elcopone

Why GM's Wagoner and Not BofA's Lewis?

You write, "If Mr. Wagoner is to be held responsible for the collapse of the economy and its effects on GM..."

Hold on a second, Wagoner was not fired because of the economy. That is an absurd notion and puts a major hole in your argument (which I'm actually still trying to figure out what you are arguing). He has been with GM for 30 years and was CEO for over 9 years. In the time he was CEO, GM lost market share year after year, lost the corwn of world's largest automaker, pushed Hummers as if they were the best thing ever, spent more time in washington and on private jets than he did at his own factories, and infamously said that hybrids "were not worth investing in" and focused resources on trucks and SUV's. In 2005, a year when the auto market was great, GM lost billions under his command. You seem to be forgetting that he was CEO for 7 years of economic prosperity before the economic collapse.

I'm not sure the point you are making here, but saying that these two CEO's are being evaluated based on the economy is not holding them accountable to the management decisions (blunders) they actually made.

A Bull Market That Few Are Buying

I agree with the analysis for the most part but I think the main point is being missed....

The issue is not Republican versus Democrat. It's not one parties agenda versus another. Or one President's agenda versus what another President would have done. If you think the the Republicans are any less bought off or curropt than the Democrats, I have a bridge to sell you.

The issue is that our entire political system is completely broken. Politicians on both sides have been and will continue to act in a manner that benefits no one (except them personally and their party) untill the system is fixed. Republicans are bribed by one set of special interests and Demecrats are bribed by another. Some special interest who have enough money just bribe both.

None of the problems facing the US will ever be truly solved untill the political system is fixed. Here is the simple fix that will never happen....

1. Make lobbing of any form illegal.
2. Institute term limits.
3. Eliminate fund raising of any sort. All campaigns would then be run with equal money funded by the government.
4. Institute a 10-year waiting period between the time an elected official leaves office to the time they can be hired in the private sector.
5. Create a third and equal "Moderate" party that represents the roughly 60% of the population that is either an Independant, Moderate-Dem, and Moderate-Repub.

Simple economics... People's behaviors are motivated by incentives. Fix the incentives, fix the behaviors.

Stewart vs. Cramer: A Cheap Shot

I'm a fan of both stewert and cramer but I must say I think stewert is wrong here. sure cramer makes some bad calls. Anyone who has ever invested has! But he also provides much needed insight into wall street thatno one else on any station gives. Stewert came off as high and mighty while cramer came off as humbled. Why? Cause cramer actually does care (if u read his books u would understand him much better). Blaming cramer for the state of financial reporting and for people losing money in the market is liking blaming the weatherman for weather. It completely out of his control!

Obama's Housing Plan: Elegant and Costly

Am I really understanding this correctly, this plan gives incentive to responsible people who actually pay their mortgage on time to stop paying and try to renegotiate? What is to prevent every single homeowner from stopping payment just to try and get some bailout money? This can't be right???

But again and as always, the responsible people pay the price of other people's irresponsibility.

Sucker's Rally Approaching an End

Interesting commentary and debate going on. Just judging by this discussion here, there seems to be more Bull sentiment than I have seen in recent months. The Bears are no longer dominating the discussion as they have for a while now. Take it for what you will.

I will add that it's important to not lose sight of the fact that the stock market does not move based on fundementals, technicals, or reality. It's a perception market. And if the perception is that the economy is improving, whether true or not, it will move the market up.

The Coming Economic Collapse, Part 3

What about the fact that average executive earns 100 times the average worker? If this multiple was even close to rational, real incomes would have risen significantly for the far majority of people. This multiple has been increasing dramaitically during the time frame you say the problem started.

It seems incomes have risen dramatically...for the executives. While everyone else struggles. I wonder if this was accounted for, woulld many of these be irrelevent points? Surely this should be factored into your analysis as well???

AIG Bonuses: The Tipping Point Toward Decisive Action?

Nice article and great points. I would add that this bonus scandal illustrates why the government should have stayed out of the system and let capitalism run it's course in Chapter 11.

Also, what does it say about our government when AIG execs are more scared of lawyers opinions and their own executive's potential lawsuits than they are about the governments wrath?

This "too large to fail" argument is getting really old. The cost of inaction must certainly be rivaling the cost of action (bailouts) at this point. And the real cost of the bailouts and whether they even worked is still a mystery. If companies got too large to fail then there needs to be better anti-trust laws so that company gets "too big too fail"

The Coming Economic Collapse, Part 2

What about the fact that average executive earns 100 times the average worker? If this multiple was even close to rational, real incomes would have risen significantly. This multiple has been increasing dramaitically as well during the time frame you quote.

It seems incomes have risen...for the executives. While everyone else struggles. I wonder if this was accounted for, would all these be irrelevent points?

FDIC Regulation: Reason for Alarm

I think your title does not accurately portray the point you you are making and is misleading. While I agree with you are saying specifically about the FDIC, this is not financial "regulation". I believe true financial regulation is needed to ensure that:

a) no bank or instititution is ever allowed to be "too large to fail"
b) markets are not being manipulated
c) Madoff schemes are not allowed to happen
d) executives are not being given billions of dollars for poor performance

and many other reasons. But to imply that all financial regulation is wrong because of this FDIC example is just rediculious. Regulation, like everything else, needs to be done carefully and thoughtfully.

Chrysler Lenders (Non-TARP) Come Out with Guns Blazing

To a degree, this what makes the US so great. The ability of laws and precendent to (hopefully) guide legal outcomes. As opposed to political agendas guiding legal rulings. I hope the judge sticks to the laws and judges the case as an impartial party with no biases. The fact is that regardless of how Obama wants the bankruptcy to go, laws must still be followed and these non-tarp creditors deserve their fair shake.

Why I'd Avoid Toyota, The #1 Automaker in the U.S.

"fearsome of competitors – government owned companies"

You're kidding right... The beuracratic, self-serving, special interest driven, US Gov. as a "fearsome competitor?"

And Jimmy I understand your point, however, there is a huge difference between partnering for success and outright ownership.

The Secret Paulson-Goldman Meeting

Agreed, we need to redo the entire political process. Get rid of all lobbists, trade groups and special interest groups. Eliminate campaign contributions from corporations. Put in term limits. Make it so that if you work for the government, you cannot then work for in the private sector for at least 5 years after you leave office.

That will fix this.


On Oct 21 08:56 AM jjed88 wrote:

> I think you got to the root of the problem. All this lobbying and
> political contributions is a disgrace. My state senator, Dodd, is
> the chairperson of the Banking committee. His received about $130k
> for political contributions last year from Goldman. I don't think
> he can be impartial if he had to make decisions affecting Goldman.
> He's kinda 'nowhere to be found' anyway so hopefully the next Banking
> Chairperson won't be owned.

GM Forcing More than 1,000 Dealerships to Close

David is correct in that they will look to act on technicalities within the dealer franchise agreements. While I agree that they are fully within their rights, state franchise laws are the "greesiest" laws around. They favor the dealer tremendously. GM, Ford and Chrysler know this and is why they have never attempted to dramatically reduce their dealer network before (despite the obvious need). What will happen is the dealers who are shut down will sue GM. They will either battle in court or GM will probably end up paying them. State franchise laws are an absolute gold mine for lobbyists (and politicians) and one could look at these laws as a very clear example of just how corrupt our elected officials are.

America Is Becoming a Banana Republic

Very interesting post. Clear, concise, logical and plausible. This makes compete sense when thinking about why the government has been so (approprialty) harsh on the Auto Industry, yet so forgiving and helpful to the financial services indutry. However, I fear the depth and seriousness of the post will get lost in the headline grabbing "Banana Republic" title. Thanks for the post.

The Administration Doesn't Like What GM and Chrysler Have to Sell

Juan Carlos,

Hate to break it to you but Toyota, Hyundai and Honda have been spending 5X more $$ in R&D than GM has for over a decade. So stop trying to scare people by saying that a GM restructuring it will harm the world due to a "technological lag." The Volt was mirage, a spin, nothing more. They technology in the Asians plug-ins is far superior anyway. Remember, GM decided that Hybrids were not worth investing in and instead decided to focus on SUV's and trucks. GM first hybrid came out 10 years after the Prius! So I'm not too concerned about the technological lag you speak of.

On the article, this firing and restructuring is well overdue and 20 years in the making. I applaud the Obama administration for their work here. Now, time to hold the financials to the same standard.