The Second Coming (of bailouts)
 

And more money for our now Nationally owned GMAC. Yea, our country needs to control companies through ownership of stock. That is what we are all about now, right?

Treasury to dole out $3.8 billion to GMAC, raise stake

WASHINGTON (Reuters) - The U.S. is injecting another $3.8 billion into GMAC Financial Services to help cover mortgage losses, in a bailout that makes the government the majority owner of the auto and home finance company.

http://www.reuters.com/article/idUSTRE5BT06O20091230

Are they helping GMAC or are they helping the people with those loans by allowing GMAC to be flexible with the repayment schedules?

Good question. But now that we are majority owners we can ask them.

Want to see how large GM's money games were? GM mortgaged everything possible over the past 30 years to claim profits and to protect their "largest automaker" title. Money games made legal due to America's defective accounting practices - because profits are more important than products.

Where are those GM customers over the last two years praising their purchase of GM products? Why so much silence?

We are now only just beginning to pay the price for 30 years of crappy and anti-American products. GMAC was only one 'money pit' from which GM invented profits.

How much has GMAC taken? Is it something like $13 billion? And the $20 billion that GM shorted the pension funds (see PBGC). $10billion for health care funds. How many tens of $billions did the government also give for that 61% ownership?

Where was everyone back before the Cellar even existed when I cited GM's obviously crappy products that now make bailouts necessary? Yes, for as long as there has been a Cellar, I have been overtly critical of GM products and those who bought them - even while I worked there.

Someone still has to explain to me why banks are making profits when 14% of this nation's home mortgages are in default (and not in foreclosure). Numbers still do not reflect reality. But then that is why MBAs always get promoted at the expensive of innovators and other product people. That is why George Jr also lied so often. For those who did not know - George Jr was also an MBA.

For some reason, I suspect that others here finally appreciate what I have been saying all along. What's a billion here and a billion there? Nothing until the bills come due four and ten years later. GMAC is simply another example of how we are averting debts that GM has fostered upon all of us – so that management could rake in massive bonuses.

What is the purpose of a company? Profits – especially to top management – no matter how much it screws America. What is good for GM is good for America. That also came from business school graduates.

A large part of GMAC's portfolio is home mortgages. Nationally 14% are in default. And do not yet appear on spread sheets because so few foreclosures have started. Despite so much openly declared transparency, the accounting standards continue in a 'business as usual' mode. We do not yet know how bad GMAC really is. It may be so deep that bankruptcy was no longer an option.

We still don't know even how bad AIG was in 2007 - according to their own top management. Executives at 70 Pine knew even that long ago that AIG was on the verge of toppling. They said nothing. And still put forth rosy spread sheets - because "He makes the spread sheets say what they have to say".

Finance people must be some of the most regulated people in America. They are taught even in school to be corrupt - because profits are more important than anything else.

We still don't know how deep this GMAC mess will be because accounting problems exposed by Long Term Capital Management and Enron ten years earlier were ignored - first by the American accounting industry and then by political agendas that did not know how bad (deep) this problem was.

Huh?

What I want to know is now that Taxpayers have become unwilling owners of GMC, will be allowed to vote in shareholder's meetings? Will we get dividends like other stock holders. Can we sell our shares if we don't like the way GMC is doing?

dream on ...

We own the mutual fund. The fund manager already threw out Rick Wagoner for painfully obvious reasons.

Unfortunately, the Chairman who is current in power was previously from AT&T. Enought to worry. Not enough to make a conclusion.

epic failure at a cost of billions to the American Taxpayer.....

My point exactly.

http://www.nytimes.com/2010/01/02/bu...modify.html?em

Whats the alternative? We cannot just kick all these people out on the street and the rental prices are not as favorable as one might imagine.
IIRC, the rental prices have actually increased recently, further limiting options.

Is this the lesser evil choice? I've wondered, but don't know of a viable alternative.

So where does it end? You get in over your head you get out on your own. Move to an apartment. Do what ever you have to do. But expect the government to continually bail you out over and over year after year?

All we are doing is delaying the inevitable. Many of these people are just not going to make it.

and . . . whats the next step? Where do they go? What do they do? Whats the plan?

Two reasons they can't make the mortgage payments.
1- the interest rate skyrocketed.
2- they are unemployed.
I wonder how the people in trouble divide up?

You're right, in that the corporate balance sheets have to be squared away, to get the business of business back on track more quickly. Although evicting those people leaves the banks with more empty houses that aren't selling, so they are still short on cash. On the upside more empty houses means more opportunities for the homeless to hunt and gather copper and aluminum. Oh crap, that will make my empty cans worth even less.:(

But like classic said, what are you going to do with families where the breadwinner is out of work, and will be for awhile? Let them be hunter/gatherers? Now the kids can't go to school because they don't live in the district. But the schools might not be there anyway without the tax revenue. Oh, maybe that's what those secret government camps are for? Well, fuck 'em, as long as we're doing OK, eh?

Wait, there's a third group. The three quarters of a million that are bankrupted by medical bills every year. There is hope there though, I mean they're already sick, maybe some of them will die. Then the spouse and kids can, uh, do something. But I Hope they don't wander the streets, jaywalking and shit... that would slow me down.
Hmm, there's lots of room and a milder climate down south... maybe give 'em free railroad tickets, after all we own it... Hmm.

Seems like the more 'help' that is doled out to constituents, the more people expect to have done for them, and the less they can imagine anyone possibly taking care of themselves. How helpful is that?

So what do you do with tens of millions of people that are unemployed and now homeless. Homeless people at like neglected cats and dogs, they'll amuse themselves and you won't like how they do it. :headshake

On the whole I agree with Jinx, but it still leaves the issue of how much help is too much.

Principles of economics and behavior theory are interesting discussions, and the welfare system proved it can be harmful. But that was a creeping, systematic, fuck up.

Right here, right now, what do you do with tens of millions of people, probably half of them children, that are suddenly homeless and without income or food?

Well for one you can stop throwing good money at bad programs and start to provide some help for the families through well defined temporary bridge programs to get them into some other type of housing that is appropriate for their budgets. Hell, take the money and buy down their loans but that does not fix the overall problems of shady lenders and shady buyers getting away with tax payer money for bad personal behavior and decisions. I know that the longer we prop them up the longer it is going to take for a correction to occur. A number of economists are talking about how we are doing nothing more than delaying the inevitable for many of these people and lenders.

An opinion piece by economists from the University of Chicago...

Uncertainty and the Slow Recovery





http://online.wsj.com/article/SB1000...732528426.html

So, whats your point? Its all Bush's fault.

No, not at all. Just that what ever the current Congress thought they were fixing they are not and there is no promise that throwing more money at it will fix it either. They are prolonging the pain and artifically proping up the economy. Somewhere this all this whorish spending needs to stop.

Derivatives and what may have been a better approach...

Time to put the brakes on big business bailouts

http://www.kansascity.com/340/story/1662381.html

Perhaps they are spreading the pain out instead of taking a major hit all at once that would have worse repercussions.
Just guessing here.

From my reading of the above article it seems to me that there are still some back door deals being done and that the barn door remains partially open. But in the name of spending we are going to "fix" the problem, and create jobs. It seems neither goal has been achieved and people still are feeling the pain.

Follow the money... to where?

http://www.washingtonexaminer.com/op...-80795072.html

The phony zip codes are a new wrinkle in Recovery.gov’s increasingly tattered credibility. In November, Ed Pound, director of communications for the Recovery Accountability and Transparency Board, said a rash of phantom congressional districts found on the website were the result of confusion by fund recipients, who apparently didn’t know who their congressman was.

But who would give millions of dollars to somebody who doesn’t even know their own zip code?

More fake zip codes here

UPDATE: Even with a real zip code, it takes seven hours for one firm to report back to Recovery.gov on its $2,000 stimulus contract.[

Phony zip codes?

More likely, data entry errors, as most of the independent watchdog groups suggested and which is to be expected to some small degree with any large data base that relies on information from external sources.

But absolutely the Oversight Board needs to fix the data-base to deal with the small number of self-reporting errors by the more than 100,000 grant/contract recipients.

So where's the money? More importantly, where are the Millions of "Shovel Ready Jobs"?

Been there and done that...two or three times already.

I'm not going to convince you that the recovery program has created and/or saved hundreds of thousands of jobs to-date while spending or obligating only about 1/3 of the total funds to-date and, in the opinion of many economists across the spectrum,. has contributed to preventing the economy from continuing on a unsustainable downward spiral.

And you're not going to convince me it has failed, particularly since it was envisioned as a 18-24 month program and we just passed the nine month mark.

So what's the point of further discussion?

Economy loses 85K jobs as employers remain wary]

Employers cut more jobs than expected in December, unemployment rate holds at 10 percent


http://finance.yahoo.com/news/Econom....html?x=0&.v=8

Boortz

Revisions to the previous two months' data showed the economy actually generated 4,000 jobs in November, the first gain in nearly two years. But the revisions showed it also lost 16,000 more jobs than previously estimated in October.

The report caps a disastrous year for U.S. workers. Employers cut 4.2 million jobs in 2009

No. But they want you to think it is.

Demoncrats buy the union vote...

http://www.verumserum.com/?p=11408

ha!

we were looking at the same article!

I'm just slow. I need to change my user title.

sky.....You can look at one year or look at the larger issue:

It become particularly dramatic and evident with the downward economic spiral in 07-08 ...the worst in 70 years.

Many economists are of the opinion that the recovery plan, even in the first 9 months of a 18-24 month plan, have contributed to slowing down that spiral. No one would suggest that the economy could be turned around over night, but most measures, except employment (always the last to recover) show improvement in the last nine months.

Most of the recovery money has yet to be spent (by intent) and is directed towards retooling the economy by focusing on developing new energy technologies, a national broadband network, wide spread infrastructure improvement, investments in health technology, investments in education...all critical if you're interest is looking forward to be better positioned to compete in a global economy in which we may have lost the competitive edge that we enjoyed for decades.

The massive tax cuts in 01 and 03, mostly for the top bracket and at a cost of more than $1 trillion, certainly didnt lead to economic prosperity for most Americans as was promised or transform the economy to a more forward thinking plain.

So, what would you have suggested doing differently?

walmart

It might be neat to actually make something in the States. Our wrong-headed education system is part of the problem. Real shop classes where kids build stuff are being eliminated in favor of No Child Left Behind nonsense. Kids don't use their hands at school anymore because they're being prepared for an economy that does not exist. I think I'm going to invest in welding equipment for my daughters...

Let's have a good 20% of the school year from age 13-17 be spent learning things we must actually do. Driving, personal finances, wood shop, cooking class, basic electric/plumbing/HVAC, and sex education.

whoo hoo go you!

I always wished I had the opportunity to do mechanical work instead of home economics. Even recently I wish I had a lathe I would make canes and bird houses.

Welding would be another useful skill except the bird houses would be kinda wet and heavy. :p

John Ratzenberger (yes, the actor who played Cliff Clavin on Cheers) was talking about this in the most recent issue of Make magazine. He's pushing this idea of an "Industrial Tsunami" that's about to hit the United States. He says that the average age of skilled workers like welders, carpenters, rebar setters, etc. is in the upper 50, and that virtually nobody is training to replace them. When they all retire, he basically argues that the US is screwed. There are plenty of unskilled helpers out there, but skilled workers are very hard to find.

After reading that article, I was toying with the idea of getting a welding rig so I could teach my kids how to weld. (And learn myself.)

I settled for buying snap circuits for them.

Wal-Mart is example of where America does work. Wal-Mart constantly learns what and how products are manufactured. As a Wal-Mart supplier, if you are not doing your job (ie RubberMaid), then an informed Wal-Mart pressures you even to the point of bankruptcy. Wal-Mart is where America works.

Why did Wal-Mart discover incandescent bulbs made no sense? Because Wal-Mart learned how the work gets done AND demanded companies change immediately to provide innovative products. GE refused. So Wal-Mart cut GE off; went to Phillips who offered to innovate. Suddenly GE started making light bulbs that consumed seven times less energy.

America that works is a country that innovates. And that is the problem. Not that American has insufficient welders and carpenters. The problem is that America has too many students that are communication and business school graduates. People who can only promote the status quo; who have so little experience as to never even see an innovation until long after it is no longer innovative.

The problem is already appearing in patches. General Motors that will not innovate until required to by Federal regulations. Silicon Valley that cannot find technically (computer literate) knowledgeable Americans. Silicon Valley is where ICs are important. ICs - the most common employee is now a Chinese or Indian immigrant.

Some benchmarks for technical ignorance. Show me a computer repairman who knows how electricity works? Rather than use a volt meter to identify a defective power system component, the naive computer tech will foolishly keep swapping parts until something works. A problem demonstrated by Consumer Reports that could not get simplest computer problems fixed properly. Often starting by swapping the power supply - because he has no technical knowledge. So naive that he considers himself an expert only because he can swap parts.

Another benchmark - do you have a surge protector on your computer? Then you have made computer damage even easier. How many buy a surge protector only because they were told (ordered - blindly believed) to - rather than first ask questions such as what does it do? Another example of America that does not train people how to think. That only rewards those to promote the status quo.

The only thing that creates jobs is innovation. The only thing.

Desire would be another.

Well, the school board has been reading this. :eyebrow:


btw, I better buy more incandesant bulbs before those fuckers at walmart force me to use bulbs I don't like, don't want and won't work on my dimmers.:mad:

Desire without innovation only results in nothing - or rape.

We had shop class in my highschool. In fact we had Metal shop, Wood shop, Auto shop, and a Photography Shop. Each had a separate huge bay at the end of the school. It was pretty cool. It was a great place for the kids to go concentrate and be exposed to different traditional trades if they were not going to go on to college. I am sure they are long gone by now.

I rocked when we got to take shop in Jr Hi. Got an A on my trivet. ;) Sewing, not so much...

I guess I'm in a good place: I don't think jobs in higher education will go away, but I also have years of experience in electronics and other things, mainly for defense contractors, and skills such as mil-spec high reliability soldering, testing, building, and supervising and teaching such skills.

When the machines take over, I'll be in a good spot.

I just got back from a tour of the middle school my daughter will be attending next year.

She will have a choice of joining their band, which is a really very good program and well known in the area, or participating in the "Admiral's wheel" where she gets to have a bunch of rotating electives like shop and home economics and a bunch of other similar stuff. (Except they don't call them that.)

The shop, or technological arts, as I think they call it, is pretty cool. I saw 1 table saw, 2 drill presses, a small CNC router, a table top wind tunnel!, numerous PCs, some sort of presses for maybe doing t-shirts, and some other stuff that I can't remember now. When we poked our heads into the room, the students had a bunch of cheap looking cameras set up on tripods and connected to the PCs. It looked like they were playing with the cameras.

I wish it wasn't an either/or scenario. The band would be really good for her, since she enjoys playing the trombone, but I think the Admiral's wheel would teach her more life skills.

:eyebrow:

t-dub, imma let you finish, but seriously, rape is about violence, not desire.

kthxbai

How does one be violent without desiring to be violent? And how does that violence create productive jobs?

Desire does not create the jobs. Innovation does. One can desire to be innovative. But only those who actually are innovative create jobs (not to be confused with the Pink Panther who was innovative).

A trivet? A three legged stand? What is that? What does that do?

The artificial bubble. The markets are being artificially proped up by the bailouts.

From the Economist:

http://www.economist.com/displayStor...ry_id=15211520

You have access to Google, right? A trivet. Something you put a hot plate or pot on. But mine was handcrafted from wood, no hot plate or pot saw the surface of my trivet. Ethan Allen himself could not have constructed a finer trivet. (I stole that last line from a TV show, I admit.)

I was in 8th grade, dude, getting to work with saws and things. I found I had a knack.

I'll see if my 'rents still have my trivet (bet they do) and I'll photograph it for you, in all its fine workmanship. :lol:

I was in high school when The Knack released that god-awful My Sharonna.

With age, it is sometimes interesting to pull out something I built so many decades ago that I hardly remember it. In some cases (only some) I am impressed by how good I did. A response that goes, "I did that? ... Oh. ... Yea."

Faux Recovery


continues:
http://www.realclearpolitics.com/art...ery_99868.html

I guess it is safe to assume that you dont want to address the issue of the "lost decade" or offer a better solution to long-term economy recovery.

They still existed in my middle and high school. A shop class was required in 6th and 7th grade, and then optional in 8th, 10th, 11th, or 12th.

We also had cooking, sewing, personal finance, and other classes like that. My high school has gone to complete shit since I left so I don't know what they still have nowadays.