I agree. But there are 2 things that I find even more fascinating about this dog and pony show. First is that I didn't see many (any) reps from the banks and mortgage companies on the "made for TV" hot seat. Second AND most important I find it ludicrous that the members of our "piss money away" congress have the nerve to advise ANYONE on how to make or spend money!!!
It was wrong last summer when it began with Bear Stearns. It is wrong now.
In fact, it has been wrong since many years ago when the Penn Central Railroad was bailed out, resulting in the abortion we call Amtrak. The S&L scandal was hurriedly swept under the rug so the Washington Buddy Boyz (ncluding the Bush Bros) would not go to jail.
Thanks to the crony capitalists and predatory politicians, we will now face a severe recession if not a depression that will last for years.
Had they left the market to work it out on its own we would have had a short sharp recession and recovery.
But the rats are lining up for the cheese. It's positively amazing how many states, municipalities, and companies suddenly find themself in need of cash now that the spigots have been opened by bobble head Bernanke and Prevaricating Paulson. 2 clueless dolts if I ever saw one.
Oatmeal is cheap, I think i will write a book on 101 ways to fix it. Probably be a best seller.
Let's look back to the start of the bailouts of the 'banking' giants as chipking puts it so well. A long time ago my dear aunt told me that the 'bankers' are not going to allow the common man contiue to drive the same type of automobiles as the 'bankers' do. I see now what she meant. Look at how many of us baby boomers trusted the system and put our money in 401-K's. we made, as a group, trillons of dollars of worth. Now then it is time for the baby boomers to maybe start drawing some of this out. Wait a minute, the 'bankers' said, if we let the common man make money the way we do and they start to draw it out then we will have to come up with maybe trillions of dollars over time. Let us make the market tank and take away a lot of their money, the 'bankers' don't think it is right for the common man to enjoy the easy way to make money the way 'bankers' do. Now then about the financial giants getting their bailouts with out having to be in the 'hot' seat. It went something like this, Hymie from a banking outfit met up with Moishie from the tresuary over lox and bagels at the Wall Street Deli and asked for a 30 billion bailout. Moishe not wanting to seem like a piker said how about 40 billion instead and of course Hymie replied Oy vie you are the best. Hope every one gets my point!! Yes I am an anti semite = I don't like Arab camel nut lickers, 'bankers' rank right up there with the mullahs in the far east. Bill
I do find it interesting that the Big 3 chiefs were subjected to a most satisfying (for the proletariat, anyway) anal exam in a Congressional hearing room...and yet, the Wall Street types received their bailout under cover of darkness during the weekend.
No anal exam, no bright lights, no horde of reporters examining what type of vehicles the Wall Streeters were traveling in...the markets just went to sleep on Friday, and >poof!<...we woke up on Monday morning, and it was done.
Good point Brian, AND the Wall Street bailout was a gift, the Big 3 are asking for a loan.
I heard some congressman talking last week, can't remember which one, but he was for the Big 3 bailout. He stated that they need a helping hand so they can "restructure and start to build the small high mileage cars American's need." Excuse me, where the heck do they get off determining what American's NEED? I guess there's little or no concern for what American's may want. Freedom is slipping away bit by bit. cls
To hear the leaders tell it, we need to borrow. For everything. Most especially to consume. Newest fashions, electronic toys and games, cruises, and other very important parts of the American Way.
Somehow they neglect the fact that that's what got us into this mess in the first place. I guess when you have friends in high places the national interest comes second.
It's called "the eleventh dollar". If there are only ten dollars in the world and you borrow them, agreeing to pay back eleven, you have agreed to an impossible deed. But people fall for it all the time. We are witnessing the results of that impossibility now.
Rock, who is going to finance a Chapter 11 filing by GM or Chrysler? There is very little private sector money for investment now. No investment or commercial bank, let alone private equity resources would put a penny into GM. Cerberus Capital owns Chrysler. Why haven't they put more money into their investment? They've got loads of cash.
If you think that Chapter 11 just makes labor contracts vanish, guess again. The UAW could go on strike if their contracts were nullified in Chapter 11, because they would get to start collective bargaining all over again. Gettelfinger's guys aren't going to work for $7.15/hour. The National Labor Relations Act (Wagner) guarantees the right to collective bargaining, Chapter 11 notwithstanding.
If GM and/or Chrysler go(es) into Chapter 11, it will be the Federal government who will finance the re-org. A foray like that will make the $25 billion seem cheap.
And what about those pensions? Right now the Pension Benefit Guarantee Corporation is underfunded. Add the money that GM, Ford, and Chrysler are underfunded, and the Pension Guarantee Board will be in front of Congress getting money to bring them to solvency. The Big Three pensions are defined benefit, and not defined contribution (401k).
Everyone seems to think that Chapter 11 solves everything. It works for smaller companies, but the Federal government has never had to deal with a problem which represents almost 15% of the GDP. An it most certainly isn't equipped to handle this type of complexity.
I was working at a IAM shop of 125 people in the union. They filed for Chapter 11. The contract was canceled the court decided about everything. If the company or the union objected there was always chapter 13. Chapter 11 was for us restructuring.
I believe that everything the employees bargained for they should keep. I also think that they should have bargained for cash not benefits. They could afford insurance and retirement. That would take the money out of company control.
"How can the economy straighten itself out if it is being systematically skewed by government inference with prices? We are in the mess we're in precisely because of earlier government interference. Easy mortgage terms and guarantees contrived a housing boom and irresponsible lending that could not be sustained. The consequences have shaken the foundation of the financial industry. But instead of freeing the market and allowing the errors to be corrected, the government is seducing the economy into a whole new set of errors. That will lead to the next bust. 'But doesn't the government have to act?' people ask. 'We can't just let financial companies fail!' I say, Why not? Jim Rogers, the successful investor and author, puts it well: 'Why are we bailing out Citibank? Why are 300 million Americans having to pay for Citibank's mistakes? The way the system is supposed to work [is this]: People fail. And then the competent people take over the assets from the failed people, and then you start again with a new stronger base. What we're doing this time is ... taking the assets from the competent people, giving them to the incompetent people, and saying, 'OK, now you can compete with the competent people.' So everybody's weakened: The whole nation is weakened, the whole economy is weakened. That's not the way it's supposed to work." --ABC "20/20" co-anchor John Stossel