On Sat, 06 Dec 2008 02:36:20 -0800, Gunner
wrote:
Seems like a $35Bn loan to the car companies would be a better
investment than AIG etc, especially if the unions provide some
concessions to help. We don't have much history to go on other than
Chrysler's loan in the K car era, which they paid back with interest.
Will the Banks pay back their $700Bn in loans any time soon?
It would be better (and far cheaper) if the government simply gave a
voucher to everyone over the age of 16, for a new vehicle.
Gunner
-----------------
In the short[est] term you are probably correct.
The problem is this fixes none of the underlying problems and
Detroit [and all the rest of the corporations in line with their
tin cups] will be back in 6 months to a year for another
"rescue." Indeed, this type of "economic crank," while it would
provide a momentary euphoria, would make the problems worse in
that it continues, even amplifies, "business as usual."
It now appears that some short term assistance will be provided
to Detroit, ==but this fixes nothing,== and only provides 30-90
days of time, hopefully for additional in-depth evaluation.
---------------
Loan deal struck for Detroit
But Bush warns that one of the automakers may perish.
By Associated Press
Published: 12/6/2008 12:00 AM
Last Modified: 12/6/2008 2:43 AM
Democrats in Congress reached an agreement in principle with the
Bush administration on providing funds to prevent a collapse of
any of the Big Three U.S. automakers, a congressional aide said.
President George W. Bush warned that at least one of the Big
Three carmakers might not survive the current economic crisis.
Details of the legislation that will be voted on next week are
still to be worked out, including the total amount of aid offered
to General Motors Corp., Chrysler and Ford Motor Co., the
Democratic aide said. The Associated Press reported that the loan
deal would be about $15 billion.
snip
--------------
for complete article click on
http://www.tulsaworld.com/news/artic... _Genera854484
I don't know how many people have read the exchange between John
Carroll and myself, but while we disagree on the details, we both
agree that the current economic problems go far deeper than a
simple cash-flow/liquidity crisis in that many of the major
American and foreign corporations, particularly financial
institutions and those with significant [neo] financial
operations [e.g. GMAC] now appear to be insolvent when strict
GAAP/FASB accounting standards are applied [e.g. mark-to-market],
and accepted [or even plausible] forecasting methodology used.
The economic situation at its base does not appear to be any
sudden lack of credit, but rather entirely too much credit, for
far too long, on far too E-Z terms, for far too many people and
especially corporations, private equity pools, hedge funds, etc.
that should have known better.
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).