Quote:

Forget not that the car companies troubles - all of them, foreign and domestic - are primarily due to a business model that depends on customers that use credit to buy the products.

When 40% of the customers go away nearly overnight (that's what happened in less than a 6 month time frame with the elimination of the credit markets for those 40% of customers), then NO business can really sustain itself.

I don't care who runs those car companies - they won't figure out a way around that fact. The CEOs of the banks are the ones who should be answering questions in Washington, not the bosses of the big 3.

Who here can buy any new car on a cash basis without a major upset to your current budget?

That's what I thought - very likely less than 5% of the readers of this forum could do just that.

If the credit market doesn't turn around soon, watch your beloved Japanese car companies come tumbling down as well. They have some cash reserves, but they will not last long.



I think you've nailed it Scott. But the problem isn't going to go away - our human societies have been living on credit too much for too long. Our governments have been running deficits year after year, and many individuals have maxed out their credit cards and are mortgaged to the hilt. The mess we're seeing now (and it's world-wide so let no one smirk) couldn't possibly go on forever and it's caught up with us - this shouldn't have been a surprise. We could call this the free lunch syndrome and it has overtaken rational thinking.

Our (brain dead) PM defended the minister of finance's gigantic miscalculation on the deficit, by saying he would spend more if it was required. How can you possibly spend your way out of debt? Good grief, the man is supposed to be an economist - if an economist thinks we can spend ourselves out of debt, what chance do we have?

Just my deflated two cents worth.

Glenn