F. George McDuffee wrote:
On Fri, 5 Dec 2008 02:41:01 -0500, "Ed Huntress"
wrote:

snip
And there's always a chance that the Big Three, or the Big Two, could
recover. I don't give that much probability but, again, the alternative is a
lot uglier than sinking one or two percent of GDP into giving it a try.
snip
--------
Most likely Ford can make it, especially with some additional
credit and if GM goes. Chrysler with additional credit and if GM
goes should also make it as a niche player [mini vans] and
contract assembler/manufacturer for other car companies [AFAIK
they are currently assembling VWs vans in the US]

VW vans? all 15 sold per year?

"Ed Huntress" wrote in message
...

"ATP*" wrote in message
...

"oldjag" wrote in message
...
Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.

They need to go bankrupt and reorganize. There will still be a US auto
industry and it will be more competitive than ever without the UAW
millstone around its neck.

Most of the industry experts I've heard over the past few days say there
will be no receivership and no reorganization. People don't buy cars from
bankrupt manufacturers. (Studebaker is an example; once it became known
they were thinking about getting out of the car business, they were.)
They'll go straight to liquidation, possibly with a few months of
receivership in order to handle the selloffs. The brands have very little
goodwill equity so most of the remaining value will be real estate and
hardware.

The Chinese are already sniffing around, looking for possible bargains.

--
Ed Huntress
I think the brands are still valuable. Chevrolet, Cadillac, Ford, even
Chrysler will always retain a certain percentage of the market. If the newly
reorganized company is solvent and honors existing warranties, people will
still buy from it. Whether the trademarks and desirable production
facilities can remain intact and be transferred in a liquidation is of
course, questionable. The other question is, even assuming the US automakers
are not long term viable, can we afford to let them fail right now?

In article ,
"Ed Huntress" wrote:

"ATP*" wrote in message
...

"oldjag" wrote in message
...
Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.

They need to go bankrupt and reorganize. There will still be a US auto
industry and it will be more competitive than ever without the UAW
millstone around its neck.

Most of the industry experts I've heard over the past few days say there
will be no receivership and no reorganization. People don't buy cars from
bankrupt manufacturers. (Studebaker is an example; once it became known they
were thinking about getting out of the car business, they were.) They'll go
straight to liquidation, possibly with a few months of receivership in order
to handle the selloffs. The brands have very little goodwill equity so most
of the remaining value will be real estate and hardware.

Studebaker.

My parents owned a Studebaker when the company collapsed, in 1953 if
memory serves. The car became instantly worthless, for lack of repair
parts. I don't recall how long it was before we were forced to replace
that car at a loss, but it wasn't long. They broke a lot.

We subsequently had two Ramblers (both were junk!), then in the 1960s my
Mother discovered Volvos from reading Consumer Reports. Volvos were new
and cheap then.

The family has not bought an American car since.

Joe Gwinn

"Joseph Gwinn" wrote in message
...
In article ,
"Ed Huntress" wrote:

"ATP*" wrote in message
...

"oldjag" wrote in message
...
Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.

They need to go bankrupt and reorganize. There will still be a US auto
industry and it will be more competitive than ever without the UAW
millstone around its neck.

Most of the industry experts I've heard over the past few days say there
will be no receivership and no reorganization. People don't buy cars from
bankrupt manufacturers. (Studebaker is an example; once it became known
they
were thinking about getting out of the car business, they were.) They'll
go
straight to liquidation, possibly with a few months of receivership in
order
to handle the selloffs. The brands have very little goodwill equity so
most
of the remaining value will be real estate and hardware.

Studebaker.

My parents owned a Studebaker when the company collapsed, in 1953 if
memory serves. The car became instantly worthless, for lack of repair
parts. I don't recall how long it was before we were forced to replace
that car at a loss, but it wasn't long. They broke a lot.

We subsequently had two Ramblers (both were junk!), then in the 1960s my
Mother discovered Volvos from reading Consumer Reports. Volvos were new
and cheap then.

The family has not bought an American car since.

Joe Gwinn

I had a 1953 Studebaker 1/2 ton pickup and with the little six and overdrive
trans it was quit thrifty but not overpowered. I still have it but it has a
Chev 350/350 in it with a nova subframe. I think Studebaker had one of the
first double wall pickup boxes. In the sixties they had Chevy engines in
their trucks. It seems there are still quite a few Stude parts available
but without a dealer network parts would have been a problem before the
internet made things more readily available. Here is a timeline of the
company.
http://www.studebakerhistory.com/dnn...5/Default.aspx
Steve

"Ed Huntress" wrote:

The important question is how many of them were bringing home a paycheck.
The nice thing about someone else being overpaid is that they spend the
money into the same economy the rest of us swim in. It becomes a bad thing
when they make so much money that they invest it overseas to avoid taxes and
high wages.


No, when the over aid buy second homes in my neck of the woods and drive up my property
values and taxes they hurt the locals. Then there is their attitude. Sadly they retire
where I live and then get to vote in our elections. ARGH!

Wes

Lew Hartswick wrote:

I'm being pragmatic. I can divorce what is personally good for me from what is good for
the country.

It's too bad the CEOs of the auto co. can't or WONT. :-(
...lew...


Everyone that GM/Ford/Chrysler hands a check to, better get real if they want to salvage
something out of this. That means White collar, Blue Collar, and Retired.

I'm wondering what the PBGC is going to pay if Detroit goes down? That is the starting
point for legacy costs on retired employees.

If I understand it correctly, new hires have a totally different deal than those that have
senority. Seniority needs to give some more up. Top level management needs to give up
something also. Lower level likely has. I don't know what the deal is with the huge
number of contract engineers. (AKA Temps)


Wes

"Wes" wrote in message
...
"Ed Huntress" wrote:

The important question is how many of them were bringing home a paycheck.
The nice thing about someone else being overpaid is that they spend the
money into the same economy the rest of us swim in. It becomes a bad thing
when they make so much money that they invest it overseas to avoid taxes
and
high wages.


No, when the over aid buy second homes in my neck of the woods and drive
up my property
values and taxes they hurt the locals. Then there is their attitude.
Sadly they retire
where I live and then get to vote in our elections. ARGH!

Wes

You got there first, eh? Look over your shoulder. There may be some Indians
who would disagree. g

--
Ed Huntress

"ATP*" wrote in message
...

"Ed Huntress" wrote in message
...

"ATP*" wrote in message
...

"oldjag" wrote in message
...
Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.

They need to go bankrupt and reorganize. There will still be a US auto
industry and it will be more competitive than ever without the UAW
millstone around its neck.

Most of the industry experts I've heard over the past few days say there
will be no receivership and no reorganization. People don't buy cars from
bankrupt manufacturers. (Studebaker is an example; once it became known
they were thinking about getting out of the car business, they were.)
They'll go straight to liquidation, possibly with a few months of
receivership in order to handle the selloffs. The brands have very little
goodwill equity so most of the remaining value will be real estate and
hardware.

The Chinese are already sniffing around, looking for possible bargains.

--
Ed Huntress
I think the brands are still valuable. Chevrolet, Cadillac, Ford, even
Chrysler will always retain a certain percentage of the market. If the
newly reorganized company is solvent and honors existing warranties,
people will still buy from it. Whether the trademarks and desirable
production facilities can remain intact and be transferred in a
liquidation is of course, questionable. The other question is, even
assuming the US automakers are not long term viable, can we afford to let
them fail right now?

My feeling is that we can't. But I'm going on all second-hand information
and analysis. Overall, my fear is that the layoffs or firings would be
enough to push us over the brink into a deflationary spiral, which most
experts agree would require years of recovery -- or an extremely expensive,
revolutionary government program that we'd be paying off for decades.

Either way, it isn't pretty. Deflationary spirals tend to last for close to
ten years. And growing the economy with a multi-trillion-dollar national
debt hanging over us would succeed only if the economy is generally healthy
so that the debt service doesn't drive us down in another spiral.

From an economics point of view, I think a bailout is less expensive and a
lot less risky.

--
Ed Huntress

"Ed Huntress" wrote:

You got there first, eh? Look over your shoulder. There may be some Indians
who would disagree. g

Well if the 1836 Treaty of Washingon court case is ruled on the side of the tribes, they
will have their hand in my pocket. I might have to pay them to take water out of my well.

When the Indians had arrows not a problem, when they got guns, still not a problem, now
they have casino's and lawyers. That is a problem

Wes

"Wes" wrote in message
...
"Ed Huntress" wrote:

You got there first, eh? Look over your shoulder. There may be some
Indians
who would disagree. g

Well if the 1836 Treaty of Washingon court case is ruled on the side of
the tribes, they
will have their hand in my pocket. I might have to pay them to take water
out of my well.

When the Indians had arrows not a problem, when they got guns, still not a
problem, now
they have casino's and lawyers. That is a problem

Wes

We found the solution in NJ. We chased them all the way to Oklahoma (Lenee
Lenape tribe). Now there are only 50 of them left, and they're smart enough
not to want NJ back.

--
Ed Huntress

On Fri, 5 Dec 2008 19:57:41 -0500, "Ed Huntress"
wrote:


My feeling is that we can't. But I'm going on all second-hand information
and analysis. Overall, my fear is that the layoffs or firings would be
enough to push us over the brink into a deflationary spiral, which most
experts agree would require years of recovery -- or an extremely expensive,
revolutionary government program that we'd be paying off for decades.

Either way, it isn't pretty. Deflationary spirals tend to last for close to
ten years. And growing the economy with a multi-trillion-dollar national
debt hanging over us would succeed only if the economy is generally healthy
so that the debt service doesn't drive us down in another spiral.

From an economics point of view, I think a bailout is less expensive and a
lot less risky.

Usually, the political leadership will just start a world war to get
things going again. National debts can then have their terms
"rearranged" by the victors i.e., we won't pay you a dime because you
started it.
Dave

Right - they got the protection of the black bear law into effect - eh ?!

Now there are more black bear per square mile than ever before and are
running people crazy.

Martin :-)

Ed Huntress wrote:
"Wes" wrote in message
...
"Ed Huntress" wrote:

You got there first, eh? Look over your shoulder. There may be some
Indians
who would disagree. g
Well if the 1836 Treaty of Washingon court case is ruled on the side of
the tribes, they
will have their hand in my pocket. I might have to pay them to take water
out of my well.

When the Indians had arrows not a problem, when they got guns, still not a
problem, now
they have casino's and lawyers. That is a problem

Wes

We found the solution in NJ. We chased them all the way to Oklahoma (Lenee
Lenape tribe). Now there are only 50 of them left, and they're smart enough
not to want NJ back.

--
Ed Huntress

On Thu, 4 Dec 2008 23:57:45 -0500, "Ed Huntress"
wrote:


That's a good summary of a legitimate point of view. I don't know if it's
right (nobody really does, I think), but it's good sense.

I think that most of the people who object to a bailout are frustrated. They
aren't in a mood to be pragmatically analytical. It *is* frustrating. It is
tempting to say "I'll take a hit myself, rather than bail those *******s
out." And the *******s are the UAW, car company management, and the rest of
the voodoo dolls they keep in the dark places they store their resentments.

It's hard to keep one's head while something like this is going on, and I
think it's pressing Congress and the rest of the government really hard,
trying to rise above the politics and to focus on what's good for the
country. IMO, they've looked pretty good on stage, expressing their own
frustrations fairly openly while trying to come to a sensible resolution.

But that's no assurance they'll stick to it. There are some easy outs, and
there are plenty of other people to blame. My fear is that they may wind up
doing nothing because they don't want to wrestle with all of the conflicts
and the political risks, and doing nothing looks like it could establish a
new equilibrium for our economy, in which shining each other's shoes looks
like economic growth.

How much will the government be on the hook for in the Pension Benefit
Fund if auto makers fail?

"John R. Carroll" wrote in message
...

snip


The examples of BK'd automakers that bit the dust won't wash either. This
is a very viable possibility today because none of the examples cited
represented the end of home grown auto manufacturing in the US. It also
ignores the Chrysler turn around.
People bought K Cars by the thousands at a time when both GM, Ford, and
the media were braying publicly about orphaned vehicles built and sold by
a company that wouldn't survive. Lee Iaccoca sold the press and public.
The rest is now history.

See if your wife doesn't think these guys don't remind her a little of
"small ball" Palin. Especially Gettlefinger. Where in hell did they find
that ignorant bumpkin? I wouldn't buy a car, new OR used, from that
cracker.

The one I want to know about is Wagoner. Jeez, for a guy with such
impressive credentials, he sounds to me like a tier-two PR man. I was
appalled listening to him.

I guess he's better at running a company. Or he was...

--
Ed Huntress

"F. George McDuffee" wrote in message
...
On Fri, 5 Dec 2008 02:58:29 -0500, "Ed Huntress"
wrote:

You're quite right, and it's so common in world trade that economists even
have a name for it, which I forget at this late hour.

Transfer Pricing.

Ah, right. Thank you. Honda was so blatant about it in China that the
Chinese almost sent them home. d8-)

Common not only internationally but also
interstate in the US for multistate corporations. "Profit" flows
to lowest tax area. Internationally there are "divisions"
established in tax haven countries such as Aruba, that take legal
title but not physical possession of goods in international
transit. Buy low, sell high and any "profit" winds-up in the tax
haven, possibly with tax "losses" on each end.

The magic of high finance...

--
Ed Huntress

"Martin H. Eastburn" wrote in message
...
Right - they got the protection of the black bear law into effect - eh ?!

Now there are more black bear per square mile than ever before and are
running people crazy.

Martin :-)

I don't think it was the Lenapes who wanted to protect the black bear.

The bear hunting battle has gone back and forth here for 30 years. Hunting
bears was shut down here on procedural grounds (fish & game procedures
weren't being followed in setting seasons and so on), but the state senate
introduced a bill a month ago to normalize it and to reinstate bear hunts.

Whether it will pass is anybody's guess.

--
Ed Huntress

"Andy Asberry" wrote in message
...
On Thu, 4 Dec 2008 23:57:45 -0500, "Ed Huntress"
wrote:


That's a good summary of a legitimate point of view. I don't know if it's
right (nobody really does, I think), but it's good sense.

I think that most of the people who object to a bailout are frustrated.
They
aren't in a mood to be pragmatically analytical. It *is* frustrating. It
is
tempting to say "I'll take a hit myself, rather than bail those *******s
out." And the *******s are the UAW, car company management, and the rest
of
the voodoo dolls they keep in the dark places they store their
resentments.

It's hard to keep one's head while something like this is going on, and I
think it's pressing Congress and the rest of the government really hard,
trying to rise above the politics and to focus on what's good for the
country. IMO, they've looked pretty good on stage, expressing their own
frustrations fairly openly while trying to come to a sensible resolution.

But that's no assurance they'll stick to it. There are some easy outs, and
there are plenty of other people to blame. My fear is that they may wind
up
doing nothing because they don't want to wrestle with all of the conflicts
and the political risks, and doing nothing looks like it could establish a
new equilibrium for our economy, in which shining each other's shoes looks
like economic growth.

How much will the government be on the hook for in the Pension Benefit
Fund if auto makers fail?

Dunno. It shouldn't be hard to find it online.

--
Ed Huntress

"Ed Huntress" wrote in message ...

"John R. Carroll" wrote in message
...

snip


The examples of BK'd automakers that bit the dust won't wash either. This
is a very viable possibility today because none of the examples cited
represented the end of home grown auto manufacturing in the US. It also
ignores the Chrysler turn around.
People bought K Cars by the thousands at a time when both GM, Ford, and
the media were braying publicly about orphaned vehicles built and sold by
a company that wouldn't survive. Lee Iaccoca sold the press and public.
The rest is now history.

See if your wife doesn't think these guys don't remind her a little of
"small ball" Palin. Especially Gettlefinger. Where in hell did they find
that ignorant bumpkin? I wouldn't buy a car, new OR used, from that
cracker.

The one I want to know about is Wagoner. Jeez, for a guy with such
impressive credentials, he sounds to me like a tier-two PR man. I was
appalled listening to him.

I guess he's better at running a company. Or he was...

Do you know Taleb's "The Black Swan" and the story of the turkey Ed?

Every day for one thousand days a butcher feeds a turkey. The turkey steadily and predictable continues to get fatter and fatter.
Every day conveys with increasing confidence to the turkey, the turkeys economic department, risk management department, and the turkey ratings analysts that the butcher LOVES turkeys. Every metric supports that conclusion.
On the day when the turkey, the turkeys economic department, risk management department, and the turkey ratings analysts confidence is at its maximum, they all get a big surprise. It's no surprise to you or I but since all of the turkey metrics indicated that the butcher LOVES turkeys, it's a surprise to the others and an example of the propensity of unexpected events - "Black Swans" - to intervene on decision making based exclusively on metrics.

Rick Waggoner is the turkey. Ben Bernanke is the turkey. In fact, the worlds bankers are the turkey.
They were all fooled by the illusion of stability. Every one.
Read Bernanke's paper that describes what he called "the Great Moderation".
He is exactly the turkey.


JC

"Ed Huntress" wrote in message
...

"Andy Asberry" wrote in message
...
On Thu, 4 Dec 2008 23:57:45 -0500, "Ed Huntress"
wrote:


That's a good summary of a legitimate point of view. I don't know if it's
right (nobody really does, I think), but it's good sense.

I think that most of the people who object to a bailout are frustrated.
They
aren't in a mood to be pragmatically analytical. It *is* frustrating. It
is
tempting to say "I'll take a hit myself, rather than bail those *******s
out." And the *******s are the UAW, car company management, and the rest
of
the voodoo dolls they keep in the dark places they store their
resentments.

It's hard to keep one's head while something like this is going on, and I
think it's pressing Congress and the rest of the government really hard,
trying to rise above the politics and to focus on what's good for the
country. IMO, they've looked pretty good on stage, expressing their own
frustrations fairly openly while trying to come to a sensible resolution.

But that's no assurance they'll stick to it. There are some easy outs,
and
there are plenty of other people to blame. My fear is that they may wind
up
doing nothing because they don't want to wrestle with all of the
conflicts
and the political risks, and doing nothing looks like it could establish
a
new equilibrium for our economy, in which shining each other's shoes
looks
like economic growth.

How much will the government be on the hook for in the Pension Benefit
Fund if auto makers fail?

Dunno. It shouldn't be hard to find it online.

Real easy. The entire liability was fully funded by the issuance/transfer of
what is known as an alphabet soup equity.
GME.
Another "turkey" example if you will.
LOL


JC

On Fri, 5 Dec 2008 00:01:02 -0500, "Ed Huntress"
wrote:
snip
Are you sure? A sell off of the Big Three would result in so much
displacement that car sales for the whole country are likely to tank, IMO.
The multiplier effect throughout the economy will cause many more to be laid
off or fired. And then there will be no reason to hire most of the fired
workers, because nobody's buying.
snip
-------------
Ed made a good case.

I sent the following email to my Congressmen. Feel free to use
any or all of it if you want to write your
senators/representative. Get their webmail at
http://www.house.gov/
http://senate.gov/

---------- start of email -----
Looks like we gotta' take at least some of the castor oil…

After watching the Congressional hearings on the C-SPAN website,
reading the "rescue plans" submitted by the "big three," and
discussing this at length with some very intelligent contributors
in several news groups, I have come to the conclusion that while
it will be very expensive and costly to the taxpayers to provide
loan guarantees and other funding, IT WILL BE MORE EXPENSIVE NOT
TO DO SO.

This does not mean that I accept the numbers that the automobile
companies have provided, nor do I approve of their highly
conditional, theoretical, hypothetical, provisional, and
qualified "re-structuring plans" filled with ambiguities and
"weasel words," that do not commitment them to any specific
actions or measurable goals.

AT THIS POINT THERE ARE NO GOOD OPTIONS, but the least
harmful/expensive alternative at this time appears to be the
allocation of 10 to 12 billion dollars to fund GM and Chrysler
until an adequate and detailed evaluation can be done, and the
new administration and Congress is installed. This can be taken
from any convenient/available "pocket," and the funding worked
out later.

It is critical that the actual financial condition of the
automotive companies be established and the
feasibility/plausibility of their projections and assumptions be
evaluated using GAAS/FASB accounting standards and accepted
forecasting techniques, during this 30 to 90 day "grace period,"
purchased at great taxpayer expense. This verified data could
then be used for a data driven decision on a company-by-company
basis in a calmer and less emergency/crisis environment. A joint
taskforce composed of qualified and senior personnel from the
GAO, IRS, SEC, and outside specialists as required, is suggested.

N. B. It will be vital to insure that *ALL* debts/obligations are
evaluated, for example Delphi's possible claims/interactions with
GM, and Visteon's possible claims/interactions with Ford. The
links between GM and Chrysler through GMAC, and GMAC's attempt to
become a "one bank holding company" should also be considered.
There are likely many more "off the books" obligations.

Assuming that the audit/verification is favorable, and additional
funding is warranted, it will be critical to eliminate the
"weasel words" from the "rescue/restructuring plans" and
establish firm, measurable goals, objectives, and mileposts, with
funds released only as these goals, objectives, mileposts, etc.
are met.

It is also critical that a "Board of Inquiry" be established to
determine how, and by whom, the domestic automotive industry was
driven into the ground, so that legislation and regulation can be
implemented to prevent any reoccurrence in this and/or other
industrial/economic sectors, with criminal referrals as may be
appropriate.
-----------------------


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).

"F. George McDuffee" wrote in message
...
On Fri, 5 Dec 2008 00:01:02 -0500, "Ed Huntress"
wrote:
snip
Are you sure? A sell off of the Big Three would result in so much
displacement that car sales for the whole country are likely to tank, IMO.
The multiplier effect throughout the economy will cause many more to be
laid
off or fired. And then there will be no reason to hire most of the fired
workers, because nobody's buying.
snip
-------------
Ed made a good case.

I sent the following email to my Congressmen. Feel free to use
any or all of it if you want to write your
senators/representative. Get their webmail at
http://www.house.gov/
http://senate.gov/

---------- start of email -----
Looks like we gotta' take at least some of the castor oil.

After watching the Congressional hearings on the C-SPAN website,
reading the "rescue plans" submitted by the "big three," and
discussing this at length with some very intelligent contributors
in several news groups, I have come to the conclusion that while
it will be very expensive and costly to the taxpayers to provide
loan guarantees and other funding, IT WILL BE MORE EXPENSIVE NOT
TO DO SO.

The cost will be the same either way George.
I'm snipping the rest of your post but not disrespectfully.
Putting a few billion dollars into the big three as a stop gap might make
this Chrismas season and the period between administrations a bit more
tolerable but given the ongoing wave of retrenchment in the other sectors of
the economy, one boogie man will just be replaced by another, and
immediately.

What the world must do is find a way to deleverage the financial system more
effectively than what is happening at present.
Every time the DOW makes a run, hedge funds, banks and investment banks sell
inventory until the gain is cancelled out and the sell off stops.This is
happening way to slowly and without any intelligence. Not only are markets
not self regulating - they are completely stupid.

We must also rig the system, if you will, to insure that the cycle of
privatizing gain and publicly funded losses is permanently broken to the
extent possible. Banks absolutely have got to get out of the risk business
beyond a certain very low level. Investment banks and Hedge funds must be
seperated from banks and the attendant reserves and cash flows. Let them
take the risks as private or publicly traded entities but with the full
understanding that they will bear every bit of the risk. The public sector
won't, under any circumstances, step in and clean up the mess of a big loss.

We have been on this hobby horse in a big way since Reagan and it has got to
come to a halt. Sooner, in this instance, is better.

Furthermore, people have to go back to making their money based on what they
do, not the debt or equity positions they can manipulate for financial gain
or speculative increases in the value of property.
Doctors must return to the practice of medecine, Dentists to dentistry and
teachers to teaching G

I've said it before and will repeat again that had Reagan allowed the S&L
crisis settle itself with a huge prat fall we wouldn't be where we are
today. You seem to be suggesting that we repeat that mistake and in the face
of the obvious result didn't work.

It's time to move forward to Capitalism 2.0.
V1 is as dead as a door nail.

JC

On Fri, 5 Dec 2008 22:22:46 -0800, "John R. Carroll"
wrote:

It's time to move forward to Capitalism 2.0.
V1 is as dead as a door nail.

JC
-----------
That's why the last of the email is so important.

"It is also critical that a "Board of Inquiry" be established to
determine how, and by whom, the domestic automotive industry was
driven into the ground, so that legislation and regulation can be
implemented to prevent any reoccurrence in this and/or other
industrial/economic sectors, with criminal referrals as may be
appropriate. "

Also the need to eliminate trying to nail "jelly to the tree" is
critical:
"Assuming that the audit/verification is favorable, and
additional funding is warranted, it will be critical to eliminate
the "weasel words" from the "rescue/restructuring plans" and
establish firm, measurable goals, objectives, and mileposts, with
funds released only as these goals, objectives, mileposts, etc.
are met."

While the Reagan vision was appeling, and may have been optimal
for a simpler time [much earlier than his administration] it is
clear [to me at least] that with the proliferation of
transnational private organizations rivaling many countries in
wealth and influence, and the introduction/proliferation of novel
financial instruments such as CDOs and derivatives, ==an
entirely new socio-economic environment has been created== and
the old platitudes, shibboleths, rules-of-thumb, etc. are no
longer operational, and indeed these may well be
counter-productive on a macro basis.

As I indicated he
"It is critical that the actual financial condition of the
automotive companies be established and the
feasibility/plausibility of their projections and assumptions be
evaluated using GAAS/FASB accounting standards and accepted
forecasting techniques, during this 30 to 90 day "grace period,"
purchased at great taxpayer expense. This verified data could
then be used for a data driven decision on a company-by-company
basis in a calmer and less emergency/crisis environment. A joint
taskforce composed of qualified and senior personnel from the
GAO, IRS, SEC, and outside specialists as required, is
suggested."

The actual financial condition of the Detroit big three is highly
questionable, particularly when their "off the books" obligations
and ties to other companies are considered, and what they
submitted is more than likely the absolute best possible
case/spin, but until a full audit/review is done by the
GAO/IRS/SEC etc, we won't know for sure.

Even if (as seems likely for GM) these are zombie [or more
precisely vampire] corporations, it is still better to verify
this, put *SOME* money in, and wind up their operations in an
orderly/structured manner than have a Lehman style "black hole
implosion" over a weekend. [My guess would be during the
Xmas/New Year holiday week w/o some governmental funding].

My special concern is that *ALL* the major corporations are
facades and stage sets, and that the Detroit three, far from
being unique, are simply the first. This is particularly true
where there was any significant involvement with the "new
finance."


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).

On Thu, 4 Dec 2008 16:18:46 -0800 (PST), oldjag
wrote:

Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.

Consider the crash, emission control and fuel economy regs that have
to be met. Some US auto startups have made it for a few years, but
none have ever been sustainable. Will Tesla Motors break the mold? It
would seem that perhaps a Chinese or other foreign company may want
some of the assets, but maybe not. Meanwhile a huge loss of jobs in
the US, for steel, semiconductor, plastics, software etc etc. I doubt
many US consumers realize how many of their own jobs could be affected
by supply chain fallout.

One last consideration, during WII, many auto plants and suppliers
were leaned on to mass produce items needed for the war effort. With
one of our last major manufacturing industries potentially going belly
up, what does that say about our emergency manufacturing capabilities
in the USA?

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

"F. George McDuffee" wrote in message
...
On Fri, 5 Dec 2008 22:22:46 -0800, "John R. Carroll"
wrote:

It's time to move forward to Capitalism 2.0.
V1 is as dead as a door nail.

JC
-----------
That's why the last of the email is so important.

"It is also critical that a "Board of Inquiry" be established to
determine how, and by whom, the domestic automotive industry was
driven into the ground, so that legislation and regulation can be
implemented to prevent any reoccurrence in this and/or other
industrial/economic sectors, with criminal referrals as may be
appropriate. "

There haven't been any criminal acts George. Phill Graham saw to that.
Stupidity isn't a crime and neither is gaming the metrics.
The ratings agencies and their clients might be in trouble but those
investigations are underway.

Like I said, car companies that evolved into financial services players is
the problem.
Everyone is going to have to get back to their roots so to speak. Otherwise
a car company, like GM, can take on increasing and incredible levels of risk
on the one hand, while reporting stable and positive metrics on the other.

The way to keep Ford or GM on track is to keep GMAC and Ford Motor Credit in
the business of funding vehicle purchases and out of risk arbitrage.
Otherwise, and what's happened, is that car companies focus all of their
energy and resources creating the illusion that infinite risk can be assumed
and then properly managed to avoid any real downside manifestation. More
real money has been put at risk than a GM or Ford can afford to lose. This
is the result of keeping their nose pressed up against the metrics window
that increased confidence to 100 percent that failure wasn't just unlikely,
but impossible. Not only is that not the case, history is repleat with
examples of risk unexpectedly coming home to roost and upsetting the apple
cart. This is the one certainty if you think about it.

Greenspan, Bernanke and an army of 30 something analysts producing and then
gaming the metrics are the real "criminals" here.
They all denied the certainty that eventually, risk will materialize and
losses paid. They claimed to be able to predict the unpredictable.
That is pretty amazing in light of the fact that all of the people at the
top have no doubt read a little history. I mean really, how seriously should
people claiming to be God be taken?
This is blasphemous, not criminal.
LOL


Also the need to eliminate trying to nail "jelly to the tree" is
critical:
"Assuming that the audit/verification is favorable, and
additional funding is warranted, it will be critical to eliminate
the "weasel words" from the "rescue/restructuring plans" and
establish firm, measurable goals, objectives, and mileposts, with
funds released only as these goals, objectives, mileposts, etc.
are met."

What possible metric would you put in such an agreement to insure that GM
deleverages the now collosal financial risks that exist outside of their
auto manufacturing operations?

The deflationary cycle has already begun. It is upon us NOW.
The only sane and acceptable way for GM to free itself is through
bankruptcy.
Releasing productive assets back into the market is exactly the purpose and
intent behind our laws in these matters.


While the Reagan vision was appeling, and may have been optimal
for a simpler time [much earlier than his administration] it is
clear [to me at least] that with the proliferation of
transnational private organizations rivaling many countries in
wealth and influence, and the introduction/proliferation of novel
financial instruments such as CDOs and derivatives, ==an
entirely new socio-economic environment has been created== and
the old platitudes, shibboleths, rules-of-thumb, etc. are no
longer operational, and indeed these may well be
counter-productive on a macro basis.

The old "platitudes, shibboleths, rules-of-thumb, etc" still apply George.
The difference is in their velocity, on the one hand, and the degree to
which the world now interlocks on the other.


As I indicated he
"It is critical that the actual financial condition of the
automotive companies be established and the
feasibility/plausibility of their projections and assumptions be
evaluated using GAAS/FASB accounting standards and accepted
forecasting techniques, during this 30 to 90 day "grace period,"
purchased at great taxpayer expense. This verified data could
then be used for a data driven decision on a company-by-company
basis in a calmer and less emergency/crisis environment. A joint
taskforce composed of qualified and senior personnel from the
GAO, IRS, SEC, and outside specialists as required, is
suggested."

A task force that will be doing an autopsy, not the triage intended.
Events are moving much too quickly for this to be productive and none of
these task forces will adress the issue of high school dropouts being hired
for top wage and benefit positions by management. Thirty eight year old
employees without an education is what has killed ther car companies George
and neither have done our educational system much good either. The incentive
to get an education has been severely degraded.


The actual financial condition of the Detroit big three is highly
questionable, particularly when their "off the books" obligations
and ties to other companies are considered, and what they
submitted is more than likely the absolute best possible
case/spin, but until a full audit/review is done by the
GAO/IRS/SEC etc, we won't know for sure.

There isn't any real question at all in this regard. With the possible
exception of Ford, the others are dead.
Dead, Dead, Dead......
Freeing the market of Cerberus and GM through bankruptcy/consolidation will
provide the opportunity and resources required for the remaining players to
have a chance at survival and possible prosperity in the future. It's the
only way.
You might as well write a five year plan otherwise George.


Even if (as seems likely for GM) these are zombie [or more
precisely vampire] corporations, it is still better to verify
this, put *SOME* money in, and wind up their operations in an
orderly/structured manner than have a Lehman style "black hole
implosion" over a weekend. [My guess would be during the
Xmas/New Year holiday week w/o some governmental funding].

My special concern is that *ALL* the major corporations are
facades and stage sets, and that the Detroit three, far from
being unique, are simply the first.

The first of what, exactly?
I'd say Drexel was the first, or one of the first. Enron and Worldcom were
Generation II products and what we are now experiencing is the failure to
apply the lessons learned from that history.

This is particularly true
where there was any significant involvement with the "new
finance."

"New Finance" aside, it isn't true at all. The truth is as old as mankind.
Greed is in fact good but only in moderation. When greed isn't bounded by
common sense, the avaricious and greedy have no real reason to protect the
underlying source of their gain - their flock - beyond the time required to
accumulate a huge wad of cashand then get out, leaving the risk behind for
others to deal with.
You can't solve a behavioral economics problem with a metric driven model.

JC

In article ,
"Up North" wrote:

"Joseph Gwinn" wrote in message
...
In article ,
"Ed Huntress" wrote:

"ATP*" wrote in message
...

"oldjag" wrote in message
...
Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.

They need to go bankrupt and reorganize. There will still be a US auto
industry and it will be more competitive than ever without the UAW
millstone around its neck.

Most of the industry experts I've heard over the past few days say there
will be no receivership and no reorganization. People don't buy cars from
bankrupt manufacturers. (Studebaker is an example; once it became known
they
were thinking about getting out of the car business, they were.) They'll
go
straight to liquidation, possibly with a few months of receivership in
order
to handle the selloffs. The brands have very little goodwill equity so
most
of the remaining value will be real estate and hardware.

Studebaker.

My parents owned a Studebaker when the company collapsed, in 1953 if
memory serves. The car became instantly worthless, for lack of repair
parts. I don't recall how long it was before we were forced to replace
that car at a loss, but it wasn't long. They broke a lot.

We subsequently had two Ramblers (both were junk!), then in the 1960s my
Mother discovered Volvos from reading Consumer Reports. Volvos were new
and cheap then.

The family has not bought an American car since.

Joe Gwinn

I had a 1953 Studebaker 1/2 ton pickup and with the little six and overdrive
trans it was quit thrifty but not overpowered. I still have it but it has a
Chev 350/350 in it with a nova subframe. I think Studebaker had one of the
first double wall pickup boxes. In the sixties they had Chevy engines in
their trucks. It seems there are still quite a few Stude parts available
but without a dealer network parts would have been a problem before the
internet made things more readily available. Here is a timeline of the
company.
http://www.studebakerhistory.com/dnn...5/Default.aspx

Interesting. It seems that the name endured past 1953, but that date is
burned into my mind; don't know why. Perhaps my father remembers.

Joe Gwinn

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).

"John R. Carroll" wrote in message
...

"F. George McDuffee" wrote in message
...
On Fri, 5 Dec 2008 22:22:46 -0800, "John R. Carroll"
wrote:

It's time to move forward to Capitalism 2.0.
V1 is as dead as a door nail.

JC
-----------
That's why the last of the email is so important.

"It is also critical that a "Board of Inquiry" be established to
determine how, and by whom, the domestic automotive industry was
driven into the ground, so that legislation and regulation can be
implemented to prevent any reoccurrence in this and/or other
industrial/economic sectors, with criminal referrals as may be
appropriate. "

There haven't been any criminal acts George. Phill Graham saw to that.
Stupidity isn't a crime and neither is gaming the metrics.
The ratings agencies and their clients might be in trouble but those
investigations are underway.

Like I said, car companies that evolved into financial services players is
the problem.
Everyone is going to have to get back to their roots so to speak.
Otherwise
a car company, like GM, can take on increasing and incredible levels of
risk
on the one hand, while reporting stable and positive metrics on the other.

The way to keep Ford or GM on track is to keep GMAC and Ford Motor Credit
in
the business of funding vehicle purchases and out of risk arbitrage.
Otherwise, and what's happened, is that car companies focus all of their
energy and resources creating the illusion that infinite risk can be
assumed
and then properly managed to avoid any real downside manifestation. More
real money has been put at risk than a GM or Ford can afford to lose. This
is the result of keeping their nose pressed up against the metrics window
that increased confidence to 100 percent that failure wasn't just
unlikely,
but impossible. Not only is that not the case, history is repleat with
examples of risk unexpectedly coming home to roost and upsetting the apple
cart. This is the one certainty if you think about it.

Greenspan, Bernanke and an army of 30 something analysts producing and
then
gaming the metrics are the real "criminals" here.
They all denied the certainty that eventually, risk will materialize and
losses paid. They claimed to be able to predict the unpredictable.
That is pretty amazing in light of the fact that all of the people at the
top have no doubt read a little history. I mean really, how seriously
should
people claiming to be God be taken?
This is blasphemous, not criminal.
LOL


Also the need to eliminate trying to nail "jelly to the tree" is
critical:
"Assuming that the audit/verification is favorable, and
additional funding is warranted, it will be critical to eliminate
the "weasel words" from the "rescue/restructuring plans" and
establish firm, measurable goals, objectives, and mileposts, with
funds released only as these goals, objectives, mileposts, etc.
are met."

What possible metric would you put in such an agreement to insure that GM
deleverages the now collosal financial risks that exist outside of their
auto manufacturing operations?

The deflationary cycle has already begun. It is upon us NOW.
The only sane and acceptable way for GM to free itself is through
bankruptcy.
Releasing productive assets back into the market is exactly the purpose
and
intent behind our laws in these matters.


While the Reagan vision was appeling, and may have been optimal
for a simpler time [much earlier than his administration] it is
clear [to me at least] that with the proliferation of
transnational private organizations rivaling many countries in
wealth and influence, and the introduction/proliferation of novel
financial instruments such as CDOs and derivatives, ==an
entirely new socio-economic environment has been created== and
the old platitudes, shibboleths, rules-of-thumb, etc. are no
longer operational, and indeed these may well be
counter-productive on a macro basis.

The old "platitudes, shibboleths, rules-of-thumb, etc" still apply George.
The difference is in their velocity, on the one hand, and the degree to
which the world now interlocks on the other.


As I indicated he
"It is critical that the actual financial condition of the
automotive companies be established and the
feasibility/plausibility of their projections and assumptions be
evaluated using GAAS/FASB accounting standards and accepted
forecasting techniques, during this 30 to 90 day "grace period,"
purchased at great taxpayer expense. This verified data could
then be used for a data driven decision on a company-by-company
basis in a calmer and less emergency/crisis environment. A joint
taskforce composed of qualified and senior personnel from the
GAO, IRS, SEC, and outside specialists as required, is
suggested."

A task force that will be doing an autopsy, not the triage intended.
Events are moving much too quickly for this to be productive and none of
these task forces will adress the issue of high school dropouts being
hired
for top wage and benefit positions by management. Thirty eight year old
employees without an education is what has killed ther car companies
George
and neither have done our educational system much good either. The
incentive
to get an education has been severely degraded.


The actual financial condition of the Detroit big three is highly
questionable, particularly when their "off the books" obligations
and ties to other companies are considered, and what they
submitted is more than likely the absolute best possible
case/spin, but until a full audit/review is done by the
GAO/IRS/SEC etc, we won't know for sure.

There isn't any real question at all in this regard. With the possible
exception of Ford, the others are dead.
Dead, Dead, Dead......
Freeing the market of Cerberus and GM through bankruptcy/consolidation
will
provide the opportunity and resources required for the remaining players
to
have a chance at survival and possible prosperity in the future. It's the
only way.
You might as well write a five year plan otherwise George.


Even if (as seems likely for GM) these are zombie [or more
precisely vampire] corporations, it is still better to verify
this, put *SOME* money in, and wind up their operations in an
orderly/structured manner than have a Lehman style "black hole
implosion" over a weekend. [My guess would be during the
Xmas/New Year holiday week w/o some governmental funding].

My special concern is that *ALL* the major corporations are
facades and stage sets, and that the Detroit three, far from
being unique, are simply the first.

The first of what, exactly?
I'd say Drexel was the first, or one of the first. Enron and Worldcom were
Generation II products and what we are now experiencing is the failure to
apply the lessons learned from that history.

This is particularly true
where there was any significant involvement with the "new
finance."

"New Finance" aside, it isn't true at all. The truth is as old as mankind.
Greed is in fact good but only in moderation. When greed isn't bounded by
common sense, the avaricious and greedy have no real reason to protect the
underlying source of their gain - their flock - beyond the time required
to
accumulate a huge wad of cashand then get out, leaving the risk behind for
others to deal with.
You can't solve a behavioral economics problem with a metric driven model.

JC


While excessive greed is a problem it isn't what caused our problems today.
The real source of our problem is that we have lost our ability to compete
in the world economy and win. That is why over the years we have become so
reliant on finance to make our money. I don't remember the percentage but
until this mess hit we were making something near half of all our money from
financial operations. We used to be the big industrial power and made money
by making things. We let our corporations send that business to the third
world. The result is that we now have only a few ways to make money and they
are growing like crazy. We have nothing left but finance, service, and
entertainment and that's about it. So we just don't have the capacity to
create wealth except from moving paper. Now we have seen what the down side
of that is. When your economy is based on the sale and trading of paper and
not from producing real products you see what happens when things go down.
This is not new. It has happened to other nations before and the result is
the same. When you stop competing in the innovation and production of
products people want and need you become uncompetitive. We have to turn this
ship completely around and get back to doing things the way we did when we
were successful. Continuing to do what we have done since Reagan set the
agenda is a recipe for disaster. Corporations have to be regulated and
managed for the good of the country and not simply for the stockholders.
Markets have to be regulated and closely monitored for the good of everyone.
That means the free market way isn't going to cut it anymore. We have seen
what deregulation brings. We have seen what the republican/conservative
agenda has wrought. Now we need to do things differently. Lucky for us we
have a new guy in charge who is nothing like the old one. So at least we
have a chance.

Hawke

"Hawke" wrote in message
...

"John R. Carroll" wrote in message
...

"F. George McDuffee" wrote in message
...
On Fri, 5 Dec 2008 22:22:46 -0800, "John R. Carroll"
wrote:

It's time to move forward to Capitalism 2.0.
V1 is as dead as a door nail.

JC
-----------
That's why the last of the email is so important.

"It is also critical that a "Board of Inquiry" be established to
determine how, and by whom, the domestic automotive industry was
driven into the ground, so that legislation and regulation can be
implemented to prevent any reoccurrence in this and/or other
industrial/economic sectors, with criminal referrals as may be
appropriate. "

There haven't been any criminal acts George. Phill Graham saw to that.
Stupidity isn't a crime and neither is gaming the metrics.
The ratings agencies and their clients might be in trouble but those
investigations are underway.

Like I said, car companies that evolved into financial services players
is
the problem.
Everyone is going to have to get back to their roots so to speak.
Otherwise
a car company, like GM, can take on increasing and incredible levels of
risk
on the one hand, while reporting stable and positive metrics on the
other.

The way to keep Ford or GM on track is to keep GMAC and Ford Motor Credit
in
the business of funding vehicle purchases and out of risk arbitrage.
Otherwise, and what's happened, is that car companies focus all of their
energy and resources creating the illusion that infinite risk can be
assumed
and then properly managed to avoid any real downside manifestation. More
real money has been put at risk than a GM or Ford can afford to lose.
This
is the result of keeping their nose pressed up against the metrics window
that increased confidence to 100 percent that failure wasn't just
unlikely,
but impossible. Not only is that not the case, history is repleat with
examples of risk unexpectedly coming home to roost and upsetting the
apple
cart. This is the one certainty if you think about it.

Greenspan, Bernanke and an army of 30 something analysts producing and
then
gaming the metrics are the real "criminals" here.
They all denied the certainty that eventually, risk will materialize and
losses paid. They claimed to be able to predict the unpredictable.
That is pretty amazing in light of the fact that all of the people at the
top have no doubt read a little history. I mean really, how seriously
should
people claiming to be God be taken?
This is blasphemous, not criminal.
LOL


Also the need to eliminate trying to nail "jelly to the tree" is
critical:
"Assuming that the audit/verification is favorable, and
additional funding is warranted, it will be critical to eliminate
the "weasel words" from the "rescue/restructuring plans" and
establish firm, measurable goals, objectives, and mileposts, with
funds released only as these goals, objectives, mileposts, etc.
are met."

What possible metric would you put in such an agreement to insure that GM
deleverages the now collosal financial risks that exist outside of their
auto manufacturing operations?

The deflationary cycle has already begun. It is upon us NOW.
The only sane and acceptable way for GM to free itself is through
bankruptcy.
Releasing productive assets back into the market is exactly the purpose
and
intent behind our laws in these matters.


While the Reagan vision was appeling, and may have been optimal
for a simpler time [much earlier than his administration] it is
clear [to me at least] that with the proliferation of
transnational private organizations rivaling many countries in
wealth and influence, and the introduction/proliferation of novel
financial instruments such as CDOs and derivatives, ==an
entirely new socio-economic environment has been created== and
the old platitudes, shibboleths, rules-of-thumb, etc. are no
longer operational, and indeed these may well be
counter-productive on a macro basis.

The old "platitudes, shibboleths, rules-of-thumb, etc" still apply
George.
The difference is in their velocity, on the one hand, and the degree to
which the world now interlocks on the other.


As I indicated he
"It is critical that the actual financial condition of the
automotive companies be established and the
feasibility/plausibility of their projections and assumptions be
evaluated using GAAS/FASB accounting standards and accepted
forecasting techniques, during this 30 to 90 day "grace period,"
purchased at great taxpayer expense. This verified data could
then be used for a data driven decision on a company-by-company
basis in a calmer and less emergency/crisis environment. A joint
taskforce composed of qualified and senior personnel from the
GAO, IRS, SEC, and outside specialists as required, is
suggested."

A task force that will be doing an autopsy, not the triage intended.
Events are moving much too quickly for this to be productive and none of
these task forces will adress the issue of high school dropouts being
hired
for top wage and benefit positions by management. Thirty eight year old
employees without an education is what has killed ther car companies
George
and neither have done our educational system much good either. The
incentive
to get an education has been severely degraded.


The actual financial condition of the Detroit big three is highly
questionable, particularly when their "off the books" obligations
and ties to other companies are considered, and what they
submitted is more than likely the absolute best possible
case/spin, but until a full audit/review is done by the
GAO/IRS/SEC etc, we won't know for sure.

There isn't any real question at all in this regard. With the possible
exception of Ford, the others are dead.
Dead, Dead, Dead......
Freeing the market of Cerberus and GM through bankruptcy/consolidation
will
provide the opportunity and resources required for the remaining players
to
have a chance at survival and possible prosperity in the future. It's the
only way.
You might as well write a five year plan otherwise George.


Even if (as seems likely for GM) these are zombie [or more
precisely vampire] corporations, it is still better to verify
this, put *SOME* money in, and wind up their operations in an
orderly/structured manner than have a Lehman style "black hole
implosion" over a weekend. [My guess would be during the
Xmas/New Year holiday week w/o some governmental funding].

My special concern is that *ALL* the major corporations are
facades and stage sets, and that the Detroit three, far from
being unique, are simply the first.

The first of what, exactly?
I'd say Drexel was the first, or one of the first. Enron and Worldcom
were
Generation II products and what we are now experiencing is the failure to
apply the lessons learned from that history.

This is particularly true
where there was any significant involvement with the "new
finance."

"New Finance" aside, it isn't true at all. The truth is as old as
mankind.
Greed is in fact good but only in moderation. When greed isn't bounded by
common sense, the avaricious and greedy have no real reason to protect
the
underlying source of their gain - their flock - beyond the time required
to
accumulate a huge wad of cashand then get out, leaving the risk behind
for
others to deal with.
You can't solve a behavioral economics problem with a metric driven
model.

JC


While excessive greed is a problem it isn't what caused our problems
today.
The real source of our problem is that we have lost our ability to compete
in the world economy and win. That is why over the years we have become so
reliant on finance to make our money. I don't remember the percentage but
until this mess hit we were making something near half of all our money
from
financial operations. We used to be the big industrial power and made
money
by making things. We let our corporations send that business to the third
world. The result is that we now have only a few ways to make money and
they
are growing like crazy. We have nothing left but finance, service, and
entertainment and that's about it. So we just don't have the capacity to
create wealth except from moving paper. Now we have seen what the down
side
of that is. When your economy is based on the sale and trading of paper
and
not from producing real products you see what happens when things go down.
This is not new. It has happened to other nations before and the result is
the same. When you stop competing in the innovation and production of
products people want and need you become uncompetitive. We have to turn
this
ship completely around and get back to doing things the way we did when we
were successful. Continuing to do what we have done since Reagan set the
agenda is a recipe for disaster. Corporations have to be regulated and
managed for the good of the country and not simply for the stockholders.
Markets have to be regulated and closely monitored for the good of
everyone.
That means the free market way isn't going to cut it anymore. We have seen
what deregulation brings. We have seen what the republican/conservative
agenda has wrought. Now we need to do things differently. Lucky for us we
have a new guy in charge who is nothing like the old one. So at least we
have a chance.



Very little of the above reflects reality or the facts.
American companies are very effective competitors for example.
Free markets are and have been a myth.

The one thing you got right is that the economic and financial policies
embraced by, and the subsequent activities of, the Republican party in their
platform and real life have produced an obvious and enormous failure.

JC

On Sat, 6 Dec 2008 12:06:37 -0800, "Hawke"
wrote:

When you stop competing in the innovation and production of
products people want and need you become uncompetitive. We have to turn this
ship completely around and get back to doing things the way we did when we
were successful. Continuing to do what we have done since Reagan set the
agenda is a recipe for disaster. Corporations have to be regulated and
managed for the good of the country and not simply for the stockholders.
---------------
Lots of lip service was paid to "the stock holders," but that's
is all they got. [other than the shaft]

Look at what the IPOs for all this paper were and look at the
current prices,espically the banks and brokerages. The
stockholders have taken a haircut down to their toenails.

[e.g. GM stock currently $3.75-4.55]
http://money.cnn.com/quote/quote.htm...ory_quote_link
-------------
snip
But after GM shares dropped earlier this week to ==a 50-year
low,== Smith and other local retirees are concerned about the
company's future --and their nest eggs.

Shares on Monday hit $9.92, tying their lowest point since Sept.
13, 1954, according to the Center for Research in Security Prices
at the University of Chicago. The price is adjusted for splits
and other changes.
snip
---------------
for complete article click on
http://www.mlive.com/flintjournal/bu...es_for_gm.html


Repeated efforts have been made to limit executive compensation
to something rational, and to impose other reforms, but these
have always been defeated by the boards, generally appointed by
the CEO. Nothing short of time in the federal pen has worked.
http://www.networkworld.com/news/200...08-ebbers.html

Corporate governance is now totally out of control. Lord Acton
was correct when he observed "power corrupts and absolute power
corrupts absolutely." Unfortunately for the officers and
directors of these corporations, the world is far larger than the
boardroom and corner office, and their absolute power was a
hallucination, as they are now discovering. The downside is that
they are taking the rest of us along for the ride as they go over
the cliff.

The underlying reason for the absolute refusal of Detroit
management to even consider a bankruptcy filing is that *ALL*
contracts are then subject to court review and abrogation,
including executive employment contracts w/golden parachute
provisions and "perks." It is highly likely these will be among
the first contracts nullified by the court, to be followed
immediately by "pink slips" for all the board members and senior
executives, and quite possibly "claw back" of their "performance"
bonuses and stock option profits for prior years.


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).

Good luck.
Martin

Ed Huntress wrote:
"Martin H. Eastburn" wrote in message
...
Right - they got the protection of the black bear law into effect - eh ?!

Now there are more black bear per square mile than ever before and are
running people crazy.

Martin :-)

I don't think it was the Lenapes who wanted to protect the black bear.

The bear hunting battle has gone back and forth here for 30 years. Hunting
bears was shut down here on procedural grounds (fish & game procedures
weren't being followed in setting seasons and so on), but the state senate
introduced a bill a month ago to normalize it and to reinstate bear hunts.

Whether it will pass is anybody's guess.

--
Ed Huntress

On Thu, 4 Dec 2008 16:18:46 -0800 (PST), oldjag
wrote:

Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings.
snip
---------------
Just ran across this article
--------------
LONDON, Dec. 6 (UPI) -- Vauxhall Motors, a British subsidiary of
General Motors (NYSE:GM), has held secret talks with government
officials as it seeks to save thousands of jobs, sources said.

The Times of London reported Saturday that the English automaker
approached Business Secretary Peter Mandelson for financial help
as its U.S. parent company faces potential collapse.

Follow-up meetings with Mandelson are believed to have also
involved representatives from other car manufacturers with
British plants, including Ford and Honda.

The newspaper said Vauxhall's move marks the first time a company
outside the financial services sector has sought government aid
since the global credit crisis began more than a year ago.

Although Vauxhall employs about 5,000 workers in Britain, but
there are estimates the company's collapse would affect 50,000
workers employed by part suppliers, car dealerships and local
businesses.

The Times said European Union rules normally preclude state aid
to car manufacturers, but EU officials are under pressure to
prevent the loss of jobs during the current recession.
--------------
for complete article click on
http://www.upi.com/Business_News/200...8251228584895/

also see
-------------
18 November 2008

German federal and state governments are working on a $2.6
billion (two billion euro) bailout package for ailing carmker
Opel, a subsidiary of General Motors Corporation of the US.

Opel sought government help after its management was left with no
cash to run the company.

Germany, which is confirmed to be in a recession, said it wants
to help Opal, General Motors' struggling German subsidiary, but
the aid will be limited to the German company and the government
wants to make sure it does not percolate over to Opel's US parent
or lead to demands for support from other companies.
snip
-----------
for complete article see
http://www.domain-b.com/industry/Aut...1118_opel.html

and this little morale builder
----------
Chinese Automakers may buy GM and Chrysler
by Bertel Schmitt

Chinese carmakers SAIC and Dongfeng have plans to acquire GM and
Chrysler, China’s 21st Century Business Herald reports. A
National Enquirer the paper is not. It is one of China's leading
business newspapers, with a daily readership over three million].
This newspaper cites a senior official of China’s Ministry of
Industry and Information Technology– the state regulator of
China’s auto industry– who dropped the hint that “the auto
manufacturing giants in China, such as Shanghai Automotive
Industry Corporation (SAIC) and Dongfeng Motor Corporation, have
the capability and intention to buy some assets of the two
crisis-plagued American automakers.” These hints are very often
followed with quick action in the Middle Kingdom. The hints were
dropped just a few days after the same Chinese government gave
its auto makers the go-ahead to invest abroad. And why would they
do that?
A take-over of a large overseas auto maker would fit perfectly
into China’s plans. As reported before, China has realized that
its export chances are slim without unfettered access to foreign
technology. The brand cachet of Chinese cars abroad is, shall we
say, challenged. The Chinese could easily export Made-in-China
VWs, Toyotas, Buicks. If their joint venture partner would let
them. The solution: Buy the joint venture partner. Especially,
when he’s in deep trouble.
At current market valuations (GM is worth less than Mattel) the
Chinese government can afford to buy GM with petty cash. Even a
hundred billion $ would barely dent China’s more than $2t in
currency reserves. For nobody in the world would buying GM and
(while they are at it) Chrysler make more sense than for the
Chinese. Overlap? What overlap? They would gain instant access to
the world’s markets with accepted brands, and proven technology.
The editors of 21st Century Business Herald, obviously with input
from higher-up, writes that Chinese industry must change and
upgrade. China wants their factories to change from
low-value-added manufacturing to technically innovative and
financially-sound high-value-add industries. Says the paper: “It
would be much easier now for strong Chinese automakers to go
global by acquiring some assets of their U.S. counterparts in
times of crisis.”
snip
--------
for complete article click on
http://kencan7.blogspot.com/2008/11/...or-gm-and.html


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).

On Sat, 06 Dec 2008 23:33:12 -0600, F. George McDuffee
wrote:

Chinese Automakers may buy GM and Chrysler

Oh yes....we will no longer have to COMPETE with Chinese coolie
labor.......we will BE Chinese coolie labor. Great idea.

Get ready for the massive influx of employment litigation as the
Chinese learn about the American legal system.
Dave

On Sun, 07 Dec 2008 01:27:13 -0500, the infamous
scrawled the following:

On Sat, 06 Dec 2008 23:33:12 -0600, F. George McDuffee
wrote:

Chinese Automakers may buy GM and Chrysler

Oh yes....we will no longer have to COMPETE with Chinese coolie
labor.......we will BE Chinese coolie labor. Great idea.

Get ready for the massive influx of employment litigation as the
Chinese learn about the American legal system.

I think their lesson will be to buy a company which is bloated at the
top and the bottom. They may replace the bloated salaries of the
management but the union is there to stay without a Chapter 7
amputation of the afflicted wages.

Imagine: the workers each being paid more than the managers and CEO.
(Anyone cross-eyed yet?)

--
At current market valuations (GM is worth less than Mattel)
the Chinese government can afford to buy GM with petty cash.
--Bertel Shmitt on kencan7 blogspot

On Sun, 07 Dec 2008 05:35:04 -0800, Larry Jaques
wrote:
snip
I think their lesson will be to buy a company which is bloated at the
top and the bottom. They may replace the bloated salaries of the
management but the union is there to stay without a Chapter 7
amputation of the afflicted wages.
snip
Major problem [or opportunity from their point of view] is that
when they own the brand names they can make the cars where every
they wish and then import, much like the "domestic" brand name
consumer electronics such as VCRs, blu-ray players and TVs [e.g.
RCA, Magnavox].

After purchase, they can keep most of the dealer networks and
brands, keep some but not all of the sales, marketing, design,
and spare parts staff/facilities, and liquidate the rest.

Detroit is among the top car importers now, and they also import
major amounts of high value added components [engines,
transmissions, electronics] for domestic assembly so this is
simply an extension of the existing situation, not something new,
and has been in progress for at least a generation. Consumer
electronics, consumer optics [cameras], textiles/clothing, shoes,
tools, and many other economic sectors have already gone this
route.

Detroit had a cow several years ago when adding "country of
origin" and/or "percent domestic content" information on the
existing new car dealer sticker was proposed, claiming it would
cost too much. As in so many things, a cost reduction can be
obtained here with "China" and "100%" pre-printed on every dealer
sticker...


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).

On Thu, 4 Dec 2008 16:18:46 -0800 (PST), oldjag
wrote:

Well, I guess most folks don't really care to much if the US auto
companies fold, judging by the internet postings. If one or more does
fold, who has the capital in the US right now buy up any of the
assets? The cost of admission for new vehicle design is very high.
snip
==============
In case you missed these

-------------
Krugman: US auto industry will probably disappear

By MALIN RISING, Associated Press Writer Malin Rising,
Associated Press Writer – Sun Dec 7, 7:36 am ET
Nobel Prize Laureate in Economics Paul Krugman of the U.S signs a
chair, at the AP – Nobel Prize Laureate in Economics Paul Krugman
of the U.S signs a chair, at the Nobel Prize museum in …

STOCKHOLM, Sweden – Nobel economics prize winner Paul Krugman
said Sunday that the beleaguered U.S. auto industry will likely
disappear.

"It will do so because of the geographical forces that me and my
colleagues have discussed," the Princeton University professor
and New York Times columnist told reporters in Stockholm. "It is
no longer sustained by the current economy."
snip
---------------
for complete article see
http://news.yahoo.com/s/ap/20081207/...D.6Zb mayBhIF

also
-----------------
Senator calls for Chrysler merger, new CEO at GM

WASHINGTON – A key senator says the nation's car companies should
have to replace top executives in exchange for a long-term
bailout package from Congress.

Sen. Chris Dodd heads the Senate Banking Committee. He says he is
hopeful Congress will pass a short-term $15 billion aid package
for the automakers in the next several days. But the Connecticut
Democrat says the companies should have to restructure if they
want a more significant bailout from Congress next year.

Dodd says the companies need quick cash to avoid collapse in the
next several weeks. But over the long-term, Dodd says Chrysler
probably ought to merge with another company and General Motors
should be required to replace chief executive Rick Wagoner.

Dodd says Ford is the healthiest of the Big Three U.S.
automakers.
snip
------------------
for complete article see
http://news.yahoo.com/s/ap/20081207/...Zkf1zkPomyBhIF


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).

That's why the last of the email is so important.

"It is also critical that a "Board of Inquiry" be established to
determine how, and by whom, the domestic automotive industry was
driven into the ground, so that legislation and regulation can be
implemented to prevent any reoccurrence in this and/or other
industrial/economic sectors, with criminal referrals as may be
appropriate. "

There haven't been any criminal acts George. Phill Graham saw to that.
Stupidity isn't a crime and neither is gaming the metrics.
The ratings agencies and their clients might be in trouble but those
investigations are underway.

Like I said, car companies that evolved into financial services players
is
the problem.
Everyone is going to have to get back to their roots so to speak.
Otherwise
a car company, like GM, can take on increasing and incredible levels of
risk
on the one hand, while reporting stable and positive metrics on the
other.

The way to keep Ford or GM on track is to keep GMAC and Ford Motor
Credit
in
the business of funding vehicle purchases and out of risk arbitrage.
Otherwise, and what's happened, is that car companies focus all of
their
energy and resources creating the illusion that infinite risk can be
assumed
and then properly managed to avoid any real downside manifestation.
More
real money has been put at risk than a GM or Ford can afford to lose.
This
is the result of keeping their nose pressed up against the metrics
window
that increased confidence to 100 percent that failure wasn't just
unlikely,
but impossible. Not only is that not the case, history is repleat with
examples of risk unexpectedly coming home to roost and upsetting the
apple
cart. This is the one certainty if you think about it.

Greenspan, Bernanke and an army of 30 something analysts producing and
then
gaming the metrics are the real "criminals" here.
They all denied the certainty that eventually, risk will materialize
and
losses paid. They claimed to be able to predict the unpredictable.
That is pretty amazing in light of the fact that all of the people at
the
top have no doubt read a little history. I mean really, how seriously
should
people claiming to be God be taken?
This is blasphemous, not criminal.
LOL


Also the need to eliminate trying to nail "jelly to the tree" is
critical:
"Assuming that the audit/verification is favorable, and
additional funding is warranted, it will be critical to eliminate
the "weasel words" from the "rescue/restructuring plans" and
establish firm, measurable goals, objectives, and mileposts, with
funds released only as these goals, objectives, mileposts, etc.
are met."

What possible metric would you put in such an agreement to insure that
GM
deleverages the now collosal financial risks that exist outside of
their
auto manufacturing operations?

The deflationary cycle has already begun. It is upon us NOW.
The only sane and acceptable way for GM to free itself is through
bankruptcy.
Releasing productive assets back into the market is exactly the purpose
and
intent behind our laws in these matters.


While the Reagan vision was appeling, and may have been optimal
for a simpler time [much earlier than his administration] it is
clear [to me at least] that with the proliferation of
transnational private organizations rivaling many countries in
wealth and influence, and the introduction/proliferation of novel
financial instruments such as CDOs and derivatives, ==an
entirely new socio-economic environment has been created== and
the old platitudes, shibboleths, rules-of-thumb, etc. are no
longer operational, and indeed these may well be
counter-productive on a macro basis.

The old "platitudes, shibboleths, rules-of-thumb, etc" still apply
George.
The difference is in their velocity, on the one hand, and the degree to
which the world now interlocks on the other.


As I indicated he
"It is critical that the actual financial condition of the
automotive companies be established and the
feasibility/plausibility of their projections and assumptions be
evaluated using GAAS/FASB accounting standards and accepted
forecasting techniques, during this 30 to 90 day "grace period,"
purchased at great taxpayer expense. This verified data could
then be used for a data driven decision on a company-by-company
basis in a calmer and less emergency/crisis environment. A joint
taskforce composed of qualified and senior personnel from the
GAO, IRS, SEC, and outside specialists as required, is
suggested."

A task force that will be doing an autopsy, not the triage intended.
Events are moving much too quickly for this to be productive and none
of
these task forces will adress the issue of high school dropouts being
hired
for top wage and benefit positions by management. Thirty eight year old
employees without an education is what has killed ther car companies
George
and neither have done our educational system much good either. The
incentive
to get an education has been severely degraded.


The actual financial condition of the Detroit big three is highly
questionable, particularly when their "off the books" obligations
and ties to other companies are considered, and what they
submitted is more than likely the absolute best possible
case/spin, but until a full audit/review is done by the
GAO/IRS/SEC etc, we won't know for sure.

There isn't any real question at all in this regard. With the possible
exception of Ford, the others are dead.
Dead, Dead, Dead......
Freeing the market of Cerberus and GM through bankruptcy/consolidation
will
provide the opportunity and resources required for the remaining
players
to
have a chance at survival and possible prosperity in the future. It's
the
only way.
You might as well write a five year plan otherwise George.


Even if (as seems likely for GM) these are zombie [or more
precisely vampire] corporations, it is still better to verify
this, put *SOME* money in, and wind up their operations in an
orderly/structured manner than have a Lehman style "black hole
implosion" over a weekend. [My guess would be during the
Xmas/New Year holiday week w/o some governmental funding].

My special concern is that *ALL* the major corporations are
facades and stage sets, and that the Detroit three, far from
being unique, are simply the first.

The first of what, exactly?
I'd say Drexel was the first, or one of the first. Enron and Worldcom
were
Generation II products and what we are now experiencing is the failure
to
apply the lessons learned from that history.

This is particularly true
where there was any significant involvement with the "new
finance."

"New Finance" aside, it isn't true at all. The truth is as old as
mankind.
Greed is in fact good but only in moderation. When greed isn't bounded
by
common sense, the avaricious and greedy have no real reason to protect
the
underlying source of their gain - their flock - beyond the time
required
to
accumulate a huge wad of cashand then get out, leaving the risk behind
for
others to deal with.
You can't solve a behavioral economics problem with a metric driven
model.

JC


While excessive greed is a problem it isn't what caused our problems
today.
The real source of our problem is that we have lost our ability to
compete
in the world economy and win. That is why over the years we have become
so
reliant on finance to make our money. I don't remember the percentage
but
until this mess hit we were making something near half of all our money
from
financial operations. We used to be the big industrial power and made
money
by making things. We let our corporations send that business to the
third
world. The result is that we now have only a few ways to make money and
they
are growing like crazy. We have nothing left but finance, service, and
entertainment and that's about it. So we just don't have the capacity to
create wealth except from moving paper. Now we have seen what the down
side
of that is. When your economy is based on the sale and trading of paper
and
not from producing real products you see what happens when things go
down.
This is not new. It has happened to other nations before and the result
is
the same. When you stop competing in the innovation and production of
products people want and need you become uncompetitive. We have to turn
this
ship completely around and get back to doing things the way we did when
we
were successful. Continuing to do what we have done since Reagan set the
agenda is a recipe for disaster. Corporations have to be regulated and
managed for the good of the country and not simply for the stockholders.
Markets have to be regulated and closely monitored for the good of
everyone.
That means the free market way isn't going to cut it anymore. We have
seen
what deregulation brings. We have seen what the republican/conservative
agenda has wrought. Now we need to do things differently. Lucky for us
we
have a new guy in charge who is nothing like the old one. So at least we
have a chance.



Very little of the above reflects reality or the facts.
American companies are very effective competitors for example.
Free markets are and have been a myth.

The one thing you got right is that the economic and financial policies
embraced by, and the subsequent activities of, the Republican party in
their
platform and real life have produced an obvious and enormous failure.


So we can agree that the policies of the neocons and those implemented by
the republican party are what has brought us this giant economic mess. But I
am correct in that the US has become uncompetitive, at least in comparison
to what it was at one time. That means our corporations are not doing all
that well. In the eighties manufacturing was about 40% of GDP and finance
was around 12%. That has now just about reversed. So as I stated, finance is
what has produced a far bigger piece of our GDP than ever before.
Manufacturing has gone to 12% of GDP, it's shrinking, and it is being done
by the countries with growth rates in the 8 to 12 percent range. We, on the
other hand, have a negative growth rate. Do the calculations. The countries
making the products are doing well, like we used to. The country doing
mainly finance is doing ...well, you know. So the US is having to rely on
finance of all kinds to make its money and that is not a good sign. History
shows that every country that did this in the past was on the way down hill.
If you add the fact that the only thing the US leads the world in is debt
you can see what our recent policies have done to us. We need to make big
changes, and fast.

Hawke

When you stop competing in the innovation and production of
products people want and need you become uncompetitive. We have to turn
this
ship completely around and get back to doing things the way we did when
we
were successful. Continuing to do what we have done since Reagan set the
agenda is a recipe for disaster. Corporations have to be regulated and
managed for the good of the country and not simply for the stockholders.
---------------
Lots of lip service was paid to "the stock holders," but that's
is all they got. [other than the shaft]

Look at what the IPOs for all this paper were and look at the
current prices,espically the banks and brokerages. The
stockholders have taken a haircut down to their toenails.

[e.g. GM stock currently $3.75-4.55]
http://money.cnn.com/quote/quote.htm...ory_quote_link
-------------
snip
But after GM shares dropped earlier this week to ==a 50-year
low,== Smith and other local retirees are concerned about the
company's future --and their nest eggs.

Shares on Monday hit $9.92, tying their lowest point since Sept.
13, 1954, according to the Center for Research in Security Prices
at the University of Chicago. The price is adjusted for splits
and other changes.
snip
---------------
for complete article click on

http://www.mlive.com/flintjournal/bu...es_for_gm.html


Repeated efforts have been made to limit executive compensation
to something rational, and to impose other reforms, but these
have always been defeated by the boards, generally appointed by
the CEO. Nothing short of time in the federal pen has worked.
http://www.networkworld.com/news/200...08-ebbers.html

Corporate governance is now totally out of control. Lord Acton
was correct when he observed "power corrupts and absolute power
corrupts absolutely." Unfortunately for the officers and
directors of these corporations, the world is far larger than the
boardroom and corner office, and their absolute power was a
hallucination, as they are now discovering. The downside is that
they are taking the rest of us along for the ride as they go over
the cliff.

The underlying reason for the absolute refusal of Detroit
management to even consider a bankruptcy filing is that *ALL*
contracts are then subject to court review and abrogation,
including executive employment contracts w/golden parachute
provisions and "perks." It is highly likely these will be among
the first contracts nullified by the court, to be followed
immediately by "pink slips" for all the board members and senior
executives, and quite possibly "claw back" of their "performance"
bonuses and stock option profits for prior years.

Back in the 1920s the big companies all had what they called interlocking
directorates. Basically, this was just an old white boys network of bigwigs
that were members of many boards of directors. Everybody was on the boards
of everybody else's companies. It was a real nice deal for those in on it.
Today we have basically the same sort of thing. Nobody on any of these
boards of directors ever says anything is too much for the management. Why
would they? That is why they are on the board, to help the managers and to
make money for themselves. It's just more of the same old boys network we
saw in the past. It just makes you wonder if things are ever going to be
fixed. By now we know exactly what the greedy capitalist pigs do when you
give them the change to do it. So the question is whether the new
administration is going to reign them in like FDR did or will they just go
along with them like they have in the past. With the two parties acting as a
duopoly that rubber stamps the decisions of the corporations it's no wonder
why we are in this mess. I for one will be very disappointed if the Obama
administration goes along with this corruption like everyone else has since
1980.

Hawke

On Sun, 7 Dec 2008 22:53:09 -0800, "Hawke"
wrote:

So we can agree that the policies of the neocons and those implemented by
the republican party are what has brought us this giant economic mess.
While the "Brave new world order" "crystalized" under the
neocons, this was just the end result of a long process. Don't
forget that it was "Slick Willie," with much help from Bobbie
Dole, that rammed NAFTA through.
But I
am correct in that the US has become uncompetitive, at least in comparison
to what it was at one time. That means our corporations are not doing all
that well.
This all depends on your point of view, your expectations of
corporations and your definations. We have more billionares than
ever before.

In the eighties manufacturing was about 40% of GDP and finance
was around 12%. That has now just about reversed. So as I stated, finance is
what has produced a far bigger piece of our GDP than ever before.
Problem here is that much of the financial "profit" reported was
cobwebs and moonbeams, and in many cases was generated by the
canibilization of the manufacturing sector. When judged by net
taxable income [in many cases zero], the results were *MUCH* less
impressive. Either there was tax fraud on a massive scale, gross
book cooking, or both.

Manufacturing has gone to 12% of GDP, it's shrinking, and it is being done
by the countries with growth rates in the 8 to 12 percent range. We, on the
other hand, have a negative growth rate. Do the calculations. The countries
making the products are doing well, like we used to. The country doing
mainly finance is doing ...well, you know. So the US is having to rely on
finance of all kinds to make its money and that is not a good sign. History
shows that every country that did this in the past was on the way down hill.
If you add the fact that the only thing the US leads the world in is debt
you can see what our recent policies have done to us. We need to make big
changes, and fast.
Needing to do somthing [fast] and doing it are two very different
things, as the country is about to discover.

Even in the countries with high rates of manufacturing growth, it
has taken *AT LEAST* a generation to develop their infrastructure
[e.g. roads, power plants], vendor networks, supporting/secondary
firms, and an educated/trained workforce.

In many cases in the US, the buildings, equipment and machinery
used for manufacturing no longer exist, having been exported or
sold for scrap, the infrastructure, again roads and power, have
been allowed to deteriorate, the vendors and secondary supporting
firms no longer exist, and the educated/trained workforce has
either found other jobs [mainly in the service sector/retail
sales] or retired/died.

Perhaps the single most critical item, the orgazational memory
and informal methodology that are the basis of all successful
manufacturing has been destroyed, if not by
bankruptcy/liquidation, then by an endless series of
reorganizations, reengineerings, right sizings, downsizings, etc.

A close second it the total lack of trust and confidence by the
[potential] workforce in American management. The employees, or
their parents, have seen what management promises are worth, even
in the form of written contracts, as their pensions, 401ks,
retiree health benefits, etc. disappeared and their jobs were
eliminated.

While market forces may in fact be liquidating some obsolete
economic sectors and their companies, in far too many cases, the
process is being accelerated. exacerbated and exploited by
sociopathic individuals who already possess more money than they
and their children can ever spend.

FWIW -- having driven "manufacturing" into the ground, plundering
of corporations, including looting their pension plans, continues
and has moved on to other areas such as the media. For one
example see
-----------
Tribune Considering Filing for Bankruptcy Protection, WSJ Says

By Jennifer Sondag and Sarah Rabil

Dec. 8 (Bloomberg) -- Tribune Co., the newspaper publisher and
broadcaster taken private by billionaire Sam Zell last year, is
considering filing for bankruptcy protection, according to the
Wall Street Journal.
snip
Tribune continued talks with lenders to restructure its debt in
recent days, the Journal said. The Chicago-based company, saddled
with $11.8 billion in debt from the $8.3 billion buyout of the
company last December, has been cutting jobs and selling assets
including Long Island’s Newsday to reduce its obligations.
snip
-------------
for complete article see
http://www.bloomberg.com/apps/news?p...QxM&refer=home

An ESOP [employee stock ownership plan] was the trojan horse used
in this particular case
-------------
snip
When the Tribune Company was purchased by Samuel Zell by utlizing
an ESOP, one question was how long would it take before the
litigation began. Today, that question was answered when a group
of current and former employees filed suit in the U.S. District
Court for the Central District of California. A copy of the
complaint is available here.
http://online.wsj.com/public/resourc...ments/zell.pdf

The complaint is not a good read from a pension geek standpoint.
In 115 pages, the complaint failed to tell a clear ERISA-related
story typical of defined benefit plans which are converted to
ESOPs which then lead to litigation. I am hopeful that the
forthcoming motions to dismiss or motions for summary judgment
will provide more details about the frozen Tribune Company
Employees’ Pension Plan which was merged into the Times Mirror
Pension Plan which had an ESOP then merged into the Times Mirror
Savings Plan, and at some point these plans became the Tribune
ESOP.

A quick check of the filed Form 5500s reveal that these are not
small plans. For example, the Tribune Company Employee Stock
Ownership Plan for 2003 had over 11,000 participants and
beneficiaries, and total assets of over $800 million. The Tribune
Company Master Retirement Savings Trust had over $2.2 billion in
assets for the 2006 plan year listed on Schedule H of Form 5500.
A really interesting part of this litigation to watch will be the
ultimate attorneys fees awarded when this litigation ends.
snip
--------------
for complete article see
http://www.uslaw.com/library/Benefit...?item=23794 3


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).

On Mon, 08 Dec 2008 10:07:16 -0600, the infamous F. George McDuffee
scrawled the following:

FWIW -- having driven "manufacturing" into the ground, plundering
of corporations, including looting their pension plans, continues
and has moved on to other areas such as the media. For one
example see
-----------
Tribune Considering Filing for Bankruptcy Protection, WSJ Says

By Jennifer Sondag and Sarah Rabil

Dec. 8 (Bloomberg) -- Tribune Co., the newspaper publisher and
broadcaster taken private by billionaire Sam Zell last year, is
considering filing for bankruptcy protection, according to the
Wall Street Journal.
snip
Tribune continued talks with lenders to restructure its debt in
recent days, the Journal said. The Chicago-based company, saddled
with $11.8 billion in debt from the $8.3 billion buyout of the
company last December, has been cutting jobs and selling assets
including Long Island’s Newsday to reduce its obligations.
snip

Question: How does some entity which is $3.5 BILLION in debt borrow an
extra $8.3B for a merger?!?

--snippage--
beneficiaries, and total assets of over $800 million. The Tribune
Company Master Retirement Savings Trust had over $2.2 billion in
assets for the 2006 plan year listed on Schedule H of Form 5500.
A really interesting part of this litigation to watch will be the
ultimate attorneys fees awarded when this litigation ends.

That's enough to make a mortician puke, and they don't puke easily.

--
At current market valuations (GM is worth less than Mattel)
the Chinese government can afford to buy GM with petty cash.
--Bertel Shmitt on kencan7 blogspot

On Mon, 08 Dec 2008 12:52:58 -0800, Larry Jaques
wrote:

-----------
Tribune Considering Filing for Bankruptcy Protection, WSJ Says

By Jennifer Sondag and Sarah Rabil

Dec. 8 (Bloomberg) -- Tribune Co., the newspaper publisher and
broadcaster taken private by billionaire Sam Zell last year, is
considering filing for bankruptcy protection, according to the
Wall Street Journal.
snip
Tribune continued talks with lenders to restructure its debt in
recent days, the Journal said. The Chicago-based company, saddled
with $11.8 billion in debt from the $8.3 billion buyout of the
company last December, has been cutting jobs and selling assets
including Long Island’s Newsday to reduce its obligations.
snip

Question: How does some entity which is $3.5 BILLION in debt borrow an
extra $8.3B for a merger?!?

Remember those banks that were lending money to people based on distorted
views of the way the world should work?? The whole Private Equity Company (buy
someone with a loan and then make _them_ pay it off) thing is not far short of
fraud.



--snippage--
beneficiaries, and total assets of over $800 million. The Tribune
Company Master Retirement Savings Trust had over $2.2 billion in
assets for the 2006 plan year listed on Schedule H of Form 5500.
A really interesting part of this litigation to watch will be the
ultimate attorneys fees awarded when this litigation ends.

That's enough to make a mortician puke, and they don't puke easily.

Isn't the retirement trust fund inviolate? If not, you need some legislation
fast!

Mark Rand
RTFM