Sing for Chrysler

Wall Street Journal

Bad management has Detroit's Big Three auto makers approaching the brink of bankruptcy, so maybe music can rescue them. That, at least, seems to be the premise behind a marathon concert now under way in Ferndale, Michigan...

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Reply to
man of machines

But GM and Chrysler raping the taxpayer is okay? Robbing us to make up for very poor business decisions and rewarding incompetence of the Detroit Duds is just fine?

Reply to
Jim Higgins

Sorry, but you're wrong. This financial crisis was initially caused by fraud and greed in the sub prime mortgage business. That happened because of too little regulation, so the white collar crooks did what they wanted to do. Now that money is tough to get, many financial crooks are being flushed out.

As for the very severe problems with GM & Chrysler, they didn't listen to what the customers wanted. So they've been losing many customers over the years, while the "foreign" manufacturers have been growing.

Reply to
Just Facts

If you include the crooks in and around Congress (Frank, Raines, et al) who mandated and profited from (Raines: $90 million in 6 years when he cooked the books at just the right times to trigger his personal bonuses) the way the mortgage industries were forced to operate so as not to get persecuted by the government (think CRA) then I will accept that statement of yours.

BTW - heard anything about Fannie Mae's recent bonuses? Didn't think so.

No - Barney Frank is still in Congress.

Speaking of too little regulation, did you see the youtube of the Congressional hearings some years ago in the attempts to reign in Fannie Mae and Freddie Mac?

Here it is:

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Listen carefully to who is saying what - then tell me where the blame for non-regulation lies for Fannie Mae and Freddie Mac. Frank Raines Pelosi.

You mean like Toyota who is losing money too?

Reply to
Bill Putney

Sorry, but you're wrong.

The crisis was caused by the policies of the Bush administration, chief among them:

1) invasion of Iraq (very expensive, how does gov't pay for it?) 2) insane and reckless drive to increase home ownership rates at any cost (convert many new home owners into republican voters) 3) Fed Bank keeps interest rates articifically low to help (1) and (2)

The cost of money (interest rates) was (and still is) being kept artificially low, and hence the real estate bubble formed (bubbles were forming with almost everything imaginable, because everything must rise in value when currency itself is depreciating). Oil will again hit $150 / barrel if interest rates don't start to rise.

If it was just a phenomena limited to mortgages, then explain why this sub-prime mortage bubble formed during the years 2003 to 2007? Why did this never happen in the past? Why not during 1995 - 1999? Why not

1985 - 1989? There really was no material change to rules and regulations regarding mortgages and mortgage-backed securities lately that would have prevented this explosion of bad lending in the past.

Lack of regulation at the mortage-origination level. Lack of rules regarding minimum down-payment, regarding manditory requirements for mortgage insurance. The ability to deduct mortgage interest from income tax has significant implications for individual tax planing and irrational purchasing behavior (paying inflated home prices).

Stupid buyers paid insane house prices and participated in mortgage fraud along with the agents that falsified mortgage documents related to "stated income" with little to no legal or financial repercussions for them.

Car buyers are irrational. Last july they were paying over-list for hybrids, and now that gas is under $2 you can't give a hybrid away.

All car companies are leveraged financially. In Japan, there is a bank at the top of every industrial pyramid of family of companies. It's normal for most companies to be in debt and to periodically re-finance that debt. The US car companies are no exception. Newspapers, other media companies, etc. Except that now, the banks don't want to refinance debt (they want to hord cash because FED rates of 0% and prime rates of 3% are simply not attractive enough to risk lending). The banks are making enough money on service charges and will not lend money normally again until interest rates go up. In Japan, they force car turn-over with rules that require all cars to meet *current* emissions standards (not the standards that were in place when the car was made). In Europe, the gov't has been providing incentives to junk old cars when you buy a new one. None of those mechanisms are in place in US/Canada.

Ford and GM own foreign car companies because it's hard to import US-built cars into foreign countries (esp. Korea and Japan). Meanwhile anyone can sell their foreign-built car into the US with relatively few obstacles. Chrysler is hurting because it does not get much in direct overseas sales (exports) because of these imbalanced trade rules, and it doesn't own a foreign car maker like GM and Ford does. It's also hurting because of the LX platform designed under the direction of Daimler management. The LX platform doesn't lend itself to making small cars. That's why were're hearing all this talk of Fiat providing Chrysler with "small car technology". It's more like a small car platform. How Chrysler gets geared up to stamp out Fiat cars here in North America, I can't figure out (or, who will pay for the retooling). Or perhaps the plan is to simply import Fiat cars and rebadge them as Chrysler.

This deal where Chrysler gives 35% of itself to Fiat means that Chrysler isin't going to be buying fiat cars and bring them over to the US to sell. It means that the new trans-national "Chriat Incorporated" will be shipping "parts and components" here for "final assembly" and then sell them through "Chriat" dealerships (aka Chrysler dealerships).

Reply to
MoPar Man

Below..

DAS

To send an e-mail directly replace "spam" with "schmetterling"

Reply to
Dori A Schmetterling

No. Research "CRA" which was enacted under Jimmah Carter and put on steroids by Clinton. Congress has been controlled by the Democrats for the last few years (ever hear of Nanci Pelosi?). No - I don't think getting people into housing they couldn't afford at any cost was a Republican plot to gain votes.

Reply to
Bill Putney

The finger is usually pointed at the Community Reivestment Act, but it far predates the criminal mortgages given out starting in 2003 - 2004 time frame and the artificially low interest rates that were necessary to prevent the growing federal deficit from spiraling out of control. The deficit spending was caused by both the cost of the Iraq invasion and the Bush tax cuts during his first term.

Bush seeks to increase minority homeownership

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YouTube - Home Ownership and President Bush
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If the CRA was the cause of reckless mortgages, then why didn't it happen years ago? Why did it happen only in the past 5 years?

The democrats only got a majority in 2006. Long after they could do anything about the Bush tax cuts and the costs of the invasion and occupation of Iraq.

Bending over backwards for minorities (and being soft on illegal aliens vis the guest worker initative) is nothing more than pandering to a captive voting block at the expense of good governance and fiscal responsibility.

Reply to
MoPar Man

You make some valid points.

Reply to
Bill Putney

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