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No. of Recommendations: 1
Right again.

The way that cars have been selling the past few years, it simply can't go on forever. We're not talking pancakes here. People only need so many cars. Anyone who believes the optimistic pabulum of the manufacturers is very naive. Are they as good and OPTIMISTIC at projecting future auto sales as they are at projecting future returns on their pension plans?. http://boards.fool.com/Message.asp?mid=18399834

Apparently not. From what I've seen, GM is just as bad or worse at projecting future sales as it is at projecting future pension returns. Last week GM announced it is going to be giving GM Hughes stock to the pension fund. What does that tell us if we read between the lines?

Yes GM is having problems with sales falling off dramatically; however, there is still a major part of my prediction from the aforementioned link that has yet to be fulfilled.
That is:

The last major concern I have is that they are making too many sub-par loans to people who are much more likely to default, especially in this economy as people get their pink slips. It's much harder to make a car payment on a car with an unemployment check. They make these loans to "undesirables" in my opinion, in order to delay the inevitable. The pressure is strong to keep moving cars, especiially with the heat on them regarding possible pension shortfalls.

As the economic reality continues, I think we should start hearing news of high defaults from GMAC Finance. If we don't hear anything, than I will start to wonder about possible “creativity” in the accounting department. If that's the case, could we have another corporate confidence rocking scandal in America? We'll see.

I don't have evidence to that effect; it's all based on my seemingly patented common sense business analysis. So don't think I'm breaking news here. I have no inside information.

Covering Brokers 15
Average Recommendation: BUY Average Target Price: 44.00
Although, I must congratulate one of the firms. I don't know which firm it is but one of them has a strong sell on GM.

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No. of Recommendations: 1
Covering Brokers 15
Average Recommendation: BUY Average Target Price: 44.00
Although, I must congratulate one of the firms. I don't know which firm it is but one of them has a strong sell on GM.


These analysts should be forced to buy their own recs (with their own dough). I'm waiting for the next Bear Rally to dump it from my IRA (bought at 44.50) and take the loss. Right now I'd settle for 37 ... mebbe get back in at 31.50 again. I like GM. Nothing wrong with the company, and unlike some I believe in its longevity but you have to be seriously naive to believe that this company doesn't have any problems.

Patrick
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No. of Recommendations: 5
Arbitrage...

I agree with much of what you said.

One caveat: Delinquent loans are EVERYWHERE, not GMAC only. The economy is very little to do with bad loans. The destruction of the family unit.."that is my ex's loan", or "divorce caused my credit to suck" is a big problem. Also, Liberalism attack on responsibility is working. Look at "bankruptcy"! It is no shame anymore, heck some lawyers give the idiots a blue ribbon with the discharge papers!

For what its worth, a big part of my own business deals with GMAC, and GMAC makes money hand over fist. Their ratio of "good loans" to bad is awesome.

Wanna see bad loans? See Ford Motor Credit.They approve people just for having a pulse. Also, look at Americredit and Household.

Just my 2 cents. GMAC is tougher on credit than its peers.

Jedi
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