FYI: NO LOANS!

[dersequim]

My friend who just had to close his two RV Dealerships, showed me several letters from the Banks ETC, that he financed his units with. They were from varied dates starting in Apr. They listed ALL the MFG's that went out of business and stated they would no loner finance any NEW or USED units from those Mfgs. He also got stuck with several NEW Units from a certain Mfg and could NOT sell them as NEW, due to NO WARRENTY!
This for a business that was one of the Largest volume Dealers, in the COUNTRY, for one of his Lines and one of the top for his other three, including the one that folded.
That also means about 30+ more unemployed in a market that is shrinking on a daily basis.

[sailer]

All this hits vert close to home as we are now closing our mens store that goes back to 1896 ,, yes over 110 years old and can't make it go ,,, sailer

[dersequim]

Sailer, We own a womens store that started in 1932 and we are just hanging on.
A customer came in today and told us her 401k has lost 76% since the first of the year and her brother worked for Lehman for 27 years. He was going to retire in 3 years. He has lost everything.
She was SORRY that she hasn't been in as much as in the past! We appreciate that she cared enough to even bring it up.
In our small town there isn't any place for our Employees to find work. Two other Women's Apparel stores have closed in the last two months. WE were not in a position to hire any of their staff.
Several resturants have dropped their Dinner hours and those still open evenings are not busy.

[Delaine and Lindy]

We were at the Dealership yesterday on our way back from Texas. Was told that until the last few weeks, they had 7 Banks that would finance there Allegro MH and the Mobile Suites and now are down to only 3, money is very tight and in most cases you will have to score in the 700's and above to get financed. We looked at the MH's but the final numbers we was $50,000 dollars apart so no MH for us. The turn down rate is now above 65%, but people still want to buy but money is very tight. We had another factory close this month which made parts for GM for many years but are now in Mexico. Thanks NAFTA. GBY....

[richfaa]

Our 401K has dropped 11% the last time we looked. Fortunatly we do not rely on any of that fund for monthly retirement income and it the long run it will come back up...but...the folks who rely on their investment for monthly income have seen that fund shrink..if they know enough to look. A very large furniture manufacturer that has been building quality furniture for over 100 years here in Ohio folded this week. Who do I contact to get bailed out of the funds we have lost..

[Delaine and Lindy]

Rich if we had bought houses that we couldn't afford we could have gotten bailed out. It looks as if the Banks will be making good deals on the houses people couldn't afford but now the Government will give the banks the money to back the loans.. So the Tax payers are footing the bill again for people who make bad decisions and real estate dealers who are greedy. GBY...

[Mrs. CountryGuy]

There is that word again

GREED

[richfaa]

"Rich if we had bought houses that we couldn't afford we could have gotten bailed out. It looks as if the Banks will be making good deals on the houses people couldn't afford but now the Government will give the banks the money "

True but these folks made bad decisions based on advise from experts , folks they could trust..bankers , real estate companies mortgage lenders, Finanical advisors... Why smart folks like us would not be that dumb>>> We would not entrust our money/investments to folks like money managers, folks who manage our retirement funds, 401K funds, etc..you know the "Finanical experts" who have lost billions of our dollars
and will now be bailed out....by us...with our money..Will we get a check from the Government for the $ lost in our 401K, etc??? Will the folks who had their Homes, Cars, etc forclosed on get a check from the Government for their losses...So they made a bad decision..so sorry..the banks and investment firms made bad decisions..we bail them out.. Now all those institutions are backed by Government $(our $) and they have nothing to lose..so it starts over again.. It will get worse... Oh and where will the Government get all that money used to bail everyone out. Those are tax dollars and we are taxpayers..Hummmmmm????

[Mrs. CountryGuy]

Rich,

Your words:

"True but these folks made bad decisions based on advise from experts , folks they could trust..bankers , real estate companies mortgage lenders, Finanical advisors... Why smart folks like us would not be that dumb"

Kinda sums it up for me, so many of us followed the trends, they said it would be great, safe, wonderful.

And, today, we all hurt, and I am thankful that this month the mortgage is paid and the electric bill too. Next month??? Who knows.

My gut has told me for quite a while that all this sounds like a repeat of the Great Depression. I have not said it out loud to many, but, they sure are saying it on the telie this last week.

Am I scared? You bet. Is that negative, well, I would rather think it is realistic. Call it what you may.

Keep hanging on to your hats folks!

[richfaa]

Actually the Government had no choice but to bail out all those financial institutions. We are on the brink of total financial disaster and had all those banks and financial institutions failed our Financial system as well as our Government may have collapsed. Think about this..in almost any other so called first world country the Government in power would have already collapsed over a incident such as this.
Lets hope we have learned and will put regulations in place to prevent this kind of thing of happening again...It would not hurt if some folks went to jail.

[TLightning]

quote:Originally posted by richfaa

Lets hope we have learned and will put regulations in place to prevent this kind of thing of happening again...It would not hurt if some folks went to jail.

Actually, some of our larger companies are in the tank because of too much government regulation. GM and Ford are going great guns overseas because they are not limited by regulations (EPA, MPG requirements, etc). We have the government, who can recognize a vehicle two out of three times if it is speeding down the road, telling the folks that have make them for years, what the MPG WILL be in five years down the road. If big gov would go away, they'd all do better.


As for going to jail...I sure agree, how 'bout the scoundrels that took millions from Fannie Mae and Freddie Mac to start with.

[HamRad]

The American Auto industry is not in trouble because of over regulation. That is a simple way to look at things. Remember that the auto companies that are NOT in trouble have to meet the same standards as the US automakers. Nissan, Toyota, and Honda just to name a few are doing quite well and meeting OR exceeding all the same rules that our US automakers have to meet. So that reasoning just doesn't fly.

I do not know all the reasons the US companies are not able to compete. I would suggest that perhaps they are so management heavy that they have a hard time making decisions. And when they do make decisions they are often the wrong ones. But this is a complicated issue. US auto companies for so long had no competition so they got to believing that they could produce ANYTHING they wanted and we'd have to buy it. After all there was no one else! That attitude got them to produce things that we would not buy once we had a choice from foreign auto makers. And they often didn't seem to learn. They'd just produce another product similar to the previous one! And then wonder why we didn't buy them!

Those upper management types that have the Golden Parachute deals and are now crying in their multimillion dollar houses should have to sell those things and give the money to the companies they drove into the ground. Saw one poor guy putting his boxed up office supplies into his chauffeur driven limousine on his way to his 5 million dollar town house apartment. Of course he was really worried about how he was going to get to his 50 million dollar beach house in Jupiter Beach, Florida! He was crying because the "hardest thing he had to give up was his personal Lear Jet!

Jail! Yes. If they actually broke the law. Some poor slob steals a few hundred dollars ends up spending 15 years in jail and yet a "white collar" crook ,who steals millions, simply looses his job with a severance package of millions! Of course they should be brought to justice. But it ain't ever gonna happen in our society. They'll probably just go into politics!

HamRad

[richfaa]

Well said Hamrad.. Just how much trouble are we in???

Economists see financial bailout as necessary
9/20/2008 1:36:41 PM
By MARTIN CRUTSINGER


The economy could suffer a massive hangover from the government’s efforts to rescue the financial system in the form of a soaring debt burden. But the alternatives look infinitely worse.

The $700 billion the administration is seeking from Congress as the upper bounds of what it will need to take a mountain of bad loans off the books of financial firms is certainly an eye-popping figure.

To get the funds to buy up the bad mortgage loans that have threatened to bring the financial system to its knees, the government will have to borrow. And that borrowing will come at a time when the federal budget deficit is already soaring.

The deficit for this budget year, which ends on Sept. 30, is expected to rise to $407 billion, a figure that is more than double the $161.5 billion imbalance for 2007, reflecting what the economic slowdown and this year’s $168 billion economic stimulus program are already doing to the government’s books.

The Bush administration is estimating that the deficit for the budget year that begins Oct. 1, which will cover the new president’s first year in office, will hit $482 billion, a record in dollar terms.

And that forecast doesn’t include the $200 billion the administration committed to spending two weeks ago when it took over the nation’s two biggest mortgage companies, Fannie Mae and Freddie Mac.

And it doesn’t have any of the $700 billion the administration is seeking to soak up the bad mortgage-backed securities that have been at the heart of the severe credit crisis the country has been struggling with since August 2007.

The legislation Congress passed this summer that gave the authority to rescue Fannie and Freddie boosted the limit on the national debt by $800 billion to $10.6 trillion.

The legislation the administration is now seeking to authorize the financial system bailout, according to a draft obtained by The Associated Press, would boost that debt limit to $11.3 trillion, up another $1.3 trillion.

It is the rapidly rising debt that is cause for concern. The government is already spending more than $400 billion a year just to pay interest on the national debt. The higher that debt goes, the higher the government’s borrowing costs and the less it has to spend on other programs.

Republican John McCain and Democrat Barack Obama are both running for president, making campaign promises about what new programs they will implement once in office, promises that could be severely constrained by the costs of a financial bailout.

The escalating borrowing also means that the government is competing with the private sector for loans, driving up interest rates. And then there is the matter of the country’s large trade imbalances which mean the United States has to borrow $2 billion a day from foreigners.

Will foreigners still want to lend as much to the United States if there are concerns that all the borrowing could weaken the dollar’s value against other currencies.

But even with all these threats, economists said the government has to take decisive action because the alternative of letting the financial system slide into even deeper problems which could jeopardize the routine loans that businesses and consumers need was simply not an option.

"It was critical to arrest the downward slide in financial markets," said Sung Won Sohn, an economist at California State University, Channel Islands.

The dire situation was dramatically demonstrated this past week when the Federal Reserve, working with the central banks of other nations, poured billions of dollars into the financial system without any significant impact because of the fear keeping banks from lending.

The financial system has already been staggered with $500 billion in losses from the mortgage mess and the International Monetary Fund has estimated the ultimate price could be $1 trillion.

What the administration’s plan would do is at least establish a price for the mortgage-backed securities, which at the moment no one wants to own.

Officials who have briefed Congress on Treasury Secretary Henry Paulson’s plan have suggested that one approach would be for the government to buy the toxic debt through a reverse auction process in which companies wanting to unload their mortgage-backed securities would propose a price to the government — say 50 cents on the dollar — and those offering the lowest price would win the bid.

By establishing a price for assets no one currently wants to buy, it could allow a market to develop and allow financial firms to get on with the effort of taking their losses and getting the damaged assets off their books.

"This could go a long way toward solving these problems," said Mark Zandi, chief economist at Moody’s Economy.com, who has written a book on the mortgage meltdown.

And the final cost to the government?

No one knows for sure, but Zandi said if the experience with cleaning up all the assets left over from the savings and loan mess is any guide, it should be less than the $700 billion that the administration is seeking.

In the S&L crisis, the government was able to recoup about two-thirds of its initial costs when it sold the assets it had obtained from the failed S&Ls.

"Obviously there is a big upfront cost to taxpayers," Zandi said, "but the ultimate cost may be measurably lower."



Copyright 2007 Associates Press.All right reserved.This material may not be published, broadcast, rewritten, or redistributed.

[mail2us]

Does Nissan, Toyota and Honda employ UAW employees? I agree that CEO's and their like seem to show up at another company even if they fail. Kind of reminds me of the NFL! Fannie Mae and Freddie Mac CEO's should be jailed but instead are now in politics. Great transition. Dennis

[mopar1]

I work for Subaru in Lafayette Indiana. Our business has been up this year because of people unloading there gas guzzlers but still wanting an all wheel drive vehicle. Our cars get around 26 MPG.
We do not have all the levels of upper management like the big 3 do. There is probably around 200 uppers here in the plant. That includes the CEO.
Another point of interest is the fact that all the managers of that level are in one very large room with there desks in it. Even the CEO sits with everybody else. They don't even have cubicles. No wasted money on special offices and stuff. Just generic metal desks room wide.
Plus we make a very good car. The big 3...well....maybe depending on what you get.