sometimes it pays to listen to these guys

Wall Street Journal buried this deep within their pages: Banks Delay Sale Of Chrysler Debt As Market Stalls

In plain English it means that banks have decided not to fund the Chrysler deal. The deal will still go through, mind you, but the risk will be absorbed solely by those underwriting the deal, and the 12 billion will not be spread to investors as has been done in the past. “The market has dried up.”

This does not bode well for Newark. Why? Because the cost of money, or the interest rate for the twelve billion, has just risen.  That means that all costs, supplies, labor, and facilities, must be tightened even tighter in order that corporate is able to pay for the increased financing.

Plain talk: their mortgage, which was already 200 million a year, just hit the ARM plan and may go as high or higher than 300 million!!

That money was sorely needed to invest in environmentally friendly and marketable vehicles. They do not have that option and will have no recourse but to buckle down, hold on, and hope to survive a financial ride as scary as the Ka.

One can only hope that Kia or Hyundai is interested in opening shop in Delaware…..It will be a new experience for the local UAW to be sure, but Toyota seems to treat Americans more fairly than does our own……..At least foreign autos are sensitive to America’s needs and do not foot drag when it comes to creating cars that American’s WANT to buy…….

Anyone who clicked on the above links saw a difference in profitability among all those manufactures. Delaware needs to send someone to South Korea today. Secure jobs are often found within secure companies.

So what does this mean to everyone else? A lot. Here is how it breaks down.

Cheap money is no longer available. It is what has been driving up the stock market. Next time someone tells you it was republican tax policy, bitch slap them. (smile) If borrowed money is cheap then one can afford to spend more in the acquisition of a corporation, because on the bottom line, the cost is the same. Similar to the housing boom which has now ended, the monthly mortgage is the same on a house costing 250,000 at a 3% rate as an 80,000 house at 9%. Just as house prices soared, so did the price of corporations, pushing the market upward……….

Well, ladies and gentlemen. That push has stopped, as of yesterday…….The Fed may react someway and save us from a crash similar to the last time money was not available…..1929.

The political implications are obvious. This could not have happened under a competent Al Gore administration. But I will leave that for someone else to expound. Right now my broker is shut down, off-line, and not answering calls………

I just hope I can shift everything over to “fixed” before everyone else catches on…………………….Sometimes it pays to listen to these guys.....