FLASH: GM runs out of gas, blames housing crash

I guess the fact that GM makes overpriced gas guzzling crappy cars nobody wants is just a side note.

Seriously, for a company this screwed and mismanaged (a car company that owns subprime loans!), I don't know how they can avoid bankruptcy. And the fact that (as HP predicted) the housing crash helped kill the US automotive industry is mind boggling.

For GM, all that cash-out refi loot is gone, never to return. I'd guess HELOC money bought half the new cars purchased these past few years (anyone know the #?). And how many trucks were purchased by people in the homebuilding profession? Those days are over...

Had enough? Here's more... The yen is undervalued. Toyota is kicking their behind. Their pension situation is a time bomb. Their cars are crap. Their workers make a hundred times someone in China would require. They still own 49% of subprime cancer GMAC. And now desperate homedebtors are flooding the used car market with inventory in an attempt to raise cash.

And yes, I'm short GM via put options at time of writing...

Mortgage 'meltdown' hits auto sales: GM's Lutz - Vice chairman sees entire sector hit by problems in home financing market, truck sales to suffer.

LOUISVILLE, Ky. (Reuters) -- The crisis in the U.S. mortgage market has hurt U.S. auto sales this month, General Motors Corp. Vice Chairman Bob Lutz said Monday.

"The market as a whole has been a little weakish. That has come as a result of the housing market problems and the mortgage industry meltdown," Lutz told Reuters. "A lot of people are finding themselves in a position of reduced affordability and that has had an impact, not just on us, but across the industry."

Got Yen?

You can move some of your dollar holdings easily into the waaaaaaaaaaaaaaaaaaaaay underpriced yen via the yen etf FXY. Buy low sell high. The Fed will be lowering rates soon, the BoJ will be raising rates, and we all know how the yen carry trade bubble will end - just like all bubbles. The only question is when.

Why Americans put all their savings into dollars I'll never understand. Well, when you pay $15 for a glass of so-so wine at a pub (as I did last night), then it really comes to life. The dollar will continue to shrink and shrink and shrink. We're insolvent folks. And all that funny money Bush and Congress keep spending? The only way we'll ever pay it back is through the printing press.

Neil Mellor, currency strategist at Bank of New York, warned that with a large amount of uncertainty still surrounding the health of the US economy and with continued geopolitical tensions, there was a good chance that carry trades could face further pressure.

"The fact is the trigger is cocked," he said. "Given the recent rise in volatility, the risks investors are taking to get yield smack of the end of a bubble.There is little rationale that this bubble will not meet its end."