Tuesday, May 29, 2007

Monday, May 21, 2007

Michael Moore Unveils Sicko

Documentarian Michael Moore finally showed off Sicko, his film on the sorry state of health care in the United States.

Most of the early reviews are positive, but then again, the reviewers are those liberal media types. The movie debuts in late-June.
How Bodacious! Tata Rumored to take over Visteon

A Reuter's story cited by autonews.com says that Tata may be planning to buy a share of Visteon, an automotive component company that was formally part of Ford. The price: $1.2-2.0 billion. It's not clear how Tata would benefit from financially-troubled Visteon unless Tata plans to "lift and shift" the parts-making equipment to India.

Wednesday, May 16, 2007

Fuel Cell News #1:
GM Fuel Cell Vehicle Passes 300 Mile Test

GM's Sequel, a hydrogen fuel-cell powered SUV, passed a key test, travelling 300 miles over public roads without refueling. This real world range test demonstrates that only cost stands in the way of producing a practical car that does not produce carbon emissions. Well, cost and hydrogen infrastructure. Nevertheless, advances in fuel cell technology have rendered performance gains similar to the "Moore's Law" techonology curve followed by the semiconducter industry. Under Moore's law, performance doubles every 18 months. Fuel cell progress may not be quite that good, but GM engineers have report that they have improved the efficiency of the Sequel by 30% since last September. The Sequel is a 5300 lb. SUV, but it recorded the equivalent of 43 mpg on the 300 mile test.

The sequel to the Sequel will be the low-slung Volt which sports a fuel-cell stack that is half the size of the Sequel's. The Volt also has a 300 mile range on fuel-cell power, but it also relies on lithium ion batteries for a 20 mile electric-only range.

In my opinion, the progress shown by GM on fuel cell vehicles is encouraging. Honda has made similar progress. What is disappointing is the level of support shown by the United States government. The government should be funding service-test fleets for government agencies and the United States Postal Service. It would not be hard to establish hydrogen fueling facilities in larger government installations, and postal hubs also could house the required infrastructure.

Source: Detroit News

Tuesday, May 15, 2007

Prom Babies: New Trend, or Urban Legend?

If you do a Google search on the neologisms (new words) "prom baby" or "prom babies", you'll come up with almost 50,000 hits as of today. What's a prom baby? A good starting point would be to review a recent Dear Abby column wherein a writer suggested that he/shehad witnessed a new trend of female high school seniors intentionally getting pregnant on prom night to avoid the pressures of college.

Despite thousands of web pages discussing the term, the editors at Wikipedia apparently determined that the phenomenon of prom babies, if real, was not widespread enough to warrant an entry in the Wikipedia encyclopedia. They could find no independent confirmation that this is a social trend.



Monday, May 14, 2007

Cerebus to Buy Chrysler

About 9:00 PM last night (Sunday) the news flash went out that there was a deal to buy Chrysler. It was confirmed this morning. DCX issued a press release that Cerebus was going to buy 80.1% of the Chrysler division for $7.4 billion, a price that was on the higher end of the speculated value. Contrary to early reports, including in the Wall Street Journal, DCX will be retaining pension obligations, and the deal has the blessings of the UAW. Complete coverage is available on the Detroit News website, www.detnews.com.

Chrysler workers have to feel like a mail-order Russian bride, they're heading off to a new land, and they have no way of knowing whether the new spouse will be true love, or a drunken wife-beater. Of course, it has to be encouraging that Cerebus Capital Management was named after Cerebus, the three-headed dog who guards the gates of hell.

I'll try to post a follow-up late this evening.

Friday, May 11, 2007

The Mexican Witch Craze

Apparently, I'm the last to know that an evil witch is terrorizing Monterrey, Mexico. Videos of this story have been passed around my daughter's middle school for some time now. Some people don't believe that it's a witch. To me it's easy to prove if she's a witch. WEIGH HER. If she weighs the same as a duck, then she's made out of wood, and A WITCH. Or you could build a bridge out of her.
Youtube Music Video of the Day
Bush & Blair - Endless Love

Yesterday's big news was that British PM Tony Blair was resigning. What better way to remember the good old days but with a link to Tony and George's version of Endless Love.
Spy Shots - 2008 Honda Accord!

Actually, when you click on the link, you'll probably wonder why I put the exclamation mark in the heading. Although the redesigned Accord is a big deal for Honda and for the industry, if these spy shots are the final version, the design is pretty vanilla. It kind of reminds me of the Hyundai Sonata.

Thursday, May 10, 2007

Spotlight on General Motors' Cash Flow

Robert Farago just posted installment 122 of his GM Deathwatch series at thetruthaboutcars.com. Subtitled Burn Baby Burn, the focus is on GM's cash flow as reflected by its recent quarterly financial statement. As you may recall. GM effectively posted a break-even quarter, thanks to profits all over the world but North America, not to mention the sale of the General's stake in Suzuki. There's no question that GM is not bleeding as fast as it was last year, but it's still not a healthy company. With $24.7 billion in cash on hand, GM reported a loss of 1.7 billion, plus it had increased payables to suppliers (who are now treated as bankers) of $1 billion. Put the two together, and GM lost $2.7 in cash over the quarter.

Now is the time that GM should really be salting away the big bucks. There's a brand new line of profitable pick up trucks as well as the Envoy/Acadia/Outlook crossovers. Saturn has a product line that is top-heavy with new models -- for a change. There won't be as much new metal on the floor next year, and there will be some new competition, most notably, a new Honda Accord.

Farago gives GM two years until Chapter 11 bankruptcy at the current rate of cash burn. Is that accurate? How can you tell when the end is neigh? One sign will be massive stock-sell offs. GM officials just received permission to sell their accumulated shares. Another sign would be cancelled new models, delayed new models, or, even worse, pie in the sky announcements of models they don't have a chance at producing in the time frame announced. We're seeing some of those signs now. The rear-wheel drive platform has been delayed, and GM has made blue-sky predictions about the Chevrolet Volt electric car concept.

Make no mistake about it, if you read about the insiders selling their shares, it's a sign the rats are leaving the sinking ship, and it's time to put on your life jacket.
Rebate Story #1
Wall Street Journal - One in Five Rebates Goes Through Normally

The Wall Street Journal submitted 5 consumer rebates in an unscientific test. Only one of the five went through without a hitch.

Rebate Story #2
Company Patents Method to Avoid Paying Rebates

Parago, the company that handles Circuit City rebates, has been awarded a patent for a system that is designed to reduce the payout on rebates by maintaining a high "breakage rate". For more info, see the Adrian Kingsley-Hughes blog on ZDnet.com.
Best Buy and Microsoft Accused of Racketeering

According to this post at the Consumerist blog, a civil racketeering case has been filed against Best Buy and Microsoft. The suit alleges that Best Buy had a practice of regularly scanning MSN trial subscriptions when the consumer did not request them; and (at least by implication) Microsoft knew about it and was more than happy to charge a monthly fee to the consumers' debit cards or credit cards.

Tuesday, May 08, 2007

Queen Becky & President George Play the Dozens
You couldn't help but think "That's My Bush" when reading news accounts of the state dinner hosting Queen Elizabeth at the White House. Apparently, W thought the party wasn't lively enough (perhaps his Mr. Microphone was in the shop), so the natural thing to do was to engage his guest of honor in a game of the dozens, at least the WASP version thereof.

In the spirit of harmoneous diplomatic relations, in preparation of the inevitable rematch at Buckingham Palace, I'm linking to sites providing suitable disses for the next round of the dozens played by these spirited foes.

For George W., here are some "you so old" lines.

For the Queen, there are enough "you so stupid" jokes here to hang right in there.
Detroit News Reports on Ford Family Meeting

The Detroit News article published this morning gives an interesting behind-the-scenes look at a recent Ford family meeting. When I say Ford family, I'm talking about the 13 great grandchildren of Henry Ford (and other associated kin) who together hold 70 million shares of Class B Ford stock and control 40% of the entire voting rights of the company. Because (so far) the Ford family has voted its shares as a bloc, even though the family controls a minority of the total shares outstanding, the family has effectively controlled the company.

The report discloses restlessness and cluelessness on the part of some family members. The restlessness was shown by a spirited discussion on whether to hire an outside investment banker to represent the family's interest. The cluelessness was illustrated by one family member asking when the company is going to restore dividend payments. Dividend payments are nowhere in the immediate future. Last year Ford reported a $12.7 billion loss, and it mortgaged all of its substantial assets in order to generate $23 billion with which to fund its turn-around plan. The market value of the family's stock has plunged to about 1/4 of it's value in 1999, and dividend payments have gone from $130 million per year to zero.

The sad state of the Ford family makes me think of the Ford Family version of Clarence Carter's song Patches. "Every day we had to cash T-bills, cause that's the only way we'd work our deals." I'll work on it.

Monday, May 07, 2007

Delphi loses 1/2 Billion Dollars in First Quarter

Chapter 11 denizen, Delphi Corp., announced that it lost $533 million in the first quarter of 2007, up from a $363 million loss in Q1 last year. Per the Detroit News, $73 million was employee termination expense.

The large Delphi losses come at a time where Delphi's former parent and largest customer, General Motors, has fought hard to get to the break-even point, reporting a statistically insignificant $62 million profit in the first quarter. GM's profit of $395 million from the sale of its Suzuki stake was mostly offset by a $305 million charge due to bad subprime loans at GMAC.

It's hard to see how the bankruptcy court judge will allow Delphi to post losses at the rate of $2 billion per year without a concrete plan for survival. I also don't know who's bearing the loss for the current losses, since Delphi was already bankrupt in the first place. Look for all the creditors (except GM) to revolt any quarter now. GM no doubt benefits by having these loses on Delphi's books rather than GM's. If the losses eventually come to rest upon GM's shoulder's, that's going to be a hard blow for the general to overcome.
Cleveland Rocks with Ford Plant Closures

Ford is closing one Cleveland area factory and idling another. Ford announced that it would be idling it's Cleveland, Ohio casting plant. Simultaneously, Ford announced that it would be idling for a year one of two Cleveland area engine plants. The plant will be switching over from the old 3.0 liter to the new 3.5 liter engine. Other carmakers can switch engine lines within a typical summer shut-down period, perhaps extending it a little bit.

Thursday, May 03, 2007

How Much Does Ameriquest Pay its Employees?

Ameriquest is one of the key players in the subprime mortgage market. A good chunk of these loans have been termed "predatory mortgages" by various commentators. There is currently a multidistrict litigation consolidating numerous individual and class actions against Ameriquest.

I just found a comment on theripoffreport.com which, if true, really brings home the unfairness in subprime lenders. They load poor people up with unaffordable debt, and they assuage their consciouses with pay packages which are way in excess of what most people get for similar but ethical jobs.

According to someone posting as Maryjoshelton, Here are the annual salaries for various levels of Ameriquest employees:

$200,000 for account executives

$700,000 Branch Managers

$1,300,000 Area Managers

$2,000,000+ Regional Managers

Compare this to your typical UAW-LSP lawyer or legal services organization lawyer handling mortgage fraud cases on behalf of consumers who typically make less than $60,000, sometimes quite a bit less.

Wednesday, May 02, 2007

Conspiracy Theory of the Month
The Return of Lyndon LaRouche

Eight-time presidential candidate Lyndon LaRouche, Jr., has published a 21,000 word essay in the American Intelligence Review (which is actually his standard mouthpiece) called Ask the Man Who Owns One. To be quite candid, I only read a part of this article. Even I get tired of conspiratorial bitchfests. Nevertheless, this is the article to read if you're into phrases like "Al Gore's neo-Malthusian swindle".

I'd be interested in seeing George W. in a debate with LaRouche. It would be like watching a dual between a windbag and a windsock.
Trans Union taking some lumps over Mixed Credit Files

I spend a significant portion of my time working on credit report cases. One thing that I've noticed over the years is that Trans Union seems to have a worse time keeping the files straight than Experian or Equifax (CSC in our neck of the woods). It was therefore gratifying to read a case report in the Myfaircredit.com forums reporting on a new case, Cortez vs. Trans Union LLC, where the jury awarded $50,000 in actual damages, and $750,000 in punitive damages against Trans Union for a mixed credit file. According to the report, the jury foreperson wrote on the verdict form "THE TRANS UNION BUSINESS PROCESS NEEDS TO BE COMPLETELY REVAMPED WITH MUCH MORE FOCUS ON CUSTOMER SERVICE AND THE CONSUMER."
From the Not Available Here File:
2007 Ford Mondeo

England's 4 Cars site has a review on the 2007 Ford Mondeo. If you saw the recent James Bond pic, Casino Royale, the pre-production Mondeo featured in the Bahamas scene stole the show almost as much as the Aston Martin later in the film. Supposedly this car would be too expensive for the mainstream if sold in the USA. Too bad. As is the normal practice, a huge range of engines are available in Europe. The most interesting to me is the 2.0 liter diesel. It seems to have well-balanced performance with 0-60 in 9.5 seconds, 130 mph top speed and 47.5 mpg (european cycle) -- not bad for a family car.