economy. Yes, GMAC was a sub prime lender, not just on Chevy cars and trucks, but on mortgages.

    General Motors is a dead company with nowhere to go. The Volt? Come on, in this past year the Volt and paying back the money they hoarded in reserves are the only talking points the company has. There is no direction, no products, no innovation. They got bailed out to keep the sub prime mortgage mess from further declines.

    Toyota actually makes viable products for the global economy. The wage package for them is lower because they are a newer company with fewer retirees.

  45. 45
    Mikal says:

    Anyone who doesn’t think business is up in the Puget Sound region works hourly.

  46. 46
    Scotsman says:

    RE: pfft @ 42

    I didn’t say a thing about the markets. Better read my post again.

  47. 47
    Scotsman says:

    RE: Mikal @ 45

    Source, please.

  48. 48
    One Eyed Man says:

    RE: Pegasus @ 31

    I’ll be the first to agree that a few analyst estimates don’t make it true, but even before GM announced their Q 1 results Bloomberg ran this article saying that GM’s IPO may result in a stock price that will pay off the Treasury.

    “DETROIT (Bloomberg) — General Motors Co. may be able to command a stock price greater than $100, tempting holders of warrants to buy shares that would reduce the U.S. government’s controlling stake.
    Improvement in GM’s cash generation and profit outlook, just nine months after emerging from bankruptcy, may set the equity value of the company at about $68.6 billion, JPMorgan Chase & Co. debt analyst Eric Selle said in an April 26 report. That would be 50 percent more than Ford Motor Co. and lead to a share price of $113 to $137 a share — depending on how many shares GM decides to sell.
    ‘I’m optimistic that GM is going to have a tremendously successful IPO and maybe eventually get to $100 a share or more,” said Maryann Keller, president of consultant Maryann Keller & Associates in Stamford, Conn. “The proof is going to be whether people are walking into dealerships and putting money down to buy a car.’ ”

    http://www.gminsidenews.com/forums/f12/gm-financial-outlook-improving-ipo-91560/

  49. 49
    David Losh says:

    RE: One Eyed Man @ 48

    This is the perfect example of the stock market. Yes, the price per share of stock, or an IPO will most certainly boost General Motors. It is a trusted American Brand name, built Chevy Tough.

    People will buy the stocks even though the company makes, and finances widgets.

  50. 50
    wreckingbull says:

    By Mikal @ 45:

    Anyone who doesn’t think business is up in the Puget Sound region works hourly.

    So what are you really trying to say here? Small businesses are being excluded from the ‘recovery’? If so, I’d have to agree. Can you give us a little more substance than calling people morons?

  51. 51

    RE: One Eyed Man @ 18

    Exactly

    And to also defend Pfft, the Cash for Clunkers tax credit to our upper middle class incomes buying new cars helped them buy buy foreign engineered/managed makes like Toyota [who also made the bad power steering unit for GM’s Cpbalt and their own Corolla, GM safety recalled it, Toyota didn’t to date]; so the loans to GM helped our domestic college kids find work….the Cash for Clunkers tax credit helped foreign college students find work, with Americans stuck with the debt.

    I like the loans to GM much better.

  52. 52
    Pegasus says:

    one eye @ 48

    I am not saying we will not get all or more of our money back. We will if the administration keeps giving them low cost loans at our expense, cleaning their waste sites up at our expense and what I suspect will be the greatest pump job ever for the IPO. My point is they were a failed business and they used our money to bailout GM without our permission. When you see administration and GM executives saying GM was never expected to repay the money, you have to ask why. Why were they giving out our money when then never expected it to return? Payola to the union?

  53. 53
    sleepwalker says:

    http://www.redfin.com/WA/Seattle/4012-NE-56th-St-98105/home/313754

    If you hadn’t bought yet, you’re definitely priced out forever.

  54. 54
    Pegasus says:

    sleepy @ 53

    Haha. Typo or do they have the lost Inca gold buried in the yard? We conspiracy nuts have to ask…..is this how they get the real estate prices to go up? I can see the headlines: Housing Prices Exploding In Seattle!!!!

  55. 55
    Scotsman says:

    RE: sleepwalker @ 53

    You’re right- I’m out. Didn’t see that coming! We’re going to need log scales on all the charts now. . .

  56. 56
    pfft says:

    By Scotsman @ 46:

    RE: pfft @ 42

    I didn’t say a thing about the markets. Better read my post again.

    you first. you don’t even know your own quotes.

    “It seems that fear is coming back to financial markets in a big way “

  57. 57
    pfft says:

    By Pegasus @ 52:

    one eye @ 48

    I am not saying we will not get all or more of our money back. We will if the administration keeps giving them low cost loans at our expense, cleaning their waste sites up at our expense and what I suspect will be the greatest pump job ever for the IPO. My point is they were a failed business and they used our money to bailout GM without our permission. When you see administration and GM executives saying GM was never expected to repay the money, you have to ask why. Why were they giving out our money when then never expected it to return? Payola to the union?

    it’s the million or so jobs. the midwest would have been an economic dessert for years.

  58. 58
    pfft says:

    prices are up YOY in Socal.

    Southern California home sales dip, median price rises from ’09
    http://www.dqnews.com/Articles/2010/News/California/Southern-CA/RRSCA100518.aspx

  59. 59
    Mikal says:

    RE: wreckingbull @ 50 – I have a small business and work with other small businesses. I’m easily up 30 percent compared to the previous two years at this point. Guess what… so are the others. The unemployment rate is also down.

  60. 60
    wreckingbull says:

    Can you please clarify what you meant with your reference to hourly workers? I still don’t understand your statement.

  61. 61
    David Losh says:

    RE: Mikal @ 59

    I agree our business is up 30%.

    My problem is that our business will have to service the debt from other businesses, related to Real Estate, that we have had to close.

  62. 62
    Scotsman says:

    RE: pfft @ 56

    Um, that’s not me speaking, that’s the author of the article. Little thing called quotation marks. Mikal was right.

  63. 63
    Scotsman says:

    RE: pfft @ 57

    “an economic dessert ”

    Like TARP, but with a cherry on top?

    http://en.wikipedia.org/wiki/Dessert
    “In Western culture, Dessert is a course that typically comes at the end of a meal, usually consisting of sweet food. The word comes from the French language …”

  64. 64
    pfft says:

    By Scotsman @ 62:

    RE: pfft @ 56

    Um, that’s not me speaking, that’s the author of the article. Little thing called quotation marks. Mikal was right.

    so you quoted something you didn’t agree with after you just agreed with it?

    “Oh, and that “global recovery” we keep hearing about?”

    followed by the article quote.

    ““It seems that fear is coming back to financial markets in a big way”

    I guess I have to ask line by line what you agree with? we all know you’re bearish. if the market is down 10% or 15% you and everyone else will go crazy.

  65. 65
    pfft says:

    By Scotsman @ 63:

    RE: pfft @ 57

    “an economic dessert ”

    Like TARP, but with a cherry on top?

    http://en.wikipedia.org/wiki/Dessert
    “In Western culture, Dessert is a course that typically comes at the end of a meal, usually consisting of sweet food. The word comes from the French language …”

    I know. I know.

  66. 66
    David Losh says:

    RE: One Eyed Man @ 25RE: pfft @ 15RE: pfft @ 57

    There was a lot said in this thread about the way America does business. GMAC is a Real Estate, and mortgage lender. In the world of high risk, sub prime, Real Estate investing GMAC was the bomb, literally, that was, in my personal opinion, the reason they were bailed out.

    http://en.wikipedia.org/wiki/GMAC_Real_Estate

  67. 67
    Mikal says:

    RE: wreckingbull @ 60 – I was being a wise ass. I don’t ever have enough time in the day to get the amount of work I want done. Watching people work for hourly wages seem to work differently.

  68. 68
    pfft says:

    By David Losh @ 66:

    RE: One Eyed Man @ 25RE: pfft @ 15RE: pfft @ 57 Real Estate investing GMAC was the bomb, literally, that was, in my personal opinion, the reason they were bailed out.

    http://en.wikipedia.org/wiki/GMAC_Real_Estate

    I agree, and there is no way to tell if their lending standards will be better the next time home prices decline. there is simply no way to know. maybe right now their lending standards are tighter and they hedge their risk.? maybe in 15 years they drastically lower their standards right before the next housing crash. that is why I said I have no idea about GMAC. the next crisis GMAC faces might have nothing to do with lending. maybe they are on the wrong side of a commodity hedging trade? maybe they are on the wrong side of an interest rate trade?

  69. 69
    wreckingbull says:

    RE: Mikal @ 67 My hourly employees are busting their asses, because if they don’t, they know there are 10 more vying for their job. What industry are you in that you see this laziness when we have such high unemployment? My curiosity is now quite piqued.

  70. 70
    pfft says:

    By wreckingbull @ 69:

    RE: Mikal @ 67 My hourly employees are busting their asses, because if they don’t, they know there are 10 more vying for their job. What industry are you in that you see this laziness when we have such high unemployment? My curiosity is now quite piqued.

    maybe another reason why unemployment lags?

  71. 71
    Scotsman says:

    Raw bear porn:

    “Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country.”

    http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5

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