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Started By
Message
Photos of hundreds of thousands of autos awaiting buyers
Posted on 1/19/09 at 9:51 am
Posted on 1/19/09 at 9:51 am
Mish is hot today. Great photos of autos in storage lots around the world awaiting shipment or buyers or both.
Mish's comments about the statement by Cadillac is too perfect:
'No Choice? What kind of statement is that? Of course GM has a choice. GM has a history of making choices, most of them horrible: ResCap, not dumping GMAC, not dumping the Hummer on time, launching the Saturn line which has never had a profitable year in its entire history, caving in to ridiculous union demand the worst of which was granting 90% pay for laid off workers, too many models in general, etc.
Who cares if GM never produces another luxury car? Hardly anyone buys them anyway. With GM's new lease on life at taxpayer expense, it ought to figure out how to do one thing right rather than attempt to do 100 things, and get all of them wrong.
Auto Prices About To Crash
With unsold cars stacking up by the day, demand falling faster, and bailout silliness getting sillier, I have three easy to make predictions.
1) Hundreds of dealerships are headed for bankruptcy in 2009
2) The Fed Is Destined To Become World's Largest Auto Dealership
3) Cars are going to get cheaper, much cheaper. Auto prices will crash. Liquidation sales later this year after the 2010 models come out are going to be fabulous.
It makes no sense to buy a car now, no matter how good the deal looks. The deals will get progressively better as the year rolls on.
and back to the press release...
'History Repeats At Cadillac
Three months after the 1929 stock-market crash, Cadillac premiered at the New York auto show its Series 452 with a 185-horsepower V-16 engine designed to trump chief rival Packard's V-12.
Fast-forward almost 80 years: Cadillac is ready for another flagship, perhaps something along the lines of the gorgeous Sixteen concept that was first shown in 2003. Except, once again, the economy isn't ready. Worse, once-mighty GM doesn't even have the money to spend on such a project -- it's got Chevy Volts and Cruzes that badly need building.
All this explains why GM is taking a bigger gamble now than it did in 1929 and launching up to 10 new Cadillacs in the next five years. But it has no choice. The future of American luxury is at stake.'
LINK /
Mish's comments about the statement by Cadillac is too perfect:
'No Choice? What kind of statement is that? Of course GM has a choice. GM has a history of making choices, most of them horrible: ResCap, not dumping GMAC, not dumping the Hummer on time, launching the Saturn line which has never had a profitable year in its entire history, caving in to ridiculous union demand the worst of which was granting 90% pay for laid off workers, too many models in general, etc.
Who cares if GM never produces another luxury car? Hardly anyone buys them anyway. With GM's new lease on life at taxpayer expense, it ought to figure out how to do one thing right rather than attempt to do 100 things, and get all of them wrong.
Auto Prices About To Crash
With unsold cars stacking up by the day, demand falling faster, and bailout silliness getting sillier, I have three easy to make predictions.
1) Hundreds of dealerships are headed for bankruptcy in 2009
2) The Fed Is Destined To Become World's Largest Auto Dealership
3) Cars are going to get cheaper, much cheaper. Auto prices will crash. Liquidation sales later this year after the 2010 models come out are going to be fabulous.
It makes no sense to buy a car now, no matter how good the deal looks. The deals will get progressively better as the year rolls on.
and back to the press release...
'History Repeats At Cadillac
Three months after the 1929 stock-market crash, Cadillac premiered at the New York auto show its Series 452 with a 185-horsepower V-16 engine designed to trump chief rival Packard's V-12.
Fast-forward almost 80 years: Cadillac is ready for another flagship, perhaps something along the lines of the gorgeous Sixteen concept that was first shown in 2003. Except, once again, the economy isn't ready. Worse, once-mighty GM doesn't even have the money to spend on such a project -- it's got Chevy Volts and Cruzes that badly need building.
All this explains why GM is taking a bigger gamble now than it did in 1929 and launching up to 10 new Cadillacs in the next five years. But it has no choice. The future of American luxury is at stake.'
LINK /
8
Posted on 1/19/09 at 9:59 am to Rivers
Good post. I keep telling everyone I know to avoid any large transactions of any type right now - or at the very least REALLY lowball the shite out of it. I'm talking everything - car repairs, houses, etc. EVERYTHING is negotiable.
Posted on 1/19/09 at 10:10 am to Rivers
I was at GMAC/Rescap for 5 years.
When I arrived, GMAC Mortgage Wholesale and RFC/Homecomings were two different divisions. I was at GMAC. We did Fannie/Freddie, FHA and some nonconforming, mainly Jumbos and some seconds. RFC/HC was subprime. They offered Fannie/Freddie but they were mainly supbrime. No limits on condos, 107% LTV's, 125% seconds, etc. RFC/HC was teh first company on subprime to roll out true automated underwriting, assetwise, and it was very good.
the last year they were seperate GMAC (which still exists as a correpospondent lender, no brokers allowed, and servicer) was did 6 billion in loans. GMAC was more conservative and we didnt' do most of the stuff RFC did. RFC did 17 billion and had MUCH higher profit margins and dealt mainly with brokers.
SOooooooooooooooo they had the bright idea to merge the broker divisions together and were later going to merge GMAC correspondent with RFC as well. RFC/HC took over GMAC broker division. closed down all the branches. Let go all the sales reps, flat out said they werent' the kind of people they wanted as they didn't produce the kinds of numbers they wanted (which we now know were bogus because of the crash). Needless to say, RFC/HC is now out of business, GMAC part remaining is actually pretty good, but the subprime guys ran the show for so long and ran it into the ground so well it still may not survive even though what is in place now will probably work.
2 years ago 77% of Rescap's portfolio was subprime. thank you RFC.
When I arrived, GMAC Mortgage Wholesale and RFC/Homecomings were two different divisions. I was at GMAC. We did Fannie/Freddie, FHA and some nonconforming, mainly Jumbos and some seconds. RFC/HC was subprime. They offered Fannie/Freddie but they were mainly supbrime. No limits on condos, 107% LTV's, 125% seconds, etc. RFC/HC was teh first company on subprime to roll out true automated underwriting, assetwise, and it was very good.
the last year they were seperate GMAC (which still exists as a correpospondent lender, no brokers allowed, and servicer) was did 6 billion in loans. GMAC was more conservative and we didnt' do most of the stuff RFC did. RFC did 17 billion and had MUCH higher profit margins and dealt mainly with brokers.
SOooooooooooooooo they had the bright idea to merge the broker divisions together and were later going to merge GMAC correspondent with RFC as well. RFC/HC took over GMAC broker division. closed down all the branches. Let go all the sales reps, flat out said they werent' the kind of people they wanted as they didn't produce the kinds of numbers they wanted (which we now know were bogus because of the crash). Needless to say, RFC/HC is now out of business, GMAC part remaining is actually pretty good, but the subprime guys ran the show for so long and ran it into the ground so well it still may not survive even though what is in place now will probably work.
2 years ago 77% of Rescap's portfolio was subprime. thank you RFC.
Posted on 1/19/09 at 10:37 am to Rivers
quote:
Great photos of autos in storage lots around the world awaiting shipment or buyers
Put in containers & ship 'em out to sea! They can circle around those oil tankers that are out there.
Posted on 1/19/09 at 10:49 am to Rivers
Posted on 1/19/09 at 11:00 am to Rivers
We were recently down on the coast at Brunswick, GA where they offload new cars. The lot is completely full of new cars and according to the local paper the city of Brunswick is making money by leasing an unused airport for storing the overflow. The spin of the story was what a great thing it is for the finances of the city of Brunswick.
Posted on 1/19/09 at 11:10 am to Tigris
The car dealerships in south La have yet to really realize what is coming yet. I don't see many deals yet.
I have about two years until I start looking for another car, so things should be cheap by then.
I have about two years until I start looking for another car, so things should be cheap by then.
Posted on 1/19/09 at 11:14 am to footballislife
quote:
The car dealerships in south La have yet to really realize what is coming yet. I don't see many deals yet.
I have about two years until I start looking for another car, so things should be cheap by then.
That is b/c the economy isn't nearly as bad in south LA has it is in the rest of the country. Hopefully it will stay that way, but the 'doom and gloom' of the national media is making it hard.
Posted on 1/19/09 at 11:19 am to MikeBRLA
I would like a Cadillac. How negotiable is "negotiable?"
Posted on 1/19/09 at 11:22 am to Rivers
I got a plan:
Obama should offer a free new car to everyone who has one that is older than, say, 2002 - 7 years old. 1 car per family / person, whichever is less.
Then take the old car and dump it in the ocean to create reefs for marine life.
Woohoo!
Obama should offer a free new car to everyone who has one that is older than, say, 2002 - 7 years old. 1 car per family / person, whichever is less.
Then take the old car and dump it in the ocean to create reefs for marine life.
Woohoo!
Posted on 1/19/09 at 11:27 am to Meauxjeaux
quote:
Obama should offer a free new car to everyone who has one that is older than, say, 2002 - 7 years old
That would be cruel and unusual punishment. Don't you know that it is not the American way to have a car that old dammit.
Actually as part of the stimulus package he is going to push, if you buy a house, you get a free GM car.
This post was edited on 1/19/09 at 11:31 am
Posted on 1/19/09 at 11:27 am to Meauxjeaux
Sounds great - would work for me!
Posted on 1/19/09 at 1:39 pm to Tigris
yeah but one thing I'm hearing is people are getting ridiculous and walking out in a huff when they can't get 50% off sticker (i'm exaggerating but you get the point).
Posted on 1/19/09 at 2:06 pm to Colonel Hapablap
why don't we just destroy the new cars like they are proposing for excess milk cows?
Posted on 1/19/09 at 2:20 pm to Rivers
quote:
Mish: It makes no sense to buy a car now, no matter how good the deal looks. The deals will get progressively better as the year rolls on.
Mish better start watching his back. This deflationary behavior rhetoric is going to wear thin with some govt and union types.
I'm only half joking.
Posted on 1/19/09 at 2:21 pm to prplhze2000
quote:
yeah but one thing I'm hearing is people are getting ridiculous and walking out in a huff when they can't get 50% off sticker (i'm exaggerating but you get the point).
Jersey's right, we're going to see an economy wide clearance sale in the next year or so.
Posted on 1/19/09 at 2:27 pm to clamdip
quote:They tried this in the Grapes of Wrath, and it led to revolution.
why don't we just destroy the new cars like they are proposing for excess milk cows?
Posted on 1/19/09 at 2:49 pm to Cold Cous Cous
quote:
why don't we just destroy the new cars like they are proposing for excess milk cows?
Wasn't this the answer to gun violence as well?
Set up a machine with a hammer to smash the guns as they're rolling off the assembly line?
Great stuff from the anti-gun freaks.
Posted on 1/19/09 at 5:07 pm to Cold Cous Cous
The difference between killing cows and destroying cars is that cows cost money to be kept alive during times of low beef prices. Cars are like refrigerators. They just sit there unsold until the price goes down.
I gots me 20K saved up for a new car and I'm sittin on it till the crash comes.
I gots me 20K saved up for a new car and I'm sittin on it till the crash comes.
Posted on 1/19/09 at 5:09 pm to TigerinATL
TigerinAtl...You have hit upon one of the great terrifying consequences of deflation. People stop buying NOW because they EXPECT prices to be LESS in the future. Of course this is not a terrifying consequence to the average person but it sure frightens governments and businesses. Of course, putting off buying now and being rewarded by lower prices leads to a downward spiral of expectations of lower prices in the future which leads to lower prices, rinse and repeat.
We often hear the term 'inflation expectations' from the Fed minutes or beige book notes...as in 'polls of consumer sentiment showed no or little increase in consumer inflation expectations'.
When did you hear the Fed say something like 'polls of consumer sentiment showed little or no increase in consumer deflation expectations'? The Fed is loathe to mention the words deflation, recession and, god forbid, depression. The Fed is in the greatest battle it has fought since the great depression and few people even know a battle is going on.
It is probably best that most people do not know what might lie ahead. I imagine most people to be like revelers dancing in the ball room of the Titanic prior to striking the iceburg. What possible good could come from telling the revelers what is in store for them? It is ok for those with hard shells to know what could happen but I would not try to explain to my mom that she might have to go through another great depression. My mom lived on roastin' ears, squirrls, biscuits, garden veggies and maybe a fried chicken on Sunday for years...They were share croppers. Mom had little schooling and went barefoot till she was almost a teen. To her credit she got her HS GED and a degree from a community college when she was in her 30s. Her generation, what is left of them, are terrified of another great depression. Mom worked hard and doesn't deserve two depressions in her life but life is not fair. We all should take care of our old folks cause someday it might be our turn to need a helping hand. A visit, some friendly words, a basket of food, a few dollars...none of that means much to most of us but it might mean the world to someone barely getting by or someone that is lonely and just needing a little company to talk with, a word of reassurance. It might also mean a lot to you when you face your maker.
Sorry for the rant but sometimes we all get a little too caught up in our own problems, and we forget that there are those with worse problems.
We often hear the term 'inflation expectations' from the Fed minutes or beige book notes...as in 'polls of consumer sentiment showed no or little increase in consumer inflation expectations'.
When did you hear the Fed say something like 'polls of consumer sentiment showed little or no increase in consumer deflation expectations'? The Fed is loathe to mention the words deflation, recession and, god forbid, depression. The Fed is in the greatest battle it has fought since the great depression and few people even know a battle is going on.
It is probably best that most people do not know what might lie ahead. I imagine most people to be like revelers dancing in the ball room of the Titanic prior to striking the iceburg. What possible good could come from telling the revelers what is in store for them? It is ok for those with hard shells to know what could happen but I would not try to explain to my mom that she might have to go through another great depression. My mom lived on roastin' ears, squirrls, biscuits, garden veggies and maybe a fried chicken on Sunday for years...They were share croppers. Mom had little schooling and went barefoot till she was almost a teen. To her credit she got her HS GED and a degree from a community college when she was in her 30s. Her generation, what is left of them, are terrified of another great depression. Mom worked hard and doesn't deserve two depressions in her life but life is not fair. We all should take care of our old folks cause someday it might be our turn to need a helping hand. A visit, some friendly words, a basket of food, a few dollars...none of that means much to most of us but it might mean the world to someone barely getting by or someone that is lonely and just needing a little company to talk with, a word of reassurance. It might also mean a lot to you when you face your maker.
Sorry for the rant but sometimes we all get a little too caught up in our own problems, and we forget that there are those with worse problems.
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