Happy New Year – For Some More than Others
George Boelcke FCI
December 31, 2008
Next year, a number of companies are going to be reinvented as banks. GMAC, the ex finance arm of General Motors, just made it yesterday. No, of course they´re not a bank. It´s just what it takes to be able to access the existing bailout money!
This was a hugely profitable company until they took stupid pills and got into sub prime mortgages in a huge way through their mortgage division Ditek.com that you see advertising on TV all the time. Two years ago, they made billions of dollars, last year they lost about $8 billion and now finance only about 2% of GM vehicle sales.
How sad. But it was either deal with it, or get a bailout. I know I'd pick the $6 billion...
Car loans 60-days in arrears is up 17% for the 3rd quarter. That just came out - and that pain will continue to worsen. If people can't pay their current car loans there isn't going to be any relief for the Little Three, formerly known as the Big 3.
Now that most credit card companies have jumped interest rates and cut limits, for the coming year, get ready for a ton more marketing of prepaid Visa and Mastercards. They'll make the same profit, along with an administration fee, and have no chance of delinquency. After all, you can´t go in arrears if it´s all pre-paid. Cash is still legal and since pre-paid cards have no affect on credit ratings, there is absolutely no point in buying them.
Did you get any gift cards for Christmas? If so, get out there and use them - the sooner, the better. It´s a real crap shoot if that merchant or restaurant will still be in business to honor the card and that isn´t worth the risk.
Last week, a U.S. report showed that an estimated 148,000 retail businesses will go under in 2009. Someone paid real cash for that gift card, but until you use it up, all you´ve got is an I.O.U.
Here´s one more prediction for 2009: As the economy gets worse, there´s a business that´s up 30% as a result: It´s on-line psychics. Yes, for about two to four bucks a minute, or $100 an hour, psychics are doing very well predicting your financial future on-line.
I´m going to do that free for you. Think of it as your late Christmas present: One on-line psychic was quoted as saying he tells people (that´s code words for: he tells everyone the same thing) your finances really won´t improve until about the middle of next year.
Now aren´t you glad you didn´t have to find some web site and pay for that?
Have a happy New Year and we´ll discuss some "real" New Years resolutions in the coming weeks. You and I both know that the week before, of and after New Years is not the time for any resolutions which will survive beyond a month…
This was a hugely profitable company until they took stupid pills and got into sub prime mortgages in a huge way through their mortgage division Ditek.com that you see advertising on TV all the time. Two years ago, they made billions of dollars, last year they lost about $8 billion and now finance only about 2% of GM vehicle sales.
How sad. But it was either deal with it, or get a bailout. I know I'd pick the $6 billion...
Car loans 60-days in arrears is up 17% for the 3rd quarter. That just came out - and that pain will continue to worsen. If people can't pay their current car loans there isn't going to be any relief for the Little Three, formerly known as the Big 3.
Now that most credit card companies have jumped interest rates and cut limits, for the coming year, get ready for a ton more marketing of prepaid Visa and Mastercards. They'll make the same profit, along with an administration fee, and have no chance of delinquency. After all, you can´t go in arrears if it´s all pre-paid. Cash is still legal and since pre-paid cards have no affect on credit ratings, there is absolutely no point in buying them.
Did you get any gift cards for Christmas? If so, get out there and use them - the sooner, the better. It´s a real crap shoot if that merchant or restaurant will still be in business to honor the card and that isn´t worth the risk.
Last week, a U.S. report showed that an estimated 148,000 retail businesses will go under in 2009. Someone paid real cash for that gift card, but until you use it up, all you´ve got is an I.O.U.
Here´s one more prediction for 2009: As the economy gets worse, there´s a business that´s up 30% as a result: It´s on-line psychics. Yes, for about two to four bucks a minute, or $100 an hour, psychics are doing very well predicting your financial future on-line.
I´m going to do that free for you. Think of it as your late Christmas present: One on-line psychic was quoted as saying he tells people (that´s code words for: he tells everyone the same thing) your finances really won´t improve until about the middle of next year.
Now aren´t you glad you didn´t have to find some web site and pay for that?
Have a happy New Year and we´ll discuss some "real" New Years resolutions in the coming weeks. You and I both know that the week before, of and after New Years is not the time for any resolutions which will survive beyond a month…
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