Wednesday, November 19, 2008

I love Xm Radio......

Can't sell cars, can't sell radios. trickle down economics. We ain't seen nothing yet. We need to shake out the incompetents, crooks and nitwits out of the economy before a new cycle can begin. Of course the fed's have to bail out all their screw ups.

By the way, why  do we need bank financing for no money down no down payment 0 interest loans? Am I missing something? Other than a reluctance to assuming risk maybe these dealers will have to be like the used car guys. Sign here and drive it home. Screw up and they hire Jose to steal it back.

I used to buy cars by simply signing my name and leaving the keys to the piece of shit they sold me last time. Of course you could get a new car for 3 or 4 thousand dollars back in those days. However, when my wages couldn't keep up financing became the only way that  this wage slave could drive to work. To pay his debts to put a roof over his head. Pay all those taxes. eat. Hell,come to think about it  now days we can't even afford to die.

We have to go back in time to the "good old days" to understand what happened. The simple fact is that wages haven't kept up with inflation. When I bought and sold Real Estate back in the Stone Age it was always a simple formula we used to qualify prospects. (Today it's formulated as the affordability index.)  20 % down, 25% of monthly gross for the monthly payment and no  outstanding debts payable or in arrears over a year or more. (Buy the car and furniture later.)

This worked for "prudent lenders". It was the the Fed who  financed 95% of the loan amounts for what we call today, "sub prime borrowers".  (About the only qualification was that they had a social security number and could show an income of some kind) In other words "socializing" the risk for political reasons.

Because of the growth in credit caused by the Government lowering the Fed rate everyone and their brother got in to the lending business. Inflation in housing, cars and business financing took off. Since Government guarantees most of these loans we have "socialized" all this risk. As soon as wages fall behind we have people pulling in and not borrowing. Causing a collapse in credit creation. A vicious cycle starts and ends up destroying innocent companies like Sirius XM. This is the fall out from economic boom and bust. Innocents get it in the ass.

Read the whole article and see what these guys did to get smacked around like this  .
Sirius XM at 17 cents - look out below - Nov. 19, 20


NEW YORK (CNNMoney.com) -- "Brother, can you spare a dime?" During the Great Depression, ten cents could buy a little something for those really hard up.

During this financial crisis, ask for two dimes, and you can get a share of Sirius XM. That's right, the stock of the much-ballyhooed satellite-radio merger has plunged more than 90% this year and was trading recently at just 17 cents.

And now, several analysts wonder if Sirius XM (SIRI) will even be able to last for much longer without a major restructuring.


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