All Blog Posts Tagged 'credit-crisis' (19)

Lenders Warn of Mid-Decade Auto Finance Credit Debacle

DALLAS — “Those who cannot remember the past are condemned to repeat it.”

Auto financiers will likely be reliving the past by about mid-decade as the lessons of the credit crisis fall away, said a panel of risk managers at the Auto Finance Risk Summit last month. Now that competition is creeping back into the marketplace, finance company executives are starting to think about how they will manage to withstand aggressive lending tactics.

“That’s the hallway conversation,”… Continue

Added by Marcie Belles on June 14, 2010 at 12:45pm — No Comments

Chrysler Financial to Cut 350 Jobs

From the Wall Street Journal:

Chrysler Financial, once the financial arm of the new Chrysler Group LLC, will dismiss roughly 350 employees, or 9% of its work force.

More than 100 of the layoffs are effective Tuesday and will come primarily out of the company's sales teams. Another 240 will come at the end of August, when a customer call center in Kansas City, Mo., will be closed, the… Continue

Added by JJ Hornblass on June 30, 2009 at 9:54pm — 5 Comments

Liquidity Programs Start Looking Good to Investors

Like a steak that had been too rare and is now looking scrumptious, the new Public-Private Investment Program (PPIP) from the Treasury Department is starting to look awfully enticing to fixed-income investors. Which is exactly how the federal government likes it.

The PPIP has two parts: a legacy loan program and the legacy securities program. The legacy loan program is being administered through the FDIC (see… Continue

Added by JJ Hornblass on March 23, 2009 at 1:24pm — 1 Comment

A Cure for Systemic Risk

By JJ Hornblass and Boaz Salik

Of all the massive corporate failures that precipitated our current financial crisis, AIG’s has stood out because it endangers the overall economy with such a large quantity of distressed assets. Its risks are so acute that the federal government has felt obligated to bail it out not once, twice or three times, but four. The $173 billion already pumped into AIG will likely not be the last of the government’s rescue funds.

The gravity… Continue

Added by JJ Hornblass on March 17, 2009 at 9:37am — 3 Comments

Cities Bailing Out Local Dealers

A pair of California cities are bailing out car dealerships in their municipalities, according to the Wall Street Journal.

A car dealership in Victorville, Calif., requested $1 million from the local government, and was awarded a $200,000 line of credit. The line of credit will hopefully keep people employed and tax revenues flowing in from the dealership.

Two dealerships have received funding from the… Continue

Added by Mike Gibb on January 27, 2009 at 11:55am — No Comments

Embattled Merkin Resigns As GMAC Chairman

Among an announcement that it is creating a new board of directors, GMAC Financial Services also announced that current chairman J. Ezra Merkin has resigned, effective as of today.

Merkin has been replaced by Lenard Tessler, a managing director and co-head of private equity at Cerberus Capital Management, GMAC's majority owner. Merkin had been chairman for two years.

Merkin has been closely tied to Bernard Madoff, the investment adviser charged with orchestrating a $50… Continue

Added by Mike Gibb on January 9, 2009 at 4:30pm — No Comments

New Iteration of Bailout Reportedly on Its Way

In what could be a major development for the future of the financial services sector, the incoming Obama administration is expected to overhaul the government's financial bailout and Troubled Asset Relief Program.

A Page One report in the Washington Post today says Timothy F. Geithner has been holed up for eight weeks working on a new strategy for TARP. The new plan could… Continue

Added by JJ Hornblass on January 9, 2009 at 9:30am — No Comments

GM Wants To Get TARPed

Two of the most stalwart corporate names in America are considering joining forces, principally so they can participate in the federal government's $700 billion bailout, according to an article in today's Wall Street Journal.

The proposed marriage of General Motors Corp. and Chrysler LLC is based on finances and not much else, according to the Journal. Worried that it might run out of cash within a year, GM has its eyes on Chrysler's $11 billion cash reserves. Cerberus… Continue

Added by Mike Gibb on October 29, 2008 at 8:20am — 1 Comment

Rating Agency: Chrysler Loan Performance Faring Worst Among Big Three

The loan performance on three Chrysler asset-backed securitization deals issued since the beginning of 2007 is worse than expected, according to a report released yesterday afternoon by Standard & Poor's.

Deals issued by Ford Credit and GMAC are within their performance expectations, according to the rating agency.

Funding and liquidity issues are expected to remain a problem for the captives into 2009. Without getting into… Continue

Added by Mike Gibb on October 16, 2008 at 9:30am — 2 Comments

GMAC Tightens Origination Criteria

In yet another sign that the credit crisis is strangling the auto finance sector, GMAC yesterday announced that it would only lend to borrowers with a credit score of at least 700. Full coverage of the news is available here.

GMAC is 51% owned by Cerberus Capital Management. Cerberus also owns 80% of Chrysler, including its captive financing operation. Chrysler earlier this year stopped… Continue

Added by Mike Gibb on October 14, 2008 at 8:41am — 1 Comment

Can Rate Cuts Cure Auto Finance Woes?

The Auto Finance Summit is still going on in Las Vegas, and already the core message of this year's gathering is clear: auto finance needs capital markets relief.

I certainly hope today's actions by central banks around the world do the trick (although I am not encouraged).

Today, the Federal Reserve, European Central Bank, Bank of England, Bank of Canada, Bank of Sweden, and the Swiss National Bank each cut their benchmark rates by 50 basis points. The Bank of Japan,… Continue

Added by JJ Hornblass on October 8, 2008 at 9:30am — No Comments

Prognosis Poor for the Auto Finance Market

This evening I'll be kicking off the eighth annual Auto Finance Summit with a presentation on the prospects for the automotive lending and leasing market. My central message: the prospects are not good.

Among the points that I will be making are:

-Both the overall auto market, as well as auto loan and lease asset quality, will be poor for the foreseable future;

-That inadequate access to capital will continue to plague this industry;

-That there still… Continue

Added by JJ Hornblass on October 6, 2008 at 1:30pm — No Comments

Will 2009 Be The New 2008?

Tucked neatly into a Wall Street Journal article about the approval of $25 billion in low-interest loans for auto manufacturers to help them re-tool their operations to produce more fuel-efficient vehicles was this little nugget:

"Detroit's Big Three, once bullish on a turnaround in the auto sector in 2009, now expect to be another challenging year for auto sales in the U.S."

Today's… Continue

Added by Mike Gibb on October 1, 2008 at 8:39am — No Comments

Auto Loan Delinquency Rates Hit All-Time High

Yesterday, the proposed $700 billion federal bailout of the banking industry went down in (possibly temporary) flames. Tomorrow, car manufacturers are expected to report abysmal September sales.

The meat in this bad-news sandwich comes courtesy of Fitch Ratings, which noted today that losses on auto-loan securitizations are at an all-time high. Annualized net losses were 22% higher in August than July, and more than double the levels from a year ago. More details… Continue

Added by Mike Gibb on September 30, 2008 at 2:51pm — No Comments

Bailout Revival Lifts Stocks

Investors remained optimistic this morning that a new bailout package will be presented -- and passed -- by as early as Thursday. After mixed results from Asian and European markets overnight, the Dow Jones opened 200 points higher, and has remained at that level throughout the morning.

While details on Plan B (for Bailout) are still sketchy, the markets are expecting some good news in the near future.

Added by Mike Gibb on September 30, 2008 at 11:00am — No Comments

DOW DROPS OVER 700 POINTS AFTER CONGRESS FAILS TO PASS BAILOUT BILL

President Bush's plea this morning to urge Congress to pass the $700 billion bailout was not enough to win over the approval from the House of Representatives this afternoon. The House rejected the bailout plan by a vote of 228 to 205.

The failure of the bill sent the Dow Jones Industrials Average plunging. By day's end, the Dow lost more than 700 points, or more than 6.6%. Today was the largest drop of the Dow in history.

Many Republicans in the House voted down the plan… Continue

Added by JJ Hornblass on September 29, 2008 at 4:00pm — 2 Comments

Report: GMAC Needs Bailout to Survive

If GMAC is banking on being included in the $700 billion bailout in order to survive, as this article suggests, then word tonight of a Congressional impasse can not be seen as a positive development.

Added by Mike Gibb on September 25, 2008 at 10:38pm — No Comments

Big Three Lobbyist Pushing for Auto Finance Inclusion in Rescue Plan

Big Three lobbyists are pushing for the inclusion of auto loan-backed securities in the Treasury Department's rescue plan, The Wall Street Journal is reporting this morning.

According to the Journal, "So far, Congress hasn't agreed to include auto-industry finance companies in the bill specifically. Companies are 'working to make it happen,' said the auto-industry lobbyist. 'The finance companies want… Continue

Added by JJ Hornblass on September 23, 2008 at 9:31am — 5 Comments

CREDIT CRISIS: Morning Headline Scan for 09.19.08

The financial crisis is evolving so quickly that we thought it best to simply share some crisis-related wire headlines with you. Viewing them in aggregate gives a good sense of what is happening in the moment. These headlines are as of 8:58 a.m. ET:

[WB] Wachovia shares rise 41% in pre-open trade 8:48 AM ET

[WM] Washington Mutual shares rise 45% in pre-open trade 8:47 AM ET

[MS] Morgan Stanley shares rise 50% in pre-open trade 8:46 AM ET

[GS] Shares of Goldman Sachs… Continue

Added by JJ Hornblass on September 19, 2008 at 9:16am — No Comments