Our economy is looking worse than a Pontiac Aztec.
The government's investment took off worse than an automatic Cavalier.
Does the bailout package come with crumple zones?

yea, but it'll prolly be totaled if we use them. At least we will survive though?

The government's investment was made with the foreknowledge of chapter 11.

Draw your own conclusions, they are not pretty.

we'll be left with a salvage title

What are you talking about ? Last time I checked, economy was getting better :) or so they say.

Temporary.

Will any of this mean i can afford the Z06, ZR1 or CTS-V in the near future?

With inflation on the horizon, I'd suggest maybe looking into putting your money into tangible assets.

Well, GM will be filling within the next two weeks probably,and when they do,they will close a lot of dealers. You need to pounce when there is a lot of confusion. Pounce with a LARGE cash deposit, and a lot of questions about manufacturer support that they won't be able to answer.

I have heard theories that the economy "is getting better" to attract investors, and then it will go down again.. Someone out there is getting rich, some people are getting poorer. Goodbye middle class.

On the other hand, maybe its time to buy a cobalt ss coupe :)

"The Post-American World" by Fahreed Zakaria.

Read it - you will feel a lot better about the world in general and thank god that Obama won the election.

The question is: What is a tangible asset?

Real estate? Probably not. Equity? Oh yeah, lets bet... errm, better not. Gold? No one has ever made money with gold.

Best asset is that one you wanted to buy anyway in the first place (Z06, ZR1...). Because it will be more expensive tomorrow when there is a big inflation. Which BTW I'm quite sure will not come within the next two years in the current economic climate.

I'm reading in the german newspapers that GM will file for chapter 11 on Monday.

This day is also very relevant for Germany because the separation of Opel and GM which is still in progress and not yet secure must be finished then. Otherwise Opel will go bankrupt together with GM.

Bullets and gasoline. I knew watching Mad Max would come in handy some day...unfortunately.

Do it. And there aren't too many people out there getting rich. Rich people invest, and the market isn't going anywhere happy.

Thanks, but I've read enough economics texts to feel pretty hesitant about Obama getting elected.

Equity is questionable as to right now, there are bargains to be had, but with current levels of volatility, I'd keep my money out of it until some stability is found and the major cost cutting initiatives and toxic assets have been displaced. RE is a good investment right now within this country just because the bottom has fallen out of the market and there are major deals to be had. Gold isn't that terrible of an investment, but in 2008 it was nearly as volatile as the equity market itself (usually it's not a bad idea in this market, but I'll concur with you in a growth market.)

That last point is right on the money - I'd put my money towards just something I wanted. I'd say inflation could come sooner, but my familiarity with the European markets is embarrassingly lacking.


+1

Investing in Winchester, Smith & Wesson, and malt liquor isn't a bad idea right around now. Particularly ammunition and arms manufacturers - 2nd amendment support has never been stronger and people have never bought as many guns as they are right now.

I am investing in a mosin nagant, Springfield Armory .45 and a AK 47. Bring it on bitches.

I have owned all three of those things. You sir have good taste! XD?

Who knew midnight had such an exquisite knowledge in economics.

I'm kind of actually enjoying this conversation.

Not sure .. something about the 1911 kicking so much ass in real combat makes me want to side with that. All of the 3 guns i mentioned have been battle proven instruments of ass kicking.

Cant really go wrong with the 1911. Just don't get carried away with the options. They are all really the same gun, so pick on with all of the features you "must" have and let the others go.


*Edit* and post up pics when you get it. :)

In my view equity is currently the best investment if - and that's a big IF - you know what you are doing and which companies to buy. So I sorta agree with you.

RE - I thought too that house prices are down and cannot fall further. But they can. I just saw a diagram about the american house price index and they have fallen now to the level where they were in 2002/03. If they should decide to fall to the level of 1997 (where the big rally began) you will have a devaluation of another 50% from now on. And the questions are who has the money right now to support the current level of house prices (my estimate: not a lot of people) and will the lurking credit card crisis happen or will it not?

Gold - of course there are people who made money with it. But I'm quite sure its not Johnny Sixpackinvestor. It doesn't earn you interest rates, on the contrary you probably have to pay deposit fees. And the so-called gold 'experts' are harping now for months and years that the gold price will definitely now cross the $1000 border. Yeah right.

With regards to RE, I'll agree that prices could drop even further, but there are some serious deals to be had at the moment in the right places. And I know that I've got a bunch of folks that graduated with their master's degrees with me that are looking to move straight into a house - paying rent money toward a mortgage is just so damn appealing since it builds equity as opposed to being an expense. But I'll look up the HPI history, I hadn't looked that far back before.

Gold experts are on drugs - I don't think there are that many people who've made money on it. But I think there are more folks out there looking to secure their capital in something other than cash or CDs that have weathered this crisis fairly well (certainly better than other commodities or equity investments). And I couldn't agree more, $1,000 is ridiculous.

How is $1000 ridiculous? Its risen nearly $20 in the past month and is close to $980. It may never be worth $1000 in inflation adjusted value based on what it was when the gold standard was proposed for the US dollar, but I think it will definitely hit it in real dollars.

Over the last 3 years, I might be inclined to agree with you.



But over the last 30, I'd say that it's a ridiculous assertion to hold onto gold for any extended period of time. Note - late 70's, you get Carter (Obama) and stagflation, followed by Reagan (anybody but Obama in 4 years, with any luck or help from people who don't vote with their "feelings" for "hope" and "change") and the corresponding rise and tremendous drop in gold prices as soon as the economy begins to pick up again. Since I'm an investor who's young and has a chance to invest in growth rather than quick dollars, I'd stay away from gold for the (albeit mildly conservative) philosophy that we could see this again.

Looks like Magna is buying Opel/Vauxhall.

Fiat-PSA merger, a possibility?

And Koenigsegg wants Saab.

And unfortunately the german taxpayer will be responsible for the bill, thanks to one big idiot in the german delegation.

Just what he said: Fiat boss Marchionne desperately wants a production volume of 6 million cars per year. The failure to buy Opel is not going to stop him.

Please no! There's no faster and better way to ruin Koenigsegg than buying Saab.

We've got lots of those in our legislative bodies, how did y'all get away with just one?

Upping capacity, overhead, and investing more capital in this market? Is he on drugs or just stupid?

One-way ticket to bankruptcy, please!

So it's official, GM has gone chapter 11.

And Chrysler's sale of asset has been cleared.

How much did we spend trying to keep this from happening because that would have been the worst possible thing ever? Thanks congress for fucking my generation and my children's financial future right in the ass.

Pelosi and Co. FTW

Ya WTF! They should've done this earlier before receiving taxpayers' money. Some people im sure got rich by staying longer, maybe rich enough for a lifetime. On the other hand, the workers get screwed.

how does this fuck your children's future "in the ass"? the cost to the individual tax payer was <$1000. if any money changes hands in the future, it will be GM repaying debts to the federal government and not the other way around. yea, we have a huge deficit, but GM's 50 some odd billion is kind of a drop in the bucket for a country with a GDP of over $30 trillion. im not saying it isnt shitty and that GM should have been forced to go chapter 11 before the bailout cash was handed out, but this kind of reaction is pretty exaggerated.

I guess the problem is the same on this side of the pond. We have here a big bailout package for the banks, we have an economic stimulus package and we have a bailout package for the industry. The latter one is intended for companies that got into trouble due to the credit crunch and not because their management made shit decisions.

Opel for instance are in a dire situation because they have not enough customers, yet they were saved by taxpayers money. And this seem to have opened all the gates. We have a big warehouse company here in Germany (Arcandor-Karstadt) which are near bankruptcy now for several years but thanks to the immense insight of our bonehead politicians they want to save them with $1 billion - the federal elections in September might have a tiny little bit of influence [/irony]. One fucking billion dollars for a company that is bankrupt and has no chance whatsoever of recovering!

And so it adds up. 500 million EUR here, one billion there and suddenly we are in debts we have no realistical chance of ever paying back, except by the means of hyperinflation.

No one got rich here - furthermore, I'm almost positive that the government knew about this transpiring before making the investment. GM had already had a going concern opinion issued by their independent auditors back when their 10K was filed (http://www.sec.gov/Archives/edgar/data/40730/000119312509045144/d10k.htm, they also got hammered on their internal controls) and this was a well known fact that they'd have to file Chapter 11 eventually (same concept as E85 subsidies, if it takes government funds to make it viable, it is, in reality, a pipe dream without radical change.) Congress was in essence throwing good money after bad money and there are only 3 reasons that I can see that they'd do this:

1.) They must be perceived as "doing something" about the situation, and, as all politicians seem to have issue, if they stood by idly (the clear choice to let this happen) they wouldn't garner votes for the next election from the UAW bloc.

2.) They sought control of one of the largest companies in the world to "affect change" and "impart hope" and the like. Furthermore, with such control, policy changes in this area of the corporate world are just that much easier to pass.

3.) Genuine incompetence was, I'm sure, a huge part of this decision. Most (if not all) of our legislative branch has not the slightest clue about business or economics, let alone any understanding of where our economy is headed and how much we cannot keep holding on by a string and decided to vote with the crowd rather than actually gain any useful knowledge on the situation. Pathetic, if you ask me.


Couple of notes on this post:

1.) Cost to the individual taxpayer may have been less than $1,000 (I've gotta get to the pool before it closes, so I'm not going to check the math here, but we'll assume your number is correct for the sake of argument) but just read that sentence again. For me, that's nearly two months of rent of funds that the U.S. government spent for purposes that, to me, don't make a goddamn lick of sense. Factor in TVM for the fact that we're going to be paying this far down the line, and you're looking at, even with an insanely conservative discount rate, much, much more than $1,000.

2.) The U.S. government budget is closer to $3T, not the $30T GDP.

3.) Why does this evoke this kind of reaction? Several reasons. We already can't pay for the legislation that has been passed by this administration - and we've spent a whole lot of money that we don't have. So that means that we're going to be paying for this down the line. I file quarterly, so I've got a pretty damn good idea how much I'm paying - I'd suggest you do the same at least for a year to get a handle on how much you already pay in taxes. Especially as these policies necessitate more funding by folks like you and me for purposes that are both unconstitutional and just plain stupid.

Any way you slice it, this administration has been the most fiscally irresponsible anywhere in recent history (a feat after the Bush administration) and following a blueprint that was set forth in the Roosevelt era to keep the economy either on life support or failing miserably. I'd write more, but I've really gotta get my workout in.

*Word on the street* is that the 2010 will be the last year of the ZR1, but no word yet on the Z06. I'd speculate that with a 60% ownership of GM, their production of performance-oriented vehicles will be either ended or severely incapacitated. So, like I said before, buy now.

I didn't know what to think, pro or con, about the auto bailouts while they were underway because I'm no economic wizard or industry expert, the best I could do was see what was going to happen. Clearly, in hindsight, this was all a massive mistake for several reasons. First of all, there should've been enough evidence to show that Chrysler and GM weren't about to pull through, but there's two reasons why they got funds anyway: 1) As midnight said, politicians felt the need to do something and 2) Chrysler and GM were both plenty happy to get a handout, even if their odds of pulling through were just a longshot. I think it's important to not forget that it wasn't just the government stepping in here, the automakers were clearly pushing for the bailout as well.

But the second aspect of all this was the pitiful mishandling of the whole bailout procedure. There seemed to be an almost random selection of firings, layoffs, and new appointments at various levels in both GM and Chrysler. Most of the people who got brought in had little to no experience in the automotive industry, and I know exactly why the government did that...they heard too many miracle stories about the outside guy coming in to clean up the mess. The thing they completely failed to take into account, which is quite unacceptable, is the fact that that tack mostly fails...and here we are.

But even before all this, shame on GM and Chrysler for attempting to hold on to their huge market shares in a shrinking market. Guess what? The basic global problem is this: capacity exceeds demand by a huge amount, funds and credit are limited, somebody has to give. Meanwhile you've got every manufacturer in the world praying for growth and you're faced with shrinking demand, and while GM and Chrysler are not the only offenders, they certainly shot themselves in the foot with their inflexibility, not to mention with decades of bad choices. It can be a little hard to blame the current management for what was decided in the '80s, but you've got huge issues when you've got 10 retires receiving benefits for every active worker, which GM claims to have at this point.

I'm in support of the reorgs and bankruptcy. I suspected for awhile that it was the best route to go, and in hindsight, there never should've been a bailout and there should've only been a bankruptcy for both companies.

And midnight, find me a way to improve the economic sense of our government without sacrificing sense on civil rights, the environment, education, and a million other things and you might have me convinced. I think the first step is to make holding a masters-level degree in political science, economics, history, law, etc. a minimum requirement for being in the legislature.

Hummer goes to the Chinese?

TBH, one has to say they have inherited lots of problems for which they were not responsible. The bailout package for the banks was necessary otherwise the financial meltdown would have followed. Even if we can discuss the HOW (lots of economists - Krugman for instance - saying the Geithner plan is actually a very poor execution of a bailout).

Penske is buying Saturn.

The next model has already been designed for the chinese market:

I will be sooo fucking pissed/ jealous if they come out with saturn spec'd Penske racing suspension bits.

shit?

You didn't expect them to leave in production everything but the good cars, did you?

Well no, but I didn't expect them to be retarded either.

^ How's that retarded, they're nixing slow-selling and expensive models, and keeping what's feasible. The Astra is German-built, and at current exchange rates, it isn't a very profitable model. Nevermind that they aren't exactly moving off the lots. The Sky isn't a hot seller anymore either, and Saturn needs to concentrate on more mainstream models before they branch off to build image-building, niche cars such as the Sky. The Aura's a pretty sold effort, a little more work, and it'll run with the class leaders, same goes for the Vue. I'd argue that the Outlook probably already is one of the best cars in its class.

But now that pontiac is going under wouldn't you think that the sky would start selling more? And I agree about the lineup there keeping. There all good cars and with some tweaking here and there, they could be even better.

Why will the Sky start selling more just because Pontiac's dead? The Solstice? Initial sales were good for the Solstice, but it's not like those are exactly flying of dealer lots either.

I didn't say the sky would start flying off the lots because pontiacs dead, I said they would improve. But I see what you're saying about waiting to "branch out" their models.

Ok, I see your point, but I think their first priority is replacing the Astra with something more profitable and getting a subcompact into the range. Perhaps something even smaller would be nice, seeing as other than the premium Smart, there really isn't a "city" car on sale in the US.