Although I generally applaud the recovery measures advanced by the Obama Administration, I think their approach the Auto companies and AIG have been been marked by an unwillingness to face facts. Why are we bailing out AIG? Because it is a backdoor way to bailout the big banks. Every time AIG pays a bank 100 [...]
The Great Recession is giving us a lesson in just how “discretionary” most spending is. Auto sales fell off a cliff in the last three months. It was obviously easy for most people to postpone the purchase of a car, despite massive sales incentives. But surprisingly the same is true for many medical procedures.
Forty-four percent [...]
I have from the outset of the auto company debacle, maintained that a prepackaged bankruptcy was the only way to resolve the problems. The plans put forth by GM and Chrysler should not be confused with a true restructuring. In a bankruptcy the equity holders are wiped out and the bondholders are forced to convert [...]
David Cole, who runs the supposedly independent Center for Automotive Research (funded by the car companies) is a shill for the Big Three Auto companies. Here’s what he had to say about President Obama’s move to let the California auto emissions standard become the law of the land.
The California regulations, if enacted today, “would basically [...]
This is a bottle of Tide detergent. It costs about $7 at your local market. It has less than $1 of ingredients in it. The rest is packaging, marketing, “shelf space fees” and profit. Tide’s manufacturer, Procter and Gamble spends $255 million per month in U.S. advertising for all its products.
In the first six months [...]
As I have been suggesting for weeks, bankruptcy is a very useful tool in restructuring bloated companies like GM and Chrysler. It now looks like Hank Paulson is going to recommend an orderly bankruptcy in order to put some new funds in.
The action would be unusual, and would require concessions by the United Automobile Workers union, suppliers, [...]
The Big 3 Bailout Fails.
A frantic, last-ditch attempt to forge an relief package for the auto industry collapsed in the U.S. Senate, dealing a giant blow to hopes of the Big Three.
Senate Majority Leader Harry Reid of Nevada suggested the $14 billion wouldn’t be revisited until January. “It’s over with,” he said.
Ford is cool, I’m [...]
The most significant section in Bob Corkers Auto Bailout is this.
Under his plan, which was the subject of intense negotiations with Democrats, the automakers would be required by March 31 to cut their debt obligations by two-thirds — an enormous sum given that G.M. alone has more than $60 billion in debt.
The automakers would also [...]
Back in July I said that Chrysler was “road kill”–that the company couldn’t possibly survive with all the debt the hedge fund geniuses at Cerberus Capital put on it. Now a very respected analyst says the same thing.
Chrysler, which this month warned that it could soon run out of money without a $7 billion loan, [...]
One of the great problems the Obama Administration will face in the next few months is that the need to create or preserve jobs may conflict with the need to invest in our future. The term “shovel ready” has already made it’s way into the beltway lexicon and although there is a certain merit to [...]