Friday, November 30, 2007

RIP Evel Knievel
RIP Roger Smith

Motorcycle Daredevil Evel Knievel died today at age 69. Coincidentally, former GM CEO Roger Smith, the Roger of Michael Moore's Roger & Me, also died. Roger was 82.

I don't have much to say about Roger Smith, but I think I'll miss Evel. Evel was certainly one-of-a-kind. Maybe not entirely, check out all the bike ramp videos on At least one of these kids will make it into adulthood.
Wall Street Lawyers Laid Off Due to Mortgage Mess
4 months Severence for 1st Year Associates

According to, A 350 lawyer Wall Street firm is laying off up to 50 associates due to a slow down in the mortgage security market. The portion of the laid off associates who are 1st year associates will be offered 4-months severence pay.

This is only 4 months more severence pay than laid off UAW Legal Services lawyers make during slowdowns in the auto industry.
It's Here! Zoo Animals On Wheels on Youtube

Here's one of the funniest moments from Chris Elliot's early 90's show Get a Life, a send-up of Cats and all the other Lloyd Webber musicals of the era, Zoo Animals on Wheels. Whatch this before they take it down.

Chrysler to Return to Profitability by 2010?
. . . Yeah, right . . . whatever . . . is reporting that Chrysler LLC's VP of North American Sales, Steven Landry, stated in an informal conference that Chrysler planned to return to profitability in about two years. As a private company under Cerberus, Chrysler no longer has to report earnings publicly, so this may be the best guidance we get as to Chrysler's health. Even so, folks have a right to be sceptical. Mr. Landry suggested that Chrysler would lose about a billion dollars this year, would break even next year, and would be profitable the year after that.

The only way I can see that happening is if Cerberus-owned rental car companies start buying a whole lot more Chrysler vehicles. I definitely can't imagine the American public doing so. As far as passenger cars go, only two relatively low-volume models are set to be introduced during that time, the Dodge Challenger and Dodge Journey. As far as trucks are concerned, a new Ram pick-up will be introduced within the next year, but it will be going against relatively new trucks by GM and Toyota as well as a redesigned Ford F-Series truck. The F-Series is Ford's do or die model, so Ford isn't just going to roll over and let Chrysler take market share. The Chinese-made compact has apparently not even been fully designed yet, so it's not in the two-year time frame. As far as upgrades to new models are concerned, the Phoenix V-6 engines will at best be available in limited quantities in 2010, and plant to produce efficient dual clutch automatic transmission is still being built.

If I were running Chrysler, I'd try to initiate talks with Hyundai for some sort of combination. Despite greatly improved cars, Hyundai has not had correspondingly increased market share. The problem may lie in a dealership network that is not prepared to satisfy a larger number of customers either at the sales or service level. Hyundai's affilliate, Kia, has the same problem, but to a greater degree. Hyundai's product line complements Chrysler's. Hyundai is competitive in small cars where Chrysler has no presence. Hyundai has a fairly fresh lineup of crossover vehicles. Chrysler doesn't. Even though it uses the same 4-cylinder engine as the Chrysler Sebring, the Hyundai Sonata is a clearly superior car now, and it's set for a well-received facelift early 2008. Chrysler does not have the presence in trucks and off-road vehicles that Chrysler does, and Chrysler has a superior dealer network.

An alternative for Chrysler would be work a deal with Nissan/Renault. Renault would like to sell cars in the United States. Nissan and Renault have competitive small cars. The Atlima platform is very competitive. Although Nissan trucks have their fans, sales have been disappointing, and the same goes for sales of the Nissan Quest minivan. Nissan has top-notch engine technology on the shelf and ready to go, and as such, by combining with Nissan, Chrysler can kill the Phoenix engine project and not miss anything. The downside to a Renault/Nissan deal is that CEO Carlos Ghosn may not be interested. He's interested in a deal with a US automaker, but Ford or GM could make better partners. Both have stronger model line-ups internationally than Chrysler.

To save what's left of Chrysler in its current form, Chryslerberus needs to act quickly. Even more questionable than the notion that the company will be in the black by 2010 is the proposition that it will only lose a billion dollars in 2008. With high fuel prices expected to continue, things don't look good for Chrysler's current gas-guzzling line-up. Cerberus has already been hit hard by the subprime mortgage crisis, and since it doesn't have a lot of capital tied up in Chrysler, I don't see it having the desire to tie up a lot of other capital to cover ongoing operational losses.

Monday, November 26, 2007

Sibling Rivalry - Round 1
2008 Chevrolet Malibu LT vs. 2008 Chevrolet Impala LT 3.9

The Chevrolet Impala is General Motors' best selling passenger car in the United States, with about 270,000 sold this year. That's about double what the outgoing Chevrolet Malibu sold.

The Impala has a lot going for it. It's roomy, comfortable, quiet, has a huge trunk, and it returns better than average fuel economy for its size, especially on the highway. These attributes make it a fleet and company car darling. At the insurance company where my sister works, the field adjusters screamed bloody murder when their Impalas were replaced by Dodge Stratuses (Stratii?), and I can't blame them.

On the other hand, the Impala's little brother, the Malibu, was known as a "get 'r done" mass transportation appliance, at least until this fall. That's when the 2008 redesigned Malibu arrived to great acclaim. The new Malibu actually has a longer wheelbase than the Impala, and comparably equipped, they weigh about the same. When equipped with V-6 engines at the LT level, the Malibu has slightly higher horsepower, but gets slightly lower fuel economy.

Which is the better deal? Take a look at Michael Karesh's excellent comparison site, I ran a comparison that suggests that the $1500 rebate offered on the Impala gives the old workhorse a slight edge, but the two are close enough that intangibles could, and probably should control any buyer's decision.

Wednesday, November 21, 2007

Lessons in Doing the Impossible

Meet Bouncin' Dan, the Paddleball Man. I'm sure that people told him; "No Dan, you'll never amount to anything, bouncing that paddleball all day."

To which, he replied; "You'll see. I'm going to practice, practice, practice, until I'm the best paddleball bouncer in the world. Thousands of people will watch me and be amazed." Lo, as it turns out, Dan was right. Now he has the power to crush all the little-minded people who held him down.

Meet Valentine's Performing Pigs. People said it was daft to spend years trying to get a pig to jump through a hoop. And yet . . .

What does all this have to do with cars? I've heard a rumor that Chrysler President, Tom Lasorda heard about Valentine's success in getting pigs to move, so he asked for help selling the Chrysler Sebring.

Monday, November 19, 2007

Holy Fat Tom Cruise

It's been this way for several years. Every time I see Tom Cruise, it seems like he's just working that much harder to hold on to his leading man good looks and marketability. Let's face it, Tom, sooner or later, old man time will kick the shit out of you sooner or later, whether you are ready or not. Judging from this picture, Tom's time is up. Actually, if you believe, this is just make-up for a cameo in Ben Stiller's next movie, Tropic Thunder. Is it possible that just PART of it is make-up? Don't worry Tom, they'll still be macho roles for you as you age. They still have to make the movie version of Mike Myer's Middle-aged Man. Of course, there's always Captain Underpants. Tom, you probably know about Captain Underpants, if you didn't read the books to your kids, then Katie read them when she was a kid.

Friday, November 16, 2007

From the "Never Piss off A Federal Judge" File:
Will Deutsche Bank's Mistake mean Independence Day for Borrowers?

(Spoiler warning) There's a scene toward the end of the movie Independence Day, that President Bill Pullman and his gang find a way to defeat the massive alien ships that are attacking them. They defeat the ship that is hovering over Area 51, and spread the word so that air units all over the globe can defeat alien ships worldwide. In the past couple weeks, consumer crusaders and courageous judges in Ohio have made some significant headway that could, in the long term result in fewer home foreclosures and a rationalization of the secondary mortgage market.

I always liked Federal Court. Partially it's because I never liked the "good old boy" feeling in state court, and partly it's because federal judges don't tolerate sloppy lawyering. The fact of the matter is, a lot of mortgage foreclosure law firms, work almost exclusively within the "good old boy" state court network, and they get sloppy. Now there are so many foreclosures in some areas that some mortgage firms are starting to file their foreclosures in federal court. That could be their undoing.

On October 31, 2007, Halloween, Ohio Federal District Court Judge Christopher A. Boyko must have worn his scary mask as far as lenders are concerned because he dismissed numerous foreclosure cases filed by Deutsche Bank on the grounds that the bank did not prove that they were proper assignees of the mortgage at the time the suit was filed. It's not so much what Judge Boyko did that was newsworthy, other judges have dismissed mortgages for the same reason in the past, it's the language that the judge used in dismissing the cases. One of the plaintiff's lawyers must have really pissed off the judge, because Honorable Judge Boyko pulled no punches in dressing down the lender's attorneys. Here's the text of the Judge's footnote 3, a footnote which might go down in judicial history as one of the classics of all time. Heck, it even made front page of the New York Times.

3 Plaintiff’s, “Judge, you just don’t understand how things work,” argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process. Typically, the homeowner who finds himself/herself in financial straits, fails to make the required mortgage payments and faces a foreclosure suit, is not interested in testing state or federal jurisdictional requirements, either pro se or through counsel. Their focus is either, “how do I save my home,” or “if I have to give it up, I’ll simply leave and find somewhere else to live.”

In the meantime, the financial institutions or successors/assignees rush to foreclose, obtain a default judgment and then sit on the deed, avoiding responsibility for maintaining the property while reaping the financial benefits of interest running on a judgment. The financial institutions know the law charges the one with title (still the homeowner) with maintaining the property.

There is no doubt every decision made by a financial institution in the foreclosure process is driven by money. And the legal work which flows from winning the financial institution’s favor is highly lucrative. There is nothing improper or wrong with financial institutions or law firms making a profit — to the contrary , they should be rewarded for sound business and legal practices. However, unchallenged by underfinanced opponents, the institutions worry less about jurisdictional requirements and more about maximizing returns. Unlike the focus of financial institutions, the federal courts must act as gatekeepers, assuring that only those who meet diversity and standing requirements are allowed to pass through.

Counsel for the institutions are not without legal argument to support their position, but their arguments fall woefully short of justifying their premature filings, and utterly fail to satisfy their standing and jurisdictional burdens. The institutions seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test, their weak legal arguments compel the Court to stop them at the gate.

The Court will illustrate in simple terms its decision: “Fluidity of the market” — “X” dollars, “contractual arrangements between institutions and counsel” — “X” dollars, “purchasing mortgages in bulk and securitizing” — “X” dollars, “rush to file, slow to record after judgment” — “X” dollars, “the jurisdictional integrity of United States District Court” —“Priceless.”

In re
Foreclosure Cases, No. 1:07CV2282, et al., slip op. (N.D. Ohio Oct. 31, 2007) (Boyko, J.)

In one fell swoop, Judge Boyko didn't just dismiss cases for failure to comply with the rule that you show you are a holder of a note or a real party at interest, he attacked the good old boy network for their acquiescence in allowing such pleadings and condoning sloppy filing by foreclosure attorneys. already there are some signs that other courts are picking up on this and taking this further. Just yesterday, in the Western District of Ohio,Dayton Division, In Re Foreclosure Cases, 3:07-cv-00286, Judge Thomas Rose, citing Judge Boyko's decision, looked at the 27 mortgage foreclosure cases filed in his district, and determined that 26 of them were facially deficient in alleging standing (based upon the plaintiff not owning the obligation upon filing.) Judge Rose gave the plaintiffs 30 days to show proof of standing at the time the case was filed. The judge also broadly threatened sanctions if the attorneys could not prove the oversight was not willful.

If you are a consumer attorney defending a foreclosure case, you should acquaint your self with your state laws regarding assignments of mortgage and demand strict compliance by the lender.

What I've been seeing in the non-foreclosure context that most of my cases are in is that lenders heretofore have been unwilling to do workouts on delinquent mortgages (usually subprime and predatory) because the ownership of the loan and the servicing are split. The servicer has no ability to negotiate the loan. The owner often can't even be determined. The mortgage securitization business may change dramatically hereafter. Hopefully, we'll be able to identify an entity who actually owns the loan and has a willingness to work something out.

For companies that buy home mortgage loans that are already in default and demand payment and bring foreclosure actions without proof of ownership, these companies may be setting themselves up to Fair Debt Collection Practices Act and Abuse of Process lawsuits, often on a class action basis.

Ford Contract Approved by Landslide
The Union was in a Giving Mood

Ford's UAW locals quietly and nearly uniformly approved the recently-negotiated collective bargaining agreement. About 78% of voting members approved the contract.

Surprisingly, the Ford agreement passed much more easily than recent contracts at General Motors and Chrysler even though the Ford workers are giving up significantly more than their comrades who work for the other automakers.

The Detroit News
finally shook loose some of the details on the contract and posted them in Thursday's edition. Like the GM deal, the Ford contract includes a retiree healthcare VEBA (trust). The deal also includes a 2-tier wage scale. The Ford deal apparently includes UAW carrots for job creation and retention and much more flexibility on work rules and job classifications.

The VEBA: Unlike GM, Ford did not pony up a large amount of new cash to fund the plan. Ford will get rid of $23.7 billion in liabilities with a $13.6 billion trust. New money contributions will only be about $3 billion. Six billion will come from notes issued by Ford, in other words, IOUs, and the remainder will consist of assets already pegged to retiree healthcare. If the Detroit News article and my 1 AM math are correct, only $7.6 billion of the VEBA, about a third of the entire actuarial liability will be backed by real cash assets, and because the VEBA won't be fully operational until 2009, the money doesn't have to be contributed now. I think Wimpy said it best: "I will gladly repay you Tuesday for a hamburger today."

The Wage Scale:
Up to 20% of Ford's workforce can be made up of lower-tier workers who start at $14.20 per hour. In addition, Ford can hire "in-sourced" workers at the lower wage without counting toward the 20% cap. UAW Workers other than the lowest 20% will not get a "baseline" wage increase. The article is silent about bonuses.

Job Security:
Ford agreed to keep open 5 facilities that were scheduled to be closed in Ford's "Way Forward" plan. Also Ford agreed not to build a "low cost" North American (read that - Mexican) facility during the contract. Ford agreed to invest in flexible manufacturing for its existing facilities. The UAW is doing its part in that area by agreeing to reduce skilled labor job classifications from 350 to 22.

In summary,
the UAW gave about as much as you could expect it to give. It's now up to Ford management to cure its tendency to mis-spend product development and marketing resources and stop dumping money into black holes like Jaguar.

Thursday, November 15, 2007

2008 Dodge Journey
When the Lights go out in the city . . .

Dodge issued a press-release in August about a new midsized crossovever vehicle that is set to debut early next year. After I read it, I started a blog entry, but didn't have time to finish it. It's ominous that after reading the release, I couldn't remember the name of the vehicle. I few days later, I went back to blog again, and I still couldn't remember the name of the vehicle. I came back to it today, and once again - blank. It's ominous for Chrysler that even after multiple exposures, someone in their target market can't remember the name of their vehicle.

For the first vehicle released after the Cerberus buyout of Chrysler, it's appropriate that the company has picked the name "Journey" for its midsized CUV. I perused the titles of singles by the band Journey, and there are a number that you could apply to the abandonment of Chrysler by Daimler AG.

I'll be alright without you,
Separate Ways,
Still they ride. . .

My favorite: Who's crying now? That would be the Cerberus shareholders, because at first blush, the Dodge Journey seems like an also ran right out of the starting gate.

The Journey is based on a version of the platform of the Dodge Avenger, but stretched about 5 inches to leave room for a "limited use" 3rd row seat. In other words, the Journey is the station wagon version of the Avenger. The Journey apparently is designed for the slot in the Dodge line-up formerly occupied by the short-wheeelbased version of theDodge Caravan minivan. It's a family hauler shorter than and (they hope) more stylish than a minivan. In the market, the Journey directly competes with the Ford Taurus X (formerly the Freestyle) and sandwiches between the Toyota Rav4 and Highlander.

I find it interesting that Dodge did not release the curb weight of the Journey. In my experience, detailed press releases omit curb weight when the vehicle is heavy and bloated compared to its competitors. Since no Dodge vehicles are light weight, it's not a good sign. Ford did a good job keeping the weight down on its Freestyle, but even with a curb weight lower than its two-row Edge, and a performance-maximizing CVT transmission, het three-row Freestyle was criticized for its performance with a 200 horsepower 3.0 liter V-6. The Journey's two lower trim levels get by with engines that deliver less power than that of the outgoing Ford Freestyle, specifically 2.4 liter 4-cylinder and 2.7 liter 6-cylinder powerplants, both coupled to an outdated 4-speed automatic transmission. Only the 3.5 liter V-6 (six-speed auto) appears to be competitive in terms of engine-transmission pairing.

There are some nice interior touches in the Journey. There are kid-friendly middle row seats with optional integrated booster seats, and under-floor storage similar to the "stow" part of the "stow -n- go" minivan seating. The Avenger offers Chrysler's heated & cooled drink holders and Mygig(tm) entertainment system.

The Avenger will apparently be built in Mexico, initially sharing capacity with, and eventually replacing, the PT Cruiser. That means that UAW-LSP employees can't drive it to work because it is a non-uaw built vehicle.

Here's a link to more detailed information on the Chrysler buff site
2009 Honda FCX Clarity
The First Fuel Cell Production Car?

This week, at the L.A. Auto Show, Honda unveiled the FCX Clarity show car. This car looks very similar to the FCX that was first shown as a concept car in 2005. Last year, Honda showed a drivable version. This year's car is a production-ready prototype, with a finished interior and refined mechanicals. Honda expects to lease several hundred of these cars starting mid-2008. By that time, General Motors may have 100 fuel-cell powered Chevrolet Equinox CUVs on the road, but these are more proof-of-concept vehicles than true production cars.

What makes the FCX unique is that it is powered by a fuel cell coupled to a lithium-ion battery pack. The fuel cell provides for a range of 270 miles on nine pounds of hydrogen. The energy-efficient car is claimed to yield the equivalent of 68 mpg. The hydrogen is packed in carbon fiber storage tanks compressed to 5,000 psi pressure. Note that General Motors' Equinox fuel cell pilot vehicles store their hydrogen at 10,000 psi, so perhaps through technology sharing there is the possibility of doubling the unrefueled range without increasing the space required by the hydrogen.

Where will customers get their hydrogen? Well, the first leases will be in southern California where hydrogen refueling stations are already in place. In the future, the hydrogen could come from your own home. Simultaneously with the FCX Clarity, Honda announced the Experimental Home Energy station IV. The Home Energy Station, a natural gas fueled hydrogen reformer, was designed to provide hydrogen for a vehicle for "daily use" plus a household's daily electricity requirement. Actually, the home energy station is both a natural gas reformer and a 5-kilowatt residential fuel cell with capability to serve as a back-up generator -- or even a cogenerator if it's hooked into the power grid.

Honda plans to lease the FCX Clarity for $600/month including maintenance and collision insurance. I currently lease a $25,000 vehicle for $535 per month not including insurance or maintenance, so Honda's price is quite competitive for a high tech vehicle with serious green street cred. Among the Hollywood elite, once the FCX hits the streets, the Toyota Prius will be (in the words of Hillary Duff) "So Yesterday."

Source (unless otherwise noted): Autoblog Green
Consumer Groups Unite to Try to Defeat Predatory Lending Bill

I don't think it would be an exageration to say that policy wonks at the various prominent consumer groups feel stabbed in the back by H.R 3915, the predatory lending bill which was supposed to go up for vote today in the House. (As far as I can tell at this time, there was no vote; however I can't confirm that.) Anyway, below is a joint press release issued by the consumer groups.

Community Legal Services of Philadelphia * Consumer Action * Consumer Justice Law Center (Wis.) * Cuyahoga County Foreclosure Prevention Program (Ohio) * Empire Justice Center (N.Y.) * Financial Protection Law Center (N.C.) * Gateway Legal Services (Mo.) * Housing Research and Advocacy Center (Ohio) * Jacksonville Area Legal Aid, Inc. (Fla.) * Legal Services (N.J.) * Mountain State Justice (W. Va.) * National Association of Consumer Advocates * National Consumer Bankruptcy Litigation Center * National Consumer Law Center * National People's Action * National Training and Information Center * Neighborhood Economic Development Advocacy Project (N.Y.) * NC Justice Center (N.C.) * Public Citizen * U.S. Public Interest Research Group * Virginia Poverty Law Center

For Immediate Release: Contact: NCLC: Alys Cohen/Margot Saunders (202) 452-6252

Nov. 15, 2007 Public Citizen: Angela Bradbery (202) 588-7741

Consumer Action: Linda Sherry (202) 544-3088

U.S. PIRG: Ed Mierzwinski (202) 546-9707

Legal Services (N.J.): David McMillin (732) 572-9100

Mountain State Justice (W.Va.): Dan Hedges (304) 344-5564

NC Justice Center: Al Ripley (919) 274-8245

Coalition of Consumer and Anti-Poverty Groups Opposes Predatory Mortgage Bill

Weak Remedies and Pre-emption of State Law Would Harm Homeowners Facing Foreclosure

WASHINGTON, D.C. – A bill designed to address abuses in the lending market would leave consumers worse off than if Congress did nothing at all, a group of national and local consumer and poverty law organizations told lawmakers today. The group is urging lawmakers to defeat H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, scheduled for a vote today in the U.S. House of Representatives. In a letter sent to the Hill, the organizations decry the bill’s insulation of Wall Street and the removal of key state protections that borrowers use to protect their homes.

“At a moment when the economy is being rocked by the subprime mortgage crisis and when predatory loans are sending millions of Americans into foreclosure, it is shocking that the House of Representatives is protecting Wall Street, instead of the consumers who are at risk of losing their homes,” said Joan Claybrook, president of Public Citizen.

“This bill represents a net loss to consumers because it replaces strong state protections with a weak, untested federal scheme,” said Alys Cohen, staff attorney with the National Consumer Law Center. “We appreciate the authors’ efforts to combat predatory lending, but compromises made to attract wider support make the bill an empty promise.”

The bill is designed to address serious abuses in the lending market, including the making of loans that homeowners cannot afford to repay; prepayment penalties that lock borrowers into high-cost loans; binding mandatory arbitration clauses that deprive homeowners of access to court; and other protections against high-cost loans.

But because it combines weak federal remedies with pre-emption of existing state-law remedies, H.R. 3915 would actually harm consumers. The measure lacks meaningful remedies that borrowers need to save their homes. Worse still, the bill contains a state-law pre-emption provision, which would entirely undercut the value of the bill’s protections. The bill would eliminate homeowners’ ability to raise state-law claims—claims they may already bring under current law—against the actual owners of their loans. If homeowners cannot sue the owners of the loans, they will have no relief available at all because, in most cases, the original issuers of the mortgage have sold the loan and, in many cases, have gone bankrupt or are otherwise out of the picture.

“We cannot support a bill that eliminates strong state-law remedies for the victims of predatory mortgage abuses,” said Ed Mierzwinski, consumer program director of U.S. PIRG. “Consumers need these protections now more than and ever, and intentionally or not, this federal law creates rights without remedies.”

In the letter sent today to Reps. Barney Frank (D-Mass.) and Spencer Bachus (R-Ala.), chairman and ranking member of the House Financial Services Committee respectively, the groups noted that the bill creates multiple hoops through which the homeowner has to jump to obtain any redress. The remedies in the bill are limited to borrowers already in foreclosure and safe harbors in the bill provide little or no incentive for the market to change.

“While we commend the bill’s sponsors for seeking to address serious abuses in the mortgage industry, it’s clear that lawmakers are not listening to consumers and the groups they trust to represent their interests,” said Linda Sherry, director of national priorities at Consumer Action. “Congress has ignored suggestions for a stronger bill that contains real remedies to protect consumers, while giving in to demands from the industry to weaken the bill.”

Added Ira Rheingold, executive director of the National Association of Consumer Advocates, “We hope that if the bill passes the House, the Senate will be able to retain the bill’s strengths while ensuring that it has real remedies that give life to the protections. Communities are being devastated by lending abuses. The market needs to be changed now.”

“While we appreciate the good effort in Congress devoted to addressing the terrible problem of predatory lending, this bill will pre-empt much stronger state laws, like those in North Carolina,” said Al Ripley, director of the Consumer Action Network at the North Carolina Justice Center. “Unfortunately, homeowners in North Carolina and in the rest of the nation will find themselves with fewer protections from predatory mortgages if the bill in its current form passes.”

Groups signing onto the letter are: Community Legal Services of Philadelphia, Consumer Action, Consumer Justice Law Center (Wis.), Cuyahoga County Foreclosure Prevention Program (Ohio), Empire Justice Center (N.Y.), Financial Protection Law Center (N.C.), Gateway Legal Services (Mo.), Housing Research and Advocacy Center (Ohio), Jacksonville Area Legal Aid, Inc. (Fla.), Legal Services (N.J.), Mountain State Justice (W. Va.), National Association of Consumer Advocates, National Consumer Bankruptcy Litigation Center, National Consumer Law Center, National People’s Action, National Training and Information Center, Neighborhood Economic Development Advocacy Project (N.Y.), NC Justice Center (N.C.), Public Citizen, U.S. Public Interest Research Group, Virginia Poverty Law Center.

For more information, see:
House to Vote On Predatory Lending Bill

Today the U.S. House of Representatives is scheduled to vote on Rep. Barney Frank's predatory lending bill HR-3915. As predatory lending bills go, it's a pretty good one, unfortunately, what we really need is an ANTI-predatory lending bill. It appears that most democratic and some republican representatives are expected to vote for the bill. Most consumer advocate groups and most lending industry groups oppose the bill, but for different reasons.

The consumer groups, such as Public Citizen, PIRG, and the National Association of Consumer Advocates oppose the bill because it creates a ceiling, not a floor, for consumer protection. It increases federal preemption over tough state laws, when preemption should decrease, and it creates a safe haven for assignees of mortgage obligations. If assignees would have paid attention to the crap they were buying, we would have never had this problem to begin with.

Here's a link to a critique by Alan White in the Public Citizen Consumer Protection blog.

Note- this is me talking not 3357 - I strongly urge you to call, write or email your representative, and let your representative know that you want an anti-predatory lending bill, and not a predatory lending bill, and HR-3915 just doesn't cut it.

Monday, November 12, 2007

Opel Zafira Runs the Nürburgring

Here's a video from Youtube of the Opel Zafira running Germany's famed Nürburgring road course. The video says that the Zafira is the world's fastest compact van.

Chevrolet to Get Michigan-made Version of Opel Zafira

Jalopnik, among other sites, is reporting that General Motors is planning on building a version of the European Opel Zafira mini-minivan in Michigan, starting as early as 2009. (I have my doubts whether they'll meet that on-sale date.) Even though Saturn is the new Americanized Opel, Chevrolet is set to get the first version, with Saturn to follow.

If you don't know about the Zafira, it's a 4-cylinder 3-row MPV, similar to the Mazda5 and the Kia Rondo, but with what appears to be more flexible seating and more uplevel content options (at least in Europe). I first blogged about the Zafira in 2005.

I've always been intrieged by the Zafira, especially after seeing this commercial with the Zafira being dropped out of an airplane, with freefall skydivers entering the car in mid-air. It would be interesting to see a small 3-row peoplemover powered by GM's 2.0-liter direct-injection, turbocharged Ecotech engine coupled with a dual-clutch gearbox. They might just pry money out of my hands with one of those.

Wednesday, November 07, 2007

From the Insult to Injury File:
Toyota Reports Record Quarterly income

Toyota announced a record quarterly profit equivalent to $8 billion (US). Toyota set quarterly records in revenue, profit and number of vehicles sold.
From the "Is this anything?" file
GM Takes $39 Billion Noncash Charge

There are lies, damn lies, and General Motors accounting. Yesterday I read that General Motors announced that it would report a $39 billion quarterly loss. That loss is dominated by a $37 billion noncash charge against assets based on a writedown of tax-loss carryforwards held as assets. The company stated that the company's cash position and business prospects weren't affected, and the market yawned, with the stock going down less than two dollars in afterhours training. Even this morning, there has been no Exodus from the stock.

The news stories that came out yesterday were garbage, basically. There was no analysis or scrutiny of the company's statement. It was no coincidence that General Motors released the statement on an election day, a near holiday with many journalists off or covering other things. Cash or no cash, $39 billion is still real money to me, so I'll tell you what I make out of this, whether it is a hat, a broach or a pterodactyl.

So far, the Detroit Free Press has done the best at putting this in perspective. The full GM spokeshole press release is here at Cash or no cash, this is the largest quarterly loss in automotive history. As I write this, GM stock is trading for about $34 and some change per share. This quarterly loss alone amounts to $68.90 per share according to

It may be true that the paper loss does not affect GM's cash position. (Although the company's cash hord did go down $2.5 billion in the quarter.) It may also be true that GM's business prospects are unaffected. That doesn't mean that this is insignificant, especially if you are a GM shareholder. It's also important if you are a GM employee who now has a vested interest in GM stock thanks to your brand new VEBA.

To explain the significance, you have to understand the asset that GM wrote down. General Motors held on its balance sheet credits for past losses that it could use as credits to reduce future tax liability. According to Generally Accepted Accounting Practices, this type of paper asset must have some reasonable possibility of being converted into a useful cash type asset at some reasonable point of time in the future, otherwise this asset should not be given the same status as a real asset, such as cash. The write-down by General Motors is a tacit admission that they have no reasonable prospects of making profits in the near term that would make this asset useful. In other words, the company is saying that it really doesn't have the foggiest idea when it's going to be profitable again. Why announce the change now? Did the accountants suddenly get religion? Or did they realize that the leg's going to have to be cut off anyway, so they might as well bite the bullet.

I believe that General Motors may be salvagable, but virtually none of the future earnings of the company will go to current shareholders, no matter what. For the company to be successful, it will have to recapitalize at some point, and that will mean issuing new stock. Already there will likely be dilution of ownership based on the VEBA.

Speaking of VEBA, the UAW was sold a deal based upon GM's books during the negotiations. For the company's financial officer to announce suddenly that $39 billion on the books was an imaginary asset is highly suspicious, and it may end up being the subject of litigation. I'm sure the professionals that the UAW hired to look at the books realized that there was $37 billion of bullshit sitting in GM's asset column, but the union members were never explicitly told that their retirement healthcare was going to be financed to a large part based on company stock, and the company stock is supported by imaginary but worthless assets equal to twice the stock price.

In the wake of all this it is almost anticlimactic to mention that $1.6 billion of GM's quarterly losses came from losses at GMAC. It's not a record or anything, but it's half of what it would cost to develop a new car model, and there's no guarantee that things are going to be better next quarter.

If you have any investment in GM stock, what are you doing still reading this? you need to get busy. If you want to read more about this, I'm sure Robert Farago at will have a new GM Deathwatch momentarily.

Monday, November 05, 2007

From the Contract Demands file:
Restroom Videogames

You never know what you absolutely gotta have until you see it. Now that I've seen it, I must have it. It's a urinal driving game. The computer monitor is at eye-level above the urinal, and you control your car by aiming your stream. We must have this. It must be written into our next contract. We can make sure that the game is adapted for the ladies. Those who are flow-challenged can start with a handicap. According to Engadget, this game is banned in Belgium, so you know it has to be good.
Tentative Ford Deal

Late Friday, Ford and the UAW came to tentative contract terms. The deal is similar in concept to the Chrysler and GM deals. The contract includes a VEBA and a two-tier wage structure. On balance, the UAW may have given up more concessions to Ford, however, Ford (supposedly) agreed to keep open two plants that were originally slated to close.

There is an interesting difference in the VEBA. Ford is only putting 40% of the funds in cash, compared to 54% in the GM deal and 59% for Chrysler. Ford agreed to invest the remainder of the cash in its factories to make them capable of producing more than one model. Corrected 12/47 AM 11/5/2007
Source: Detroit News

Friday, November 02, 2007

Youtube Video of the Day
Because you Just can't have enough Jimmy Osmond

Here's a clip from the Donny and Marie Show with Donny in Keith Emerson mode, wailing on two stacks of synthesizers, with Jimmy Osmond and Jay Osmond exchanging drum solos with Desi Arnez, Jr. I don't see how I missed this one the first time around.

Friday Mish Mash #1
Edmunds Inside Line - Drives the 2008 Chevrolet Malibu

All positives except for steering. It's heavy though. The V-6 weighed in at 3,649 lbs, about as heavy as an old Pontiac Aztek, and within a cheese sandwich of its bigger brother, the Impala.

Friday Mish Mash #2
Meet Porky the Corolla

Speaking of weight, the 2009 Toyota Corolla is taking some heat over at Autoblog Green for gaining weight and losing fuel economy. To put things in perspective, the Corolla Matrix with the Camry's 2.4 liter engine has a highway EPA rating of 29, just one MPG more than the full-sized Ford Taurus, which has about a hundred horsepower advantage over the Matrix. Automakers are never going to make progress in Corporate Average Fuel Economy if every iteration of a model gains 200 to 400 lbs. (I'm looking at you Honda Accord.)

Friday Mish Mash #3
Businessweek's Cars for bargain hunters

Businessweek compared the actual selling prices to the Mfr list prices of various models and came up with the 20 biggest automotive "bargains"; by bargains, they mean the cars that sell for the highest percentage off sticker price figuring in incentives. By this measure Chrysler LLC comes out the big winner with 8 models in the top 20. The Jeep Commander is selling for 29% off sticker price, and the Dodge Ram 1500 is selling for 28% off sticker price. Though Businessweek is the source of the of the information, the presentation and commentary at is better.
Ford within Hours of Tentative Contract has flashed a story that Ford and the UAW are within hours of a tentative collective bargaining agreement. Earlier speculation was that Ford bargaining would be hurt by tummult at Chrysler over thousands of layoffs the week after their contract with UAW was approved.

According to Autonews, Ford agreed to outsource fewer non-manufacturing jobs than Chrysler or GM, including forklift drivers. Other provisions appear to be similar to the GM and chrysler pacts, including two-tier wage levels, VEBA plan for retiree benefits.

Thursday, November 01, 2007

New Holidays for Our Next Contract?

I'm always thinking ahead regarding our next contract. I just heard from a preacher for the Church of the SubGenius. Not that I'm ready to convert or anything, but I have to admit, they have lots of holidays that it would be great gravy if we could get these days off in our next contract negotiation. Here are the holidays (from the Wikipedia entry):

January 16 - The Night of the Lemur
January 24 - The Feast of St.Klaatu
February 16 - Cremation Wednesday
February 23 - The Feast of St.Monty Python
March 8 - The Feast of Weird Al Yankovic
March 17 - The Feast of the Blessed Leprechaun
March 28 - Palmistry Sunday
April 1 - The Feast of Saint Eris
April 13 - Saint Bill Hicks Day
April 15 - The Feast of Saint Dracula
May 6 - The Feast of Saint Guinness the Stout
May 31 - Desecration Day
June 1 - Yell "Fudge" at North American Cobras Day
June 22 - The Feast of Saint Kali
July 16 - The Display of the Embarrassing Swimsuits
July 17 - The Feast of Saint Caligula
August 1 - Drug Side-Effects Day
August 6 - The Dance of the Insensitive Bastards
September 1 - Start of the Holy Month of "Ramalamadingdong"
September 6 - Caesarean Section Day
September 20 - Yummy Kippers Day
October 9 - The Feast of Saint Attila
October 20 - The Feast of Saint Oliver the humanzee
November 10 - The Feast of Saint Cthulhu
November 19 - Hate for the Sake of Hating Day
December 9 - The Martyrdom of Saint Kenny
December 14 - Whiny Victimization/Co-Dependency Day
December 31 - The Feast of Saint Lucifer
Chryslerberus Announces 6000-7000 Job Cuts

Just a week after the UAW's contract with Chrysler was ratified, Chrysler, LLC announced plans to lay off 4,000 UAW members through shift reductions in Michigan, Illinois and Ohio. Earlier this week, Chrysler announced plans to lay off 1,000 salaried workers and 1,100 contract workers. Total job cuts in this round will amount approximately 6,000 workers (Detroit News) or 7,000 workers (Detroit Free Press). These cuts are part of an overall plan to cut the hourly workforce by 11,000 and the salaried workforce by 2,000. Most analysts think Cerberus's overall plan is to make Chrysler lean enough to make it an attractive aquisition candidate for another firm. In the past there has been speculation that prospective buyers could include Renault, General Motors or Magna International. Personally, I think the odds of General Motors buying Chrysler are about the same as the odds of me growing wings and flying home this afternoon. Renault would buy if the price was right. Magna seems to have a strange affinity to Chrysler, kind of like a moth attracted to a porchlight.

PT CRUISER LIVES - PT Convertible and Crossfire Die

In an addendum to yesterday's story about Chrysler's cancellation of several models. Yesterday I reported that the PT Cruiser was among the casualties. Autoblog reports today that only the PT Cruiser Convertible is being canned. The regular PT Cruiser Survives. The semi-Mercedes Chrysler Crossfire got caught in ints namesake, and it will disappear.
Patriots vs. Colts - Game of the Century?
Not even Cheney can Ruin this one

The Devil went down to Indy, he was looking for some attention to steal . . .

Dick Cheney is here in Indianapolis today, ostensibly to speak before an American Legion gathering, but really, he's here to bask in the attention surrounding the game between the undefeated New England Patriots and undefeated Indianapolis Colts that will be played on Sunday.

Two undefeated teams haven't met this late in the season since 1921. Statistically, the New England Patriots have dominated the teams that they've played by record-setting percentages, and many think the Patriots can go undefeated at 19-0, besting the undefeated 17-0 record of the 1972 Miami Dolphins. To do this, they'll have to get past the Superbowl-champion Colts, the team that rained on the Patriots' parade last year. Add to this a showdown between the two best quarterbacks of the current era, Tom Brady and Peyton Manning, and you have the script for the highest-rated regular season televised game in history.

The USA Today article linked here gives an excellent preview of Sunday's game, starting at 4:00 EST.