Washington's Wake

Posts Tagged ‘Government Motors’

Ahh yes, it’s so nice to see that we were told by HRH The Sun King that the “Cash for Clunkers” would so help out the economy that it was a hugely brilliant plan despite the incompetence and ineptitude of its implementation.

After trashing Edmunds.com, you know, the car website, as people that don’t know anything about cars, HRH The Sun King’s people absolutely knew that this Clunker thing was going to go gangbusters.

“We found out that motor vehicle output added 1.7% to economic growth in the third quarter — the largest contribution to quarterly growth in over a decade.”

I hate to say it and sound like a broken record but, yet again the numbers were wrong. Not only were they off by more than a little bit, they were off by almost 50%.

on the back of autos contributing 0.81 point to growth. That was a direct result of the August “Cash for Clunkers” program that subsidized new auto purchases.

What truly galls me is that these morons can’t calculate something simple like a trade in program for cars, and yet somehow magically they’re all of a sudden going to be able to get things right on health care? I’m supposed to trust my health and well being to idiots that couldn’t calculate how selling cars affects the national economy?

The 2010 elections can’t get here quick enough.

Oh and don’t forget, they owned two thirds of the American car manufacturers and still couldn’t get their numbers right. How pathetic is that?

As far as I’m concerned, President Bush is one of the few people that really shouldn’t be talking about government control over private industry.

Former President George W. Bush, outlining plans for a new public policy institute, on Thursday said America must fight the temptation to allow the federal government to take control of the private sector, declaring that too much government intervention will squelch economic recovery and expansion.

Let’s be honest, it was his administration that decided to buy up the financial industry in the form of a “rescue” plan. He, like many other republicans, don’t truly object to big government, they only object to not being the ones running big government. Not sure about that? How about that new Medicare entitlement? Talk about your big government.

So really, please keep your big mouth shut. Your just complaining now that you’re not in power. Or as the song goes, meet the new boss, same as the old boss.

While I already think the unions have ruined Government Motors, it’s nice to see that unions really and truly do not have a clue about anything and quite clearly have Biden’s Foot and Mouth disease.

Tom Owens, director of communications for the AFL-CIO’s Building and Construction Trades Department in Washington, D.C., had taken the company to task in an e-mail this week under the subject line “When It Comes to Volkswagen … Some Things Don’t Change.”

Mr. Owens cited VW’s World War II-era association with the Nazis, saying the idea of the company came from Adolf Hitler and automaker founder Ferdinand Porsche.

He wrote that Mr. Porsche’s “SS friend, Fritz Sauckel, responsible for the mass deportation of workers, summed up VW’s needs in his first directive on labor: ‘Foreign workers will be treated so as to exploit them to the greatest possible extent … “‘

The union official then said “fast forward to 2009.” He wrote that VW is building the plant while Tennessee is in a recession and “they resort back to their dark past by making use, and exploiting, a predominantly foreign work force that some eyewitnesses say is 80 percent non-English-speaking Latino.”

Can you call Godwin’s Law in this case?

And to think this union flack actually meant what he wrote. He sat down did the research and saw nothing wrong with sending out this email as a national union official. No wonder unions have such a bad image today.

George Stephanopolis, former Clinton flack, had an interview with Tax Cheat Timmy yesterday. And the inevitable has finally come around. We’re in for some taxes people and boy they’re going to be big ones too.

Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.

“We have to bring these deficits down very dramatically,” Geithner told me. “And that’s going to require some very hard choices.”

I got your hard choices right here Tax Cheat Timmy. First off, you can stop passing new big government entitlement plans. There’s one way to reduce the budget deficit. Let’s see if you and your boss are man enough to do that.

And then there’s the bailouts and the Government Motors and the cap and trade bills. Gee Timmy, I wonder where else we could start before raising taxes. I supposed we could always give Congress a pay cut. After all, don’t they want to share the pain that the average American is experiencing?

Of course the bind that you have is your boss was quite clear and emphatic about the no new taxes. As a matter of fact, let’s go to the videotape to see what your boss said himself.

Seems pretty cut and dried. Guess he was either lying then or now. Either way, he was lying and so are you.

Could be. The way things are going, I wouldn’t be surprised.

So Government Motors finally filed for bankruptcy and the US and Canadian governments will now be the majority owners of the company.

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

Sigh, already the stupidity of the media is apparent. The bondholders, before the government ignored the law, were secured by the company itself. That’s why it was such a big deal that the government forced the bondholders into a deal that is unconstitutional and goes against the rule of law. So no, the bondholders are not unsecured. Of course they have now been forced, at the end of a stick wielded by the government, to relinquishing their legal rights and obligations.

It’s news to me that the US government gave the Canadian government a 12.5 ownership stake. Of course the Canadians are paying for the privelege.

the fallen icon of American industrial will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That’s on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

So now Government Motors is well over $70 billion dollars in tax payer money. I hope I get a nice discount on a Corvette or something to show for my troubles.

Of course, now that the government owns GM, how do all the conflicts of interest get worked out? There’s the safety standards. There’s the environmental wacko’s out there trying to get rid of cars, yet now we own the company. And what about repayment? I know, surely I jest. Let’s be honest. The federal government has never, and I do mean never, let it’s talons go from an industry once it gets its hooks in.

So, Ford has a really good opportunity to take a heck of a lot of marketshare from the Government Motors divisions and really build a good company. Hopefully they won’t be too much at a disadvantage from the unlimited well of my taxpayer money.

So HRH The Sun King was not amused when people stood up for their legal rights in the Chrysler bankruptcy proceedings. He berated them for you know, following the bankruptcy code.

With a flash of anger Thursday morning, President Barack Obama offered a blistering critique of “a small group of speculators” who refused to go along with the government’s plan to keep Chrysler out of bankruptcy.

So who are those speculators exactly?

Indiana Treasurer Richard Mourdock revealed this week that his state’s police and teacher pension funds have lost millions of dollars in the Chrysler “restructuring.” Indiana’s State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher’s Retirement Fund “suffered, at a minimum, a loss of $4.6 million due to the action of the Federal government,” reports Mr. Mourdock.

Far from being speculators, these funds represent retired public employees, including cops and teachers. The funds paid a premium to buy “secured” status, only to discover that they were politically outranked by the United Auto Workers in the White House hierarchy.

And that is the biggest problem with HRH The Sun King’s actions in the “bankruptcy” case. He’s deliberately moving the country away from the rule of law to the rule of man. And this shows exactly why the rule of man is wrong. One constituency is able to bribe themselves a better deal, and that’s wrong. If the rule of law were still working, all those policemen wouldn’t have their retirement funds decimated for the benefit of their union bretheren in the UAW. Now they are.

In addition to ruining the rule of law. HRH The Sun King and his minions are actually making this country into a worse investment case. These exact actions, ignoring the rule of law will make companies less likely to help these types of companies. And really, they will be the companies that need more money, rather than less.

Mr. Mourdock says that from now on no funds under his control will invest in the secured debt of “General Motors, other manufacturing companies, or those insurance companies who have or will be receiving bailout funds.” Given the recent actions by the feds, he adds, “the risk is too great for any prudent investor to accept.”

And he is correct. Why would you invest money, at a premium, when you are actually going to get less than you should? Your fiduciary duty is to your investors. If you invest in a class that is likely to be stolen by the Feds, you know you’ll get wiped out. So you don’t invest in those industries. And it’s not just specifics to Indiana’s State Police Fund. There is anecdotal evidence this is happening with other investors too.

Pacific Investment Management Co., Barclays Capital and Fridson Investment Advisors have joined Schultze Asset Management LLC in saying lenders may be unwilling to back unionized companies with underfunded pension and medical obligations, such as airlines and auto-industry suppliers, because Chrysler’s creditors failed to block Obama’s move. The reluctance may put additional pressure on borrowers seeking capital in the worst financial crisis since the Great Depression.

“Lenders will have to figure out how to price this risk,” Schultze, 39, said in a telephone interview from his office in Purchase, New York. “The obvious one is: Don’t lend to a company with big legacy liabilities or demand a much higher rate of interest because you may be leapfrogged in a bankruptcy.”

Talk about saving the village by destroying it. In the end, HRH The Sun King will have “saved” Government Motors at the expense of higher costs for everyone else. Talk about unintended consequences.

Yet another leaking in the good ship HRH The Sun King. This time it’s about the plan for Mussolini to truly take over the car industry. Ok I know, I’m insulting Mussolini. At least he got the trains to run on time, right? Anyway…

General Motors Corp’s (GM.N) plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.

Ha, initially. That’s a funny statement. I dare anyone anywhere, to show me where the federal government ever actually stopped getting involved with something, once they started. And you will never find a case like that. That’s because government never ever ever, gives up power once it takes it. And that’s why the less government does, the better. But to compound that, in this case, they’re going to waste tens of billions of dollars and still screw it up royally.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

And yet, because I haven’t given hundreds of thousands of dollars to democrats, like the union, I still have to pay every red penny that they government alleges I have to pay in taxes. Of course if I was a democrat like Tax Cheat Timmy, or Tom Daschle or all the other rich democrats that “forgot” to pay taxes, this all wouldn’t bother me.

And to prove the incompetency of this situation is the Wagoner issue.

Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.

Of course we learned yesterday that while publicly, Government Motors has fired Rick, the reality is that he hasn’t been fired and is still collecting a pay check. This pathetic exercise shows precisely why this is a bad idea. Both Chrylser and GM will become nothing more than a dumping ground for the unions and will produce as good a car as the Yugo. I’m sure Ford is just happy as can be thinking about all the wonderful new business they are going to get.

At this point in history, the less the Treasury Department can do, the better off you and I really are. And it’s stories like this that make me realize how badly things are run, but hopeful that the institutional incompetence will keep things nice and slow.

Seven weeks after the Treasury Department announced that it was ousting General Motors chief G. Richard Wagoner Jr. in the federal bailout of the company, he is still technically on GM’s payroll.

Wagoner’s removal has been held up because senior Treasury officials have yet to decide whether he should get the $20 million severance package that the company had promised him.

Well, only seven weeks to decide whether one person should be fired or not. I’m so glad the government is going to be in charge of the hundreds of thousands of people on the new Government Motors payroll. I can only imagine what the HR horror will look like in another couple of months.

But now, even minor matters, such as Web site design or news releases, are reviewed by the White House. Staff members detailed from the National Economic Council, reporting directly to Obama senior economist Lawrence H. Summers, roam the Treasury building. Treasury staff members working on restructuring the nation’s automakers took much of their direction from the NEC, sources said.

As I said, this is incompetence. Of course after the poor and incompetent job Tax Cheat Timmy did as the head of the NY Fed, I’m not surprised that he’s just as incompetent as the head of the Treasury. Another thing this story points out is that HRH The Sun King will be solely to blame if this does turn in to the next depression. This story says quite clearly, in matters large and small, the presidents men are in charge. If things go well, remember, it’s the presidents men that did this.

I know this story disappeared and didn’t make any headlines but it’s a pretty big story.

Fannie Mae reported yesterday that it lost $23.2 billion in the first three months of the year as mortgage defaults increasingly spread from risky loans to the far-larger portfolio of loans to borrowers who have been considered safe.

The massive loss prompts a $19 billion investment from the government to keep the firm solvent, on top of a $15 billion investment of taxpayer money earlier this year.

So, you and I have paid Fannie Mae more money, up till now, than GM & Chrysler have received. And, you and are I on the hook for even more money.

Fannie Mae said that the losses will continue through at least much of the year and that it “therefore will be required to obtain additional funding from the Treasury.” Analysts are estimating that the company could need at least $110 billion.

Considering that the ubiquitous unnamed analysts have been completely and utterly wrong about the financial world for the past few years, I’d double that number, just to be conservative.

But wait, it gets worse.

The Federal Reserve has bought $366 billion of their mortgage investments and $70 billion of their debt, and has pledged to buy hundreds of billions of dollars more of both. The Treasury has pledged $200 billion to each company to keep them solvent and already bought $124 billion of their mortgage investments.

In total, the government has committed about $2 trillion to supporting Fannie and Freddie and buying the securities they issue.

Over the next 10 years, the government’s rescue of Fannie Mae and Freddie Mac is expected to cost $389 billion,

And yet, you, most likely, didn’t hear a word on this story. You heard a media shit storm over a stupid flu, but nothing about 2,000,000,000,000.00 to support these “companies”.

Maybe you haven’t heard anything because Rahm and a whole host of other democrats made millions from the company. I don’t know. I do know that this is an important story and it’s getting zero real coverage. And we’re all paying more for these crap companies than Chrysler/Government Motors combined.