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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (80703)	6/26/2008 7:01:13 PM
From: benwood	Read Replies (2) \| Respond to of 116555

I think the big problem is the SUVs and trucks on lease. The collapse in resale values means the residuals will be far greater than expected, meaning when the car is returned, the company will sell the car and realize a loss, if I'm working the math correctly. And the greater return of SUV/trucks means further downward pressure on prices in the used market.

To: koan who wrote (80703)	6/27/2008 6:09:06 AM
From: John McCarthy	Read Replies (2) \| Respond to of 116555

Hi Koan Hadn't --realized-- that. i.e. walking away ... I know squat about squat - but one of the big fears with GM is this ... (a) I leased their SUV (b) At end of lease - I give it back. (c) Their stuck with a metal box with a NET BOOK VALUE of XYZ but a MARKET_VALUE of _holy chit_ ..... the difference (NET BOOK VALUE - MARKET_VALUE) being a HIT to GMAC finance corp.. i.e. complete writedown .... we could be talking billions .... out their in the not too distant future ... regards, John