News yesterday that GM is now back in the sub prime business as it has bought AmeriCredit for 3.5 billion. It seems the auto maker is frustrated losing customers who, get this one, can't qualify for financing. So rather than lose a sale due to bad credit score, buy the lender, be the lender and go back to "you can fog a mirror you qualify!" Lovely!
Newsflash for GM management, and while it may appear complicated I will simplify it for you..... a sale to a customer who cannot pay for the product is not a sale at all! But it sure looks good on your quarterlies for the Wall St. analysts that's for sure.
Still own those Muni's?
In what seems like a daily basis we get news on how ludicrous municipal finances have become. I know many jokingly refer to California as the land of fruit and nuts but this story, Is a City Manager worth $800,000?, seems to provide credible evidence to that claim.
In what is sure to make your blood boil, we got news that in Bell, California the city's chief administration officer Robert Rizzo is paid $787,636. As if that is not enough Bell also pays police chief Randy Adams $457,000.
Do you have any idea how many aspiring MBA's at Princeton, Harvard and Yale are reading this-that little mouse is up running in that wheel- contemplating a career in civil service? I cannot count that high.
But wait, this whole story gets better. What? How?
Well, this devoted civil servant 55 year old Rizzo, if he was forced out, would be entitled to at least $600,000/year pension for the rest of his life! This would earn him the title of highest paid retiree in the CalPERS system, just edging out former Vernon, CA city manager Bruce Malkenhorst who makes $509,664.
Remember Randy Adams, the 59 year old the police chief? If he were to step down his pension would be $411,300.
The seeds of class warfare have been sown folks, and while on the topic..... anyone still own those tax-free muni bonds?
Now given you know all this, I highly recommend the following which is an article, forwarded to me by a friend (thx B.H) out of the American Spectator entitled America's Ruling Class -- And the Perils of Revolution by Angelo M. Codevilla who is professor emeritus of international relations at Boston University.
It is must reading. Take some time over the weekend, I assure you, no make that strenuously assure you will not be disappointed.
In more news from the WWF eeer, excuse me I meant to say congress, it appears Rep. Rangle has been accused of using his former position as the Chairman of the House Ways and Means Committee to benefit his financial interests.
What does one say to this other than to ask what the over/under is on him doing time? Cause I'm surely taking the under, it's Washington which Wall St. is only second to in self-policing.
Transocean and British Petroleum
I hope you all took the time to listen to Matt Simmons comments the other day in his interview with Eric King which I had posted. Given that BP is down so hard and psychologically it is hard to pull the trigger shorting something so beaten up, I have been contemplating watered down version, that being long RIG short BP as a spread trade. Still thinking about that one.
Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".
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