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Open Letter to Congress re Automotive Bail Out

BillB1 — Wed, 19 Nov 2008 16:55:11 -0500

RE: Automotive Bail-Out

Letter to Congress---

Automotive contract jobs in states (NC, VA, etc.) dependent upon the Auto Industry are going to suffer badly unless you and your fellow Congressmen take action, and it is not what you think. Just saving GM's bacon is not going to help NC Car Manufacturing or Dealers one little bit.

If you give GM a simple bailout, they're going to close down plants anyway, and shift contract work in States up to Detroit, to pay for non-working laid off employees, not other state’s jobs. Those states and the suppliers will lose big. That includes North Carolina if you don't do more than give GM a "handout".

BTW, the same thing happened in the 80's in Buffalo NY. The whole economy foundered for two years because Detroit pulled back in all the work. Not only that, the reason that GM's "burn rate" has been so high for the last quarter is they moved work oversees to Russia (just opened big facility) and China rather than invest in America. Same as Oil companies did in the 80's. Take U.S. Taxpayer dollars and move their operations "offshore" where they were nationalized to use against the U.S. and our economy. Surprise, surprise. They've been closing down plants in the US with the same products still being produced in Mexico and Canada.

Here’s what needs to be done. One of two options. First is better, but we could tolerate the 2nd. And, by the way, 72% of Americans do not want congress to bail out GM. Maybe Ford for planning better, but not GM. Got that? 72% do not want a bail out.

--Allow GM (and any of the other three) go into a "structured chapter 11" with a full government guarantee of all continuing operations and warranties for new cars (DIP Financing in lieu of normal bank lending). Note: Bankruptcies are designed to save companies (in spite of the management led counter and self serving rhetoric), not destroy them; however, they will be smaller and more efficient. The vast majority of workers keep on working during the restructuring. Not everyone will win, but the winners will survive, but not all deserve to win. The one key, unlike other industries is that you've got to guarantee continued operations (DIP Financing) so that consumers won't switch from a brand totally, so you got to guarantee Chapter 11 temporary financing (a pretty good deal) so it won't go to Chapter 7.

If you don't like that, then you need to remember that Hank Paulson, tricked you (about how he would use TARP). Well, the Auto Industry is less trustworthy, and much more likely to shift their dollars overseas, and in fact are alread doing it. You need to be tough on funding for either "bail out's or bridge loans" Here's the conditions: Money for exchange for FIRST CALL, SENIOR DEBT, at a 8-11% Interest rate, with WARRANTS at the current price of stock of $3 per Warrant. If they don't want to play, then fine, no money. The intent is that if they go bankrupt anyway, then the government gets paid back so we can spend the money on real stuff. After this, no dividends, no bonuses, controlled CEO salaries, and etc. until 100% paid back.

Contract State work is going to suffer greatly unless and even if you do it right. But, we won't do as badly, if you restructure the big three so they are efficient and not bloated paying for the city of Detroit to be out of work and still paid, while North Carolina takes it in the ear. Contract jobs will be let out to the most efficient place, and that means we have a shot at them on a level playing field. At least it will be a level playing field, even if smaller of necessity.

BTW--I'm going to copy this note to the media and to all voters so they can measure whether you did this one smart this time around. This time I'm keeping count. We all are. And I mean that with all due respect. Please don't screw this one up with Partisan Politics and typical Congressional Payola and Pork and self Agrandisement.

(Please note that I am not against helping the Auto Industry, however I am against “giving” them a handout without helping them become efficient and more likely to survive, and so far their own actions are “too little, too late, and not enough”. I am for everyone coming to the table and giving until it hurts as much as it hurts the common taxpayer. And I am for Congress not taking a “knee jerk” reaction full of “pork” like last time. I’m for doing this right, not for political payola, business as usual. I'm looking for a written and agreed to plan and check points measuring delivery and continued participation in the program, if they care to participate in an honest straight up environment. However, let me assure you, that I am distrustful of the Big Three arriving in Washington in Private Jets, with Top Hats on, and Tin Cups in hand, and unwilling to discuss what they really need versus the amount they've set for themselves as a goal for raping America, because they can)

Thank you,

BillB

Colombia Free Trade Agreement will save us....yeah right!

FirstMarine — Tue, 18 Nov 2008 12:01:55 -0500

Heard any BS from the village idiot, George Bush, about how " free trade " is providing all these jobs for Americans? Free trade is a oneway street that allows American companies to send their factories and plants to third world countries to build their products for pennies on the dollar. All the so-called economic experts are just now figuring out that if you don't have a middleclass buying all those cars, washing machines, refrigerators, furniture, etc. because they've all lost those manufacturing jobs, then the economy goes down the drain. Yet, this Republican administration is rewarding those companies with billions of taxpayer dollars being given to their co-criminals in the banking industry. Watch Bush come out and tell us again how the pending Colombian free trade agreement will provide US jobs.

Welcome to the Bush

FirstMarine — Tue, 18 Nov 2008 12:00:29 -0500

Welcome to the Bush Depression. Now that the looting

is almost over, it's time to hand Obama a dead economy

to assure a GOP victory in '12.

Mike Whitney: "Paulson is intentionally blowing the stock market to hell"

http://www.lifeaftertheoilcrash.net/Archives2008/WhitneySelfInflictedCrisis.html

Paulson's announcement was like tossing a hand-grenade in a San-i-can; it

blew the stock market to Kingdom come. Just minutes after the opening

bell on the New York Stock Exchange (NYSE) stocks plummeted to new

lows ending the session in a 400 point death-spiral. Wall Street doesn't like

uncertainty and Paulson's sudden about-face sent jittery investors running

Alternet: Bush Administration Purposely Destroying Automobile Industry

http://www.alternet.org/story/107008/bush_playing_chicken_with_detroit_in_last-gasp_effort_to_demoralize_the_dems/

It wouldn't be the George W. Bush we all know if our shamed president

didn't spend his remaining White House days in a final fit of polarization.

That's what Bush's moves this week are clearly about: dividing -- not

uniting. During his first meeting with Barack Obama, the outgoing president

suggested he might support Democrats' economic stimulus package and

Losing is Easier than Winning (for Elected Officials)

BillB — Wed, 05 Nov 2008 08:52:22 -0500

Losing is Easier than Winning (for Elected Officials)

A government functionary who retires to a Senate seat in the south, while rubber stamping failed political policies probably isn’t enough in and of itself to cause you to lose. But, throwing an insane “godless” charge over your shoulder is enough to even affront those who tolerate lack of performance, as tolerable criteria, for effective governance. Or, Mayors who lob bombs at well liked Governor’s Wives, either directly or indirectly, is probably not enough to tip the scales against you. But, when you lose one of the Largest Banks in America, on your watch, you’ve got to question whether the public just might notice. But, winning is far harder.

Now that the Presidential campaign is over with, and we’ve broken the glass ceiling with a newly elected Female Governor, as well as a Black President, all eyes have to turn to Congress, who has a worse rating than does the outgoing president. Now that is some testament to government failure. So, how do we justify voting in a clearly democratic Congress and Senate, in spite of the fact that they’ve had leadership control for the last few years as the Economy tanked? See what I mean about winning not being easy?

No one should make any mistake. Congress was given a mandate for one and only one reason, and that mandate can be taken away faster than you can say “impeachment”. Congress was given a mandate to enable the new president to be an American President. Not a democrat, not a republican, not an independent. And with the same brush stroke, we gave him a majority of control of government to give him every chance of success. I would suggest that Congress shall now be held to a new standard. America will now look for Congress to provide Leadership in restoring integrity, honesty, and concern for all Americans and American interests through responsible action and effort to Congress itself.

This means that Pork, Earmarks, and personal aggrandizement needs to take a back seat. The front seat should include Regulation and Management of the Banking System and Wall Street, instead of just “throwing money at them”. The front seat should include a formal, legitimate, and funded Energy Policy (including build out of Nuclear, Solar and Wind Energy) which targets America’s independence of Foreign Fossil Fuel Markets and the outflow of 600 Billion per year to countries who do not necessarily support US Goals. The front seat should include answering the question of why the same drugs cost ½ as much in Europe as they do for citizens of the USA. And the front seat should include a thorough cleaning of Congressional Misuse and poor management of the public trust, so that American Industry will have a role model it can emulate with pride, rather than one that is paid off in back room cesspools of corruption, either in Washington or on Wall Street.

However, let me offer one word of advice to our politicians. Everyone makes mistakes, hopefully not too many and not repeated. However, a politician who makes a mistake, then refuses to apologize for it, will get what they deserve. They’ll be on the outside looking in, which is exactly where they belong. Even those we formerly, and probably mistakenly, held in high regard. This applies on the local, national, and international stage. I wish all you “winners” the best of hard work and success. Roll up your sleeves and do a better job than you or your predecessor did as former “losers”.

And.. politicians..don't misinterpret the mandate we gave the president and try to over reach yourselves. Your job is to fix the Economic and Social Issues fairly for all. Our job is to decide which politicans and political beliefs gain ascendency.

Congress Held Accountable

BillB — Thu, 09 Oct 2008 08:33:57 -0400

All too true.

My favorite is that the "Executive Mortgage Loans" that Countrywide gave leaders of the House of Representatives (Barny who?). Of course there were the "contributions" by Fannie and Freddie to politicians to (excessively exhuberant). And, then there is the "Acorn" slush fund, which has made payoffs, bribed politicians, and has a little embezzelment problem (oops, was that the democratic addition in the first version of the EESA).

Tell you what. You make up a list of all Senators and Congresspeople who "changed sides" from EESA-1 to EESA-2 to vote for the Pork, and maybe I can help you get the word out to America about who we should fire this pass of the congressional hat. As far as I'm concerned, this is totally non-partisan in nature. Both sides have exercised the stupidity and corruption personified.

Good Post.

Congress held accountable

O.B. Raphael — Tue, 07 Oct 2008 13:03:59 -0400

It seems to me that a great deal of the problems facing our economy can be directly attributable to our congressional leaders who refused to recognize sup prime difficulties when they began to surface in early 2000. Why, because it was politically expedient to do so. If you doubt that politics is ugly all you have to do is look at the shameful conduct of our lawmakers who went about their business spending tax payer money like crazy while ignoring the warning signs that were clearly there. In particular when in 2005 the Democrats unanimously rejected legislation that would have provided strict regulatory oversight on Fannie Mae and Freddie Mac. As a consequence we are now in one heck of a mess. A travesty that Congress finds appropriate to blame on everyone but themselves. Is there anything we can do? The simple answer is nothing. We have become victim to policymakers whose understanding of this economic fiasco is minimal at best. Their solution, as usual, is to throw more money at the problem and hope for the best.

Somehow we must rid Washington of ingrained lawmakers who have made a career out of government service. Looking ahead, we can and must seek out young, bold and imaginative people to run for office. People who refuse to play political gamesmanship and have the guts to thumb their nose at special interest groups. People who are dedicated to the principle of putting the the welfare of America first. Above all we must encourage and support prospective candidates who are willing to stand on a platform that imposes term limitations in both the House and Senate.

There is no doubt in my mind that Washington elitists bear a huge responsibility for the melt down in our economy. Now we are supposed to thank them for straddling us with a 700 billion dollar burden in addition to the multiple trillion dollar debt already on the books. The saddest note of all is that this Congress couldn't even approve a bail out bill without loading it up with a host of disgraceful earmarks. What a sorry bunch! I'm afraid that this is just the beginning.

The Great Wall Street Lie (SAS to the RESCUE?)

BillB — Mon, 06 Oct 2008 17:33:43 -0400

The Great Wall Street Lie
(SAS to the the RESCUE)

The great Wall Street lie is that “no one knows” how big the “derivatives” problem, underlying the Credit Risk Problem, is. It’s also a lie that you can not calculate the price of those instruments or what a “fair value” apposed to a “fire sale” or an “end of term” value might be. That’s just not true. It's this lie that prevents a potential buyer from acting, uncertainty and opaqueness. SAS Builds systems to do this, on a “scale” basis every day.

The fact is that every Bank and Broker knows how much the Mortgage was written for. And, in fact, every “instrument” from which the Mortgages were bundled is known. They know who they sold them to, and for the most part, they’re held by the largest of funds, Banks, and entities. They know exactly how much of “haircut” each instrument received, and therefore can calculate the face value of every one of them, with very few exceptions.

Additionally once this work is done, and I assure you that most banks really do know their exposure already, then, the other pieces are done too. For example, housing prices are known by region, area, and the “what not”. And while a “composite model” of average price needs to be calculated, that is a no brainer too. And, oh by the way, it turns out that we know which areas of the country are experiencing which default rates, and we know which areas are beginning to bottom out versus still accelerating downwards. In fact, we know that there could be another 10% loss of value from where we are, which is easy to load in on the most elementary of spreadsheets programs on the most elementary of personal computers. We even know the rate at which these loans are retired ahead of time. All of this can be uploaded and dealt with at a central point, another “no brainer”.

The great Wall Street Lie is that we “don’t know” or we “can’t find out”. What is the truth? Well the truth is that current accounting rules force companies to account for the difference between real value and formerly expected value too fast for many to survive the process. So, they do the “I don’t know thing” to put off the inevitable in hopes that the Federal Government will bail them out.

Now you know why no matter what the FED does, that Wall Street begs for the next step on the following day. It’s a lie that “we don’t know”. Wall Street doesn’t want to come to terms with the truth, Simple as that. Unfortunately, the government doesn’t want to clarify the situation so that everyone really does understand the rules. They’re afraid there would be panic in the streets. Maybe it’s time to save the taxpayer, and tell the truth, all around the table. Otherwise I suppose we can take 10 years just like Japan did. And, gosh, we’ve already knocked one of them out of the way.

Make you feel better knowing the truth? The fact is that the Credit market cannot be fixed until many if not most of the calculations are completed and made public, so that a potential buyer knows the true risk. Even at Auction, this is the basis of truth, and therefore returns of resulting "Confidence and Trust".

Is your money safe? Who knows, as long as Wall Street lives the Great Lie? But, one thing for sure, Alan Greenspan and Ben Bernanke crank their laptops doing this type of aggregation just about every day of the week. And if they miss a day, some staffer is cranking his or hers. The fact is that it’s probably more of a “scalar” problem than one of doing it, at least on an aggregation level. Doesn’t SAS do that type of thing every day? Maybe Jim Goodnight should call Hank Paulson and offer his services. Or maybe Hank should reach out and contact Jim Goodnight. Either way, why let the Great Lie get in the way of success.

Bail-Out Facts in, DOW Reaching for 9k

BillB — Mon, 06 Oct 2008 09:25:00 -0400

Well, looks like Main Street and Wall Street are voting with their feet for the door as they all flee the aftermath of what now is acknowledged to be a Bail Out of Banks first, and an attempt to rescue Main Street second, if it all works out as not quite yet planned. Goodness Gracious. DOW seems headed for 9k for sure, but I'm sure that doesn't suprise the "fors", since everyone knows the old addage of "beware what you ask for". Oops! is that the FED dumping a cool Trillion into TAF? Wonder why we didn't do that before the Vote, and before things unwound to this point? I guess that's the problem with "arm twisting". Oh well, we have the "Golden Bullit" of the $700 Syndication, waiting in the wings now. Thank Goodness <>

Bailout or rescue

Barry — Sun, 05 Oct 2008 22:20:18 -0400

This is basically a rescue of congress and their failure of another social experiment. The "poor lending practices"were actually required by the gov. monopolies of Freddie and Fanny with pressure from congress. It isn't surprising that the lenders used the rules to make a lot of money, though. The deal was rushed through without discussion because a serious investigation would point right to congress. A few rich lenders may be blamed but no serious investigation will ever happen.

Tally-Ho

larrybob — Sun, 05 Oct 2008 17:30:39 -0400

Conservatives now say the housing credit crisis is the result of a Democratic law that allowed lower income families to purchase homes.Question: What percentage of the foreclosures were from families earning below the normal bank cutoff line for issuing mortgages?John McCain says that the earmarks are the major cause of increased government spending. Actually earmarks make up 1% of government expenditures.My feeling is that the percentage of mortgage failures caused by low income families, like the McCain earmarks, is very different than conservatives proclaim.Remember, conservatives are born hunters. They recognize the importance of a false trail. They specialize in creating diversions that sends the pack yelping in the wrong direction. Once again, conservatives are tooting their hunting horns and leading a tally-ho charge into the thickets while their backers and associates hide in the tall grass.

Who'll get our help?

Visitor — Sun, 05 Oct 2008 10:34:28 -0400

For Don Namm:

You said "Once everyone is safe, we can begin to punish the greedy captains of those endangered ships and ensure on one will navigate there again".

Please remind me when the "greedy captains are punished" because punishment can be forgotten or even rewarded when we are safe again!!

Mr. Paulson said this was caused by "irresponsibile lending and borrowing" but I've not heard anything about how this will be stopped without curtailing responsible lending and borrowing.

Gil_in_Cary

bailout

Visitor — Sat, 04 Oct 2008 03:02:31 -0400

why is it easy to name politicians who are for or not for the bailout, but not the top executives and financers who will benefit for it. what chickens the press is, afraid to talk abot them

Lipstick on the Pig, with a taste of the "Sky is Falling"?

BillB — Fri, 03 Oct 2008 11:23:33 -0400

Boy am I impressed. Now we have $110 Billion Extra to "put Lipstick on the Pig". Isn't that a hoot? And, just think, both Obama and McCain voted for it, right after telling America at their first debate that they decry "Pork" and "Earmarks". Wow, and all with a "little media blitz" that the "Sky is Falling" (much like Used Car Salesman use in the "only good right now" inducement).

The problem is that "The Sky is Falling" is a defective argument. it's sort of like the weak analogy that this is a "Pearl Harbor" event. First of all, a Financial Crisis is a loss of Confidence, 100% of the time, and correctible, I might add. Whereas Pearl Harbor resulted in significant numbers of deaths, never to be undone. Also, it's a scare tactic, not the voice of reason, and mostly, outside of politics and war, is shunned by morally strong leaders.

Pig? Well, little doubt about that for sure. The question is do you like Pork? And, either way, is there a substitute available at less cost or better chance of success. You know, like maybe some Chicken Thighs, or something. I've actually seen and read a couple of plans that are less complex and very interesting. One, from a surprising (to me) source, although there are several others ("daveramsey.com" has one)

However, keep this in mind. There is about 3.5 to 4.0 Trillion Dollars of exposure under current "Mark to Market" Accounting Rules (Actual exposure is 62 Trillion). And we're only giving them $700 Billion on the first pass?. Well, the point of this is that you should send Chris Cox (SEC) a note suggesting that he change the rule to say something like: "Please change Mark to Market" to include a 50% rule for "unmarkatable assets" which have "mortgage backed basis" and a presumed End of Life Value of Magnitude, if only temporarily". BTW, you can reach Chris (Chairman of the SEC) at "coxc@sec.gov".

Personnaly, I hope Congress doesn't pass the bill, as the above rule change will do more than all the $700 Billions in the world. Since the Mark to Market rule precipitated this crisis in the first place. Well along with two more dumb things that the SEC did. One was decrease Derivative based margins, at Hank Paulsons request in 1984 when he was Goldman's Chairman. The other was the dissapearance of "Naked Short" attenuation rules (nothing wrong with short selling, but selling what you don't have or can't borrow or have not intention to borrow is just stealing).

Enjoy. Weather is Perfect. Economic Fundamentals suck. I'm sure next week after we get through this little mind friggin', that we'll wake up and enjoy post panic recession. Think I'll start the weekend early. Luck to all.

Rescue-Bailout

John Lesnik — Fri, 03 Oct 2008 00:01:47 -0400

I doesn’t matter what it’s called. The blame starts with all of us. We didn’t care when lenders passed out mortgage money like candy to people with no hope of repaying. Things got so bad we spoke of Ninja loans (No Income – No Job – No Assets). Too many of us were glad to join the party. Few called for restraint. Traditionally cautious lenders threw caution to the wind. This crisis started with policy decisions in Washington and a political system grown corrupt on a monstrous scale. White collar criminals at Fannie Mac and Freddie Mac looted the system for millions while politicians who knew what was going on blocked any attempt to stop it. They were rewarded with big campaign contributions from the looters and reelection by voters. This problem is 50 times bigger than Enron, but don’t expect congressional investigations for obvious reasons. At the end the risks of these loans couldn’t be left on the books of lenders so Wall Street came to the rescue with complicated debt securities that nobody could understand, but which seemed to spread and control the risk so the circus could continue. The bubble kept growing until the entire house of cards collapsed. Even the bailout, far from being a sobering wake-up call, islarded with pork and tax benefits for every possible segment of the population. So we will continue to engage in mutual pick-pocketing while allowing ourselves to be bribed with our own money. This takes an shocking level of decadence.

Are we bailing out Wall Street or rescuing Main Street?

vdenton58 — Tue, 30 Sep 2008 17:21:44 -0400

Bailout or rescue plan?

President Bush described the $700 billion piece of legislation Tuesday as a “financial rescue plan.” Others call it a bailout. What name feels right to you? Are we bailing out Wall Street or rescuing Main Street? We’ll use two of the best responses - 250 words or less - in The News & Observer's new Sunday Focus feature this Sunday.

Bailout or rescue plan? President Bush described the $700 billion piece of legislation Tuesday as a “financial rescue plan.” Others call it a bailout. What…

share.triangle.com - Are we bailing out Wall Street or rescuing Main Street? - Comments

Open Letter to Congress re Automotive Bail Out

Colombia Free Trade Agreement will save us....yeah right!

Welcome to the Bush

Losing is Easier than Winning (for Elected Officials)

Congress Held Accountable

Congress held accountable

The Great Wall Street Lie (SAS to the RESCUE?)

Bail-Out Facts in, DOW Reaching for 9k

Bailout or rescue

Tally-Ho

Who'll get our help?

bailout

Related Question: Wachovia Healed by Pig Bill ??

Lipstick on the Pig, with a taste of the "Sky is Falling"?

Rescue-Bailout

Are we bailing out Wall Street or rescuing Main Street?