From Chapter Sixteen:
How We Stopped Selling Seven Million Cars a Year
. . . and What It Cost You
“Failure is the opportunity to begin again, more intelligently.”
—Henry Ford
Founder of Ford Motor Co.
Founder of Ford Motor Co.
& Innovator of Assembly-Line Manufacturing (1863–1947)
"...Since mortgage foreclosure inventory has become the topic du jour—as the dastardly culprit behind the collapse of our financial system—nobody has taken the cue to look at how banks finance automobiles.
"Look at the trouble they’re in with appreciating assets like homes and commercial real estate. How much worse, then, is the mess they can make with depreciating assets such as cars? The FDIC (Federal Deposit Insurance Corporation) and SEC (Securities and Exchange Commission) both regulate the valuation of assets on a bank’s balance sheet: the FDIC in the areas of insuring depositors against bank failure and the SEC in the areas of banks’ ability to buy and sell securities.
"The mechanism the SEC uses to control the banks is a regulation known as the mark-to-market rule of accounting..."
