DETROIT (Reuters) -
REI NOOBSTER,
You cannot ‘cut and past’ a copyright article in its entirety without the express written consent of the author/publisher.
It is acceptable to post a link to the article.
Keith
Moderator
Sorry, I see it done on other websites and had no idea that it is unacceptable.
REINoobster,
Well… how about the link?
It is a copyright infringement…the other sites don’t have Moderators!
Keith
Actually they have Mods on power trips. Thanks for the info though.
PM-link coming right up.
http://news.yahoo.com/s/nm/20070319/ts_nm/usa_subprime_detroit_dc
I know the economy is bad in Detroit but from what the artlicle says the sub prime mortgages and lax lending policies played a large part in what is going on there.
Damn, I wish I had about $50 million to buy and hold some properties for about 5 yrs. If I can get a $525k house for $130k I can definitely hold for a few years, resell and still be ahead of the game.
In my opinion Michigan will come roaring back! Hear me out.
The U. S. auto industry is on it’s ass right now. Entirely through their own doing. BUT… Look at what GM has in the pipeline. I’m talking about cars that aren’t even out yet. Camaro, A real GTO, Lot’s of sweet stuff being brought over from GM Europe, The New Full size pickup is a winner,. Across the street at Ford things aren’t as far along but they will get there.
The biggest reason, in my opinion, is the Dems upcoming take over of the White House. You WILL see some help for the U.S. auto makers coming out of congress. Remember The goverment guarenteed Chryslers loans in the 80’s, George W. could care less about the U.S. auto industry.
The ONLY advantage American car companies have over the Japanese is STYLING. They forgot that recently but I think you will see them come back strong in this area. Toyota’s are great cars. ( i OWN 'EM)But, no body takes the long way home from work to drive their Toyota. It’s a toaster, an appliance, you expect it to work, that’s it. When the U.S. car companies remember how to stir your soul watch out!
Buy real estate in Michigan, but be patient.
…only if the auto industry can release the grip of what put it down – the Unions. The unions now are about as useful as feudalism…all they do is protect the mediocre…
Keith
wow! Talk about a pipe dream!
Think it can’t happen???
1992 Chrysler stock…$9.00/ share
2000 Chrysler stock…$85.00/share
1992 GM stock…$30.00/share
2000 GM stock…$90.00/share
1992 Ford stock…$ 7.00/ share
1997 Ford stock…$40.00/share
1988 Harley Davidson…$2.00/share
2002 Harley Davidson…$55.00 with 5 splits in between
Now what happened in the late 80’s early 90’s???
Oh yea, I remember “RECESSION” Sort of like what we’re headed into now.
Yea, your right. Someone lock the door on your way out of Detroit.
Pipe Dream? Yea, in 2012 on the Big Island while you’re still working.
Buy now or cry later.
That article is nothing but good news for us here, IMO.
500k for 130k is a very very rare thing, however, there are PLENTY of DAMN good deals to be had here in Michigan, and especially in Oakland County or in Detroit, if you’re not scared of the D-word.
If you want to rehab and rent… there are tons of deals. In the last 2 days, in my still day-job @ the title company. I’ve seen 2 properties in Detroit that were purchased in the last 6 months for $5k, and $15k. Those homes are now being sold for $75k and 85k respectively. Banks are selling REOs for dirt cheap, especially in the less desirable areas.
This is called FIRE SALE pricing. When you see that you HAVE to buy. I’ve been doing this for over 20 years and the biggest mistake I’ve ever made was NOT buying at times like this guy is talking about.
These opportunites are very rare. It’s almost like a perfect storm in Michigan right now. FORTUNES will literally be made in the next few years. You will need some big ones to wade in there but this is as ridiculus as 600 people CAMPING outside a Florida condo sales office to buy pre-construction condo’s. OVER REACTION!!! It’s the return to mean that all investing is based on. This one is just rolling down the hill to fast!
Go get 'em boys!!!
What that article didn’t say is that the winning bidders may not have gotten the houses. I went to one of these Hudson and Marshall auctions last week. The house I wanted went for $27,500. I found out yesterday that the bank rejected that bid and didn’t sell the house to that winning bidder. (I had offered $21K).
Mike
Hi all,
I wish I could be as optimistic about Deeee-troit as Petemfa is. Sure, the Dems may prop up the Big 3 but that’s a temporary fix that’ll be useless unless and until Deeee-troit can consistently compete w/ foreign manufacturers in terms of both quality and styling.
My pessimism is based on somewhat personal experience…In my former life as a commercial banker in Columbus, OH, I had quite a few customers who were tied to the auto industry and believe you me, they were feeling wicked pain. Plants shut, they got hurt; Big 3 production lines halted or cut, they got hurt. Ironically (or maybe not?) I later felt their pain as my bank laid off boatloads of folks, including me in 2006…whereupon I got my happy a** back home to Texas where it really belonged.
My pessimism is further based on the fact that in 2006, MI was the only state to show a net exodus of people; even OH gained a net 5,000 or so. If people keep leaving, who’s going to buy or rent all these houses that were bought at fire-sale prices? No friends, I believe that the so-called Rust Belt is gonna get even rustier…look at regions where populations are increasing. Lastly, I clearly remember my outside counsel (whose offices are located, coincidentally enough, in the Renaissance Towers complex - the site of GM’s HQ!) saying that he and his wife told their kids - all of 3 of whom were in either law or med school in other states - to not plan on coming back to MI. Now then, if such a view from a well-known corporate bankruptcy attorney isn’t worth a listen, I don’t know what is…
This is off-topic, but I agree with Keith as to what has played a large part in bringing the US auto makers down - the grip of the unions and specifically, the exorbitant healthcare costs paid on behalf of the retirees by the companies. Getting out from under those onerous costs is largely why GM and Ford are offering lump-sum buyouts that’ll total billions in short-term pain, as part of their long-term restructuring plans. Many of my own customers had union shops and they (management) got the figurative crap kicked out of 'em regularly, something that seemed a lot like the union holding a gun to its head and threatening to shoot. Odd, but a lot of work found itself offshore after one too many union tantrums…
Thanks,
David
DCS_TX,
I agree with everything your saying. The big three better get it together or their done. I think the Unions are FINALLY seeing the cost disadvantage they have put on these auto makers. Look at Goodyear just recently. They signed a landmark contract with the UAW. What they did was give the Union $ 1 billion to fund THEIR health care. Thats it, Goodyear is done. It’s the UAW’s job to manage that money and pay those costs. Goodyear no longer has anything to do with these payments, and will not be giving any more .In my opinion that is what the big 3 will do this September.
Remember one thing, this is not new, these same situations occur in every industry. When Apple computer was dead and buried in the 90’s think about what people were saying, “No way they can compete with microsoft” How times have changed?
IBM was all done too, remember the stories in the papers about how great IBM once was and how the world was different now. Yea, OK should have bought that stock RIGHT THEN $25/ share Now it’s $100.
Don’t doubt the power in congress. It can be very helpful to business. When vioxx was pulled off shelves Merck stock went from $60/share to $20. Then an interesting thing happened that I bet not many people here know about. CONGRESS passed a law that allowed international companies (like Merck and Pfizer) to bring their overseas profits back into this country and not pay the usual 30% tax, for one year only that tax was dropped to 5%. Guess what big pharma is paying those law suits with?
Look at the big picture here. The American car business IS NOT going away. Yep, their gonna hurt for a while here and they should, they dug this hole. But mark my words 5-10 years from now those stocks will be back BIG TIME. As will Michigan Real estate.
Ethanol is 24 cents a gallon in Brazil. The big 3’s cars and trucks will run on e85 which is 85% ethanol. Did you know the U.S. places a $1.00/ gallon tariff on ethanol shipped in from Brazil. But that Ford built in Mexico can come over for free. NAFTA!!! If the dems (and I’m not a democrat) change policy, You could see Americans running for their beloved SUV’s again. It’s a long shot but who the hell ever thought big pharma would get taxed at 5%?
Petemfa,
I genuinely hope you’re right about the Big 3 coming back and the examples you cite show that a company can indeed be saved - if it’s still got a pulse. I think one of those necessary factors is that all reinvented themselves - adjusted to new realities. On the other hand, the once-mighty US steel industry is a shell of what it once was - after the shakeout we have just a few small mills; here again, labor ran the companies into the ground despite the clear and growing threat of cheap, imported steel. I was a very small part of a large deal team that dealt w/ United Airlines’ (UAL) post-petition financing needs and I remember thinking how insane it seemed that one small, upstart union (a breakaway from the IAM) essentially forced the Ch. 11 filing - disregarding that the other unions had made wage and benefit concessions in light of the 9/11 travel slump coupled w/ increasing fuel costs. THAT sort of mentality and not reinventing themselves is what can keep the Big 3 from recovering.
Alan Mullaly over at Ford played a big role in Boeing staging its comeback through his management of the 777 program - maybe he can do something similar in the auto world. If labor and management can see/agree that their fates are dependent on one another, if both can consider strategic alliances…then the Big 3 can “come back.” (See American Airlines as a great example of such a partnership.) And I’ll tell ya what: if we - Americans - set our minds to something, there’s no one who can outproduce, outwork or outfight Americans. Yessir, I still believe that!!
Now back on topic to REI in MI…My thinking is that Deeee-troit and the rest of MI is going to have to do the same thing mentioned above - reinvent itself so that it’s not such a “company town” so dependent on one industry. I was in Dallas when the 80’s S&L and banking crisis hit…Dallas was essentially a banking “company town” and it paid the price. It has since diversified its economic base and is now better insulated against the same kind of economic shock that really beat it down earlier. (Same thing w/ Houston and the O&G industry.) That’s what Deeee-troit has to do if people are to have employment, stick around and, buy/rent real estate. Right now, they’re “voting” w/ their feet, blowing town and heading…South.
David
good deals but… its Detroit. who would want to live there???
DCS-TX
EXCELLENT insite into a very complex problem. I agree 100%.