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GM's Woes May Burst Housing Bubble

Posted by: Michael Dudley
Thanks to: Michael Dudley
25 March 2005 - 5:33pm

GM has been trying to finance autos, homes and second mortgages at record-low interest rates, but it's hard to see how the company can continue to do so.

"The use-your-house-as-an-ATM-to-live-beyond-your-means stimulus is finished, thanks to the recent de-leveraging/crackup in the bond market. The refi[nance] game and the bull market in housing it created postponed the consequences of the largest stock-market bubble in history. Though the Fed and the rest of the government succeeded in postponing the fallout from the massive misallocation of capital that took place in the mania, they have also succeeded in compounding and exacerbating those consequences."

Full Story: GM's woes one more blow to housing bubble
Source: MSN, March 25, 2005
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