This is Gonna HURT !!!!! REALLY BAD !!!!!!!
July 25 (Bloomberg) -- Chrysler LLC, hurt by plunging prices for used sport-utility vehicles, said its finance unit will stop offering leases to customers on Aug. 1.
``It profoundly hurts me,'' said Alan Helfman, owner of Helfman River Oaks Chrysler Jeep in Houston. ``I was doing 20 to 30 leases a month.''
Chrysler's announcement also comes as Chrysler Financial has been trying to persuade more than 20 banks to renew a $30 billion credit facility -- backed by car loans, leases and loans to dealers -- that was issued by the auto-finance company last year when it was carved out of the former DaimlerChrysler AG. The debt represents a sizable chunk of Chrysler Financial's $70 billion portfolio in working capital. The higher financing costs could further complicate the attempt by private-equity firm Cerberus Capital Management LP to turn around the auto maker.
Alan Helfman, a dealer in Houston who was informed of the change by Chrysler, said the change will make it more difficult to sell vehicles because a number of rebates and sales incentives kick in when customers lease through Chrysler Financial. "It will hurt," he said.
$30 BILLION BEING REFINANCED IN EARLY AUGUST????????
Can you imagine being a Chrysler dealer? Leasing is a huge part of any dealer's business. It will be interesting to see if floor planning financing is also affected by this......
Tightening credit and declining asset values is destroying wealth. Everyday America gets poorer and poorer and credit is getting tougher and tougher to obtain.
Now rumors are circulating that deposits are flying out the door at WaMu? Bloggers are recommending that all deposits over $100K should be transferred. What do you think that will do to WaMu's capital base?
Actually, should anyone maintain over $100K in deposits in any one FDIC institution?
If you don't things are deteriorating rapidly yet.......just wait until you read how quickly high yield bonds are becoming distressed!!!!!!!!!!!!!!!!!!!
NEW YORK, July 25 (Reuters) - U.S. junk bonds trading in distressed territory rose in July to their highest level since March 2003 as troubles in the auto sector took a toll on bond values, Standard & Poor's said on Friday.
About 23.5 percent of U.S. junk bonds were distressed in July, up from 13.7 percent in June, S&P said in a statement.
Bonds are considered distressed when their yields, which move in the opposite direction of prices, are at least 1,000 basis points higher than those on safe Treasuries of comparable maturity.
The low prices on distressed bonds often make them the target of so-called vulture investors, who specialize in debt of bankrupt or financially stressed companies.
About $159.2 billion of bonds were distressed in July, up from $70 billion in June, the rating agency said.
FOR THOSE WHO CAN'T ADD, THAT'S DOUBLE IN JUST ONE MONTH!!!
MY CAPS BUDDIES.....THINGS ARE SPINNING OUT OF CONTROL......JUST WAIT UNTIL NEXT WEEK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!