PDA

View Full Version : Bailout Plan


BMT (RIP)
09-27-2008, 14:19
Everyone is bitchin' about the Paulson Plan.

Paulson present a plan he knew the the DIM's would jump on and approve. Let the poeople pay for this mess!!

REP member's of the House found some backbone and said NO!!

Their idea is place these bank or what ever on the market and sell at a discounted rate and NO capital gain's taxes for 3 to 5 years.

The idea of not paying any capttal gain's taxes put the DIM's in a nutroll and lip stall.

Waiting on the sideline's to see how this play's out. :D

:munchin


BMT

Ret10Echo
09-27-2008, 22:14
So I guess sub-prime loans for citizens are bad...but sub-prime loans for corporations are Ok...

As long as the CIO/CFOs lifestyles do not change (driving the Benz and living in a 7000 sq ft house) they should get two things and one of those is Jack...

Basically it is a declaration of bankrupcy. Those who do/have run these organizations into the place they are need to bleed a bit before the American taxpayer pays another dime.

My .02

JJ_BPK
09-28-2008, 05:11
Basically it is a declaration of bankrupcy.

Maybe not..

I was wondering around RealClearPolitics.com,, wanted to see what the talking heads thought of the Friday Nite Funnies,, with the John & Barry Comedy Hour..

Glad I didn't watch,, probably would have shoot the TV when Obamassiah couldn't remember who's name was on his bracelet ^%(^%*(^%*^%*^%(^%(^%(^%(

I am sure that Sgt Ryan Jopek's mother was not happy, after she gave Barry the bracelet, so he would remember her son's name.

I know I'm know happy...

May Sgt Jopek rest in peace

Do any of you read or listen to Larry Kudlow?? Larry is a little right of Attila the Hun,, worked as Reagan's economic advisor,, I think I heard he was one of the top five candidates for Fed Chairman,, Larry knows money... Larry is also one of the few rays of light on CNBC.. He and Jim Creamer are the Ying & Yang of the market set..

Anyway,, I stumbled across Larry's post.. He is so much more eloquent,, does not stutter,, or drool,, not as handsome as I,, but like I said,, Larry knows money,, and he has friends in hi-places...

Have a read,, it's just a different opinion...

And reading this AM,, looks like most of what Larry suggested is happening..

My $00.00002



A Slimmer, Cleaner Paulson Plan is a Win-Win, By Lawrence Kudlow, Sept 27,
2008

http://www.realclearpolitics.com/articles/2008/09/a_paulsoncantor_plan_is_a_winw.html


The single-biggest mistake in the Paulson bank-rescue-plan marketing effort
has been the failure to explain clearly how taxpayers are going to recoup
$700 billion used to buy toxic assets at auction in order to unfreeze the
banking system. In other words, folks don't understand how taxpayers will be
paid back, and may actually make profits, which will enable the new
government debt to be erased after the Treasury bank-rescue is completed.

Here's the key point: Any loan package bought by the Treasury will be 100
percent taxpayer owned. Period.

Let's walk through this hypothetical for a moment. Through a market-driven
auction, the Treasury will purchase some dollar amount -- say $100
billion -- of loans that banks will sell. The Treasury will then buy those
loans at the prices that fill the auction, starting with the lowest prices
and working up. Now, the Treasury will hold those bonds either to maturity
or for a sale in the open market if rising prices in the market make that
sale attractive. In other words, suppose the Treasury buys a bond package at
20 cents on the dollar. They hold it for a while, and if market conditions
improve, they sell it for 50 cents on the dollar to some buyer (e.g., an
investment fund, a private-equity fund, a hedgie). The Treasury will make
the sale at the higher price in order to gain a profit for taxpayers.

In the meantime, as the Treasury holds the loans, the government will get
monthly cash-flows coming in on the mortgages, or on any other loans that it
owns. So it is win-win for taxpayers. First, taxpayers get the cash flow
generated by the assets. (Something like a 10 percent interest rate.)
Second, if the loan is sold for profit, the taxpayers will own that profit.
And the new law must of course stipulate that all the cash flows and/or
profits go for debt-reduction to protect taxpayers.

I don't think a lot of folks understand this win-win scenario. Let me
repeat: The taxpayers own the bonds the Treasury buys; the taxpayers own the
cash flows generated by the bonds; the taxpayers own the profits when the
bonds are sold; and the taxpayers benefit when the profits and cash flows
are used to pay-down government debt.

Actually, for taxpayers, it's a win-win-win-win.

Think about this. The troubled assets purchased by the Treasury right now
are likely to be very under-priced because of the chaotic and frozen market
conditions. But over time, through monthly cash-flow payments or through
loan sales, taxpayers will get all their money back and in great likelihood
a handsome profit.

House Republicans understand these key points. Unfortunately, this
understanding did not materialize in their original meeting with Mr. Paulson
a few days ago. But now the actual reality is sinking in.

Another point: Republican leader Eric Cantor has an excellent idea for a
federal bond insurance guarantee for straight mortgage-backed paper,
financed by private-sector insurance premiums. That will improve investor
confidence in mortgage bonds and will make those bonds highly marketable.
Importantly, senior Treasury officials have told me that Mr. Paulson will
accept the insurance idea as an option in the final bill, alongside the
ability of the Treasury to purchase distressed assets.

Sources also tell me that other conditions will be necessary to bring the
House GOP along. First, the ACORN slush fund must be removed. Second, the
so-called union proxy to run a slate of corporate directors is a big
problem. Third, all profits from the Treasury rescue mission must be used to
reduce the national debt -- 100 percent. Fourth, Republican members are
opposed to bankruptcy judges setting mortgage terms and interest rates (Sen.
Obama also is opposed). Fifth, the so-called government equity ownership of
banks is distasteful because it effectively creates a corporate tax increase
on banks at a time when they are struggling. And last, the Treasury
secretary's request for $700 billion is regarded as way too high.

Essentially, House Republican leaders want a slimmer, cleaner Paulson plan
supplemented by Mr. Cantor's mortgage-bond insurance program. I think it's a
good package that would be great news for stock and bond markets that are
now ailing badly. It would set the stage for a gradual return to normalcy on
the part of bank lenders, including loans to small businesses, consumers,
and homeowners. It would be a pro-growth package at a time when the economy
desperately needs a prosperity tonic.

Lawrence Kudlow is a former Reagan economic advisor, a syndicated columnist,
and the host of CNBC's Kudlow & Company. Visit his blog, Kudlow's Money
Politics.

Ret10Echo
09-28-2008, 10:26
Thanks for the piece JJ.

Doesn't this make the assumption that the bottom has been reached and it is up from here?

This solution is an educated decicsion altered by partisan politics. I'm not a finance and business major so I am not looking at this through what I would consider an educated lens....just my perception.

Time will tell I suppose....but I wonder who is buying up all this U.S. debt...(loan sales)?

JJ_BPK
09-28-2008, 10:57
Doesn't this make the assumption that the bottom has been reached and it is up from here?

This solution is an educated decicsion altered by partisan politics. I'm not a finance and business major so I am not looking at this through what I would consider an educated lens....just my perception.

Time will tell I suppose....but I wonder who is buying up all this U.S. debt...(loan sales)?


I'm as bad as most,, I though the 700 B was for stock that's worthless,, when Paulson wants to buy the Bonds,, and collect the payments..

It's also to easy to think that of the 700B EVERY ONE OF THE MORTGAGES is in default,, They arnt,, less than 10% are defaulting..

When the talking heads say the defaults have tripled, they don't tell you that's a jump of 3% to 9% default rate,, over 90% of the loans are being paid by people like you & me...

Here are a few quotes from wikipedia,, with prejudice,, they have been know to be wrong,, but in this instance it appears they have the correct gist..

The U.S. mortgage market is estimated at $12 trillion with approximately 9.2% of loans either delinquent or in foreclosure through August 2008.

Subprime ARMs only represent 6.8% of the loans outstanding in the US, yet they represent 43.0% of the foreclosures started during the third quarter of 2007.

During 2007, nearly 1.3 million properties were subject to 2.2 million foreclosure filings, up 79% and 75% respectively versus 2006.

Foreclosure filings including default notices, auction sale notices and bank repossessions can include multiple notices on the same property

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

Richard
09-29-2008, 05:37
A Political "Solution"?
Thomas Sowell

Who was it who said, "crack-brained meddling by the authorities" can "aggravate an existing crisis"? Ronald Reagan? Milton Friedman? Adam Smith? Not even close. It was Karl Marx. Unlike most leftists today, Marx studied economics.

Is the current financial crisis going to lead to crack-brained meddling or to some rational actions? Predicting what politicians are going to do is risky business.

http://townhall.com/columnists/ThomasSowell/2008/09/23/a_political_solution

Richard :munchin

Ret10Echo
09-29-2008, 09:05
A Political "Solution"?[

That is my primary concern. A dangerous mix of election year politics and rabid partisanship may make for a deadly mix.

Are Paulson, the Fed and others going to "settle" simply because they feel that something is better than nothing and the ignition system is a slow enough burn for most to be able to pass off blame sometime in the future?

:rolleyes:

Richard
09-29-2008, 09:18
Here's my opinion on the 'cause' and 'effect' of all this...and now I, too, will be punished because I live within my means, pay my bills, and obey the laws. :(

Richard's $.02 :munchin

Defender968
09-29-2008, 11:27
As if it wasn't obvious I'm very against this bailout plan, if for no other reason that we don't even know what's in it yet, and that the initial draft allegedly had something like 20% of the money going to ACORN, not to mention the fact that this reemphasizes the lack of personal responsibility, i.e. oh you got a loan you couldn't afford, that's too bad let me take money from the taxpayer to help you out of your piss poor decision, and the idea that if large enough corporations act irresponsibly enough they'll just get bailed out, again reinforcing the no personal accountability, and I could go on and on.

With all that being said I couldn’t figure out why Bernanke was screaming that the sky was falling as by all accounts he is a very smart guy, now I think I understand, while he is very smart, I would theorize that he has studied the Great Depression to such an extent that that’s all he can see coming. It goes hand in hand with the theory that if the only tool in your tool bag is a hammer all problems look like nails.

I found out today that 400 economists including 3 Nobel laureates have called for delaying this bill and looking at all options to ensure the politicians get this right as the consequences are dire. So the experts besides Paulson are calling for discussion and restraint, yet they’re going to vote on this bill this week, and by most accounts we are going to get this poorly written, rushed bill, which socializes the entire finance industry. What's even worse is the auto industry already has their hands out, and you can bet the airline industry will be next in line. I might agree with Paulson that the sky is falling, but I would argue it’s not being fixed by this bill, but rather being caused by it, this bill is indeed history making, but not in a good sense, but in the sense that we may well be seeing the death of capitalism.

Just my .02

echoes
09-29-2008, 11:46
House vote: So far 227 nay / 206 yea....

Dow dropping 600.....pulling back though...

Oh man.

Holly

Ret10Echo
09-29-2008, 11:52
So far 223 nay 199 yea....

Dow dropping 600.....

Oh man.

Holly


And they don't even know if this snake-oil is the right answer....they just want a few semi trucks full of cash emptied onto Wall Street and various other financial districts.


Link to text of House version: http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/29_09_08_congress_bailout.pdf

Pete
09-29-2008, 11:58
A great number of D's voted against this bill also.

Nancy Girl didn't help by blasting R's and then walking off the floor.

Oh, well - "Evil Republicans at 6:00"

echoes
09-29-2008, 12:01
And they don't even know if this snake-oil is the right answer....they just want a few semi trucks full of cash emptied onto Wall Street and various other financial districts.

Agree Sir.

(I updated my above post to reflect the current stats.)

My question is this: Well, what kind of shape was Our economy really in before this, "emergency bail-out" came front and center?
Fannie and Freddie's demise seemed to start this cascade, but in my limited knowledge, am thinking this whole debacle began much earlier.:munchin

Just my .000002, which is worth about zero anyway.

Holly

Ret10Echo
09-29-2008, 12:12
Just my .000002, which is worth about zero anyway. Holly

Adjusted for inflation :D

greenberetTFS
09-29-2008, 12:14
Here's my opinion on the 'cause' and 'effect' of all this...and now I, too, will be punished because I live within my means, pay my bills, and obey the laws. :(

Richard's $.02 :munchin

I whole heartedly agree with Richard....This is what happens when you live within your means,pay your bills, and obey the laws. You end up getting screwed by the government..... :(
PS, Where do you get those cool thumbnails?

GB TFS :munchin

echoes
09-29-2008, 12:15
Adjusted for inflation :D

LOL Sir!:D
As was just said on Fox by Cavuto..."The market is just having a hissy fit...like my 5 year old."

Holly:munchin

Ret10Echo
09-29-2008, 12:26
September 29, 2008 - 2:21pm

By JULIE HIRSCHFELD DAVIS
Associated Press Writer

WASHINGTON (AP) - The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.

Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.

When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.

Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home.

The vote had been preceded by unusually aggressive White House lobbying, and spokesman Tony Fratto said that Bush had used a "call list" of people he wanted to persuade to vote yes as late as just a short time before the vote.

Lawmakers shouted news of the plummeting Dow Jones average as lawmakers crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for roughly 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.

They found only two.

Bush and his economic advisers, as well as congressional leaders in both parties had argued the plan was vital to insulating ordinary Americans from the effects of Wall Street's bad bets. The version that was up for vote Monday was the product of marathon closed-door negotiations on Capitol Hill over the weekend.

"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for it _ not me.' "

With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of world markets on Congress, Ryan added.

"We're in this moment, and if we fail to do the right thing, Heaven help us," he said.

Sigaba
09-29-2008, 12:49
A link to video inflammatory comments by Speaker of the House the Honorable Nancy Pelosi (D-CA).

http://www.breitbart.tv/html/184803.html

Some politicians would rather be 'right' than get problems solved. This frame mind is especially unfortunate in times of national crisis and when the politician in question is most often wrong.

nmap
09-29-2008, 13:14
While I recognize that the consensus was against the bailout, and also that the great majority of the public deeply opposed it, I suspect the cost of rejecting the bill will be significant.

I have attached a chart of the action of the Dow Industrials, with each line representing 5 minutes of trading. The line at 10,725 represents a multiyear support level. Violation of support suggests continued decline.

In addition to Wall Street, a great many people have lost money. Many people are indirectly involved with the market, such as through pension funds, have been, and perhaps will be, affected.

On the bright side, down markets lead to generational buying opportunities. Perhaps this is the prelude.

:munchin

AF Doc
09-29-2008, 13:31
Well said nmap.

I too wonder what the cost of rejecting the bail-out plan will be. Wall Street was clearly underwhelmed by the vote today.

As a percent of GDP, the proposed bail-out was relatively small as compared to some historic interventions. Dropping $700B of taxpayer money for the bad banking practices of others sticks in the craw, but not doing so may cause more pain later. In my world we often use the "ounce of prevention" aphorism. Time will tell.

echoes
09-29-2008, 13:51
On the bright side, down markets lead to generational buying opportunities. Perhaps this is the prelude.


nmap,

Thank you for your continued expert analysis of this situation.

Can only imagine what some of my former co-workers at Morgan Stanley are doing right about now:rolleyes:
...but if memory serves correct, you are spot on!

There will be many good "buying" opportunities, after this sell-off.

JMHO...:munchin

Holly

Dad
09-29-2008, 14:17
It would seem the results would best be evaluated a week from now, a month from now and a year from now. I don't trust Wall Street to NOT manipulate a panic to get their way. One thing I would really like to see is an investigation of Goldman Sachs. Both Rubin and Paulsen come from there and a lot of deregulation seems to have been for their benefit. It is interesting that the current chairman of Goldman sat in on the Fed meetings on AIG and helped design the bailout of AIG. Although he denied any Goldman interest in AIG, it turns out he was lying. Goldman stood to lose billions if AIG failed. It therefore seems taxpayers have already bailed out Goldman, they just don't want us to know.

Red Flag 1
09-29-2008, 15:20
House vote: So far 227 nay / 206 yea....

Dow dropping 600.....pulling back though...

Oh man.

Holly

Hang on folks.....there may be a bumpy ride ahead, and then some!


RF 1

Shar
09-29-2008, 16:14
What's with the name change of the bill?

To amend the Internal Revenue Code of 1986 to provide earnings assistance and tax relief to members of the uniformed services, volunteer firefighters, and Peace Corps volunteers, and for other purposes

http://i2.cdn.turner.com/cnn/2008/images/09/29/bailout.rollcall.0929.pdf

Is the billions of dollars the "for other purposes" part?

What am I missing?

I think I answered my own question - sort of...
They taked this on to the existing bill written in 2007.
But why???

Penn
09-29-2008, 16:54
Only the vanquished remember history."
-Marshall McLuhan

BMT (RIP)
09-29-2008, 17:48
Sure would be nice to know how much money member's of the House and Senate lost in the market today.

BMT

Storm
09-30-2008, 00:04
A large portion of this current crisis directly relates to the Sarbanes-Oxley act, the previous knee-jerk reaction put in place during a crisis like this. That with the additions of the Fannie and Freddie cash-cow programs "working" and being supported endlessly by Democrats saying there was no need for reform, well, here we are.

The bailout bill is necessary, as I've stated previously. This is the case not only to promote liquidity within the credit markets, but additionally calm the fears of the American public. The average American doesn't seem to understand what is going on right now, and overall, not realizing that they will be hurt as well if this bill doesn't pass. The issue is that the bill in it's current form puts entirely too much power in a consolidated position, and throws billions of dollars into the abyss.

Newt Gingrich brought up some interesting points about suspending the Sarbanes-Oxley act, and setting up a rolling 3-year average. I hadn't thought about it, but after doing some research on it, the man certainly has a point. I for one, tend to like it a lot more than the current plan. It will instantly help the liquidity issue, and most importantly, give our hard-working Congress (:confused:) time to get a proper bill in order that won't be throwing billions of dollars to left-wing organizations. Additionally, the administration can get this done without the approval of Congress, or the passage of a bill, thus bypassing Pelosi and the Dems.

However, as he noted, I'm sure this idea will be overlooked, and the omnipotent Nancy Pelosi will come up with a much worse, crooked, far-left bill by the end of the week. She's so powerful, she couldn't be bothered to rally her own party to pass the bill. Or perhaps she just wanted more Republicans to vote for it, so they can continue the blame game without getting anything accomplished.

Asian markets are open and down, it's gonna be another long day if something doesn't get accomplished soon. :boohoo

Sigaba
09-30-2008, 08:42
Storm,

Good post--I wish I could be that sharp at two am.

I think that, once again, the MSM inserted themselves into the story rather than doing their job. The MSM has called it a 'bailout' and stressed the $700 billion price tag at the expense of communicating that the end cost may be significantly less and also the long term risk to the average American if a rescue package doesn't get passed.

I guess it is a lot easier for some media outlets to throw gasoline on the fire so they can sell more papers or get higher ratings.

As for Newt Gingrich, if only the guy could be a bit more low key. I don't always agree with him but I think he has a first rate mind and is a great communicator.

As for Pelosi, her meltdown was so weird one has to think it was a calculated ploy to put Republicans on the defensive because the alternative is too scary to consider.

A large portion of this current crisis directly relates to the Sarbanes-Oxley act, the previous knee-jerk reaction put in place during a crisis like this. That with the additions of the Fannie and Freddie cash-cow programs "working" and being supported endlessly by Democrats saying there was no need for reform, well, here we are.

The bailout bill is necessary, as I've stated previously. This is the case not only to promote liquidity within the credit markets, but additionally calm the fears of the American public. The average American doesn't seem to understand what is going on right now, and overall, not realizing that they will be hurt as well if this bill doesn't pass. The issue is that the bill in it's current form puts entirely too much power in a consolidated position, and throws billions of dollars into the abyss.

Newt Gingrich brought up some interesting points about suspending the Sarbanes-Oxley act, and setting up a rolling 3-year average. I hadn't thought about it, but after doing some research on it, the man certainly has a point. I for one, tend to like it a lot more than the current plan. It will instantly help the liquidity issue, and most importantly, give our hard-working Congress (:confused:) time to get a proper bill in order that won't be throwing billions of dollars to left-wing organizations. Additionally, the administration can get this done without the approval of Congress, or the passage of a bill, thus bypassing Pelosi and the Dems.

However, as he noted, I'm sure this idea will be overlooked, and the omnipotent Nancy Pelosi will come up with a much worse, crooked, far-left bill by the end of the week. She's so powerful, she couldn't be bothered to rally her own party to pass the bill. Or perhaps she just wanted more Republicans to vote for it, so they can continue the blame game without getting anything accomplished.

Asian markets are open and down, it's gonna be another long day if something doesn't get accomplished soon. :boohoo

Snaquebite
09-30-2008, 09:18
I did some research too after hearing this and I agree with Newt...but it won't happen.

The issue is that the bill in it's current form puts entirely too much power in a consolidated position, and throws billions of dollars into the abyss.

Newt Gingrich brought up some interesting points about suspending the Sarbanes-Oxley act, and setting up a rolling 3-year average. I hadn't thought about it, but after doing some research on it, the man certainly has a point. I for one, tend to like it a lot more than the current plan. It will instantly help the liquidity issue, and most importantly, give our hard-working Congress () time to get a proper bill in order that won't be throwing billions of dollars to left-wing organizations. Additionally, the administration can get this done without the approval of Congress, or the passage of a bill, thus bypassing Pelosi and the Dems.

Dad
09-30-2008, 09:33
I am curious how Sarbox contributed to the mess and how it's repeal could help the solution?

Storm
09-30-2008, 09:53
To be brief, the Sarbanes-Oxley Act has a provision which is essentially a markdown-to-market idea.

This means that during times of economic upswing, this forces an artificial inflation of value in inventory/securities, and during a downswing, such as this, an extreme artificial undervaluing of inventory/securities.

So when you hear the government saying they'd be willing to buy this bad debt at two or three times it's value, that is the underlying reason why. This clause has artificially driven value down by a substantial amount.

The main point is that these securities are artificially rendered to a certain value regardless of which way the market is going, it has nothing to do with the markets, or actual supply/demand.

Sorry for the brief/crude response, just hopped in while eating lunch and wanted to at least give a brief overview. :munchin

Dad
09-30-2008, 10:11
Storm
Thank you. another question. Isn't one of the big problems now that we have too many securities, derivatives of the subprime mortgages, credit default swaps, etc, which nobody knows how to put a value on? And that these securities are unregulated by anyone? thankyou

Storm
09-30-2008, 10:39
Storm
Thank you. another question. Isn't one of the big problems now that we have too many securities, derivatives of the subprime mortgages, credit default swaps, etc, which nobody knows how to put a value on? And that these securities are unregulated by anyone? thankyou

Dad,

I will do a better job of answering this later when I have a bit more time, but the generic answer to your question, is yes.

However, the counterpoint is that many of these credit default swaps, derivatives etc., are doing exactly what they are designed to do. I have used structured notes, and things of this nature in my business, on the whole, when used properly they have worked beautifully.

The issue, again, is that without regulation, these types of investments can put the screws to people in a big way. They can be sold without clients, investors, and the like having any idea what they are really getting themselves into, as you mentioned. This applies to normal investors, and businesses that choose to look the other way, and gloss over the potential pitfalls.

So again, I will come back and explain this later, if somebody else doesn't get to it first, but in my view, these things are a problem. Not because of them being used, they are incredibly useful tools when used properly, the issue is misuse, due to lack of any real regulation.

Richard
10-02-2008, 19:48
Here's a bailout plan I can support! :p

Richard's $.02 :munchin

Richard
10-03-2008, 07:44
EXPOSED--the TOP SECRET terms of the Democrats' rider that led to the Senate passing the buyout plan. See attached for the special currency to be used to fund the plan. :p

Richard :munchin

SF_BHT
10-10-2008, 09:52
This is what I would support on the bailout

http://jezebel.com/5054144/wanda-sykes-campaigns-for-cabinet-position-on-last-nights-leno?autoplay=true

greenberetTFS
10-10-2008, 13:06
Here's a bailout plan I can support! :p

Richard's $.02 :munchin

Great post Richard........I hate to say it.....But JUMP is an excellent response.... :(

GB TFS :munchin

Ret10Echo
11-11-2008, 15:19
STOP...STOP....STOP.....!!!!!

My impression: The automakers made choices as did many other industries and private citizens and they blew up in their face. The so-called regulators created a situation that allowed this and turned a blind eye...Why should I pay for it? If you make a product or offer a service that nobody is buying then why do I need to prop you up? Beta-max went away...nobody wanted it... If the management and employees are not willing to concede a WHOLE LOT to keep themselves afloat then I don't have a lot of sympathy.

Just like these jack@#$ from the insurance industry who continue to "Party like it's Nineteen ninety-nine" on the taxpayer dime...there needs to be some pain. There needs to be accountability. We can fall short of the Phrench Revolution and the guillotine, but there needs to be somebody out there who is going to drag these people out of their palaces and scuff them up a bit.

Put your hands back in your pockets.



NOVEMBER 11, 2008, 4:00 P.M. ET Pelosi Backs Special Session on Auto-Industry Aid
By GREG HITTArticle
»WASHINGTON -- House Speaker Nancy Pelosi said she will push legislation next week to help the ailing auto industry.
"I am confident Congress can consider emergency assistance legislation next week during a lame-duck session, and I hope the Bush Administration would support it," the California Democrat said in a statement.
Ms. Pelosi said she has tapped House Financial Services Chairman Barney Frank (D., Mass.) to craft legislation that would give the industry "limited" assistance under the recently enacted Troubled Asset Relief Program.
"In order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush Administration must take immediate action," she said.
The speaker added the assistance would be conditioned on limits on executive pay, rigorous independent oversight, and other taxpayer protections "to ensure that any companies that benefit from this assistance -- and not the taxpayers -- bear the full burden of repaying any costs that are incurred."
The speaker's decision comes a few days after General Motors Corp. warned it is rapidly running out of cash, and Ford Motor Co. announced its situation was only slightly better.

The plight of the industry has drawn attention from the White House and the incoming Obama administration in recent days, as well as among lawmakers.
Last week, President-elect Barack Obama prodded the Bush administration to do more to help the industry, and on Monday, he raised the issue with President George W. Bush in an Oval Office conversation meant to underscore a smooth transition of power.
Before adjourning for the elections, Congress passed legislation providing for $25 billion in government-backed loans to the auto makers to prod them to retool their factories to make more efficient vehicles.
Since then, auto executives and officials in the United Autoworkers union have called for more than that to avert a possible collapse of one of the nation's most basic industries, including $50 million more to help cover future health-care payments for about 780,000 retirees and their dependents.
GM and Ford reported last week that they spent down their cash reserves by a combined $14.6 billion in the past three months. Ford said it would slash more than 2,000 white collar jobs.
Mr. Pelosi's statement didn't specify how large an aid package she prefers.
—The Associated Press contributed to this article.
Write to Greg Hitt at greg.hitt@wsj.com

Pete
11-11-2008, 16:26
......
The plight of the industry has drawn attention from the White House and the incoming Obama administration in recent days, as well as among lawmakers.
Last week, President-elect Barack Obama prodded the Bush administration to do more to .......

I don't really think it's "the plight of the industry". I think it's more like the US big three.

The foreign car makers with plants in the US seem to be doing fine. Could it be that they can produce cars at $35 per hour while the US companies have to do it for around $85.

The extra is to cover medical and retirement fees.

Lets see, pass of the retirement payments to the government like they did for some of the airlines and go for nationalized medicine. Yeah, the big union run companies and the union rank and file were pushing for Obama.

Little do the rank and file know but if that comes to pass they are so srewed.

Richard
11-11-2008, 17:11
FWIW, Toyota, Diamler-Benz, and BMW are non-union and--although they are suffering the same effects of the economic down-turn, have already pared their operations and will require to do little else as they ride this thing out.

Ford, GM, and Chrysler are union and, indeed, have tremendous HR costs negotiated by the UAW (retirement, health, etc) which affect their ability to operate profitably. They need to make the same cost and business saving decisions the others have already completed to stay in business.

Richard's $.02 :munchin

nmap
11-11-2008, 17:41
Estimates of the future budget deficit start at a $1 trillion dollars, and run up from there.

Some expect this to lead to inflation (me among them), whereas others suggest that the new cash being printed will cancel out with the bad debts, leaving us in a deflationary situation.

Will the bailouts prolong the problem? Perhaps. LINK (http://www.moneymorning.com/2008/07/17/the-lost-decade/)

I also wonder about the expanding government involvement with formerly private companies. Where is the line between a socialist society and a capitalist society? If the government owns a company - or at least influences it heavily - when does it decide to force social experiments? When does the company become a government agency?

And where do we stop? At GM? At John Doe's Bar & Grill?

The whole situation reeks. And keeps getting worse.

Ret10Echo
11-12-2008, 05:40
Estimates of the future budget deficit start at a $1 trillion dollars, and run up from there.

Some expect this to lead to inflation (me among them), whereas others suggest that the new cash being printed will cancel out with the bad debts, leaving us in a deflationary situation.

Will the bailouts prolong the problem? Perhaps. LINK (http://www.moneymorning.com/2008/07/17/the-lost-decade/)

I also wonder about the expanding government involvement with formerly private companies. Where is the line between a socialist society and a capitalist society? If the government owns a company - or at least influences it heavily - when does it decide to force social experiments? When does the company become a government agency?

And where do we stop? At GM? At John Doe's Bar & Grill?

The whole situation reeks. And keeps getting worse.


I concur with your analysis...and I share the same concern of how this all smacks of socialism. Perhaps Hugo can provide some guidance to Mz Pelozi....

If the funds are provided without stringent guidelines on use then our elected officials are much less deserving of our support.....

If stringent guidelines, restrictions and limitations on use are provided (such as is the case with most Federal grant programs) as you point out...that sounds a lot like the government running a company.

The descent down the slippery slope will be accelerating I believe.

We will see BHO has enough "pixie-dust" and Kool-Aide to take it to that level

Ret10Echo
12-10-2008, 13:15
My favorite quotes: You have GOT to be kidding me :mad:

-Sen. David Vitter, R-La. said the package has an "ass-backwards" approach to curing what ails the U.S. auto industry_ giving carmakers money immediately, and only later demanding that they restructure

-For his part, Kaplan said: "We have not seen final text of legislation that we have agreed to."

-Also included in the bill is an unrelated pay-raise for federal judges

Highlights of bailout legislation for automakers
December 10, 2008 - 12:20pm

By The Associated Press


(AP) - Highlights of bailout legislation for the Detroit-based U.S. automobile manufacturers:

_Loans: $14 billion in low-interest loans made available to General Motors Corp., Chrysler LLC and Ford Motor Co. GM and Chrysler are expected to apply for loans. Ford says it will not.

_Restructuring plans: Companies receiving taxpayer assistance must develop plans by March 31, 2009 to restructure their businesses into viable enterprises. Failure to do so would require repayment of the loans within 30 days.

_Car "czar": President Bush will name a so-called car czar to facilitate negotiations among stakeholders such as the companies, the United Auto Workers Union, creditors, retirees, suppliers and automobile dealers to develop long-term plan for viability.

_Taxpayer protections: Taxpayers would be first in line to be paid back _ ahead of other creditors. The United States government would have the right to purchase non-voting shares in the companies.

vsvo
12-11-2008, 18:08
Interesting article about the team of bankers that created credit derivatives.

The $58 Trillion Elephant in the Room (http://www.portfolio.com/views/columns/wall-street/2008/10/15/Credit-Derivatives-Role-in-Crash)
by Jesse Eisinger
Condé Nast Portfolio

The roots of this year’s financial crisis go back to a small team of bankers at J.P. Morgan in New York. Now, their invention—credit derivatives—has helped bring down Wall Street and has left Morgan with its biggest exposure of all.

zuluzerosix
12-11-2008, 19:06
FWIW, Toyota, Diamler-Benz, and BMW are non-union and--although they are suffering the same effects of the economic down-turn, have already pared their operations and will require to do little else as they ride this thing out.

Ford, GM, and Chrysler are union and, indeed, have tremendous HR costs negotiated by the UAW (retirement, health, etc) which affect their ability to operate profitably. They need to make the same cost and business saving decisions the others have already completed to stay in business.

Richard's $.02 :munchin

X2. The first thing that needs to go are these "job banks..."

Second, I work at a Ford Dealership. While other Dealerships in our community and Norther California are closing (including Ford) we are doing just fine. Most folks here where I work agree that the Big Three should not get a single penny. Thay have to sink or find a way to swim.

Ford says they want a $9 Billion line of credit to support parts suppliers should GM or Chrysler go down. If that is the case then the parts suppliers should submit their own business plan to congress and ask for the money themselves.

According to the business plan Ford submitted 25% of Ford Dealers also own GM and Chrysler franchises. Ford wants a line of credit to draw upon incase GM or Chrysler goes under. I think they should get zilch. There is noone to bail me out, why should the government bail out businesses and make me pay for it?

This is just wrong. I hope they don't get a penny. Honda and Toyota will have their union issues eventually....Someday.....When they unionize.....

When and if they do, I am sure the Japanese will take into consideration how the UAW affected the Big Three and take steps to make sure they don't have the same problems...

BMT (RIP)
12-12-2008, 05:55
http://www.msnbc.msn.com/id/28179431

UAW must love this man!! May god a paycut!!

:D

:munchin


BMT

JJ_BPK
12-12-2008, 06:09
UAW must love this man!! May god a paycut!!



The Unions may not like Sen. Corker,,

But I do..

I think it's time I reviewed my hurricane to-do list,, Shelter, Food, Ammo..
There's a big storm a com'n...

Ret10Echo
12-17-2008, 05:04
INTRODUCTION
1. This civil rights action challenges that portion of the “Emergency Economic Stabilization
Act of 2008” (or “Act”) (12 U.S.C. § 5201 et seq.) enacted by the United States Congress
pursuant to Congress’ taxing and spending power that appropriated $40 billion in taxpayer
money to fund and financially support the United States government’s majority ownership
interest in American International Group, Inc. (“AIG”), which engages in Shariah-based Islamic
religious activities that are anti-Christian, anti-Jewish, and anti-American. The use of these
taxpayer funds to approve, promote, endorse, support, and fund these Shariah-based Islamic
religious activities violates the Establishment Clause of the First Amendment to the United
States Constitution.

http://www.thomasmore.org/downloads/sb_thomasmore/DepartmentoftheTreasury-Complaint.pdf

Razor
12-17-2008, 08:52
Just because the truth hurts doesn't make it any less true:

Ret10Echo
12-19-2008, 13:05
Bailout approved: Automakers to get $17.4B
December 19, 2008 - 1:23pm


President George W. Bush makes comments on the auto industry, Friday, Dec. 19, 2008, in the Roosevelt Room at the White House in Washington. (AP Photo/Ron Edmonds) By DEB RIECHMANN
Associated Press Writer

WASHINGTON (AP) - Citing danger to the national economy, President Bush approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers.

The government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry.

At the same time, Treasury Secretary Henry Paulson said Congress should release the second $350 billion from the financial rescue fund that it approved in October to bail out huge financial institutions. Tapping the fund for the auto industry basically exhausts the first half of the $700 billion total, he said.

On Wall Street, stock prices rallied as investors cheered the government's action, though early gains eased later in the day.

Allowing the massive auto industry to collapse in the middle of what is already a severe recession cannot be allowed, Bush said.

"It would worsen a weak job market and exacerbate the financial crisis," he said. "It could send our suffering economy into a deeper and longer recession. And it would leave the next president to confront the demise of a major American industry in his first days of office."

President-elect Barack Obama, who takes office a month from Saturday, praised the White House move.

"Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers," he said. "With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together _ including labor, dealers, creditors and suppliers _ to make the hard choices necessary to achieve long-term viability."

If the carmakers fail to prove viability by March 31, they will be required to repay the loans, which they would find all but impossible. A firm will be deemed viable only if it can show positive cash flow and can fully repay the government loans.

General Motors Corp. CEO Rick Wagoner said in Detroit that GM had much work ahead but he was confident it could reinvent itself with the government help and even lead an economic recovery in America.

The president of the United Auto Workers, Ron Gettelfinger, said, "This will keep the doors of America's factories open, keep Americans working and prevent the devastating economic consequences for millions of Americans and thousands of businesses that would have resulted from a liquidation of operations by one or more auto companies."

Bush said, "The time to make hard decisions to become viable is now, or the only option will be bankruptcy. The automakers and unions must understand what is at stake and make hard decisions necessary to reform."

Some $13.4 billion of the money would be available this month and next _ $9.4 billion of it for General Motors and $4 billion for Chrysler LLC. GM is slated to receive the remaining $4 billion in loans after more money is released from the financial rescue account.

Not everyone was applauding the bailout.

House Republican leader John Boehner called the administration's plan "regrettable." He said that granting loans for automakers was never the intention when Congress passed the $700 billion plan to rescue financial institutions and that the new plan "has failed both autoworkers and taxpayers."

Bush said the companies' workers should agree to wage and work rules that are competitive with foreign automakers by the end of next year.

And he called for elimination of a "jobs bank" program _ negotiated by the United Auto Workers and the companies _ under which laid-off workers can receive about 95 percent of their pay and benefits for years. Early this month, the UAW agreed to suspend the program.

Under terms of the loan, GM and Chrysler must provide the government with stock warrants giving it the option to buy GM and Chrysler stock at a specific price.

In addition, the automakers would be required to agree to limits on executive pay and eliminate some perks such as corporate jets.

Paulson said that with the help for the carmakers, the government will have allocated the first half of the largest government bailout program in history.

He said he was confident that the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. have the resources to address a significant market crisis if one should occur before Congress approves the use of the second half of the rescue fund.

Paulson said he would discuss the process with congressional leaders and Obama's transition team "in the near future."

Friday's rescue plan retains the idea of a "car czar" to make sure the auto companies are keeping their promises and moving toward long-term viability.

The short-term overseer will be Paulson. But the White House deputy chief of staff, Joel Kaplan, said that if the Obama team wants someone else installed to bridge the administrations, Bush is open to that. Kaplan said there have been discussions with Obama's aides throughout the process and the White House believes Obama's view of the problem and the solution tracks with theirs.

The White House package is the lifeline desperately sought by U.S. automakers, who warned they were running out of money as the economy fell deeper into recession, car loans became scarce and consumers stopped shopping for cars.

The carmakers have announced extended holiday shutdowns. Chrysler is closing all 30 of its North American manufacturing plants for four weeks because of slumping sales; Ford will shut 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories _ many for the entire month of January _ to cut vehicle production.

Bush said the automakers have faced serious challenges for many years: burdensome costs, a shrinking share of the market and plunging profits. "In recent months, the global financial crisis has made these challenges even more severe," he said.

"Under ordinary economic circumstances, I would say this is the price that failed companies must pay," the president said. "And I would not favor intervening to prevent the automakers from going out of business. But these are not ordinary circumstances.

"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action."

Chrysler CEO Bob Nardelli thanked the administration for its help.

In a statement Friday morning, Nardelli said the initial injection of capital will help the company get through its cash crisis and help eventually return to profitability. He said Chrysler was committed to meeting the conditions set by Bush in exchange for the money.

Ford President and CEO Alan Mulally said his company would not seek the short-term financial assistance but predicted the aid would stabilize the industry.

"The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy," Mulally said.

GratefulCitizen
12-24-2008, 12:50
The bailout car:
http://www.youtube.com/watch?v=rAqPMJFaEdY

Defender968
12-24-2008, 15:32
The bailout car:
http://www.youtube.com/watch?v=rAqPMJFaEdY

That was absolutely AWESOME, thanks for posting!