As leveraged assets go down in value, the leverage multiples go up. Adding to that multiple is the falling dollar and the fact that these assets are in reality debt deposits, not cash deposits, that were passed on in different forms to be leveraged over and over.
Few things are as American as the Hummer. Since General Motors (GM) introduced the division in 1995, 84.5% of total sales have taken place in the United States. Apparently, everything is bigger in America.
But not for long.
With gasoline prices soaring, and more Americans looking for fuel efficient cars like the Toyota (TM) Prius and Honda (HMC) Civic Hybrid, sales of the Hummer are plummeting. In May, sales were down 62% since last year. Earlier this month, General Motors CEO Rick Wagoner announced that GM may decide to sell off the division.
Does this mark an end to a chapter in American history? Or does it mark the beginning of something new? Hoofy and Boo find out.
Minyanville staff and contributors may trade or hold securities that are discussed in an article. Staff and contributors will indicate whether they have a position in any security discussed, but will not indicate size or direction. The information on this site is not intended as individualized investment advice and all investment decisions by a reader must in all cases be made by the reader either individually or together with his/her investment professional. The views expressed in articles appearing on this site are solely those of the staff and contributors and should not be attributed to any other person or entity except where expressly stated. Minyanville staff and contributors will not respond to requests for investment advice.
Copyright 2008 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.
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