Guess who is back on Capitol Hill today?
The big 3 execs, who are seeking loans totalling $25 billion dollars:
>
via John Sherffius
While yesterday's US stock market close was poor, Asia and Europe didn't follow today as debt in Greece, Spain, Portugal, etc... rallied, their CDS narrowed and stocks bounced. The Greek finance minister said January tax revenues came in above expectations and that spending was below target for the month and said "that means the deficit reduction for January is well within what we have promised." The euro is rising in turn. Also helping is the story that Trichet is headed to the European Union leaders summit a day early in order to address Greece's problems even as the Greek finance...
read more »
December 4th, 2008 at 9:17 am
I will be buying some type of F hybrid for my wife shortly off my gains from this year. I however have no interest in the stock up 100% over the last week.
December 4th, 2008 at 9:20 am
Irrespective of whether one believes it is money being put to good use, it certainly jumps out at you how quickly the financial institutions were bailed out with trillions, yet we now see a proxy for the manufacturing sector struggling to receive a fraction of that. Again, whether its money put to good use and they are entitled to it is secondary. The point is, the double standard is astounding. We can see very clearly who is and who is not in the inner circle boys club of the financial oligarchy of the nation.
December 4th, 2008 at 9:23 am
hybrid???? you must be kidding. With oil and gas prices this low and per CERA and all these other so called “oil experts” going to say low, I’m buying the biggest gas sucking, thirstiest exhaust emitting V8 beast I can find. They win.
December 4th, 2008 at 9:24 am
I have seen else were that the were actually now asking for $34 B . These bailouts will only buy them time and they will still eventually have to file bankrupcy .
http://globaleconomicanalysis.blogspot.com/2008/12/stop-auto-bailout-campaign-phase-three.html
December 4th, 2008 at 9:28 am
SNL on Auto Bailout Hearings: http://videocafe.crooksandliars.com/heather/snl-spoofs-big-three-bailout-hearing
rough paraphrase:
“That plan is just a list of dates and amounts you will be requesting in the future”
Exec: “That’s not what you were looking for?”
The jokes on quality don’t ring true, but the fact that they will be back over and over for more money is dead on accurate.
December 4th, 2008 at 9:33 am
Too bad these manufacturers don’t do something important in the economy – like package and rate subprime debt for a fee.
If we can only get rid of the rest of our U.S. manufacturers, we truly could become the Seinfeld Economy, i.e., the economy about nothing.
December 4th, 2008 at 9:38 am
This entire discussion with the auto industry should have been held w/ the Commerce Dept/Treasury with Congressional input, not in front of a congressional committee. Since the Bush admin is so dysfunctional, it ended up as a circus.
Stuart- you’re right on about the mfr sector. We won’t miss it till it’s gone and the same people that said goodbye will lament it’s passing.
December 4th, 2008 at 9:40 am
I would like to see some cross industry numbers.
Auto Industry vs. Media Industry
What is the labor scale and off the check benefit package for entry level, mid level, top level and CEO level between those two just for chat sake ?
Joe Kernan is … say a R&D engineer with 25 years in the business. Agreed? What are the cross current numbers.
Star power is out these days. Almost anybody can be a chatter box.
I saw on Good Mornoing America an ABC brand, owned by Disney was promoting bankruptcy. That does seem to be the general flow throughout America.
Bottom line is Wall Street spent the investment savings of those promised retirement benefits. The accounts need to reflect that.
December 4th, 2008 at 9:43 am
Has no one learned the lesson of oil over the last 100 years? Whenever it goes way low it never stays there for long.
December 4th, 2008 at 9:45 am
And given the importance of the financial sector to GDP growth over the past decade, and with what we now know was rampant fraud and phony accounting within that industry, one wonders how much our GDP is overstated by… A few trillion perhaps.
December 4th, 2008 at 9:50 am
So much market green coming if your short you will be very very hurt.
December 4th, 2008 at 10:00 am
one more thing on media … relating the thought of to many auto brands to channels of tv that Service Providers must transport via the pipes
you ever wonder just how much we pay for tv via extra costs on everything we buy (tbp)?
…
but then you say if those people were not working making tv ads, tv shows, building satellites and launching them, tv salesmen, hanging wires down alleys and amp stations …what would we do with all those people?
…
balance is all we need (until that is achieved and its not enough)
December 4th, 2008 at 10:01 am
ot but worth noting, i hope: Allowing Redemptions Was So 2007
It seems the stigma has officially been removed from hedge funds having to limit redemptions. Fortress, D.E. Shaw, and Farralon Capital Management are the three investment firms to put up gates in this past 24-hour period, either limiting withdrawals or freezing them entirely.
http://www.traderdaily.com/news/item/27018.html
December 4th, 2008 at 10:02 am
The Seinfeld Economy
- Winston Munn
I’m going to quote that one around town…
December 4th, 2008 at 10:20 am
If we can bailout the Wall Street companies that created this mess, why can’t we bailout companies that actually produce something useful.
December 4th, 2008 at 11:06 am
wunsa- Right?
Winnie,
this: “we truly could become the Seinfeld Economy, i.e., the economy about nothing.”
is flipping Epic.
talk about what is up, that is too Good.
December 4th, 2008 at 11:07 am
Barry,
Are you happy with Kudlow constantly using “Bailout Nation” in his everyday, non-ending rhetoric?
December 4th, 2008 at 11:12 am
Bookstaber must read on “Should we keep the Big Three on life support?”
http://rick.bookstaber.com/2008/12/should-we-keep-big-three-on-life.html
December 4th, 2008 at 11:30 am
jmborchers:
What kind of engineering do you do?
December 4th, 2008 at 12:01 pm
Are we ever going to see the financial companies facing the music like the big three are today? I haven’t seen anything even as remotely comprehensive out of any of the financial companies and we’ve given them billions without much accountability.
The hypocrisy is pretty amazing. CITI gets 45 billion cash and a guarantee that we’ll absorb 300 billion in losses barely gets coverage.
I’m surprised the media is all about the bankruptcy given how much money they get in ads from the big three.
December 4th, 2008 at 12:07 pm
@jonpublic: I don’t see how we truly recover if we do NOT get some accountability from the financial services sector (e.g. perp walks, etc.).
December 4th, 2008 at 12:07 pm
I don’t have time to do a proper chart, but lets look at a graphical representation of what we are on the hook for in the financial industry (according to bloomberg) vs what the amount for the loans for the automotive industry.
Amount for the financial industry, 7.4 trillion
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$$$$
$$$$$$$
Amount for the bridge loan for the big three. 34 billion
$
December 4th, 2008 at 12:17 pm
i don’t know why the media companies are pushing bankruptcy, they will be among the biggest losers of that. the car companies are among the biggest buyers of advertising in our economy. loose that and these media companies could also start failing. especially since so many have so much debt from being leveraged into existence.
December 4th, 2008 at 12:28 pm
WASHINGTON (AP)
“Although a flurry of actions have been taken to ease the housing crisis, foreclosures still remain ‘too high’ with adverse consequences for struggling homeowners, squeezed lenders and the broader economy, Bernanke said. ”More needs to be done,’ he declared.”
O.K., Ben, how’s this for a start – we could save the thousands of decent paying jobs that depend on the Big 3 automakers so blue-collar workers could afford a reasonably-priced house. Of course, that would mean home prices would have to come down….
What, that’s not what you meant???? Sorry, I guess my ears are full of Great Moderation because I don’t hear a thing you are saying….
December 4th, 2008 at 12:38 pm
AMD is warning of a 25% revenue drop.
After we give $34B to the autos, I say we bail out the semiconductor companies.
After that, let’s give another $75B to the autos.
After that, let’s have a two trillion dollar stimulus package.
(LOL).
December 4th, 2008 at 12:49 pm
more on this …
Cspan airs COO Wandell of Johnson Controls empassioned plea for bridge loan, while CNBC chats (altho I’ll add I’m not much in for duplicity)
On the 95% pay package for laid-off UAW workers … let that program disolve and enroll in your states Unemployment Benefits package … go the American way and spread out the cost socially.
December 4th, 2008 at 1:26 pm
I agree with the previous comments about the Big 3 bailouts vs Wall Street . However, I think $34 is just the beginning . The UAW (Job bank , healthcare, and pensom programs) is the Achillies’ heel for for the Big 3 .
http://finance.yahoo.com/tech-ticker/article/138879/Roubini-Bail-Out-the-Automakers-But-Only-on-These-Conditions…?tickers=F,GM,^DJI,^GSPC,TEN,TRW,GT
December 4th, 2008 at 1:34 pm
My Big 3 solution:
Wipe out equity, cram outstanding debt down to equal 49% of common stock, give workers 51% ownership and control of the board, and let them fire existing management and hire competent management. Bingo, no more management/labor conflict. What workers don’t get as salary they’ll get as dividends.
December 4th, 2008 at 2:49 pm
Sen Corker touts Japans Toyota marketcap at over $100Bil and the Detroit Big3 under $10Bil. So why offer loans of $35 Bil? What could I say that would create a market selloff of Toyota in a short period? That would set a real price of Toyota ie: land value, tools and manufactured product on hand. That is how rational that statement is.
Corker talking his book for TN, AL and Miss.
http://southcentral.construction.com/news/ms/archive/2008/01.asp
“Contractors began moving the earth on Sept. 1, coinciding with the start of foundation and structural steel construction. SSOE is providing full architecture and engineering services for the facility, which will produce the Toyota Highlander sport … The Blue Springs, Miss., earthwork package represents four times more earth moved in less time than any other Toyota project in North America … The 2.4-million-sq-ft facility that will be constructed on the 1,700-acre site is expected to be operational by 2010 and house 2,000 employees. At a total cost of approximately $1.3 billion, the facility is expected to produce 150,000 vehicles per year and will include stamping, welding, painting and assembly.”
I understand his position. Toyota can pull the full out plans on above at will. Then how do those TIF plans get a payback? Locally we have a concrete re-inforcing wire weld product that needs a electrical substation upgrade while the cement plants are laying off and shutting down, temp I hope.
I repeat last line from 1st post. “Bottom line is Wall Street spent the investment savings of those promised retirement benefits. The accounts need to reflect that.” Bankruptcy or these dire straits is the … for every action there is an opposite and equal reaction.
December 4th, 2008 at 3:32 pm
They should take the home addresses of every lawmaker responsible for passing the bailouts for all financial firms, home addresses for all the Sr. Execs of each financial firm, especially AIG, that was a recipient of a Govt bailout and hand them out to each autoworker, each parts dealer, each parts supplier, and anyone else who derives their livelihood from the auto industry.
December 4th, 2008 at 10:49 pm
The solution is the Global Resource Bank at http://www.grb.net
December 4th, 2008 at 11:24 pm
The vulnerability of the premier manufacturing industry in the U.S. has done well to demonstrate two things…
1. The financial system is bankrupt. Were this not so, the auto execs would not be on their knees.
2. The names of fascists among us have become known by their calls for busting up the UAW, in similar fashion as their European predecessors attacked labor unions back in the 20s and 30s.
December 4th, 2008 at 11:25 pm
One thing that Congress should ask for is the ’strategic assessment’ that each auto company wrote for each of the past five years. If Congress spontaneously asked that question tomorrow and required faxed copies of those documents within two hours, we might be able to see how the auto execs actually viewed their situation. This might trap out the BSers.
December 5th, 2008 at 8:03 am
Should John Snow have been there to answered the question of why Cerberus is not infusing?
answer:
if GM and Ford is getting a 2% loan from the taxpayers – fair is fair – same boat – my shareholders have ponyed up already
on the “floor plan”:
I forget who had over 120Bil of manufactured stock out in the dealerships -
I didn’t quite understand that process – those are on loan right? – so the market price for the manufacturers is wacked out? Agreed?
This whole mess is to bail on retirement packages!
and:
who is manipulating oil prices?
Santa Claus for North Poles Dec24th delivery?
Car manufacturers for gasoline powered products – how many billion units are in the lots between the Big3 and the other foreigners?
Or is it marketeers for a daily paycheck?
Or is it the DoD to pay for a war?
What ever … the consumer pays!
Family … a Christmas card and a ham for you’s – don’t get me nothin.
http://www.youtube.com/watch?v=1yfQVWHnfcU
December 5th, 2008 at 10:09 am
Rockford IL Rep Manzullo in hearing reveals:
General Motors wants to become a BANK with checking account status
Wow – talkin duplicity – what do we need CNBC for?
TV is for Herding – not for full unbiased information
Now I understand the Bull / Bear analogy:
Cowboys herd the cattle, (the Bulls) into a deadend canyon so the hibernating Bears can awake and devour them