San Diego Housing Bubble News and Analysis

I think you left off a question mark between the second and third one after REALLY

Thanks...I think I just added another one...actually it was two...

Macro are you looking to get another drubbing?

A BK at GM will cost the Gov. (us) $40 billion. GM is part of the country, its veins run through us.

"The banks don't have enough money, or for that matter the gumption, to provide the billions in debtor in possession (DIP) financing needed for a chapter eleven bankruptcy. Without that DIP financing GM would have to go into a Chapter 7 liquidation which could trigger other bankruptcies in the auto industry, cause more jobs to be lost, and in general create a disastrous situation for an economy already in a recession. The bottom line: If Washington were to throw GM into bankruptcy right now, it would be running the risk of blowing an even bigger hole in the economy."

Obama's bailout will cost us $1 trillion to save or create 3 million jobs. $30-$40 billion to the auto makers will do the same thing.

Ahhh yes but we throw money at them BEFORE the election...

Timing is everything!

:P

CE

Scarlet,

Let it Bleed. Go listen to the album.....

It is inevitable and must happen...deal with it or go raise your own money to support this faulty business model.

Welcome to D2. Go rent Red Dawn and buy another AZTEKA or whatever the hell plastic mexican SUV you drive...

You are slipping Macro, that's too lame to even respond to.

GM management open to a reorg BK.

http://online.wsj.com/article/SB12362513...

I really hope GM reorg can get them out of this mess and get back to building good cars.

I think the wake up call is there now, at least.

My take:

For north america:

*Keep
Caddy as the Luxury Brand
Saturn as Appliance Brand
Chevy as Performance Brand
GMC as Truck/SUV Brand

Dump:
Buick(North America),Hummer,Saab

*Move all trucks/SUV/CUV/van/minivan from all other brands to GMC. Eliminate brand engineered duplicate trucks/suv/cuv. Eliminate platform shared duplicates.
*Move buick lucernce and lacrosse to caddy brand.
(Get rid of the stupid names). Eliminate the XLR, the Escalade, SRX.

*Move pontiac G8 to Chevy brand.
*Remove duplicate brand engineered Pontiac/Chevy/Saturn small and mid size cars and move to Saturn brand.

*Keep Opel in GM europe
*Keep Buick/Caddy in China

*Focus on bringing opel design to the rest of the small/mid segment in NA.

Not bad.

I would add:

Throw in trade restructuring. If not then any new version of GM will just suffer the same injustices the current incarnation has.

Japan has managed to lower the value of the Yen vs the Dollar by 12% this year alone. We need some sort of strategy to deal with those types of things.

Healthcare needs to be dealt with too. How can GM ever compete if the Japanese Government pays healthcare for Toyota, Honda, etc. workers? Dito Germany for BMW, Mercedes......

We don't want GM walking out of the ER nice and healthy only to be hit by the same truck.

Um, no...Finished watching Red Dawn?

If so, I recommend another movie.

Gung-Ho with Michael Keaton.
http://en.wikipedia.org/wiki/Gung_Ho_Movie

You might learn a few things from it.

The yen is still stronger than it was for most of 2008.

Scarlet, if Toyota and Honda etc. don't have to bear the costs of health care for their workers, then who is paying for that health care?

If it's the Japanese government, then does that mean it's cost-free to the people of Japan? Of course not. The cost of the health care for all the people of Japan is borne by the people (taxpayers) of Japan. That includes Toyota and its workers, and it suppliers and their workers, etc. If Toyota and its workers pay $5,000 per worker in taxes to the government for health care for those workers, that has the same long-term economic impact on Toyota and its workers as a direct payment of $5,000 from the company to the health care providers.

Why is it so hard for people to understand that government, or insurance, or any other delivery mechanism for health care, does not provide a free lunch. THERE IS NO FREE LUNCH. The only thing that will help reduce the burden of health care on our pockets and competitiveness is reducing how much we spend on it, not changing who spends it.

Sorry to be brutal, Scarlet, but sometimes I wish that every voter was required to meet economic literacy tests. We can no longer afford the luxury of making big decisions on our economy based on uninformed populism.

Don't forget Hyundai/Kia. South Korea offers universal healthcare too. The kicker is, the program covers people of Korean ancestry (not living in Korea) too. For example, if you are of Korean ancestry and a citizen of US, you can still join the program. After paying monthly fee for a few months you become eligible to receive health care in South Korea.

I personally heard a story of a lady from Southern Cal who immigrated to US 20+ yrs ago from S Korea. She felt unexplained pains but had no health insurance. So she went over to Korea and joined the program. After 1 or 2 months, she became eligible to get coverage, got some test done and turned out she had cancer. It required surgery and 10-day hospitalization. I'm not sure if she stayed for chemo/radiation but I did hear she paid $700 out of pocket for the surgery and 10 day hospital stay, done in S Korea.

Sad sad.

patientrenter said:

What's with you nerds and ancient 1980s movies? Should I take up D&D too? I bet you two are the type that has lines memorized from them um...classics?

What's up with UAW workers that can't figure out that their skills are outdated, and feel they are entitled to a government bailout. Haven't you heard of "edukation"?

"edukation"

Is that some 1980s hair band or a spell in D&D? Or perhaps some melo-drama from your high-school picked-on days, similar to The Breakfast Club?

Nerd

I was surprised GM (or the gov't) decided to shut down Saturn - I have always been impressed with Saturn's.

GM's cost structure is too high, they lost money on Saturns.

Time for GM to BK and get restructured. If there isn't a restructure, we'll just through a few billion dollars at it every quarter.

Can anyone see a day where big auto or some other big industry says they want the govt. to take over healthcare to "level the playing field"?

Can anyone see a day where big auto or some other big industry says they want the govt. to take over healthcare to "level the playing field"?

------------------

Yes, and they'd be correct to do so.

Everyone needs to realize that taxpayers (and insured patients) **already pay** for the most expensive patients: children, seniors, and emergency room patients.

Not only would socialized medicine "level the playing field" for employers, but it would also enable employees to use their talents in the most productive way. Right now, many people are trapped in their jobs because they are afraid of losing their health benefits. They might have some excellent ideas and could start their own businesses or work for smaller start-ups, etc., but can't do it if they are reliant upon their employers' benefits.

What's often overlooked, too, is that the government funds most medical research and development through grants to universities and research labs, and through the NIH, among other things. Private industries only pick up the technology once the initial development is done, and they feel they can turn a profit from it. Private industry is most involved in the middle and final stages of development and in mass producing the technology/medicine.

For a look at socialized medicine vs. privatized medicine, look here (try out different measures of health and well-being, and see what you come up with...we are nowhere near the top, and socialized countries outperform us in most areas):

http://www.nationmaster.com/graph/hea_pu...

http://www.nationmaster.com/graph/hea_ov...

http://www.nationmaster.com/graph/hea_he...

I am just looking at this from a cigar-filled back room, "how do we get this sold" perspective.

When the big honchos are in the board room with their cubans (ironic) and plotting strategy they have to convince a certain number of centrists to go along with socialized medicine. GM with it's massive health-care benefit nut could point out to the administration that if they unloaded that mess, they could restructure and survive.

I thought that's how you and your unionaw buddies spell. (close enough...).Anyway, I'd take being a nerd over being a factory worker anyday. Good luck with the BK process.
Anyone ever heard of going to college or doing a vocational program that pays you does more thinking than just assembling nuts and bolts? And some of the times, your buddies can't even get that right. Doh!

I must say whenever I read a title that says may or might when it comes to bad news, I just assume it is fait accompli. Furthermore I just assume the headline is nowhere near negative enough.

Why must GM's bankruptcy and future viability be tied to nationalized healthcare? It wasn't terribly competitive throughout most of the 90's and certainly wasn't in the 80's when the Japanese starting eating our lunch. I personally feel that too much emphasis is being placed on healthcare costs, and how to continue to offer those benefits, when the realization should be it was a dumb idea to offer them and they cannot be continued.

After GM goes through a bankruptcy and has its cost structures aligned with what the market can absorb, then we could have a national debate about the costs and benefits of nationalized or employer provided care. I just don't see these issues as being tightly linked to GM's future, so much as its past and the unrealistic expectations that its employees and retirees have.
Josh

We can bail them out on the government dole or let them bk and a bunch go on the government dole.

Either way, it's the government dole, which is yours and my taxes.

There is an advantage to bankruptcy though. The workers will be on the government dole directly and all the denial and lies about the welfare will have to stop. A bailout is welfare. The GM job bank with a bailout is a welfare. Unemployment insurance, WIC, etc, is welfare and if they need it, give it, but cripes, lets call a handout a handout.

So put them on the government dole, make them look in the mirror and admit that they are getting WELFARE. Maybe some of them will then get jobs that actually produce more than they suck up.

P_R

If we had single payer we could effectively double
health care delivery, by eliminating waste from the insurance
companies.

Medicare is 30 times more efficient then United Health.

Ditto. I don't have any specific stake in this whole healthcare debate, except to point out that currently, it's highly inefficient and failing to a point where a solid majority of America supports reform.

This really isn't an issue of socialism vs. capitalism. Healthcare is not a free-market. It's highly manipulated and controlled. Anybody suggesting healthcare is free market capitalism is on crack.

It's so bad, that in the mind of most people, the costs, quality an availability of care have become worse than what the government would provide under single-payer.

Government is the lesser of two evils... Let that sink in.

But set aside philosophical matters for a moment.

There is a SIGNIFICANT opportunity here to streamline healthcare delivery, and this would end up lowering operating costs for every business in USA that carries healthcare, as ours does. The costs are obscene. The market is broken. It's not just GM. Get a clue.

Why would anybody oppose this?

Except for political reasons. Calculations of this nature need to take a backseat to dealing rationally with this economic crisis and putting our country back on a competitive footing.

And yes, GM should go BK. It needs to restructure.

Free markets provide the optimum (lowest cost) solution when certain conditions are met- like both parties to a transaction having perfect information.

Commodities are the ideal case. Shoes, cars, etc. You can compare exactly what you are paying versus what you are receiving and make your decision. The free market works brilliantly in cases like this.

With healthcare, the provider doesn't know what services they will be asked to provide in the future, and you don't know the quality of service you will receive. Both parties enter into the agreement essentially blind. The lack of information on future services and quality of those services creates an inefficiency. This is why the free market model breaks down in the area of healthcare. Not enough information.

Free markets are a remarkable tool for driving down costs and increasing quality, but they are not a one size fits all solution. Although many politicians think otherwise.

Agree with this, Ash.

Additionally, "free markets" work best when dealing with things that are not a basic necessity. It's too easy to manipulate and monopolize a system when there is a finite resource that's provides a basic necessity. People become captive consumers, and are forced to pay whatever the monopoly decides for them.

IMHO, a free market requires both the supply side and the demand side to work with full transparency and free will. Otherwise, it does not work.

Consumers play a limited role in the transaction. They don't negotiate price. Decisions about care, diagnosis, treatment, prescriptions, etc. -- these are handled primarily by the doctor. Selection of doctor, referrals, etc. are controlled by the terms of coverage. And coverage is negotiated by employers and their agents, on behalf of their employees, with coverage 'bundled' in with salary and other aspects of the overall position. Healthcare is not even close to a free market.

I think I'm in favor of a patient-pays approach for routine matters, backed up by government provided universal coverage for catastrophic matters above a certain level. If government handles catastrophic, there is no need for insurers. A change like this would transform the economics of the field and result in enormous savings. Routine expenses could be funded from some sort of healthcare savings accounts.

Also, intellectual property in this country is a scam, and current practices should be gutted. The US taxpayer pays for the majority of medical research in this country through grants to Universities and the like. Big Pharma enters the process downstream and is a recipient of major taxpayer subsidies in this respect. Pharma's 'rights' in the resulting medicines should be reduced and competition encouraged through the support for generics and imports.

Barnaby I am not suggesting GM would ask the Govt. for this, I am merely wondering out loud. I was only using the GM situation as one possibility of how one my ram it down our throats. We've done a lot of things here in the last year that I never though we'd do. So I thought maybe they could repackage systemic crisis arguments from the cacsh injections in such a way as to sell socialized medicine to the electorate. I actually didn't mean to make a direct suggestion regarding GM.

Healthcare....One thing where we *could* start is a portable healthcare savings type account. Some of these health care plans offered by employers provide a "account" of dollars you accumulate that can be used toward healthcare. You don't spend it, it rollsover into an account. You spend it if you need healthcare, based on negotated rates with care providers. The problem is that these plans never carry over if you leave your employer and go to the next. It would be beneficial if healthcare plans can be self-selected/self directed, and employers simply pay into the plan. my opinion. Of course, then you run the risk of people "not saving for a health care plan", as you see the case for a lot of people without retirement planning.