ExpanDrive

A great picture set over at The Business Insider compiled by Barry Ritholtz showing the buildup of car inventories in various receiving ports all over the world. One great thing about selling software online: no inventory. Phew.

Here is a great shot of Nissan’s test track, which is currently not doing much performance testing.

Wow.

Planet Money has a great podcast (direct mp3) exploring why bankruptcy for GM isn’t as obvious a solution as it was for the airline industry. They speak with Steve Jakubowski, a bankruptcy attorney. Steve does a fantastic job at laying out why GM wouldn’t be able to recovery from a chapter 11 filing. Who wants to buy $30,000 car whose warranty is backed by failed company – more likely to liquidate than recover? If sales dry up further, emerging from bankruptcy would prove impossible.

via Will Wilkinson

the WSJ has an incredible piece (Titled Just Say No to Detroit) on the amount of money GM and Ford have lost in the past 25 years. Nearly half a trillion dollars has evaporated.

Over the past decade, the capital destruction by GM has been breathtaking, on a greater scale than documented by Mr. Jensen for the 1980s. GM has invested $310 billion in its business between 1998 and 2007. The total depreciation of GM’s physical plant during this period was $128 billion, meaning that a net $182 billion of society’s capital has been pumped into GM over the past decade — a waste of about $1.5 billion per month of national savings. The story at Ford has not been as adverse but is still disheartening, as Ford has invested $155 billion and consumed $8 billion net of depreciation since 1998.

As a society, we have very little to show for this $465 billion. At the end of 1998, GM’s market capitalization was $46 billion and Ford’s was $71 billion. Today both firms have negligible value, with share prices in the low single digits. Both are facing imminent bankruptcy and delisting from the major stock exchanges. Along with management, the companies’ unions and even their regulators in Washington may have their own culpability, a topic that merits its own separate discussion. Yet one can only imagine how the $465 billion could have been used better — for instance, GM and Ford could have closed their own facilities and acquired all of the shares of Honda, Toyota, Nissan and Volkswagen.

I’m not sure how I feel about the proposed $25 billion in emergency loans – but the numbers put together by David Yermack, a professor of finance at New York University’s Stern School of Business – are nothing short of astounding.

via Calculated Risk

The Onion [hilariously] hosts a panel to discuss if the Government should stop dumping money into the National Money Hole.

“No reasonable person is advocating we stop destroying money – but the American people earned that money, they have the right to decide how it should be destroyed… let the free market decide the most efficient way of destroying money”

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?