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alstry (36.32)

The Unwinding Continues

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February 19, 2008 – Comments (3)

More Shutdowns:

Feb. 19 (Bloomberg) -- GMAC LLC, the lender partially owned by General Motors Corp., plans to close about 75 percent of its auto-financing offices in the U.S. and Canada after losing $2.3 billion last year.

GMAC will reduce the number of offices serving U.S. auto dealers to four and eliminate three of four outlets in Canada, said Barbara Stokel, executive vice president of North American operations, in a letter scheduled to be sent to dealers tomorrow. GMAC had 16 regional auto-lending offices in the U.S., according to a May 17 statement.

``Given the recent macro-economic conditions during the past year and anticipated well into 2008, we need to make structural cost reductions to restore our competitive position,'' said Stokel in the letter. GMAC spokeswoman Gina Proia declined to comment.

All of these structural cost reductions lead to more job cuts and office vacancies.  More job cuts lead to more home forclosures and lower taxes for states leading to more headlines like the following:

Study: Vacant and Abandoned Properties Cost Ohio $64 Million

Abandoned homes and vacant lots are much more than an eyesore in major urban areas of Ohio — a new study released Tuesday finds that they’re costing city governments at least $64 million per year.

The total is likely much more than that figure, according to a study by the Community Research Partners of Columbus, which said Tuesday that the cost may actually be 10 times greater once the costs to all cities and towns in Ohio are fully accounted for — and if cities uniformly inventoried all of the vacant and abandoned property within their jurisdictions.

Where will this stop?

3 Comments – Post Your Own

#1) On February 19, 2008 at 7:24 PM, thisthatother47 (88.78) wrote:

Where will it stop?  Maybe when all the cities go bankrupt...

The city of Vallejo is on the brink of becoming the first California city ever to declare bankruptcy, City Council members said Tuesday.

Vallejo may run out of cash as early as March, council member Stephanie Gomes said.

"Not only that, but now we have 20 police and fire employees retiring because they are afraid of not getting their payouts," Gomes said. "That means we have another few million dollars in payouts that we had not expected. So the situation is quite dire."

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#2) On February 19, 2008 at 8:01 PM, alstry (36.32) wrote:

ThisThat,

could  you please cite the source of your story.  Thanks.

 I think we may be in for a very rude awakening very very soon.  The bulls don't appreciate the impact housing had on the ecomomy over the past seven years.  It was the key driver for financial institutions profits manufacturing, distributing, and repackaging toxic debt.  It was the key driver for big box retailer expansion and in turn trillions of commercial RE expansion.  It was the key driver for millions and millions of new jobs.

All of the above is going away but we are left with a HUGE mound of toxic debt at the personal, corporate, and government levels.  Its a toxic mess that is gong to have toxic results.

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#3) On February 19, 2008 at 9:55 PM, thisthatother47 (88.78) wrote:

Actually I made that story up.  Just kidding, you can't make this shit up...

 http://tinyurl.com/34s2qs

Darn right it's going to be toxic.

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