Wish I Could Dump My Investment In General Motors (courtesy the Federal Gov't)

By
Mortgage and Lending with SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171)

Centralized vs. Free Market decisions

There's a "one size fits all" commercial on TV currently, where people decide on a purchase (car, pet, etc.) only to be told that they can't buy what they want, because they have to buy what someone else chooses for them.

It reminds me of our government investing our money in General Motors without our agreement.  (The Federal Reserve, whose charter doesn't include manufacturing automobiles, holds 500,000,000 shares of General Motors.) You thought you were in the real estate business?  You're in the automobile business too!

GM Silverado inventory glut at 122 days

Flush with your money (not theirs, not their investors) General Motors produced many more Chevy Silverados this  spring than any economist [not on the government payroll] would have deemed prudent, and they're still on the dealers lots.

They're likely to stay there, too.  The economy doesn't support their production numbers.  At the current rate of sales, it will be November before the current stock is sold.  According to Bloomberg this morning, there's a 122 day inventory of average sales for this model at GM.

Ford F-150 sales inventory at 79 days

By comparison, Ford Motor Company, which has zero Government investment dollars, is selling their inventory of F-150 pickups in 79 days, and the F-150 outsells the GM Silverado. 

From 2002 until 2010, GM posted similar inventory numbers for its pickups.  The SNAFU came when the government got involved, and GM managers could make production decisions without putting their jobs on the line.

REAL ESTATE IMPLICATIONS

The longer it takes for our economy to wring out excesses and get back on a solid footing, the worse it will be for agents and lenders trying to survive in this artificially deflated real estate market.

_____________________

I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender

NMLS #223495

SUNSTREET MORTGAGE LLC ~ Correspondent Mortgage Bank
Offices in Mesa, Tucson, Sierra Vista & Nogales

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Rainer
123,627
Daniel J. Hansmeier
Rochester, MN

Our current Government has to be the worst in History. I hope it gets better from here or we wont have any choices we like.

Jul 05, 2011 11:36 AM #1
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Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Daniel,

There's one choice you can make to improve matters.  VOTE!

Mike in Tucson

Jul 05, 2011 11:37 AM #2
Rainmaker
591,234
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Mike,

How do you "dump" a stock with no value?

I just wish we could write it off! The tax rate wouldn't matter if we could write off government losses.

I drive a Ford, it offered what I wanted and has proven to be ultra dependable. Just like all my former Fords, Mercuries and Lincolns.

Bill

Jul 05, 2011 11:52 AM #3
Rainmaker
589,712
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

Gov was too busy protecting the unions to pay any attention to how it would effect the rest of us. Too big to fail, BULL! They could have failed restrutured and been in much better shape than they are now.

Jul 05, 2011 12:06 PM #4
Rainmaker
2,161,157
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Very good post.  Thanks for sharing these statistics.

 Blooming for you!

Jul 05, 2011 12:07 PM #5
Rainmaker
734,250
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Mike, I haven't seen the commercial you referred to, or at least, don't recognize it.  However, your stats are VERY informative and eye opening. 

I have one question - didn't GM pay back every penny of the "loan?"  Or, are the stock options yet another part that I didn't follow?  Hmmmmmm, guess I'm going to have to do some research on this situation.  Thanks for the heads up. 

Jul 05, 2011 12:17 PM #6
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Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Juli,

We're not talking about loans; it's a separate issue.  The government bought and still holds voting stock in GM.  It's now worth much less that what we [the taxpayers] paid for it, and GM wants to purchase it back at the lower price.  I hope that doesn't happen!

Roy,

Thanks for stopping by!

Than,

I'm with you!

Bill,

Drive a Ford?  Me, too!

Mike in Tucson

Jul 05, 2011 12:25 PM #7
Rainer
63,700
Brett Reichel
Pacific Residential Mtg., LLC - NMLS 1477 / WA CL-1477 - Clackamas, OR
MLO 210215

Don't kid yourself - GM will buy it back cheap....

Jul 05, 2011 01:33 PM #8
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Deb "Alayne" Brooks
Alayne Brooks, Re/Max Elite Group, Wichita Falls Texas - Wichita Falls, TX
940-500-4010 Wichita Falls Real Estate

Mike, I think Than above hit the nail on the head. We are our own worst enemies.

Deb

Jul 05, 2011 01:46 PM #9
Rainmaker
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Lou Ludwig
Ludwig & Associates - Boca Raton, FL
CRB, CRS, CIPS, GRI, SRES, TRC, e-PRO

Jim

GM is being managed by committee, and the fox (union) is in the hen house leading the way. It may not end up well for GM and the stack holders.

Good luck and success.

Lou Ludwig

Jul 05, 2011 02:38 PM #10
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Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Dyersburg Tn Real Estate

I too drive a Ford and glad not to be driving a gob'nent motors car!

Jul 05, 2011 03:52 PM #11
Rainmaker
700,754
Patricia Feager, MBA, GRI, Cert Negotiations Expert, Military Relo Prof
Dallas Premier Keller Williams Realty - Dallas, TX
The Little REALTORĀ® That Could

Oh my, this is quite shocking, and yet it doesn't surprise me at all. Somethings gotta give and somebodies got to go. I think the whole government needs to go bye-bye before we self-destruct!

Jul 06, 2011 12:40 AM #12
Rainmaker
563,876
Mike Saunders
Lanier Partners - Athens, GA

Mike - hadn't seen the commercial, but, I am in agreement, we should never have made GM a GSE, look how well that worked with the Post Office, Fannie & Freddie.

Juli - the "paper" answer is yes. The real answer is no regarding paying back the "loans". The taxpayers handed GM over $49 billion. Only $6.7 billion was a "loan", the rest was investment. Now, GM did pay back $6.7 billion plus interest. However, even that is questionable. Obama gave GM an over $13 billion "slush fund" in an escrow account so that GM could have working capital. This is what GM is using to pay back the loans. Best estimate, after everything clears the books, the taxpayers will lose over $17 billion on this deal. Probably even more because that estimate is based upon sale of stock at some elevated price.

Jul 06, 2011 11:38 AM #13
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Judi K Barrett
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma - Idabel, OK
Broker/Owner, Integrity Real Estate Services -IDAB

The whole matter stinks to high heaven and the smell is not going to go away any time soon.  The sins of the fathers....

Jul 06, 2011 11:34 PM #14
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Mike Jones

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