Auto Industry Bailout

TheTodd · Post by **TheTodd** » Thu Nov 20, 2008 4:41 pm

Mittens was speaking for ya AA.

annarborgator · Post by **annarborgator** » Thu Nov 20, 2008 4:49 pm

^^

watching the bailout testimony the other day, all our lawmakers had a common theme - "how do i justify your actions to my constituents" .... there's your representation.

I understand your position and agree that you have a valid point. We must recognize, though, that I did add the qualifier meaningful to the concept of "representation". What good is representation if the voice of the citizen falls on seemingly deaf ears?

Of course, our representatives are not deaf--the citizen's voice is merely drowned out in the cacophony raised by lobbyists of special interest groups. The effect remains though: the citizen has been cast off, left to hope for the best from the lawmakers of her society who rule unilaterally, greatly separated from the citizen herself, just as the American colonist could only hope for the best from the British Parliament that was an ocean away. What were the comments running leading up to the bailout? 90 to 1 against it or so? 100 to 1? So, basically EVERYONE (who sacrificed their personal sovereignty to create the government, btw) was against it...and good old Congress passed the bill.

Nobody wants to bailout the automakers. But they will get their money. And don't think it will stop here.

radbag · Post by **radbag** » Thu Nov 20, 2008 5:10 pm

i'm waiting for the counties, cities, townships, and communities to come out and say "hey - we need to get bailed out too! we have schools, roads, and bridges we need built and/or repaired!!! we can't begin these projects without proper funding!!! no one is lending and our constituents need/want these services!!!"

annarborgator · Post by **annarborgator** » Thu Nov 20, 2008 8:15 pm

That's coming, bro. You know it and I know it. The muni's will end up needing to be bailed out.

a1bion · Post by **a1bion** » Thu Nov 20, 2008 9:45 pm

I already saw the mayor of Atlanta on CNBC (I think), asking for TARP funding to finance muni bonds for construction work on the airport there.

annarborgator · Post by **annarborgator** » Thu Nov 20, 2008 10:27 pm

The way I understand it, they won't be using TARP for munis/counties/states. I believe they would need a new act of Congress, but I could be wrong...no telling exactly how they will interpret it all.

radbag · Post by **radbag** » Thu Nov 20, 2008 11:49 pm

paulson believes the TARP is for banks only

this is why insurance companies are buying small banks so they can qualify for aid

this is also why lenders not necessarily banks are now registering as holding companies...so they can qualify.

muni's aint gettin a lick of shit out of the TARP

annarborgator · Post by **annarborgator** » Fri Nov 21, 2008 12:02 am

That was my understanding as well, rad.

TheTodd · Post by **TheTodd** » Fri Nov 21, 2008 8:45 am

Those dumbasses should have written in a qualifier that said you had to be a bank at the beginning of the year to qualify. If those stupid policy makers in DC allow people to backdoor TARP then they are fucking morons.

radbag · Post by **radbag** » Fri Nov 21, 2008 10:42 am

paulson has discretion and so will the incoming treasury secretary.

a1bion · Post by **a1bion** » Fri Nov 21, 2008 11:06 am

GE gots them some TARP money, yo.

radbag · Post by **radbag** » Fri Nov 21, 2008 11:47 am

GE is "AAA" rated and if i'm not mistaken, they recently registered as a holding company.

TTBHG · Post by **TTBHG** » Fri Nov 21, 2008 11:58 am

GMAC, GM's financing arm, just restructured to become a bank so they could get some TARP money. Those fuckers will do anything they can to get some money.

AdGator02 · Post by **AdGator02** » Fri Nov 21, 2008 5:02 pm

GE has a corporate finance wing, maybe that's where it went?

MinGator · Post by **MinGator** » Fri Nov 21, 2008 11:46 pm

gmac owns ditech don't they?

TheTodd · Post by **TheTodd** » Sun Nov 23, 2008 8:23 am

yes they do gman.

annarborgator · Post by **annarborgator** » Wed Dec 03, 2008 11:32 pm

This is simply awesome...I've grown to love the headspinning effect this new economic paradigm has on a mere mortal like myself:

General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with internal discussions.

Auto executives have warned that bankruptcy would lead to liquidation as customers abandoned the companies. In response, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.

“It’s essential for Congress to do due diligence on bankruptcy as an option so it gets a clear sense from independent people what the risks and possibilities are,” said Alan Gover of White & Case, who has been lead lawyer in $60 billion of corporate-debt restructurings.

Many solutions to the automakers’ financial problems are on the table in discussions in Washington and around the country among company officials, lenders, union officials and other interested parties, the person briefed on internal talks said.

Negotiations currently are splintered among small groups, making it unlikely that a proposed solution such as bankruptcy would emerge until next week at the earliest, the person said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMTynXWxak9I&refer=home

Of course, I realize that if this is the only way to avoid pure liquidation then it's probably worth the investment to structure a more favorable bankruptcy settlement for everyone involved...but the idea of forcing a company into bankruptcy as a condition of loaning them money just cracks me up for some reason.

annarborgator · Post by **annarborgator** » Thu Dec 04, 2008 8:41 pm

I also wanted to say that it seems like we've come quite a ways from the first major bailout discussion that occurred on the Hill. Listening to the boys from D-town today, it sounded like they are ready and willing to accept any conditions placed on the loans. It was worlds apart from when the banksters showed up a couple months ago, basically saying they needed unmarked 20s with no questions asked.

Public warrants were openly acknowledged today in open remarks and it seemed like the mindset was...we're here to let you know we'll do whatever it takes. If it actually plays out well for the taxpayers, who knows...but they did, by far, the best sales job so far when it comes to begging for public money. Of course, they had already dug themselves a nice little hole. But, still...seems noteworthy to see the enhanced sophistication so quickly...makes me wonder how much of this can be sold to the public.

If TPTB continue to develop their skills in selling the public on taking on losers' private debt, there's no telling how quickly and drastically we may ruin the USD.

radbag · Post by **radbag** » Thu Dec 04, 2008 8:51 pm

bankers benefitted by being the first....the first always get what they want and how they want it...second to them get restrictions...thirds even more...and so on and so on...that's why the contrarians get rewarded for thinking out of the box...they are the firsts...the groundbreakers...the late comers get their faces ripped off.

annarborgator · Post by **annarborgator** » Thu Dec 04, 2008 9:02 pm

I'm a bigtime contrarian. I'm sure it will give me a few bad haircuts but, oh, the potential. Plus, it's just my personality.

annarborgator · Post by **annarborgator** » Fri Dec 05, 2008 9:12 pm

Apparently an agreement has been reached on a $15B bridge loan:

Jolted by the loss of thousands of jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis. Several officials in both parties said the breakthrough on a long-stalled bailout came after House Speaker Nancy Pelosi bowed to Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars. The California Democrat spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added.

Wonder how much more they'll need after the first of the year?

radbag · Post by **radbag** » Sat Dec 06, 2008 8:59 am

well - considering GM needs 11 BILLION every month just to pay it's monthly bills, i suspect that 15 BILLION won't do shit.

G8rMom7 · Post by **G8rMom7** » Mon Dec 08, 2008 1:06 pm

i'm waiting for the counties, cities, townships, and communities to come out and say "hey - we need to get bailed out too! we have schools, roads, and bridges we need built and/or repaired!!! we can't begin these projects without proper funding!!! no one is lending and our constituents need/want these services!!!"

I thought this was Obama's big opening act...funding all these infrastructure projects to get everyone back to work. Of course, I don't know how many of the folks that have lost their jobs are going to be willing to dig ditches for a living on minimum wage...but hey, it's a job, I guess.

G8rMom7 · Post by **G8rMom7** » Thu Dec 11, 2008 11:02 pm

I just was reading that the Auto Bailout blew-up when the Auto Workers Union refused to take a pay cut until 2011 when the Repubs were telling them they needed to take one in 2009. The Union says they will agree to a paycut when their contract is up in 2011! Well of course, they'll say that now...I'm sure they're banking on the economy being okay by then so they can say "hold up...we're okay now...we don't need to take a paycut as promised!" Sure.

And Todd, in your original post about the Japanese being worried about getting their parts from small suppliers etc? I really don't buy it. Maybe in the short run, but if the big three go under these suppliers may need to scale back and cut back jobs etc., yes, but if there is money to be made and the Jap car makers want to buy, I'm sure that some supplier would step up and fill the gap.

I just think we need to have some pain in the short term to make things better in the long term. If it means I'll have to buy a Civic instead of another minivan...so be it.

Sorry for the rant, I'm just so annoyed about all this bailout crap...it seems it will never end!

DocZaius · Post by **DocZaius** » Fri Dec 12, 2008 8:37 am

No matter what happens to the Big 3, people world-wide will still demand cars. If the absolute worst happens and the US automakers go under, it'll be very bad in the short-term.

Long-term, however, foreign manufacturers with a US presence will sell more cars, employ more people to keep up with supply, etc. In addition, maybe a new domestic manufacturer or two will step in and take the place of the failures.