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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: ChinuSFO who wrote (44658)	11/15/2008 10:47:56 AM
From: nigel bates	Read Replies (2) \| Respond to of 149317

Why it probably isn't a realistic option without government backing: tnr.com "....In order to seek so-called Chapter 11 status, a distressed company must find some way to operate while the bankruptcy court keeps creditors at bay. But GM can't build cars without parts, and it can't get parts without credit. Chapter 11 companies typically get that sort of credit from something called Debtor-in-Possession (DIP) loans. But the same Wall Street meltdown that has dragged down the economy and GM sales has also dried up the DIP money GM would need to operate. That's why many analysts and scholars believe GM would likely end up in Chapter 7 bankruptcy, which would entail total liquidation. The company would close its doors, immediately throwing more than 100,000 people out of work. And, according to experts, the damage would spread quickly. Automobile parts suppliers in the United States rely disproportionately on GM's business to stay afloat. If GM shut down, many if not all of the suppliers would soon follow. Without parts, Chrysler, Ford, and eventually foreign-owned factories in the United States would have to cease operations. From Toledo to Tuscaloosa, the nation's?assembly lines could go silent, sending a chill through their local economies as the idled workers stopped spending money..."

To: ChinuSFO who wrote (44658)	11/15/2008 11:14:38 AM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 149317

I totally agree with you. I found out this week that the SF bay area is now a declining market for real estate so if you want to buy an REO here you need to come up with 25%. Thats about 175K cash all inclusive to buy a 600K REO, way too much especially since stocks have crashed not that many people have that money lying around and it ruins the investment equation anyway. I might have considered buying another house as investment with maybe 10-15% down. Then the numbers work. Banks should be jumping all over themselves to lend to me with my credit profile and assets, especially if I want to buy an REO! And besides a lot of neighborhoods in the SF bay area aren't even declining! San Jose is but SF is NOT! This is ridiculous. They have an actuarial forecast that says if they make loans with 25% down at this juncture they can't lose under any circumstances but with 15% they might lose in 1% of the time if the buyer has a lot of credit and assets so they say no, 25% or nothing. We are never going to get out of this with these types of lending standards, thats what the bailout was for.

To: ChinuSFO who wrote (44658)	11/15/2008 4:02:44 PM
From: manalagi	Read Replies (1) \| Respond to of 149317

Have you ever met someone who rather drives 20 miles to save a dollar? That's what GM does. It will go to the lowest bidder to get inferior parts, and the result is that they have to spend millions of dollars to honor the warranty. In addition their parts departments have mumbo jumbo parts which have the same functions, like brakes, locking systems, oil filters, bulbs, etc. etc. These parts are from diverse suppliers, and practically every year, they change the parts that have been tested and functioning well. The Japanese car makers limit the number of changes once a component works well and tested. Witness how many years the engine of small truck 22E are in used. This engine is so well proven to be reliable and durable that they are discontinued because the newer trucks are getting bigger and require stronger engines. We have the best brain in managing business. We have most Noble prize winners in economics - macro and micro -, but the CEO's are just tossing the idea of economics of scale, and practice penny wise pound foolish.