BAILOUT wins a dubious honor
The word ‘bailout’ has been chosen as the Word of the Year for 2008 by the Merriam-Webster Dictionary. The word received the highest number of look-up’s in the shortest period of time on Merriam-Webster’s on-line dictionary. (see here) The word is defined as a rescue from financial distress.
A bailout recap
While the dust settles on the Citibank bailout and the media keeps much of the focus on the auto maker bailout, it may be a good time to review just where we are at with the bigger picture.
GM senior management was reported to have met over this past weekend to hash out their response to congressional requirements for bailout funds. Of the $25 billion in bailout money for the Big 3, GM is requesting $12 billion. Cost cutting was at the top of the agenda according to sources.
Auto rescue was in the cards
I delayed yesterdays post by a day to see what would happen on Capitol Hill with the second visit of the automaker CEO’s and their ‘plans.’ In so many words, Speaker Nancy Pelosi announced the forgone conclusion that may be a reward for union support to the Democrats. She made it clear that the automakers in Detroit would not be allowed to fail or declare bankruptcy. Pelosi suggested a short-term loan as an alternative after hearing the CEO’s from Ford and GM promise to work for a dollar a year.
Some lawmakers were not so impressed, stating that the automaker chiefs should have taken these steps long before now.
Ford appeared to be in the best condition of the three, only asking Congress for a ‘standby line of credit’ of $9 billion. They believe that there is a chance that they would not even need to tap those funds. The combined bailout figure could reach $34 billion.
Liquidity is the problem in the states and over the pond
Although the focus has been on the U.S. bailout, the bailout mania has been an international phenom, with similar efforts taking place across the globe. There is currently a feeling of disconnect in England, where the government bailout of the banks does not seem to be proceeding as hoped for. The British government’s bailout was a £500 billion bank bailout, meant to stimulate lending. The focus was to help small businesses who employ 13 million people in the UK.
The perceived problem in the UK is much the same as the problem in the U.S.; there has been little improvement in the credit markets and the banks are the common denominator.
A distracted media
A Google search for new stories on the bailout right now will produce a lengthy list of articles on GM, a number of blog postings and several editorials in newspapers big and small. Few, if any, articles on mortgages, banks or the credit market. It would seem that the bailout had lost its focus and reporting on the bailout has gone the same way.
The total of bailout commitments to date, to contain the financial crisis, approaches nearly $7 trillion. Please note that these are commitments, and all of the money will not necessarily be used. Also, as I stated in earlier posts, there is the possibility that the warrants and preferred stock that are part of many deals, may yield a profit.
December 3rd, 2008 at 7:19 am
We have to look at “the big picture.” Our days of tunnel vision need to cease. Our nation better wake up and smell the coffee. With all our bail outs along with the 168 billion economic stimulus package, that btw did nothing for our economy it is hard to understand why our government can’t see the need to bail us out of our dependence on foreign oil. The high cost of fuel this past year seriously damaged our economy and society.Meanwhile while we are busy doing the Happy Dance around the lower prices at the pumps OPEC is planning to cut production to drive prices back up to between 75-100. per barrel. Why don’t we invest in America’s Energy Independence. It would cost the equivalent of 60 cents per gallon to charge and drive. The electricity used to charge the car could conceivably be generated by solar or wind. Why not invest some of these millions in getting some of these projects set up? Create clean cheap energy, badly needed new green collar jobs and reduce our dependence on foreign oil. What more of a win-win situation could there be? Now there is talk of another stimulus pkg. Don’t get me wrong, if you hand me a check I will take it. I am broke from this past year myself. I just think we are going about this all wrong. I just read a fascinating book by Jeff Wilson called The Manhattan Project of 2009 Energy Independence NOW. We need to look at the “big picture” This book Is the big picture. http://www.themanhattanprojectof2009.com
December 14th, 2008 at 1:28 pm
The auto industry has been the backabone of this country since the model T. How can a country for the people and by the people let the American auto industry die. We have Senators in states with foreign Auto companies Killing our American Brands. Why? could it be kick backs. Who knows. But I do know this, if your an American, you back American. I don’t see these same Senators asking AIG how much their paying in bonuses, Im sorry RETENTION pay! I would love it if I could get $100,000.00 to $1,000,000.00 just to stay with my company, as if there are so many jobs out there, these people are going to leave. I think, they think (Republican Senators) American people are just Dumb.
December 15th, 2008 at 5:54 pm
Lynn Tilton (CEO of Patriarch Partners) was on CNBC Squawk Box on Friday…relevant insights to this discussion…Fixing the Financial Crisis: The truth of the situation can be ignored no longer (http://www.cnbc.com/id/15840232?video=960926779.)
This is the same woman who predicted the financial crisis on Bloomberg TV back in 2006 (http://www.blinkx.com/video/lynn-tilton-on-bloomberg/87JL8lMSQmrDI4ALaa5zdQ) so perhaps she’s worth listening to now.
She proposes direct lending to businesses through a new “Provisional Federal Bank (http://www.patriarchpartners.com/Lynn_Tilton_WashPost_NYT.pdf)”…Liquidity must be made available not solely to big banks where Treasury-injected capital has been amassed to fill the cavity left by gambling losses, but rather expressly to deserving American companies and their people who will reignite our sputtering economy. A provisional Federal Bank must be initiated to foster enterprise and to provide job opportunities for every American.”
December 19th, 2008 at 3:04 pm
THE FED PRINTS FUNNY FIAT MONEY & THEY’VE TRULY SET US UP FOR FAILURE, to better the personal lives and well being of the elite.
My opinion about our financial crisis, is this has been a long time coming. The FED prints Funny Fiat Money, they’re also in cahoots with the big lenders, IE: JP Morgan, BofA and Citigroup. These lenders have board members who are closely related to the FED dating back to it’s infancy in 1914.
These super Banks are in bed with the FED (Highly favored by the FED as you can see in the bailout) and date their relationships with the FED to the start of the FED in 1914. The linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn, Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control.
They also happen to own large percentages of the media compaines, IE: ABC, NBC, FOX etc. which is why the media isn’t opening the can of warms with the truth. Check out this link http://www.progressiveliving.org/mass_media_and_politics.htm and see how the Media is practically owned by the large Banks and corporations that also happen to be in bed with the FED.
The wool has been pulled over the American Citizens eyes and now we’re all paying for it dearly and we will be paying for it for generations to come. My opinion is that this was all orchestrated to empower the elitists to come up with one world government and one world dollar, dominated by the elitist. When your money is no longer worth the paper it’s written on and when unemployment is up to 20%+ most people will not object to major changes in their government and currency. My opinion is that this is most certainly the beginning of the end.