The Easiest way to fix U.S. Economy

The Easiest way to fix the U.S. Economy from the financial / mortgage bubble.

I am a big proponent of letting failure and it's respective fallout occur when it comes to corporate entities, the is no such thing as "too big to fail" but rather "to monopolistic to exist".

What happens when you can't pay your debts? You go into receivership and lose assets and any monies you have remaining.

The U.S. federal government should NOT have bailed out any of the banks and mortgage companies from irresponsible and incompetent activities and actions but rather force them to declare themselves bankrupt and hand the assets back to those who invested in the company. i.e. you and your mortgage.

Had all those homes owned by failed mortgage companies and banks been handed back to the owners because their mortgage provider failed they would have instantly had assets of tens of thousands if not hundreds of thousands back in the home owners hands.

Now imagine a few tens of millions of U.S. citizens with tens of thousands of dollars back in their checking accounts...what would they have done?

I can tell you...the would have begun spending with their new found wealth.

Home owners would have invested, remortgaged, sent kids to college, bought luxury big ticket items, etc, etc, etc.

How did bailing out big ticket CEO's who failed in the first place kick start anything with the economy?



Welcome To Detroit

GM Buys Bankruptcy For Dummies Book

GM declares bankruptcy and how your going to get the shaft.

I came across this article in the New York Times

Source

DETROIT DAILY DIRT translated it into terms the rest us can understand.

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QUESTION. Is G.M. going out of business?

ANSWER. No. G.M. is reorganizing under Chapter 11 of the United States Bankruptcy Code. The law allows companies to shed assets, restructure debt, cancel contracts and close operations that normally would have to continue running. Once they secure financing to emerge from bankruptcy, these companies are reconstituted as new legal entities.

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DETROIT DAILY DIRT TRANSLATION. Going out of business? HA! No way, they will be better off than they have in the past 20 years after all their debts are forgiven. Recent changes in the bankruptcy laws made it harder for you and I to declare bankruptcy but this one gets the corporate fast track to the tune of $172 billion.

If you or I went to court to declare bankruptcy we would have to explain to each of our debtors why we could not pay in front of a judge and then the debtor would ask the judge to make us pay...fun.

Now figure all your debts and the months it would take you to go through a bankruptcy.

Imagine how complex and convoluted the finances of a 100 year old corporation that used to be the largest employer in the country must be AND imagine that same company with piss poor board level management of finances which threw it into bankruptcy in the first place...pretty murky huh?

By all rights to be done right it should take years if not decades to resolve. I foresee this as the sloppiest chapter 11 declaration in American history.

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Should G.M. fail to successfully reorganize, it might turn to a Chapter 7 bankruptcy, which would mean liquidation, but that is not seen as likely given support from the Treasury and the Obama administration.

Q. Where will the case be heard?

A. As with Chrysler, the case will be heard in the United States Bankruptcy Court for the Southern District of New York. Judge Robert E. Gerber will preside.

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DETROIT DAILY DIRT TRANSLATION. Liquidate it how? To who? Be real, Chapter 7 is as likely to be completed as a ladder made of my poop to the moon.

No offense to the honorable Robert E. Gerber but how the hell would he even approach something like this? Introduction of the known GM assets would take years in court.

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Q. How long will this take?

A. Senior White House officials say the essence of the case should take 60 to 90 days. It plans to use Section 363 of the bankruptcy code to sell assets, rid the company of liabilities and restructure its debt, creating a new version of G.M.

Late Sunday, the bankruptcy court approved the sale of Chrysler assets to Fiat, only a month after its case began. The remaining pieces of Chrysler will remain in bankruptcy for at least several more weeks. Such quick bankruptcies are unusual. In reality, most bankruptcies take much longer. United Airlines spent more than three years under bankruptcy protection. Delphi, the auto parts supplier, has been in Chapter 11 since 2005. The bankruptcy by LTV, a steel maker, took seven years to resolve.

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DETROIT DAILY DIRT TRANSLATION. 15 to 25 years.

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Q. What happens to G.M. dealers?

A. G.M. is able under bankruptcy to cancel franchise agreements with its dealers. It has already announced plans to eliminate 1,100 dealers and may cut more. The company wants those dealers to close within 18 months. Dealers can sue to block the action, but a final decision would be up to the judge. In the meantime, G.M. will continue to provide dealers with vehicles.

GMAC, with support from the government, will provide financing for G.M. customers. It is also providing financing for Chrysler.

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DETROIT DAILY DIRT TRANSLATION. Dealers? Out of business unless they have a proven track record of selling X amount of product per year if Chapter 11 is used.

If chapter 7 is utilized all dealers are on their own, probably will switch to used vehicle sells or a new manufacturer.

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Q. What’s the biggest difference between the G.M. and Chrysler cases?

A. Chrysler had reached an agreement to sell assets to Fiat before its case began. G.M. is attempting to restructure on its own, with financing from the Treasury. It is providing G.M. with $30 billion in debtor-in-possession financing so it can operate while in bankruptcy, in addition to about $20 billion G.M. has already received. It is likely the Treasury will provide more scrutiny and guidance in the G.M. case, since such a large amount of taxpayer money is at stake.

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DETROIT DAILY DIRT TRANSLATION. GM's corporate officers collective egos would not allow them to admit to themselves and the world that they failed.

Selling assets would have been tantamount to admittance of failure in addition to the fact all the assets for lack of a better term would be considered toxic since GM had little or no worth to the private investor.

GM also went toe-to-toe with the US Government on the "we are too big to fail" defense and received $50 billion.

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Q. What happens to G.M. employees?

A. G.M. employees who are not union members do not have any job security. The company can ask a judge for an immediate pay cut for its salaried employees, and can announce job cuts and close offices, just as it can outside bankruptcy,

Contracts covering members of the United Automobile Workers union and other unions will remain in force, unless the company asks a judge to void them. However, U.A.W. members approved changes last week, and the new G.M. is expected to honor that contract.

But in bankruptcy, the company can ask for contracts to be terminated and replaced with terms it can more readily afford, and the union would have a chance to respond in court. Negotiations would take place before any cuts were imposed. Such a process could take months.

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DETROIT DAILY DIRT TRANSLATION. Attention GM employees you are hereby screwed.

If GM can squirm it's way out of ANY contractual or moral obligation to it's employees and retirees...it will.

The Union will be worth less than nothing at this point as well, what good are 20,000 members if they can't pay dues?....see ya!

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Q. Are pensions and retiree health care benefits protected?

A. The White House said Sunday that, assuming the sale goes forward, G.M. workers’ pensions and health care benefits would transfer to the new company, and remain in force.

Companies have the right under bankruptcy law to ask to terminate their pension plans. If such a request were to be made, a judge would convene a brief trial on the subject and hear both sides. If pensions were terminated, employees would still receive about a third of their benefits through financing from the federal pension agency.

A company can also eliminate retiree health care benefits for nonunion employees; they would subsequently be covered by Medicare.

The U.A.W. and G.M. agreed in 2007 to transfer responsibility for union retiree health care to a special fund, and the fund would administer those retiree benefits.

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DETROIT DAILY DIRT TRANSLATION. If GM can push its health benefit cost to US taxpayer, it will. Otherwise it will probably just cut it off regardless.

I would just consider pensions and health benefits as good as gone at this point.

P. S. Refunds on the 30 years of your life you gave to GM are not enforceable, so even though you came through with your end of the deal by giving your entire life away in 8 hour shifts to GM, they will choose to renege on their promise to you to take care of you in your golden years.

Don't believe me? Just watch.

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Q. What happens to G.M.suppliers?

A. In its bankruptcy filing, G.M. listed its 50 biggest creditors holding unsecured claims, meaning those that would have to get in line behind creditors whose debt is secured by collateral, like the company’s plants, brands and other assets. The unsecured creditors include Wilmington Trust Company, a bondholder; the U.A.W., through its health care trust; and suppliers like Delphi, Robert Bosch and Lear.

The White House said supplier contracts would remain in force, and it has created a program to provide federal help to parts makers. But in bankruptcy, supplier contracts can be canceled.

G.M. is likely to tell the court which suppliers it wants to keep doing business with, and which contracts it wants to reject. Suppliers could challenge the rejection of their contract, but most likely they would have to reach a settlement with G.M.

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DETROIT DAILY DIRT TRANSLATION. If suppliers aren't flexible enough to move sales to new clients they are as good as gone. They won't get enough money to survive without GM to continue with "business as usual" and any money the do get will take years to get and the lawyers will no doubt have their cut first.

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Q. What happens next in the bankruptcy case?

A. G.M. filed its initial paperwork with the federal bankruptcy court in New York on Monday. Next, it will ask a judge to issue a series of rulings called the first-day orders, which allow the company to keep operating. They may include authorizing the payment of routine expenses, like salaries and payments to vendors, including its lawyers, and whatever else G.M. needs to run its business. G.M., unlike Chrysler, has not halted production.

Once the case begins, a committee will also be formed that represents G.M.’s creditors.

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DETROIT DAILY DIRT TRANSLATION. The lawyers descent like maggots on a dead bison.

All officers of the GM upper management will secure their own salaries and start searching the"old boy network" to get another job. Sad part is, they will get other jobs.

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Q. Should owners of G.M. cars and trucks be concerned?

A. The federal government said it would back the warranties on vehicles bought from G.M. while it is operating in bankruptcy. So, effective Monday, warranties are underwritten by the government.

Owners of G.M. vehicles bought before Monday should expect their warranties to be honored until they expire. Owners whose vehicle warranties have run out are liable for any problems with their cars and trucks, as they are now.

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DETROIT DAILY DIRT TRANSLATION. No more concerned than those of us who own AMC Hornets should be.

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Welcome To Detroit

GM and Chrysler leave thousands of destroyed lives in their wake

Chrysler dealer closures rip at fabric of communities

Redford - At Bruce Campbell Dodge, the voice mail of owner Bruce Campbell greeted callers thusly:

"It is a thrilling Thursday here in remarkable Redford."

On a day that Campbell and 38 other Chrysler dealerships in Michigan learned they were no longer wanted by the company, the greeting may have been the only positive note.

And it wasn't just the sellers of autos who were hurting.

Communities where the dealers have been fixtures, some for more than a half century, wondered how they will fill the holes that will be left when the businesses close.

Source

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Can you hear the doors slamming America?

Did you hear that first shoe fall?

This is a signal that will reverberate with unemployment across the country.

And Why?

The PT Cruiser sold so many units that you could hardly turn your head without seeing one on the road, that was just a few short years ago.

GM was the largest automaker in the world.

How bad of a CEO/COO/Etc., do you have to be to get from prosperity to bankruptcy?

I can tell you why in one two words. I can summarize what all the analysts and commentators cannot encapsulate with hours jabbering about what if, and should of, could of, would haves....what the top 1% of executive talent could never seem to fathom.

Two words.

Incompetence and Greed.

Both words practiced ad nausea by every major auto companies' upper echelons for decades while Detroit and the country were squeezed for every dollars' worth that faulty products, lack luster design and shoddy manufacture could muster.

They sold millions of cars, MILLIONS, the US auto companies had a virtual monopoly on the automotive market for nearly a century across the entire planet and what did they accomplish?

Nothing.

No energy advances worth mention, no remarkable advances in any of the technology involved. The advent and incorporation of computers into cars did more than any automaker did to change the face of the industry.

All the auto companies did was incorporate other advances and others' inventions into a 100 year old business model that remained unchanged during that whole time.

Black ink and profit margins for shareholders were their only concerns for decades.

And now they fail.

The auto companies are falling apart at the seams and they want the very customer and employee base they took advantage of for nearly a century to pay for it.

I say let them fail.

Let incompetence and greed reap what it has sown.

The collapse of the US auto industry will be felt across the country with slow reverberations of unemployment and economic despair for decades.

But we should just take this bitter pill and get it over with.

Let new companies with forward ideals and justifiable business ethics take their place, it is economic evolution in motion and it shouldn't be stopped.




Welcome To Detroit

Why GM Is UnAmerican And I Buy A Toyota

I get a lot of ribbing, most light hearted but at other times threatening, about my choice to own and drive a Toyota.

Well here is why.

A) 3 recalls on the one new Ford I ever owned, AFTER repairs I made at my cost totaling to about 1/3 the price of the total vehicle because of poor, untested design and overall crappy manufacture.

B) The attempt by American automakers to put the spin of patriotism on their manufacture and my purchase.

C) The bureaucratic corruption and sense of self entitlement of auto worker unions.

And now....Ladies and Gentlemen I give you GM...yes the GM that was bailed out by your money...my money...your neighbors money...your employers money...

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GM ‘Likely’ to Build in China as U.S. Factories Close

General Motors Corp., shuttering U.S. plants in a bid to avoid bankruptcy, is “likely” to build a new factory in China on surging demand.

“Operations in China are profitable and in the future China can finance its own growth,” Nick Reilly, the company’s Asia-Pacific president, said at the Shanghai auto show today. He didn’t give a time frame for the new plant.

GM, the biggest overseas automaker in China, boosted sales in the country 38 percent last month as government stimulus measures spurred demand for its minivans. By contrast, the company’s U.S. sales slumped 45 percent on the recession, as it battles to convince the U.S. government that it’s still viable.

The automaker has also delayed expansion of an Indian plant for as long as two years as sales growth there has slowed, Reilly said. The company will seek to turn around sales in Australia and South Korea, he added.

GM is basing its business planning in Asia on the assumption that it will have to finance projects locally, insulating it from possible problems in the U.S., Reilly said.

“We won’t get money out of the U.S. into China,” Reilly said. Still, “we don’t need to because we have a very good balance sheet.”

China Sales

The Detroit-based car maker said April 9 it expects to double annual sales in China to more than 2 million vehicles over the next five years, with more than 30 new and upgraded models being introduced in that span.

GM makes vehicles in China through two ventures, both of which are backed by SAIC Motor Corp. Reilly said he wouldn’t comment on the possibility of Chinese automakers buying GM brands.

GM is trying to prove it’s viable in order to keep $13.4 billion in U.S. federal loans. The company is seeking to shed some brands, cut 47,000 jobs worldwide this year and close five assembly plants as it faces a June 1 deadline to avoid a U.S. government-backed bankruptcy.

Source
GM says it will expand in China despite U.S. woes
GM: 1,600 will lose jobs in next few days

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So there you go...your thanks for being a loyal buyer of GM...increases in employment in India and China while plants are closed in the US.

Feel good knowing you bought American while you drive your GM around town...while looking for work...you've earned it.



Welcome To Detroit

Foreclosures 46% higher in March than a year ago

The number of homeowners facing foreclosure surged in March as lenders lifted temporary moratoriums and resumed legal actions against delinquent mortgage payers.

Foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 341,180 properties in March, 46% more than a year ago and 17% above February's total, RealtyTrac reports today.

One in 159 U.S. housing units received at least one foreclosure notice in the first quarter, for a total of 803,459, according to RealtyTrac, which lists foreclosed properties around the country.

The sharp increase in foreclosures comes as the Obama administration is launching an effort to help as many as 9 million borrowers avoid foreclosure by modifying their loans or refinancing mortgages. Many lenders put a temporary freeze on foreclosures late last year while the administration prepared its program.

Much of March's activity was in new foreclosure actions — bank repossessions fell 3% from February. With most of the moratoriums now lifted, bank repossessions are likely to start rising again.

Source

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And so it returns with a vengeance...foreclosures by banks that are in bankruptcy themselves.

Next you can watch the credit card supplying banks raise rates to their legal maximum before the new regulations go into effect next year.

This is nothing more than last ditch gouging by financial institutions that are unable to conduct business that legally produces profit and should be required by law to fail.

Watch your credit card rates skyrocket this year as banks that are losing money attempt to make you pay for their risky mortgage investments.

Banks aren't going to pay for their losses...you are.


Welcome To Detroit

Those Responsible Few.

I recently read a great article in the Feb. 23 2009 issue of Time.

This lists the 25 people most responsible for the financial meltdown in recent months in this country...or as I like the call them, the treasonous, greedy few.

These are the archetypes that more often than not like to consider themselvesas masters of the universe types from years gone by, rail barons, oil magnets, land owners, etc, etc.

Except these people really don't produce or manufacture anything for society on the whole...just push paper and I.O.U.s back and forth for profit.

Here let me name the top 14 of them so you and I can direct your empty stomachs and guilty gaze upon them.

1. Aneglo Mozilo - Why haven't you ever heard of him? Because he is way richer that you can ever dream of being. Founded Countrywide mortgage. Gave money to unqualified borrowers as standard operating practice. Sold Countywide to Bank of America which now has to settle the $8.7 billion in legal charges filed against Countywide by 11 states.

2. Phil Gramm - Chairman Senate banking committee 1995-2000
Repealed those pesky laws invented during the depression to separate commercial banks and Wall Street.

3. Alan Greenspan - Federal reserve chairman.
Alan just knew that financial institutes could be trusted to regulate themselves, advised the government in just such a manner.

4. Chris Cox - Former SEC chief, people tried to tell him about the Madoff-Ponzi scheme, it fell on this man's deaf ears.

5. American Consumer - Time states we are rall esponsible for living beyond our means, I don't agree with this. Time Magazine hasn't been to my house for Friday night baloney and water dinners.

6. Hank Paulson - Treasury Secretary in 2006, convinced Congress to throw $700 billion at the financial problem with zero effect...good job with my money Hank.

7. Joe Cassano - Got AIG involved in Credit Default Swaps. In layman's terms, convinced AIG to bet heavily that people will spend beyond their means forever and ever and ever. That cost us about $150 billion so far to keep AIG afloat.

8. Ian McCarthy - CEO of Beazer homes, they were leaders in predatory lending practices from 2000 and on in this country, but don't expect to see Ian in court anytime soon. Criminal law is for the unwashed masses, not Ian.

9. Frank Raines - Ran Fannie Mae, left during an accounting scandal and investigations into sub prime securities, he won't be going to court anytime soon either, he worked for Bill Clinton.

10. Kathleen Corbet - Standard and Poors AAA ratings came from this lady and apparently she handed them out like tic-tacs on Halloween. Her crime? Obliviousness and under qualification.

11. Dick Fuld - My personal favorite, Dick directed Lehman deeply into the sub prime lending business. Which is all now toxic debt and mostly responsible for creating "zombie banks".
Why is Dick my personal favorite? Because he got paid $500 million to help put his country into a financial tailspin that may take decades for it's poorest citizens to pay their way out of.
This guy makes the Grinch look like Tinkerbell....what a turd. You won't see him in prison anytime soon either, why? $500 million buys a lot of lawyers.

12. Marion and Herb Sandler - Bankers who got rich on Adjustable Rate Mortgages then sold the toxic debt to Wachovia..they made $2.3. Billion by bilking their fellow US citizens.

13. Bill Clinton - The prosperity he enjoyed during his Presidency was a side effect of his deregulation policies concerning financial institutes. Now either he knew that the bubble would pop one day or that he was just stupid remains to be seen but don't forget he did go on national TV and lie to every citizen in this country about a blow job.

14. George W. Bush - George embraced deregulation like the head of a $10 hooker. Actually blocked efforts by SEC head William Donaldson to regulate hedge funds, Williamson resigned because of it. George's inadequacy has done more harm to this country in 8 years than any attack by foreign forces has in 200 hundred years.

Time magazine once again did a great job on this...now when you hear the news about how the unnamed financial types did this to us you can put some faces on it.

Madoff is in the list too for obvious reasons but as far as I know the only one facing any serious media attention or criminal investigation because he fucked rich people and celebrity types...anyone who fucked the little people up the bunghole apparently gets away with it.



Welcome To Detroit

Big 3 Threatens To Take Ball And Go Home

Democrats to automakers: Prove you can repay $25 billion

Democratic leaders in Congress called on Detroit's automakers Friday to submit "credible" financial plans to lawmakers by Dec. 2 for spending up to $25 billion in government money, including vows for "significant sacrifices" by top executives.
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A letter from House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., came just hours before the Wall Street Journal reported on its Web site that General Motors Corp.'s board of directors had put an eventual bankruptcy filing into its range of options.

Source

The Journal, citing unnamed sources, said the board was willing to consider "all options" for GM, which has said it could be near the minimum amount of cash it needs to operate by the end of the year. The story said the board's position on a potential filing put it in "rare disagreement with Chairman and Chief Executive Rick Wagoner."

Wagoner had told Congress this week that bankruptcy is not practical for the company because people wouldn't buy vehicles from a bankrupt company.

"I am very optimistic and hopeful that they have gotten the message that they just can't come and say, 'Give us this,' " Pelosi said Friday. "How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?"

According to the letter, automakers will have to explain their financial position, how they plan to spend the money and the assumptions behind their assurances that any loan will be paid back. General Motors Corp., Ford Motor Co. and Chrysler LLC consumed nearly $18 billion in cash last quarter, and analysts have said GM and Chrysler could run short of cash by the end of the year.

The terms for any loan are to mirror the conditions set in a draft bill released by Rep. Barney Frank, D-Mass., earlier this week. Among them: The government debt takes precedence among the company's other loans; automakers have to provide warrants or stock to the government, and if the automaker's plan appears off track, the government can call its loan back immediately. Automakers also must promise to meet the fuel economy standards set in last year's energy bill.

And Congress promises to limit executive pay, bonuses and other benefits of top executives, who were roundly criticized after flying corporate jets to two days of hearings this week and providing what many lawmakers called stilted, incomplete answers.

Reid and Pelosi shut down a last-minute attempt at a compromise rescue Thursday, saying there were not enough votes in either side of Congress to pass a bill backed by Michigan's Democratic senators and key Republicans. That bill would have taken $25 billion in loans for building more efficient vehicles that Congress approved in September and lent it to the automakers immediately, an approach backed by the Bush administration.

Pelosi again suggested Friday that the Bush administration had the power to help the industry without Congress acting by using money from the $700-billion financial industry bailout. She also suggested that the automakers' finance arms could have access to an additional $25 billion under that program. And she promised not to use the $25 billion approved for retooling plants as a short-term lifesaver for the industry.

"It is like taking your kids' college education fund and spending it on your credit card bills," she said.

All Detroit automakers have committed to sharing their plans with Congress, but were seeking more guidance about how much detail they would need to share.

It was still not clear Friday whether lawmakers would question the basic business assumptions made by the automakers -- who have said they don't expect U.S. sales to rebound until 2010 at the earliest. Several analysts have warned that without steep cuts, Detroit automakers would continue burning through cash even when the economy revived.

Pelosi made clear Friday that she wanted proof the automakers were making progress on building fuel-efficient models, not just slashing costs to survive the roughest period in their history and using taxpayer dollars to bail water from a sinking boat.

"Their viability is not just about tightening the belt, which is important; it is about a decision to compete and to innovate," she said, adding, "The behavior of the past generation in terms of Detroit has not produced the preeminence that we would like to see."

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GM, which has said it could be near the minimum amount of cash it needs to operate by the end of the year.

Idle threats my friends, I could probably name 100 ways for them to save money immediately and I don't even work there. I am betting you could as well.

Wagoner had told Congress this week that bankruptcy is not practical for the company because people wouldn't buy vehicles from a bankrupt company.

Uh hello dumb ass...no one is buying your vehicles because you laid them all off, no one has a job to buy your crappy line of junk and the ones that do have jobs are now so overburdened by taxation they won't be buying anything for a decade either...what a tool.

"I am very optimistic and hopeful that they have gotten the message that they just can't come and say, 'Give us this,' " Pelosi said Friday. "How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?"

Wake up call Nancy Pelosi, your head is in the sand...you just gave 700 billion to the investment industry...these jackasses are only asking for 25 billion and you make them do the whole dog and pony show...where the hell was your smart mouth when the finance industry asked and received without question? Getting your hair done or something...what a tool.

provide warrants or stock to the government,

How about make the executives give the taxpayer their Class A stock option packages? That worthless public stock the government wants is just that...worthless.

Automakers also must promise to meet the fuel economy standards set in last year's energy bill.

Puleeze! There has been mpg legislation for decades. The automotive industry just ignores it. Period.

And Congress promises to limit executive pay, bonuses and other benefits of top executives, who were roundly criticized after flying corporate jets to two days of hearings this week

If this isn't the pot calling the kettle black I don't know what is. Congressmen and Senators get so many perks for their "public service" it isn't even funny...the fact the the auto execs flew their jets in just shows how out of touch with the reality of regular people they are.

Pelosi again suggested Friday that the Bush administration had the power to help the industry without Congress acting by using money from the $700-billion financial industry bailout.

Jesus Christ! Why is everyone throwing around our money like this? I don't want to bail out the finance industry OR the automotive industry and Nancy here is saying why didn't you ask Daddy first?

All Detroit automakers have committed to sharing their plans with Congress, but were seeking more guidance about how much detail they would need to share.

This is just a smoke screen. They don't want to be answerable at all to the Government. By asking for more detail from the government you might as well throw the whole request into legislation hell.

It will take the government a decade for them to decide they want the reports in 10 pt font and not 12, let alone what content they want.

It was still not clear Friday whether lawmakers would question the basic business assumptions made by the automakers -- who have said they don't expect U.S. sales to rebound until 2010 at the earliest. Several analysts have warned that without steep cuts, Detroit automakers would continue burning through cash even when the economy revived.

If they are "burning through cash" shouldn't they then fail? I mean if you or I "burn through cash" and don't pay our bills what happens?

Everyone is terrified of the auto industry failing, I say let it fail. Yes it would be a bitter pill to swallow but it would put us on the road to recovery quicker than having it happen anyway over the next two decades in chunks of 25 million a pop.

I guarantee you this...this will NOT be the last time the auto industry asks for money if you give it to them now and I would say the same for the financial infrastructure institutions...shit they are already saying the financial institutions will need more than the 700 million and they haven't even received on it yet.

"Their viability is not just about tightening the belt, which is important; it is about a decision to compete and to innovate," she said, adding, "The behavior of the past generation in terms of Detroit has not produced the preeminence that we would like to see."

Again..then let them fail.

Business 101 says if they cannot compete and fail to innovate then they fail.


Welcome To Detroit

Paulson Orders The Printing Press To Fire Up

Paulson Indicates Need to Purchase Bank Equity `Soon as We Can'

U.S. Treasury Secretary Henry Paulson indicated that pumping government funds into banks is a priority and said financial markets will remain volatile.

``We see the need -- a clear, present need -- to raise capital,'' Paulson said yesterday at a press conference after a meeting in Washington of finance ministers and central bankers from Group of Seven countries.

The purchases of stock, the newest part of a rescue plan engineered by Paulson, would be aimed at sustaining banks and other financial institutions through the worst credit crisis in seven decades.

The U.S. Congress last week passed legislation allowing the Treasury secretary to spend as much as $700 billion to buy mortgage securities and other troubled assets and to purchase equity in banks. Paulson declined yesterday to give a timetable or details about the purchases.

``We're going to do it as soon as we can do it and do it properly and do it effectively and right,'' Paulson said. ``Trust me, we are not wasting time; people are working around the clock to deal with this.''

Source

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Quick print all the money we can and devalue what little existing money we have left!

Brilliant.

Is this what higher education churns out of it's hallowed halls?

Watch this folks I will explain it very simply.

1. Government wants to buy bank stock to stimulate monetary liquidity.
   
2. Government has no money
   
3. Government asks the Federal Reserve to print the money it needs to make said purchase.
   
4. The $10 bucks left in your wallet is now worth $1.25
   

Here is another helpful hint.

Every time you see or hear Henry Paulson saying "The Government will buy, spend, etc" substitute the word government with U.S. citizens.

Money is not created with wealth in the U.S. it is created instantaneously by creating debt the moment it rolls off the printing press in the form of a Federal I.O.U.

When the Fed prints money (upon request from The Government) say $100 bucks, the national deficit grows by $100 bucks.

Voila'

That's right there is no gold or silver to back it up it is backed up instantly by debt creation.

So every time you hear Henry OR George saying;

"The Government" think of that word as you.

and when they say;

"will spend $700 trillion to ...get hookers, salmon pate', oil, guns, stocks or whatever" think of printing newly minted money and the bill goes to the national debt

The national debt...that should be self explanatory;

"National" meaning everyone in the U.S. and "Debt" meaning what we now owe and have to pay back by producing the work the Government promised we would perform in the first place when it asked the Fed to print the money

Then taking the money we just made in the form of taxation to spend all over again with no civilian oversight whatsoever.

If the Government doesn't have enough money after taxing everyone for all the crap they just "have to have", they ask the Fed to print more and the hilarity continues all over again until your in your grave.

Picture the hooker/pimp relationship of getting f-d and giving your money to the pimp and you pretty much have it down.

There, that should put things in the proper perspective.

See how that works?

Isn't this fun?

We're learning U.S. national economics and our pimp said we were "good fer nuthin ho bags."

Now when Henry says things like "We are going to do it now; clear and present need; need capital; etc." he has no f-ing clue what he is doing and he just wants to throw money at the problem to make it go away.

And why not?

Henry has an unlimited bank account because his bitches are out there working the streets for him.....ahem.....I mean Henry, George and the Government at large can get as much money as they want, whenever they want.

A golden goose without the shit covered eggs to deal with.

Thus smorgasbord, buffet, ala carte inflation courtesy Henry Paulson.

Want to fix it?

Here is how:

Put the federal note (money) bank on a Gold or Silver standard. (i.e. $1 represents $1 worth of gold or silver that would be in a vault say at Fort Knox.)

Why doesn't the Government want to do this?

1. The Government could no longer print all the money they want, so they couldn't buy everything they wanted whenever they wanted.
   
2. The Government couldn't afford to maintain even half of what they are doing now. (wars, covert ops, insurgency efforts, guns, gitmo, wiretapping, ships, spy satellites, tanks, space based weapons, etc.)
   
3. It would hurt the current U.S. comfort level (you and I), our quality of life wouldn't go down so much (it may go up if you actually turned off the XBOX and did shit with your kids for a change) but our standard of living sure as hell would go down (no more Concorde flights, dang it).
   
4. National then global extinction of superfluous occupations...i.e. middle men who don't actually produce anything will go bye-bye, only occupations with worth would survive the transition. (Want a cesspool dug? That will be $1000, you want to short sell my investment portfolio to make enough capital to do what again?....yeah don't need that, but you can dig my cesspool).
5. We probably would need a vault the size of Mammoth Caves in Tennessee to store the amount of precious metal needed to equate to our current level of national debt....nope that is probably way too small come to think of it.

But like it or not we may come to this point regardless of our wishes.

Hyper inflation always signifies the imminent collapse of a society.

When your bread reaches $30 bucks a loaf, you'll know whats going down.

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But why worry?

Henry Paulson, George Bush and the Federal Reserve got this one.

Now let's see what Tila Tequila is dry humping on T.V.

Welcome To Detroit

Some Bush Rose Garden Rhetoric

Detroit Daily News Prediction vs. Reality

Original post

Well here are (were) my predictions:

• Bush will say he has decided to take decisive action.
  
• Bush will say everything will be ok in the long run but we have to "tough it out".
  
• Bush will say the new legislation will slow down any down turn ( he won't say it will stop it or reverse it.)
  
• And of course the obligatory "Goodbye and God Bless".
  

Below I have highlighted my correct guesses from the white house transcript.

Source

The verbiage is open to interpretation but I think I scored 4 of 4.

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President Bush Discusses the Economy
Rose Garden

10:25 A.M. EDT

THE PRESIDENT: Good morning. Over the past few days, we have witnessed a startling drop in the stock market -- much of it driven by uncertainty and fear. This has been a deeply unsettling period for the American people. Many of our citizens have serious concerns about their retirement accounts, their investments, and their economic well-being.

Here's what the American people need to know: that the United States government is acting; we will continue to act to resolve this crisis and restore stability to our markets. We are a prosperous nation with immense resources and a wide range of tools at our disposal. We're using these tools aggressively.

The fundamental problem is this: As the housing market has declined, banks holding assets related to home mortgages have suffered serious losses. As a result of these losses, many banks lack the capital or the confidence in each other to make new loans. In turn, our system of credit has frozen, which is keeping American businesses from financing their daily transactions -- and creating uncertainty throughout our economy.

This uncertainty has led to anxiety among our people. And that is understandable -- that anxiety can feed anxiety, and that can make it hard to see all that is being done to solve the problem. The federal government has a comprehensive strategy and the tools necessary to address the challenges in our economy. Fellow citizens: We can solve this crisis -- and we will.

Here are the problems we face and the steps we are taking:

First, key markets are not functioning because there's a lack of liquidity -- the grease necessary to keep the gears of our financial system turning. So the Federal Reserve has injected hundreds of billions of dollars into the system. The Fed has joined with central banks around the world to coordinate a cut in interest rates. This rate cut will allow banks to borrow money more affordably -- and it should help free up additional credit necessary to create jobs, and finance college educations, and help American families meet their daily needs. The Fed has also announced a new program to provide support for the commercial paper market, which is freezing up. As the new program kicks in over the next week or so, it will help revive a key source of short-term financing for American businesses and financial institutions.

Second, some Americans are concerned about whether their money is safe. So the Federal Deposit Insurance Corporation and the National Credit Union Administration have significantly expanded the amount of money insured in savings accounts, and checking accounts, and certificates of deposit. That means that if you have up to $250,000 in one of these insured accounts, every penny of that money is safe. The Treasury Department has also acted to restore confidence in a key element of America's financial system by offering government insurance for money market mutual funds.

Thirdly, we are concerned that some investors could take advantage of the crisis to illegally manipulate the stock market. So the Securities and Exchange Commission has launched rigorous enforcement actions to detect fraud and manipulation in the market. The SEC is focused on preventing abusive practices, such as putting out false information to drive down particular stocks for personal gain. Anyone caught engaging in illegal financial activities will be prosecuted.

Fourth, the decline in the housing market has left many Americans struggling to meet their mortgages and are concerned about losing their homes. My administration has launched two initiatives to help responsible borrowers keep their homes. One is called HOPE NOW, and it brings together homeowners and lenders and mortgage servicers, and others to find ways to prevent foreclosure. The other initiative is aimed at making it easier for responsible homeowners to refinance into affordable mortgages insured by the Federal Housing Administration. So far, these programs have helped more than 2 million Americans stay in their home. And the point is this: If you are struggling to meet your mortgage, there are ways that you can get help.

With these actions to help to prevent foreclosures, we're addressing a key problem in the housing market: The supply of homes now exceeds demand. And as a result, home values have declined. Once supply and demand balance out, our housing market will be able to recover -- and that will help our broader economy begin to grow.

Fifth, we've seen that problems in the financial system are not isolated to the United States. They're also affecting other nations around the globe. So we're working closely with partners around the world to ensure that our actions are coordinated and effective. Tomorrow, I'll meet with the finance ministers from our partners in the G7 and the heads of the International Monetary Fund and World Bank. Secretary Paulson will also meet with finance ministers from the world's 20 leading economies. Through these efforts, the world is sending an unmistakable signal: We're in this together, and we'll come through this together.

And finally, American businesses and consumers are struggling to obtain credit, because banks do not have sufficient capital to make loans. So my administration worked with Congress to quickly pass a $700 billion financial rescue package. This new law authorizes the Treasury Department to use a variety of measures to help bank [sic] rebuild capital -- including buying or insuring troubled assets and purchasing equity of financial institutions. The Department will implement measures that have maximum impact as quickly as possible. Seven hundred billion dollars is a significant amount of money. And as we act, we will do it in a way that is effective.

The plan we are executing is aggressive. It is the right plan. It will take time to have its full impact. It is flexible enough to adapt as the situation changes. And it is big enough to work.

The federal government will continue to take the actions necessary to restore stability to our financial markets and growth to our economy. We have an outstanding economic team carrying out this effort, led by Secretary of the Treasury Hank Paulson, Federal Reserve Chairman Ben Bernanke, SEC Chairman Chris Cox, and FDIC Chair Sheila Bair. I thank them and their dedicated teams for their service during this important moment in our country's history.

This is an anxious time, but the American people can be confident in our economic future. We know what the problems are, we have the tools we need to fix them, and we're working swiftly to do so. Our economy is innovative, industrious and resilient because the American people who make up our economy are innovative, industrious and resilient. We all share a determination to solve this problem -- and that is exactly what we're going to do. May God bless you.

Source

END 10:33 A.M. EDT

Welcome To Detroit

GM Says "Hey It Worked Once..."

GM seeks $250M loan from Detroit pension fund

General Motors Corp. officials pitched a plan today to borrow $250 million from a city pension fund and refinance the Renaissance Center, but pension fund members did not approve or reject the request.

It is unclear whether, or if, the request will be voted on any time soon by the Detroit Police & Fire Retirement System.

Two members are against loaning GM that much money, especially considering the automaker's financial problems, which stem from an 18 percent drop in sales this year, a credit crunch and consumer shift away from profitable trucks and sport utility vehicles.

"It's just too much money," pension board member Barbara-Rose Collins said. "We can't uphold General Motors if they are having cash flow problems."

Another member, George Orzech, said: "This little fund can't cover something like this."

GM wants to borrow about $500 million from two city pension funds. The requests come as the automaker is trying to raise about $5 billion through asset sales and borrowing to survive the worst auto sales market in 15 years.

Source

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No No No No No No No No, you do not produce profit by incurring debt.

This pathetic proposal shows the truly criminal nature and limited vision of GM's top brass.

If GM get's their hands on those pension funds they are as good as gone, mark my words.


Welcome To Detroit

Fearless Leader To Speak

Bush to make statement Fri after market volatility

President George W. Bush will make a statement on Friday morning to assure Americans that every action is being taken to stabilize the financial system, a day after the U.S. stock market tumbled more than 600 points.

"Following the market's continued volatility this afternoon, the president will deliver a statement in the Rose Garden tomorrow morning," White House spokeswoman Dana Perino said on Thursday.

"He will assure the American people that they should be confident that economic officials are aggressively taking every action to stabilize our financial system," she said.

The Treasury Department is "moving quickly" to improve liquidity to ease the credit crisis, Perino said.

Bush will make the statement at about 10 a.m. EDT (1400 GMT), she said.

Source

______________________________________________

Dana's job must really suck sausage about now.

Well here are my predictions:

• Bush will say he has decided to take decisive action.
  
• Bush will say everything will be ok in the long run but we have to "tough it out".
  
• Bush will say the new legislation will slow down any down turn ( he won't say it will stop it or reverse it.)
  

And of course the obligatory "Goodbye and God Bless".

I wonder if I could run for president?

Welcome To Detroit

Federal Bailout, Golden Parachutes And Prosperity

Federal bailout, Dow Jones taking a dive, Executives taking golden parachutes...ahh don't worry about that stuff.

Enjoy these two pictures taken at a local Michigan fair on the main street right where all the festivities were taking place.

I cannot begin to tell you how cheerful this made the fair and the attendees.

Prosperity in action.

Welcome To Detroit

Lehman? Isn't That French For Asshole?

Lehman sought millions for execs while seeking aid

The now-bankrupt investment bank Lehman Brothers arranged millions in bonuses for fired executives as it pleaded for a federal lifeline, lawmakers learned Monday, as Congress began investigating what went so wrong on Wall Street to prompt a $700 billion government bailout.

Fired Executives get millions? Explain this to me please, I am interested in your company and would like to apply.

The first in a series of congressional hearings on the roots of the financial meltdown yielded few major revelations about Lehman's collapse, and none about why government officials, as they scrambled to avert economic catastrophe, declined to rescue the flagging company while injecting tens of billions of dollars into others.

Let me guess who was first in line...those who donated most to congressional campaigns?

But it allowed lawmakers still smarting from a politically painful vote Friday for the largest federal market rescue in history to put a face on their outrage at corporate chieftains who took home hundreds of millions of dollars while betting on risky mortgage-backed investments that ultimately brought the financial system to its knees.

...on their (congressional) outrage? I think you have it wrong, it's the constituents who are outraged...you know the ones without homes and jobs.

That face was Richard S. Fuld Jr., the Lehman chief executive who sat for a two-hour-plus grilling before the House Oversight and Government Reform Committee as the panel combed through his pay history, management practices and financial strategies.

oooooo two whole hours? He must be still shaking from that Guantanamo-like interrogation.

"You made all this money by taking risks with other people's money," Rep. Henry Waxman, D-Calif., the panel's chairman, said. "The system worked for you, but it didn't seem to work for the rest of the country and the taxpayers, who now have to pay $700 billion to bail out our economy."

Technically we don't HAVE to, we could have just let them all go down the tubes in my opinion.

A subdued Fuld opened his testimony declaring, "I take full responsibility for the decisions that I made and for the actions that I took," but he conceded no errors or misjudgments in the chaotic period that led to the firm's bankruptcy.

Really?...wow....I mean really?.....well whose fault was it then Tinkerbell's?

And he said a compensation system that he estimated paid him about $350 million between 2000 and 2007 even as the company headed for disaster was appropriate.

....I am sorry...350 what? Millions?.... of dollars?.....He made over a quarter of a billion dollars for failing? 

I am still interested in working for this company I think I could go far and fail just as good as this guy.

"We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders," Fuld said.

So what did the janitors say about all this? 

Oh you didn't mean THOSE employess...ha ha sorry silly me.

That wasn't good enough for some lawmakers who decried what they called a culture of entitlement at Lehman even as the company's performance nosedived.

The panel unearthed internal documents showing that on Sept. 11, Lehman planned to approve "special payments" worth $18.2 million for two executives who were terminated involuntarily, and another $5 million for one who was leaving on his own.

Again sir I ask you, where do I apply for these jobs?

That was just four days before the government let Lehman go under, touching off a cascading series of financial shocks and failures that put Washington on track for the multibillion-dollar rescue the Bush administration urgently requested from Congress at the end of that week.

Here is my impersonation of the Bush administration that week. "...oh crap....oh crap...oh crap....oh crap"

On Wall Street, uncertainty Monday about the effectiveness of the rescue sent the Dow Jones industrials sinking below 10,000 for the first time in four years. 

Here is my impersonation of the Bush administration THIS week. "...oh crap....oh crap...oh crap....oh crap"

The bailout, now law, was so rushed that the usual congressional scrutiny is only coming now, after the fact.

"....ah perfect."

"Although it comes too late to help Lehman Brothers, the so-called bailout program will have to make wrenching choices, picking winners and losers from a shattered and fragile economic landscape," said Rep. Tom Davis of Virginia, the committee's senior Republican.

"So you didn't donate to my campaign last term huh?...Well I will see if I can fit you in."

Fuld said Lehman did everything it could to limit its risks and save itself. It failed, he said, because of a "crisis in confidence" on Wall Street, market manipulation in which investors preyed on distressed financial players by betting on their demise, and would-be buyers who waited for the government to step in to help fund a sale.

Would it have helped if they saved $350 million and not paid your loser ass?

"In the end, despite all of our efforts, we were overwhelmed," Fuld said, looking uncomfortable seated by himself at a witness table where he fiddled with a pencil and removed and donned his glasses habitually as he fielded at-times angry questions.

ooooo give him a terse talking to...that will show him.

"Do you think it's fair?" Waxman demanded of Fuld as he outlined his exorbitant pay packages and noted that shareholders ended up with nothing.

"Do you think it's fair?" asked a single mother of three to Waxman....oh wait that comes later.

Fuld said he is haunted nightly wondering what he might have done to avert Lehman's bankruptcy, the largest in U.S. history.

Haunted? In what his 100 zillion dollar house with helicopter pad and slave girl harem?

"This is a pain that will stay with me for the rest of my life," he said.
Also haunting him, Fuld said, is the question of why Lehman didn't get a federal rescue while others did: Bear Stearns, the mortgage giants Fannie Mae and Freddie Mac, and insurance giant American International Group Inc.

Your kidding me right? Your not really complaining here are you Dick?

"Until the day they put me in the ground, I will wonder," Fuld told the committee.
But the committee's investigation painted Fuld as anything but a victim.

Waxman released e-mail correspondence from June 2008 in which Fuld dismissed the suggestion from executives at a Lehman subsidiary that the company's top people forgo bonuses to "send a strong message to both employees and investors that management is not shirking accountability for recent performance."

Fuld wrote, "Don't worry — they are only people who think about their own pockets."
The suggestion came from executives at Lehman's money management subsidiary, Neuberger Berman, who also were recommending that Lehman spin off its business to insulate its employees — and their bonuses — from Lehman's sagging stock price and from "management mistakes."

Take both hands from your lawyer and place them firmly over your ass, covering it significantly.

George H. Walker, President Bush's cousin and a member of Lehman's executive committee, breezily shot down the ideas, according to the e-mails.

WHAT?!?! Bush family was in there? HAW HAW HAW HAW....I threw up in my mouth a little.

"Sorry team. I am not sure what's in the water at" Neuberger Berman, Walker wrote to the rest of the executive committee. "I'm embarrassed and I apologize."

Republicans dismissed the hearing as little more than a political stunt given that it failed to probe the role of Fannie Mae and Freddie Mac — huge players in the mortgage market — in the financial meltdown.

"If you haven't discovered your role today, you're the villain, so you have to act like the villain," Rep. John Mica, R-Fla., told Fuld facetiously, earning a tight smile.

In a statement, Rep. John Boehner, R-Ohio, the House minority leader, accused Waxman of refusing to investigate the mortgage giants "solely to shield his fellow Democrats politically," and said it "cheats the American people of key facts that could help all of us learn how we got here — and what we must do to make certain this situation never repeats itself."

Source

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