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VW scandal and impact on German economy
Started:September 25th, 2015 (04:47 PM) by rleplae Views / Replies:10,915 / 266
Last Reply:20 Hours Ago (12:51 PM) Attachments:25

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VW scandal and impact on German economy

Old   #221 (permalink)
Market Wizard
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GFIs1 View Post
New scandal in Japan:
Mitsubishi admits to have manipulated numbers of 625000 cars made for Japan.
The critical point is that many manipulated cars were made for Nissan.

The Mitsubishi stock fell more than 15% within hours and closed @ 733

Article (Bloomberg):
Mitsubishi Motors Admits Manipulating Fuel Economy Test Data - Bloomberg

GFIs1

This cheating story - and the thread also - never ends

Is it too stereotypical of me to be disturbed by these news because I've always considered people like the Japanese and the Germans among the most trustworthy and reliable to do business with?

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Old   #222 (permalink)
Market Wizard
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Very true @xplorer

What if
"the Japanese and the Germans (were) among the most trustworthy and reliable to" reveal their cheating methods?

And
the rest of the world's car makers is cheating even more?

How comes that ALL those american gasoline thirsty heavy SUV cars pass any hefty US tests without problem?
Think about it!

GFIs1

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Old   #223 (permalink)
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Haha - nice way of putting it @GFIs1

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Old   #224 (permalink)
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Likely a settlement :

http://finance.yahoo.com/news/vw-resists-move-trial-instead-epa-settlement-101425133--finance.html

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Old   #225 (permalink)
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Futures Edge on FIO

Which products do you trade?

 
more ...

VW Said to Pay At Least $10 Billion in U.S. Cheating Deal - Bloomberg

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Old   #226 (permalink)
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@rleplae

What these articles did not reveal in numbers:
VW will pay every US owner of affected model a one time sum of $5000.
With the $500 they paid already as first "sign" (sigh!) they pay a sum of $5500
and will repair the car for free.

This is ONLY for USA!
The big number of cars are indeed to find in other countries - most of them
in central Europe. This means many more costs as they have to battle in
every country separately. Things are even worse as the normal procedure
of reparation has not really begun.

The BIG question:

If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

GFIs1

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Old   #227 (permalink)
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GFIs1 View Post

The BIG question:

If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

GFIs1

Part of the rise is uncertainty that goes away as a settlement is coming..
but like you say, after that the market will realize how much more
unknown is out there and it will retank...

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Old   #228 (permalink)
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GFIs1 View Post
The BIG question:[/B]
If the total volume of damage exceeds already the liquid assets of VW -
WHY is the stock price rising today so harshly?

GFIs1

Simple answer: Liquid assets are meaningless compared with creditworthiness,
i.e. the ability to generate liquidity. Otherwise most countries would have ceased
to exist long ago.

Plus: Compared with the market cap loss after the scandal, €2.5-3bn are chicken feed.
In other words: The sum is a positive surprise compared with what was priced in.

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Old   #229 (permalink)
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Just to do the math by rule of thumb:

On 2015/9/18 the US EPA published the case.

The week of 2015/9/18 closed at €162.5, market cap around €87bn.
The panic low was at €86.36, market cap ~€45bn - i.e. calculatory costs of ~€42bn priced in (ceteris paribus).
At the moment, market cap is back at ~€67bn, which implies calculatory costs of ~€20bn overall (c.p.).

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Old   #230 (permalink)
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I made the rule of thumb too:


choke35 View Post
Compared with the market cap loss after the scandal, €2.5-3bn are chicken feed.
In other words: The sum is a positive surprise compared with what was priced in.

This might become the main achilles problem:

The liquid assets that WERE in October 2015...
Some of that is burned with all the cases in work.
And some more with markets sells going down since inception of the news.
Plus - very important: the recall has not started or not finished in all affected countries.

If one calculates the costs that will occur first in EU + Switzerland and above the ones in Asia the final sum
will much higher for all the jurisdiction with fines...

That is all not priced in yet - instead the main circle of the board of directors in doing money flow into own..
you know.

If those final debts after this are summed up then some of the assets of VW group need to be sold on
best based offers.
Imagine what the first SELL of one of the companies will have impact on the stock market price

By THEN we know where the rest of the group will head to.

GFIs1

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