FE812

CIT Prepares to File for Bankruptcy

This administration is picking the winners and losers. We haven't seen the losers start to fall yet because thus far the largest banks have jumped in the boat chanting yes master. The "Guenea Pig" that Tyler talked about is nothing more than a company that probably said the wrong thing to somebody in government or refused to give in to whatever requirements might have been tied to the "bailout" they were asking for.


To wpdragon:

While I think I understand the premise of your comment, the bashing of Dunkin Donuts was a tad unnecessary. The Starbucks downtown, big city model is probably not a good idea for any company (Starbucks is, I guess, the exception). But don't judge a company's need to expand and grow it's market share on the basis of your perspective in the Northeast. I can tell you that when you get farther into the Mid-West and Southeast, there are ample opportunities for a company like that to grow outside the canabalistic model in cities.

The Quest to Backstop Every Big Bank

Should have nationalized?

What do you call this?


On Jul 07 08:29 AM dcb wrote:

> I keep saying, and will keep saying that the fed and treasury programs
> are designed to have unlimtied funding to banks for ever until the
> entire united states economy is ruined. Of course the market loves
> these programs and bernake is a hero. He would be my hero too if
> he gave me unlimited cheap funding for ever with no oversight. <br/>
>
> This is just another reason why we should have nationalized

Preview from Europe: Stocks Almost Back in the Black

Do the people interviewing Mr. Grant sound to anyone else as though they don't understand that a central bank printing money will generally create inflation.

I think this may have been an epiphany; that a "wage-price spiral isn't the only way to create inflation?" ... ... wow

GM Common Stock Is Worth More than You Think

Good Comment -

At the end of the day, this was the plan.

The new GM, with the full backing of the US taxpayer, can sell the kind of cars that Americans don't want but Euro-loving politicians want us to have for a steep discount. If they make them cheap enough people will buy them even if they would rather not. (Side Note: I've been to Europe, it's beautiful - I don't wanna live there)

Want my honest opinion? (sorry you don't have a choice :-) ) ...

The auto industry is just a pawn in the bigger match against the current American energy industry.


On May 30 02:58 PM TBill wrote:

> I see GM management is already adjusting to its new masters. It has
> agreed to produce the Obamamobile even tho there is no market for
> it. And to please its other master, it has agreed to make it here
> in the US, now that profit is no longer the motive.
>
> No one will buy the car, so they will have to give them away. Maybe
> they can sell them at half of cost. That will get their fleet average
> MPG up so they can build a few 20 MPG SUV's they can sell at a huge
> premium, making up for the loss.
>
> Who will lend to the new GM now? No one in their right minds, now
> that we have seen contract law go out the window. But the point is
> moot as the US/taxpayers will provided all the $$ needed to cover
> the losses.
>
> Welcome to the new world of business.

GM May Be Heading for Quick, Packaged Bankruptcy

I wish I could buy stock in Government ... I've never seen growth like this.

Am I the only person who didn't skip right over the "Government holding 70% of GM equity post bankruptcy"?

I'm so far past worrying about the economic ramifications of what's going on right now. The political issues are a lot scarier.

The Fed's Balance Sheet

We'll be paying ourselves back through inflation. That is afterall, the idea of this exercise correct?

Credit Suisse Deemed 'Predatory' Lender: This Won't Help Recovery

With our artificially depressed interest rates, how can any institution compensate for the risks in this market without fees.

I'm not defending CS ... seriously. But, I don't think we can demonize them for charging whatever the borrower will pay. If you are that terribly worried about the fee, wouldn't you fight and negotiate for the 2% instead of saying ... "yeah, let's just flip for it". (Yes he got the 2% ... that's not the point)

Is this situation a good one? Was CS right in what they did? Probably not, but there's always someone on the other end. (Yellowstone is not the same as an individual convinced to buy a $200K house on an ARM while earning below the poverty line)

The evil Credit Suisse did this deal just because they wanted the up front 2% ... "Who cares about repaying the hundreds of millions"??? Really? I won't argue that there are details in this area that I don't understand, I just can't see it.

If this is the logic that will be used to categorize predatory lenders then please oh please tell me Fanny and Freddie are next ... how much fun would it be to watch congress squirm on that day.

Has the Plug Been Pulled on Cap and Trade?

"I do think that we can discern a very difficult road ahead for any type of climate legislation."


One can only wish ...

Don't Be Fooled by Inflation

Willy -

Agreed.

Credit is necessary; but the excess of spending with credit is lethal.

Thanks



"We all will probably agree though that we won't be able to spend
and consume our way out of this, which would be a true destruction
of wealth. Expansion in credit must be used to maximize investment and increase the production of goods and services."

Don't Be Fooled by Inflation

While I won't assume I know exactly what Mr. Schiff was referring to with the "artificial vs. real growth" comment; I'm sure we can all make some general assumptions. Real economic growth is increased production of venerable goods and services.

We can argue the production thing all day, but there is no denying the truth; trade based markets must have something to trade other than debt.

--------------- Also ----------------

While those reading articles and commenting on this site may realize that the "market rally" isn't real growth; the general public does not. The sad truth is that for the average citizen green means go, red means stop and Growth = DOW +200

I feel like the argument being made in this article and in many of the comments is: While the "artificial growth" you refer to as good;

(" If "artificial growth" leads to improving employment numbers, lower trade deficits, a renewed manufacturing base, higher savings rates, and decreased household debt, then I'll take it.")

may make us feel better for a while, it isn't fixing the problem long term and it isn't creating real wealth (Partially because not everything you listed will happen. Savings rate increases would be great but the whole goal of all this action has been to "restart the credit markets").

You answered your own question in quotes "artificial growth" is inherently ... ... artificial.


On May 10 10:54 PM Willy Walnuts wrote:

> I think Mr. Bern's comments are more telling than Mr. Schiff describing
> the effects of entropy that are rather obvious at this point. Yes,
> QE leads to inflation. And, yes, the strength of developing economies
> is based on the fact that they are commodity driven and that they
> have a real need for growth.
>
> However, I am failing to see the distinction of artificial growth
> and real growth in the US. Are you only referring to the stock market
> and investment portfolios? I don't think most people consider the
> stock market rally "growth". If "artificial growth" leads to improving
> employment numbers, lower trade deficits, a renewed manufacturing
> base, higher savings rates, and decreased household debt, then I'll
> take it. If that takes a lower value of the dollar on the forex,
> so be it. But of course the real question is at what cost. I think
> the political backlash on rampant QE will reign in Bernanke and Obama
> before we get into hyperinflation. And Bernanke will likely move
> his foot from the gas pedal to the brakes rather quickly at that
> point. But the choice for policy makers will be inflation or taxes,
> or both. Inflation is politically easiest, therefore inevitable.
> Some insidious tax increases like energy and vice taxes, are likely
> in the works as well.
>
> But at this time, of course they don't want anyone holding cash.
> Invest, borrow, buy stuff, create jobs. That is what we call economic
> growth right?
>
> If the stock market shows a V, but the real economy is an L, is that
> "artificial" growth, or just no growth?

GM Forcing More than 1,000 Dealerships to Close

Buyers for Hummer or Saturn?

Capitalism: Too Big to Fail IS a Failure

While your arguments are correct on the basis of trying to prevent monopolies; you have to also take into consideration the detriment to advancement that comes with any limitation on success (regulations / taxes etc.)

I agree that a monopoly isn't an efficient market participant, but to say that we are going to generically limit the size of firms is a bit reckless. You then put a cap on the success of any company. They have less incentive to grow past a certain point flattening the curve of innovation.

As painful as it may be, the market can handle the failure of excessively large firms that are poorly managed. Proprietary products and market shares will be gobbled up by the efficient entrepreneurial spirit of the American economy (if they are allowed to be rewarded for their risks.)

In my opinion what's needed isn't more government regulation but less government intervention in the failures of poor management. I understand that not everyone shares my opinion but I think we can all agree that what's being discussed here is just a variation of a salary cap for a sports team. Interestingly enough, even with those caps, certain teams still have the big names and are still always the best. How can that happen with everyone having an equal ceiling?

Geithner to Put Chrysler in Bankruptcy Next Week

Agreed ... but ERISA only supports a certain dollar figure for any one retiree and it's much lower than what is contracted for these workers.

The way I had read it and my general expectation if for the government to try and go above and beyond that figure. If they don't try anything fishy of that nature then, yes, you are absolutely right and they should be covered.

I know what I expect, we'll have to wait and see ...


On Apr 24 09:54 AM Chris B wrote:

> Thank you bricki. Most of the people complaining about the UAW still
> getting their pensions don't realize that the Earnings Retirement
> and Income Security Act (seekingalpha.com/symbo...) passed
> back in the early 70's puts taxpayers on the hook anytime a corporation
> offering pensions goes under and the pension fund is underfunded.
> It's sort of like the FDIC of the pension world. Look it up. <br/>
>
> Obama does not have a choice here, aside from trying to repeal the
> law or break the law. If you don't like the law, complain about
> the law.
>
> Also, the government can legitimately force Chrysler into bankruptcy
> because (1) overseeing and mandating bankruptcies is a fundamental
> and traditional role of government in capitalistic societies, and
> always has been since the days of debtor's prisons, and (2) the government
> is a creditor of Chrysler's and therefore has an ownership stake
> in Chrysler's remaining assets just like the hedge funds and other
> bondholders.
>
> What each creditor gets will be determined in bankruptcy court -
> a tradition of government intervention that has existed for hundreds
> of years in capitalist societies.
>

Obamanomics: In beginning to articulate his long-term approach and its ideological underpinnings, the president is putting an early stamp on what promises to be a debate of historic importance. "We cannot rebuild this economy on the same pile of sand."

Reading your comment I seen a response that didn't surprise me ... until the end.

I have never seen someone be so bold in their declaration of unbelief in the individual. While I applaud your unhindered honesty, I plead with you to take great care in you thoughts.

We are a country founded on certain inalienable rights. Liberty lies proudly among them. To take away the individual is not to remake a more caring America. It is to destroy her.


On Apr 19 10:33 AM The Geoffster wrote:

> BHO is a secular Christian. He has dedicated his life to helping
> the poor and minorities while promoting his political career and
> enriching himself. As a community organizer, his role was to obtain
> funds from governments and foundations to foster social improvements
> in impoverished neighborhoods. He does not believe that capital will
> move freely to these areas because of discriminatory lending practices
> and other socially undesirable constraints. Unlike Jesus, he does
> not accept that "the poor will always be with us." He intends to
> use his power as President to remake America as a "caring, generous
> nation" which utilizes its wealth for the benefit of all. Individual
> liberty be damned!

Geithner to Put Chrysler in Bankruptcy Next Week

Well Played Jasper ...

I've seen Cetin get pretty rowdy before though ... :)

303820:

Gene South's logic is correct. I think you misunderstood the post. I don't believe anyone would say that those people working the lines at GM, Chrysler or Ford for that matter don't deserve the retirement funds that they've worked for. It doesn't matter if the contracts helped run these companies in the ground, they are still contracts that were agreed to and should be honored. However, if one party of a contract fails, does that mean that we should pick up the tab?

What South was referring to was the fact that there are millions of other people in this country who worked just as hard for that same retirement and they are not being helped out by the tax payer. Why is it that a member of the UAW should be propped up when there are far more people who have lost it all and will get no such support. (Please don't misconstrue this to mean that I think everybody should be propped up; I hope it's obvious that I don't)


On Apr 23 10:36 PM Jasper M wrote:

> 303820 . . . friend . . . let me explain, in a nice way, that most
> readers won't feel the need, or that they have the time, to explain
> their every difference with your comments. Or mine. The whole point
> of the thumbs up/down system, I believe, is to allow the swift expression
> of one's view on a particular post.
> Your own opinions are pretty well laid out, so if you get a thumbs
> down, it means they disagree with you. Simple as that. I get lots
> of them - and I'm . . . . healing.
> And shouting (i.e., all caps) is generally not especially convincing.
> Even Cetin doesn't do that.