Who is Mark Cardenas, and For Whom Does He Work?
In the field of foreclosure of subprime mortgages, a single name seems to come up repeatedly, that's Mark Cardenas. Who is this person? A Google name search yields over 700 hits, and a perusal of the names seems to suggest that there's more than one person with the name. The one that I was looking for claims status as vice-president of several corporations relating to mortgages. You'd think that a person that important would have accomplishments, honors, etc. reflected by a Google search. Nope. Not there.
It looks like we'll have to hire Austin Powers to find out who Mark Cardenas is and who he works for. Austin's had experience with such things before. (Yes, another cheap excuse to post an otherwise irrelevant Youtube video.)
Tuesday, February 12, 2008
GM Posts Record $39 Billion Quarterly loss
GM Offers Buyouts to All UAW Members
How can you lose more money than you have and not go bankrupt? I don't have time for a big post now because I've got work to do. As I write this, (after the announcement of the loss) Yahoo quotes GM stock at $27.20 per share. According to the Detroit Free Press, my main source for this post, the loss in the 4th quarter of 2007 amounts to $68.45 per share. Despite this, GM's stock so far is only down $.27 per share.
Why is that? According to the Free Press, "excluding special items", GM's net loss was only $22 million -- that's statistical break even for GM. Here's what Freep said about the $38 Billion figure:
If tax accounting can make a $39 billion difference, it's probably more of an indictment of our tax system than it is of General Motors.
The other big news is that Chevrolet intends to offer buyouts and early retirement to all its UAW members. It has sweetened offers already on the table. Finally GM has gotten smart and offered an annual payment option. (In the last round, workers got killed on taxes by taking the lump sum. Others blew the money all at once or had the money attached by creditors.)
On the product side of things, there's no question that General Motors has been going in the right direction. Overall car sales increased 3% last year, and 60% of sales were outside North America. The Cadillac CTS is a critical and market hit. The Chevrolet Malibu is a hit with the critics. It would probably be a hit with buyers if they could find one. (I visited a Chevy dealer last week, and I passed a row of about 15 beautiful new Corvettes to look at the one Malibu on the lot. That car was already sold.) Chevrolet's flex platform looks well placed to deliver competitive vehicles that are gas/electric hybrids, plug-in electric and fuel-cell powered.
The bottom line is that you can look at this as the glass 1/4 full or 3/4 empty, your choice, but actually, that's really no change to the way things were before, so its no surprise. As press coverage continues regarding General Motors' financial condition, don't look so much at the income statement, look at the balance sheet. The balance sheet should give you a better idea of whether GM will have what it takes to ride out the rough patch and push through until the next generation of vehicles.
BY THE WAY The Blogger spell checker hasn't been working as of late. If I mispell, misspell, whatever, any words, I'm sory.
GM Offers Buyouts to All UAW Members
How can you lose more money than you have and not go bankrupt? I don't have time for a big post now because I've got work to do. As I write this, (after the announcement of the loss) Yahoo quotes GM stock at $27.20 per share. According to the Detroit Free Press, my main source for this post, the loss in the 4th quarter of 2007 amounts to $68.45 per share. Despite this, GM's stock so far is only down $.27 per share.
Why is that? According to the Free Press, "excluding special items", GM's net loss was only $22 million -- that's statistical break even for GM. Here's what Freep said about the $38 Billion figure:
Despite the historic decline, the loss is almost entirely attributable to a non-cash special accounting charge of $38.3 billion that GM announced in the third quarter.
The charge relates to the valuation allowance against deferred tax assets.
If tax accounting can make a $39 billion difference, it's probably more of an indictment of our tax system than it is of General Motors.
The other big news is that Chevrolet intends to offer buyouts and early retirement to all its UAW members. It has sweetened offers already on the table. Finally GM has gotten smart and offered an annual payment option. (In the last round, workers got killed on taxes by taking the lump sum. Others blew the money all at once or had the money attached by creditors.)
On the product side of things, there's no question that General Motors has been going in the right direction. Overall car sales increased 3% last year, and 60% of sales were outside North America. The Cadillac CTS is a critical and market hit. The Chevrolet Malibu is a hit with the critics. It would probably be a hit with buyers if they could find one. (I visited a Chevy dealer last week, and I passed a row of about 15 beautiful new Corvettes to look at the one Malibu on the lot. That car was already sold.) Chevrolet's flex platform looks well placed to deliver competitive vehicles that are gas/electric hybrids, plug-in electric and fuel-cell powered.
The bottom line is that you can look at this as the glass 1/4 full or 3/4 empty, your choice, but actually, that's really no change to the way things were before, so its no surprise. As press coverage continues regarding General Motors' financial condition, don't look so much at the income statement, look at the balance sheet. The balance sheet should give you a better idea of whether GM will have what it takes to ride out the rough patch and push through until the next generation of vehicles.
BY THE WAY The Blogger spell checker hasn't been working as of late. If I mispell, misspell, whatever, any words, I'm sory.
Sunday, February 10, 2008
Friday, February 08, 2008
2009 Pontiac Vibe
Don't quibble - We can drive it to work
With the consolidation of UAW Legal Services Offices and resulting transfers, many of us are finding that we have to drive a lot farther to go to work each day. The automobile that was sensible for the purpose a year ago, is now unaffordable. The 2009 Pontiac Vibe should be arriving at your local dealer any day now. The introduction of the revised Vibe is notable because the Vibe is one of the few UAW-built small cars that we are allowed to drive to work under our collective bargaining agreement. (The Vibe's sister under the skin, the Toyota Matrix is another. Other than that, it's just the Ford Focus and the Chevrolet Cobalt/Pontiac G5.) Is the Vibe worth buying?
The Pontiac Vibeand the Toyota Matrix are both built on a Toyota Corrolla platform in the UAW-staffed Nummi plant in Fremont California. While historically, Toyota is known for its persnickity attention to quality, the NUMMI plant has had its share of quality control lapses in the past, so the reliability scores of the Matrix and the Vibe have generally run about average overall. Most of the information below about the Vibe also applies to the Toyota Matrix as well. [CORRECTION 2/12/2008 A UAW REPRESENTAIVE PASSED WORD TO ME THAT THE TOYOTA MATRIX IS NOT BEING BUILT AT FREMONT. UNTIL I HEAR OTHERWISE, YOU SHOULD PRESUME THAT THE MATRIX IS NOT AN "APPROVED" CAR. SH]
The 2009 Vibe is the first major update to the nameplate, which debuted in 2002. Even so, this isn't a ground-up redo. The underlying mechanicals were touched up, and the body was restyled with a little more swoop and less Aztek. As a side effect, the Vibe makes do with a wee bit less room this year than last. The interior was modernized with the requisite chrome-ish metal trim and iPod jack. There's a cool cargo divider in the hatch that should come in handy when you are shopping for groceries.
If there's any element of the Vibe that's disappointing, it's in the powertrain department. The base-model vibe's engine received a mild horsepower boost, from 126 to 132 horsepower, but torque is only up 2 lb./ft from 126 to 128. The added power lines up against an extra 150 lbs of weight (mostly added safety equipment such as airbags all-around), so this car is perhaps not as sprightly as the car it replaces. It doesn't help things that the Vibe may be one of the last new cars to be introduced with a 4-speed automatic transmission. The GT model and AWD model of the Vibe receive a 158 horsepower version of the 2.4 liter engine from the Toyota Camry. None of the Vibe models are class-leaders in fuel economy. The 1.8 liter manual transmission base model is rated at 26/32 MPG. The 158 horsepower AWD is truly disappointing at 19 and 25. It is likely that a Vibe/matrix will have worse fuel economy and performance than the larger Pontiac G6 or Toyota Camry parked next to it on the dealer lot. This will be especially true for the 2009 model year when the G6 is slated to receive a 6-speed automatic transmission for its Ecotech 4-cylinder engine. IMHO, the Vibe probably would have been better off with a GM powertrain.
Still, if you are looking for a handy, small-ish hatchback, and it has to be UAW-made, you might as well start and end your search with the Vibe or Matrix. Ford no longer markets a hatchback Focus in the US. The hatchback versions of the Cobalt/G5 are more sporty than functional, and the Dodge Caliber, despite a few interesting features, doesn't really come off as a quality piece of work.
For more information check out the
Autoblog coverage
carofthefuture blog coverage
Official Pontiac Site (Turn down your speakers, the distorted rap music is very annoying.)
Picture: Pontiac Underground Blog
Edmunds coverage
Don't quibble - We can drive it to work
With the consolidation of UAW Legal Services Offices and resulting transfers, many of us are finding that we have to drive a lot farther to go to work each day. The automobile that was sensible for the purpose a year ago, is now unaffordable. The 2009 Pontiac Vibe should be arriving at your local dealer any day now. The introduction of the revised Vibe is notable because the Vibe is one of the few UAW-built small cars that we are allowed to drive to work under our collective bargaining agreement. (The Vibe's sister under the skin, the Toyota Matrix is another. Other than that, it's just the Ford Focus and the Chevrolet Cobalt/Pontiac G5.) Is the Vibe worth buying?
The Pontiac Vibe
The 2009 Vibe is the first major update to the nameplate, which debuted in 2002. Even so, this isn't a ground-up redo. The underlying mechanicals were touched up, and the body was restyled with a little more swoop and less Aztek. As a side effect, the Vibe makes do with a wee bit less room this year than last. The interior was modernized with the requisite chrome-ish metal trim and iPod jack. There's a cool cargo divider in the hatch that should come in handy when you are shopping for groceries.
If there's any element of the Vibe that's disappointing, it's in the powertrain department. The base-model vibe's engine received a mild horsepower boost, from 126 to 132 horsepower, but torque is only up 2 lb./ft from 126 to 128. The added power lines up against an extra 150 lbs of weight (mostly added safety equipment such as airbags all-around), so this car is perhaps not as sprightly as the car it replaces. It doesn't help things that the Vibe may be one of the last new cars to be introduced with a 4-speed automatic transmission. The GT model and AWD model of the Vibe receive a 158 horsepower version of the 2.4 liter engine from the Toyota Camry. None of the Vibe models are class-leaders in fuel economy. The 1.8 liter manual transmission base model is rated at 26/32 MPG. The 158 horsepower AWD is truly disappointing at 19 and 25. It is likely that a Vibe/matrix will have worse fuel economy and performance than the larger Pontiac G6 or Toyota Camry parked next to it on the dealer lot. This will be especially true for the 2009 model year when the G6 is slated to receive a 6-speed automatic transmission for its Ecotech 4-cylinder engine. IMHO, the Vibe probably would have been better off with a GM powertrain.
Still, if you are looking for a handy, small-ish hatchback, and it has to be UAW-made, you might as well start and end your search with the Vibe or Matrix. Ford no longer markets a hatchback Focus in the US. The hatchback versions of the Cobalt/G5 are more sporty than functional, and the Dodge Caliber, despite a few interesting features, doesn't really come off as a quality piece of work.
For more information check out the
Autoblog coverage
carofthefuture blog coverage
Official Pontiac Site (Turn down your speakers, the distorted rap music is very annoying.)
Picture: Pontiac Underground Blog
Edmunds coverage
Wednesday, February 06, 2008
So, What's the Deal with Plastech?
http://www.blogger.com/img/gl.link.gif
This week's big auto news, overshadowing the Chicago Auto Show, has been Chrysler'http://www.blogger.com/img/gl.link.gifs near brush with the possibility of meltdown thanks to a company named Plastech Engineered Products. The obscurity of the company suggested a trip to Wikipedia would be in order.
that Plastech Engineered Products is the largest women -owned business in the state of Michigan. It has 7,600 employees in 36 manufacturing facilities and two corporate offices in North America. Plastech started with a single plant in Caro, Michigan in 1988. Obviously, it has grown quickly since then to its current (until recently) annual sales level of $1.7 billion. This figure was helped in no small part four plants aquired from (or pawned off by) Johnson Controls in 2007 with a combined sales level of $700 million per year.
, Chrysler CEO Robert (aka "Dean Bob") Nardelli told reporters at the Chicago Auto Show that Chrysler was ending its relationship with Plastech because Plastech tried to raise its prices. What? A plastics company raising its prices the cost of oil skyrockets?
Right now there is an interim deal between Plastech and Chrysler to keep the supply of key components up until February 15th. One would assume that Chrysler would not have attempted to recover its tooling without a substitute supplier lined up. It would be easy to paint Plastech CEO Julie Brown as the villian, threatening the stability of Chrysler and its thousands of jobs. On the other hand, you could think of her as being a champion of American manufacturing, fighting a rear-guard action, defending 7,600 jobs (many unionized) against the forces of globalization.
Plastech CEO Julie Brown has certainly led a very diverse life. Not only does she have an undergraduate degree in Computer Science, and a Masters in Engineering, and run a maor corporation, since the 1980's she's maintained separate identities in the entertainment industry. As "West Coast" Julie Brown, she was the comic genius behind Earth Girls are Easy and Everybody Run, the Homecoming Queen's Got a Gun. As "Downtown" Julie Brown, she was an MTV VJ, and has popped up in countless cameos and hosting roles. Here's an excuse to post a link to the Homecoming Queen's Got a Gun
http://www.blogger.com/img/gl.link.gif
This week's big auto news, overshadowing the Chicago Auto Show, has been Chrysler'http://www.blogger.com/img/gl.link.gifs near brush with the possibility of meltdown thanks to a company named Plastech Engineered Products. The obscurity of the company suggested a trip to Wikipedia would be in order.
that Plastech Engineered Products is the largest women -owned business in the state of Michigan. It has 7,600 employees in 36 manufacturing facilities and two corporate offices in North America. Plastech started with a single plant in Caro, Michigan in 1988. Obviously, it has grown quickly since then to its current (until recently) annual sales level of $1.7 billion. This figure was helped in no small part four plants aquired from (or pawned off by) Johnson Controls in 2007 with a combined sales level of $700 million per year.
, Chrysler CEO Robert (aka "Dean Bob") Nardelli told reporters at the Chicago Auto Show that Chrysler was ending its relationship with Plastech because Plastech tried to raise its prices. What? A plastics company raising its prices the cost of oil skyrockets?
Right now there is an interim deal between Plastech and Chrysler to keep the supply of key components up until February 15th. One would assume that Chrysler would not have attempted to recover its tooling without a substitute supplier lined up. It would be easy to paint Plastech CEO Julie Brown as the villian, threatening the stability of Chrysler and its thousands of jobs. On the other hand, you could think of her as being a champion of American manufacturing, fighting a rear-guard action, defending 7,600 jobs (many unionized) against the forces of globalization.
Plastech CEO Julie Brown has certainly led a very diverse life. Not only does she have an undergraduate degree in Computer Science, and a Masters in Engineering, and run a maor corporation, since the 1980's she's maintained separate identities in the entertainment industry. As "West Coast" Julie Brown, she was the comic genius behind Earth Girls are Easy and Everybody Run, the Homecoming Queen's Got a Gun. As "Downtown" Julie Brown, she was an MTV VJ, and has popped up in countless cameos and hosting roles. Here's an excuse to post a link to the Homecoming Queen's Got a Gun
Tuesday, February 05, 2008
Voluntary Foreclosure Avoidance Programs Not Working
Should "Hope Now" loans be replaced by "Luna" loans?
It seems like just yesterday that George W. Bush came on TV, introducing the "Hope Now" program, and talking about a hotline that you could call to get help with your subprime adjustable mortgage. In George's world, that works really well. The problem is that the world that George Bush lives in and the real world rarely intersect. He might as well have appointed Luna Lovegood the head of his Hope mortgage refinancing program. Perhaps she could see these mythical remedial loan offers. The rest of us can't. Perhaps the "Hope Now" loans should be retitled "Luna" loans. (Perhaps Luna should replace Aphonso Jackson as Head of the Department of Housing and Urban Development.)
According to a study by the Center for Responsible Lending, only 3% of homeowners with adjustable rate subprime loans are likley to receive a streamlined loan modification. Lenders were 13 times more likely to foreclose than modify a problem loan.
Of all the subprime toxic loans that I've seen at UAW-LSP, I've never seen a lender come forward with a modification that we didn't cram down their throat by either suing under TILA or HOEPA, or threatening to sue. There have been occasions where the lenders let the consumers stay in a house for years without making payments for reasons that I don't 100% understand. I believe it's because the loans are securitized and they can't clear up the ownership well enough to sue to get them out.
Drink Responsibly
- Buckle Up Your Beer
Tina Williams understands how important it is to use safety belts. She had her case of beer snugly protected by the safety belt in the front passenger seat when she was pulled over by the cops. Her one year old child? Not so much. I wonder if this incident will be made into a Super Bowl commercial.
Britney, we've found somebody for you to hang with.
- Buckle Up Your Beer
Tina Williams understands how important it is to use safety belts. She had her case of beer snugly protected by the safety belt in the front passenger seat when she was pulled over by the cops. Her one year old child? Not so much. I wonder if this incident will be made into a Super Bowl commercial.
Britney, we've found somebody for you to hang with.
Chrysler and Plastech Reach Interim Agreement
Shutdown of all Chrysler Plants avoided - for now
Breaking news from the Automotive News website, Chrysler and supplier, PLastech have reached an interim agreement for Plastech to ship parts to Chrysler through February 15.
Today's Wall Street Journal included more information on the problem with supplier Plastech that shut down four Chrysler plants and threatened to shut down more. In fact, according to the WSJ, every Chrysler plant could ultimately be affected.
Apparently, Plastech has been on the verge of bankruptcy for some time. Last year it negotiated an assistance agreement with its customers that included a substantial cash payment to Plastech. That wasn't enough, so when Plastech went to Chrysler last week with hat in hand, begging for more assistance, Chrysler said enough is enough, and demanded that Plastech return the Chrysler-owned molds and tooling used by Plastech. Instead of returning the equipment, Plastech filed bankruptcy.
Until the interim deal was struck today, Chrysler was scheduled to go to bankruptcy court tomorrow to get the molds returned on an emergency basis. Presumably that court date is off the table. I would guess that neither Chrysler nor Plastech was as prepared as they would prefer to be for a court proceeding upon which the future of each company could depend.
So, 10 days from now we could be back where we are now, facing a big shutdown of all Chrysler facilities. Given Chrysler's already shakey foundation, and given Cerberus's limited desire and ability to sink new money into the company, it wouldn't take a long shut down to give Cerberus the cover to shut down operations and sell off the company piecemeal. Memo to Plastech: This ain't General Motors you're dealing with. Don't f*** with Cerberus.
Shutdown of all Chrysler Plants avoided - for now
Breaking news from the Automotive News website, Chrysler and supplier, PLastech have reached an interim agreement for Plastech to ship parts to Chrysler through February 15.
Today's Wall Street Journal included more information on the problem with supplier Plastech that shut down four Chrysler plants and threatened to shut down more. In fact, according to the WSJ, every Chrysler plant could ultimately be affected.
Apparently, Plastech has been on the verge of bankruptcy for some time. Last year it negotiated an assistance agreement with its customers that included a substantial cash payment to Plastech. That wasn't enough, so when Plastech went to Chrysler last week with hat in hand, begging for more assistance, Chrysler said enough is enough, and demanded that Plastech return the Chrysler-owned molds and tooling used by Plastech. Instead of returning the equipment, Plastech filed bankruptcy.
Until the interim deal was struck today, Chrysler was scheduled to go to bankruptcy court tomorrow to get the molds returned on an emergency basis. Presumably that court date is off the table. I would guess that neither Chrysler nor Plastech was as prepared as they would prefer to be for a court proceeding upon which the future of each company could depend.
So, 10 days from now we could be back where we are now, facing a big shutdown of all Chrysler facilities. Given Chrysler's already shakey foundation, and given Cerberus's limited desire and ability to sink new money into the company, it wouldn't take a long shut down to give Cerberus the cover to shut down operations and sell off the company piecemeal. Memo to Plastech: This ain't General Motors you're dealing with. Don't f*** with Cerberus.
The Logic of the Illogical: Your Credit Score
Only on the Bizzaro planet would you expect a system as strange as the FICO credit scoring model established by the Fair Issacs Corporation, the system used by almost all the consumer finance industry. Closing an unused account is simple prudence, right? No, not on the Bizzaro planet, and not with FICO. It makes sense to consolidate high interest rate debt into a single lower interest account, right? Nope - FICO Bizzaro again. Here's a link to an MSN Money article with more on the irrationalities of FICO.
Speaking of credit scores. Starting this year, Fair Issac will be offering a different model to establish your score. Under the new model, you will no longer be rewarded for "piggybacking" as an authorized user on an account of a person with A+ credit. ON the other hand, you will not be punished quite as much for a single major delinquency. You will be punished more for seeking credit, but rewarded for handling a diverse mix of credit. The FICO 08 model will be phased in as market demand allows. The truth be told, Fair Issac has always tailored its scoring systems to the demands of its customers, to the point where it would be largely inaccurate to say that anyone actually had a truly standardized credit score. For more information on FICO 08 see this link to MSN Money.
Thanks to PAD for the link.
Only on the Bizzaro planet would you expect a system as strange as the FICO credit scoring model established by the Fair Issacs Corporation, the system used by almost all the consumer finance industry. Closing an unused account is simple prudence, right? No, not on the Bizzaro planet, and not with FICO. It makes sense to consolidate high interest rate debt into a single lower interest account, right? Nope - FICO Bizzaro again. Here's a link to an MSN Money article with more on the irrationalities of FICO.
Speaking of credit scores. Starting this year, Fair Issac will be offering a different model to establish your score. Under the new model, you will no longer be rewarded for "piggybacking" as an authorized user on an account of a person with A+ credit. ON the other hand, you will not be punished quite as much for a single major delinquency. You will be punished more for seeking credit, but rewarded for handling a diverse mix of credit. The FICO 08 model will be phased in as market demand allows. The truth be told, Fair Issac has always tailored its scoring systems to the demands of its customers, to the point where it would be largely inaccurate to say that anyone actually had a truly standardized credit score. For more information on FICO 08 see this link to MSN Money.
Thanks to PAD for the link.
Monday, February 04, 2008
Supplier Bankruptcy Shuts Down 4 Chrysler Plants
Multiple sources report that automoative supplier Plastech, Engineered Products Inc. has filed Chapter 11 bankruptcy, and has cut off supply to Chrysler Corporation. Supplies continue to Ford and General Motors. Plastech provides key interior bits for most of Chrysler's recent models. By strange coincidence, the cars affected the ones that I consider to be the worst in Chrysler's line up: the Sebring, Avenger, Nitro, Liberty, Caliber, Compass, Patriot, Durango and Aspen, collectively Chrysler's greatist [S]hits. (Actually, the Jeep Liberty is a big seller and big money-maker for the company -- why, I couldn't tell you.) Four factories producing these vehicles are currently shut down, including the Belvidere, Illinois plant that I like to call "Brocktoon". Other closed plants include Sterling Heights, Newark, and Toledo. No word yet on when the plants will reopen.
I'm wondering if Chrysler's contract with the UAW contains an escape clause for shut-downs caused by suppliers? In that case, it would be an act of brilliance to identify an expendible supplier that supplies only plants that you want to close, stop paying the supplier, and play victim when you have to shut down the plants that you wanted to shut down anyway.
See Detroit Free Press (freep.com)
Multiple sources report that automoative supplier Plastech, Engineered Products Inc. has filed Chapter 11 bankruptcy, and has cut off supply to Chrysler Corporation. Supplies continue to Ford and General Motors. Plastech provides key interior bits for most of Chrysler's recent models. By strange coincidence, the cars affected the ones that I consider to be the worst in Chrysler's line up: the Sebring, Avenger, Nitro, Liberty, Caliber, Compass, Patriot, Durango and Aspen, collectively Chrysler's greatist [S]hits. (Actually, the Jeep Liberty is a big seller and big money-maker for the company -- why, I couldn't tell you.) Four factories producing these vehicles are currently shut down, including the Belvidere, Illinois plant that I like to call "Brocktoon". Other closed plants include Sterling Heights, Newark, and Toledo. No word yet on when the plants will reopen.
I'm wondering if Chrysler's contract with the UAW contains an escape clause for shut-downs caused by suppliers? In that case, it would be an act of brilliance to identify an expendible supplier that supplies only plants that you want to close, stop paying the supplier, and play victim when you have to shut down the plants that you wanted to shut down anyway.
See Detroit Free Press (freep.com)
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