Ouch. The bailout plan details start to be discussed as Bernanke lays out some of his plans and his take on the crisis. It also seems like the Government keeps spending and doing even more to shore up our aching economy.
Yet the markets remain unimpressed as the DOW drops another 500 today, much of that in the final minutes of trading.
My intuitive take has always been to question the idea that growth rather than efficiency is the cornerstone of a healthy economy. One thing that is now clear is that we are seeing the effects of unsustainable economic “growth” in the sense that the Real Estate price increases were unsustainable and they in turn created a huge surge in paper wealth that encouraged people to live above their means and banks to create bizarre speculative financial instruments.
I suspect the markets are recognizing and/or suggesting to us that we are in for years – perhaps even a decade – of economic contraction where the growth we’ve come to expect will no longer fuel our prosperity.
This does not have to be catastrophic. In fact to the extent folks replace big houses and cars with little ones, take more responsibility for healthy lifestyles, and seek new efficient solutions we could be in for a period where we won’t gain abundance but we might gain some …. wisdom.
Joe Duck 
One of the things to keep in mind as the Bear keeps pawing at us all is the effect of hedge funds. Given their poor performance of late and the well documented flight-to- quality (perhaps stampede is a better descriptor), it is no secret hedge funds are seeing significant redemption requests.
Most hedge funds have at least some of their money in the market, often with significant leverage. As they encounter redemptions they are forced to sell, regardless of price. Surely some of the irrationality of this decline is tied to hedge fund liquidation requests.
Good point Paul, and it’s another huge unknown since the Hedge Funds don’t have much transparency.
It fascinates me that we cannot predict overall “investor confidence” with even modest accuracy. It’s a key component of market movement, which is also impossible to predict even on a day to day basis. Tomorrow up or down? Flip a coin.
This is a classic investment panic. There is no rationality to much of what is happening with stocks right now. Virtually all asset classes are getting slaughtered. The bluest of the Blue chips, Mid Caps, Small Caps, International – the selling is indiscriminate. The former high-flyers – commodities and emerging markets – are getting thumped especially brutally.
It remains the greatest paradox that when stocks are on sale, people want less of them, and that the degree of disdain they are greeted with is proportional to the amount of mark-down…and when they are marked up to exorbitant levels, people want more of them.
If the stock market were Nordstrom’s the line would be 50 miles long and people would be killing each other to get in the door. Instead, they are trampling all over each other in an effort to get out.
(3) Paul this has moved way beyond investment panic. This has now become cash hoarding. People will bank in completely liquid assets (including non-interest bearing) now and will fortress up for their personal and family’s financial protection.
Keep in mind the foreign money is flooding from our markets now.
It’s way too soon for this.
(5) ?
There are some very important differences between now and the 1920s beyond the obvious ones:
http://online.wsj.com/article/SB122333679431409639-email.html
As far as I know, not one dollar of the 700 billion has been spent.
So expecting it to have a difference by now seems odd.
(7) Agree, it’s not so much the package as how, in the last 2 weeks, and especially the last week, it has become clear this is a very global problem and that banks & financial system globally are in trouble. I’m not saying the panic is warranted, just that the behavior of the markets is a classic panic.
I’m not disputing that, but we won’t know much about the “bailout” until it starts doing work.
The credit markets were seizing. They won’t begin thawing before the money is spent. Might not afterwards, but then we would know something – bad.
Anyway, I am not sweating it. I sold a commercial building in Dallas last month for 7 times what I paid for it 9 years ago. Locked and loaded.
(9) JCH – the credit market will not free up until the housing market hits rock bottom – PERIOD.
There is still too much risk of a downtrend in housing prices which will further erode the ratios within the banks thus further limiting their ability to lend.
Plus many more banks are going to collapse and what bank is going to take a chance lending money to a bank that could go out.
Citi is teetering at the edge and quite frankly BOA is in not that good of shape.
I think the percentage of foreclosures is very low 3-5% of the total market so far we could easily see this jump into double digits. As the economy continues to slow and since it looks we are going to raise taxes, etc there will be many more jobs loss and we could easily double digit unemployment once we get there the “good” mortgages will start to foreclose as well.
This is going to take years and I am afraid that a paltry few hundred billion isn’t even going to make a dent.
If it takes $700 billion as a hail mary pass to just try to stop the gushing blood for 3-5% of the market guess how much it will take for 15%-20% of the mortgage market collapsing.
Just imagine, if the 2005 Fannie and Freddie reforms become law, those banks might be sitting on up to a 1.4 trillion more of the toxic stuff.
Just to cheer you up, the Fed is talking up new loans to restart lending to risky home buyers. I’m sort of mad because they’re stealing my idea.
They can’t give up on the Neocon’s Ownership Society. Got a few months to go.
I’m not a pessimist. The recovery will start; always does. Can’t keep people down for long.
I, too, tend to be an optimist, but concede this market is trying that outlook in the extreme. However, all panics are like this – the problems always look insurmountable; the fear is always palpable; the pessimism extreme and all pervasive.
If capitulation is what you need to make a bottom, one would hope 13% on the Dow in 5 days, on top of already significant losses, is it. That the Fed is going to start lending to companies directly, bypassing banks, for the first time since the depression, shows how willing they are to pull out all the stops in an effort to restart the credit markets.
You will see a continued sell-off in the market as people and businesses hoard more liquid cash.
As Obama does better in regard to the election you will see the removal of capital from the markets and it will be confirmation that the markets do not believe massive increase in taxes and spending will benefit investors.
Even with the Fed dropping the rate today the DOW will close down.
The era of Free Markets is over, FDR II, Carter II is about to begin.
I guess we need to see double digit inflation, double digit unemployment again before we wake up to these big government programs do not work in the long run.
I used to be a huge optimist for the markets but not anymore.
Our deficit is going to skyrocket to the point where our country will not be able to turn it around.
We need to change our tax system. We need to streamline our laws. We needs LOTS of nuclear power. We need to cut our dependence on foreign oil by 50% within two years. We need desalination plants in every state that has a coastline.
What we are about to get is a massive unionization of workers, higher taxes for all Americans, huge spending increases, government mandated health insurance and a weakened military.
As much as our economy is imploding you will further extraction of capital as a clear sign that increased spending and higher taxes will further erode our economy and slow down our economy.
Get ready it is going to take 20+ years to recover from all of this.
If your guys hadn’t been such total F-ups, you wouldn’t have so much to be bummed about.
(14) JCH – don’t mistake my anger for being down about it. Regardless of who wins the election or what the market does for the next 20 years it will have no adverse effect either way on my life.
I am disappointed that America doesn’t wake up and require integrity and honesty from our elected officials.
It is a great country though that even allows someone with your views to live freely here.
But I will never be able to figure out how William Ayers is a college professor and how on earth he wasn’t run out of this country? He should be down living with his buddy Chavez.
“It is a great country though that even allows someone with your views to live freely here. …”
You are seriously misguided piece of work.
A lot of you in the beginning reaped piles of praise on Bernake, etc.
I don’t think Bernake has a clue about this. He made statements about inflation last night and we are suffering massive deflation around the world.
I don’t think either of them are capable of solving and yet another failure of the Bush administration.
Actually dude, when he first got the job, I started spelling his name this way:
burr sank it.
Why do you think I’m sitting on so much cash? But I know, Democrats don’t understand finance and business. Lol.
But in terms of damage, Allayn GreenRandSpam is aorund 5 to 10 trillion dollars ahead. He’s biggest F-up Fed chairman since whenever, a long damn time.
JCH we need to drastically change the tax code to bring back the $12-$16 trillion in offshore tax havens.
That would make a big difference right now and the money would flow back in 30-45 days.
You want to talk about getting the markets pumped up.
Who would have ever thunk we would see the Fed drop the rate like they did and we see a 200 point drop in the market?
The writing is on the wall…this is going to be a very long process and the market is forecasting an Obama win and the market is responding with its belief our economy will be tanked for a long time.
Even the S&P and Nasdaq are both down as well.
AIG gets another $37.8 billion after they have an epiphany while on their $400k spa retreat and realized…holy chit we need a lot more.
It disgusting and wrong – AIG should have failed just like Lehman and Bear Stearns.
Where are the prosecutors? Put these criminals behind bars.
We don’t need the money of Americans who have chosen to align themselves with foreign tax havens, and we don’t need those Americans – or the people for whom they vote.
My father did not capture Mt. Suribachi far a bunch of a-cavities of that ilk.
Who would have ever thunk we would see the Fed drop the rate like they did and we see a 200 point drop in the market?
Exactly. The drops we’re seeing are coming *in spite of* interventions that are extraordinary and favor stocks in general. A *global* half point? In good times that would have sent the markets soaring.
Now the US Treasury is considering taking ownership positions within banks…what a fiasco and what a disaster.
Folks I submit to you that Paulson and Bernake do NOT have a clue.
Another failure of the Democrat President Bush.
Now 74% of CEO’s believe Obama would be disastrous for the nation.
The survey was done by Chief Executive Magazine.
When you connect the dots of Obama’s associations many things start to come crystal clear.
Obama has a plan to make the United States a Socialist Country. It is no wonder he said he would meet with Chavez, etc with no pre-conditions – however he probably has already negotiated deals with them to convert the United States to a Socialist Republic.
If you are anti-capitalist and pro-socialist then Obama is the way to go.
I am wondering if the wall-street and banking meltdown wasn’t part of the plan.
Got news for your left loon’s…this is going to backfire – America will never go socialist.
Did you hear that AIG was planning another retreat at the Ritz Carlton at Half Moon Bay in San Fran area next week?
I have held business meetings there and that place is outrageously expensive.
What is AIG thinking?
If we see a 1000 point drop today…we are going to start free falling. 6000 might be optimistic.
General Motors Corp shares fell as much as 21.6 percent to their lowest level since 1950.
Wow…amazing…
I hear the band playing on the deck…
New polls out on the bail-out.
A 53 percent majority thinks government involvement is not part of the solution at all, but part of the problem.
This view is more intense among Republicans (69 percent) and independents (59 percent)—though a large minority of Democrats (40 percent) also views government involvement in a negative light.
Over half of voters (53 percent) oppose the seven hundred billion dollar rescue package passed by Congress, with about one-third (34 percent) supporting it.
Even higher majorities oppose the package among Republicans (57 percent) and independents (59 percent).
Moreover, most voters backing Barack Obama (47 percent) and John McCain (56 percent) also oppose the bailout plan.
Interesting today how Obama resurrects a program Hillary pitched during the primaries and Obama said it would be a disaster…
How many things does he have to change positions on before we all realize he is wrong most of the time on most of the things?
Today is going to be brutal. Hang on. I think the consumer credit side is going to start showing up and the news can’t be good.
Gee what a shock! Banks admit bailout won’t work!
http://www.clusterstock.com/2008/10/banks-admit-bailout-won-t-work
Paulson is a fool. You should hear the stories I am hearing from within the banking community of Paulson twisting arms to get banks to accept the money.
My fear is that we are simply pushing the problems forward a few years…. again…. This year the Gov will borrow approximatly another $1500 for every person in the country to add to the $30,000 every person owes right now. I don’t think that is sustainable and the fallout will be very painful.
The Dow industrials closed out the week up 4.8%, the best weekly gain since March 2003.
Also, some very compelling numbers here for all you closet Bears out there…oh wait, you all came out of the closet in the last 2 weeks !!
http://online.wsj.com/article/SB122426158451144855.html
(33) I share your concern but at the same time think it is far to early to tell. We may get much of this money back via the bank equity stakes and re-sale of toxic assets, it is extraordinarily difficult to have much clarity at this stage on the final tab right now.
I’m no defender of Republicans, but I think it is far too easy to be a critic of Paulson & Bernanke right now. There are 8 million opinions on the one/right/best way to do this, and they can’t try them all. We’ve not faced a credit crunch quite like this before, so it’s not like there’s a playbook they can consult for the best answers. The one lesson from the Great Depression was doing nothing was the WRONG answer.
If we think the costs of what has been done thus far are high, imagine the costs for food stamps, unemployment and welfare if we had numbers even remotely approaching those of the 1920s and 1930s.
No, they haven’t been perfect; yes, they have made mistakes; but they keep persistently working at it and have been unafraid to try new things when it becomes clear the last thing tried isn’t working. Bill Gross, one of the most successful investors in bonds ever, seems to think much of what they have done thus far has been helpful and sees more improvement to come in credit markets.
I think it is far too easy to be a critic of Paulson & Bernanke right now
Agree, though it didn’t comfort me to find that after all the “study” by the experts, Paulson dramatically modified his plan to be more in line with the UK’s more expensive and presumably simpler bank-centric plans.
There really should be a lot less reporting of the DOW number and more reporting of the likely values and locations of the toxic paper.
If these guys try to do this without transparency…I want them out of there.
Place your bets on Monday’s open! I’m probably going to buy more YHOO next week. Hope .com springs eternal?
(36) You just nailed one of the problems squarely on the head – no one knows for sure just how much of this (expletive deleted) paper there is out there, how much it is – or isn’t worth – and where it still resides. The transparency has been absent for a long time, in part due to de-regulation. Many who have it aren’t exactly dying to reveal it after seeing what happened to Lehman.
(35,36) The whole point of the super rush job of the bail-out was to stop the bleeding. It didn’t work.
We would be in nearly the exact same position we are today with the international scene doing what it did and if we had done nothing.
We should have taken our time and come up with a really solid approach to bring things around.
One core element to the credit markets now is that the housing market hasn’t bottomed out and we have a huge surplus of vehicles and other high ticket items.
Prices need to make some sharp adjustments before the market will start to work.
What we should have done is exactly what would be needed to create a floor on the housing market so it would bottom and then we would need to make wise choices on policy to really stimulate the economy.
Wait until the blank check congress gets going…I am afraid 700 billion is going to be norm now. When you see we have already racked up over a trillion in new spending just in the last 6 months and the different spending bills bouncing around now it look like easily another 500-800 billion in the next 6 months – it is insanity and we are all going to pay dearly.
(39) “We would be in nearly the exact same position we are today….if we had done nothing.”
I see, and you state this so absolutely like it is undeniable fact. How are you so sure? Can you prove your speculation? – because that’s all that it is, you don’t know that it’s true.
Credit markets have shown some signs of thawing this week – in response to which medicine is difficult to ascertain.
You think you know the one true right way. There are 8 million other opinions equally as zealous that THEY are right. Who do we believe ? You? Me? The guy next door?
The global community is working hard at finding answers that work. Well intentioned people are not infallible. Neither are you.
(40) Paul the point is…the bail-out had to happen yesterday when they told everyone and that if they did the bail-out it would stop the bleeding.
The bail-out did NOT do that – it is proper to say it failed.
No one ever promised the bail-out would solve the problem and I think you are confusing the two. We are still bleeding profusely.
(41) “Bail-out” implies we will never see any money back. That is far from known and even the most cynical concede it will take some time before we know that. Many respected voices, Buffett and Bill Gross among them, have speculated we might actually break-even on this.
“Stop the Bleeding” – is not a very accurate descriptor of what is going on. What is going on is the credit mechanism for funding corporate America is grid-locked. There were definite indications this week that that may slowly be starting to get better:
http://online.wsj.com/article/SB122425162969544481.html?mod=testMod
It is wildly premature to say “it failed” – when in fact there is evidence it is starting to do what it is supposed to do….thaw frozen credit markets.
But the utter irony of this is – here I am defending a Republican Treasury Secretary and a Republican appointed Fed Chief. This is your team on the field, Glenn, your President’s hand-chosen best of class – and you won’t even give them a reasonable amount of time to remedy what ails us. You voted for him – twice – but now that he and his minions are about to cost your party the Presidency he has become beyond expendable – he has become the doormat. McCain shows more loyalty than you do.
(42) Actually Paul I didn’t vote for Bush for a second term so once again you make a foolish assumption. I am fiscally conservative and socially moderate.
My point again…they pitched the bail-out as needed to stop the bleeding…their words not mine and when you hear the situation with Wells Fargo, etc where these banks were literally forced to take the money from the Fed it isn’t good policy and it isn’t changing anything.
Sounds a lot like you need to give bad loans out Mr. Banker…we the government thinks its best.
If you want to hold on to the idea that someday many years down the road we will see a return on the money…ok…but that doesn’t mean the bail-out didn’t fail. Just means you could still see a positive ROI. Failure does not mean you lost your money – failure means it didn’t do what they said it was going to do.
And it is way too early to see that the bail-out isn’t working. There is still no money available for lending even after the banks were given the money…so please explain that?
(42) Paul I can tell you first hand what is happening in the business world – I am there in the middle of several deals right now.
Go ask a VC what is happening with their funds…they are all but shut down for making any investments right now.
A lot of firms have already implemented hiring freezes immediately and are planning massive layoffs.
If Obama is elected you will see a very sharp increase in layoffs in this country.
Senator Gregg utters, “impending economic meltdown.” He notes the US has 66 trillion dollars in unfunded liabilities in Social Security, Medicare, plus Medicaid; and that the current net worth of all assets in the US is about 45 trillion dollars.
(1) FEDERAL REVENUES.–For purposes of the enforcement of this resolution:
(A) The recommended levels of Federal revenues are as follows:
Fiscal year 2008: $1,871,888,000,000.
Fiscal year 2009: $2,013,878,000,000.
Fiscal year 2010: $2,199,989,000,000.
Fiscal year 2011: $2,432,588,000,000.
Fiscal year 2012: $2,656,131,000,000.
Fiscal year 2013: $2,755,116,000,000.
Projected increase in tax revenues:
2009: + 8% [ 8% increase from FY 2008]
2010: + 9% [18% increase from FY 2008]
2011: +11% [30% increase from FY 2008]
2012: + 9% [42% increase from FY 2008]
2013: + 4% [47% increase from FY 2008]
http://thomas.loc.gov/cgi-bin/query/R?r110:FLD001:S51748
Scary stuff!
Senator Gregg utters, “impending economic meltdown.” He notes the US has 66 trillion dollars in unfunded liabilities in Social Security, Medicare, plus Medicaid; and that the current net worth of all assets in the US is about 45 trillion dollars.
(1) FEDERAL REVENUES.–For purposes of the enforcement of this resolution:
(A) The recommended levels of Federal revenues are as follows:
Fiscal year 2008: $1,871,888,000,000.
Fiscal year 2009: $2,013,878,000,000.
Fiscal year 2010: $2,199,989,000,000.
Fiscal year 2011: $2,432,588,000,000.
Fiscal year 2012: $2,656,131,000,000.
Fiscal year 2013: $2,755,116,000,000.
Projected increase in tax revenues:
2009: + 8% [ 8% increase from FY 2008]
2010: + 9% [18% increase from FY 2008]
2011: +11% [30% increase from FY 2008]
2012: + 9% [42% increase from FY 2008]
2013: + 4% [47% increase from FY 2008]
Scary stuff!
Agree it’s scary though an accounting savvy pal of mine notes that the liabilities issue is not quite as serious as it first appears because we do not count among US assets things like … forests, fisheries, oil fields, and public land. Still, I don’t think Sarah P will let us sell Alaska back to the Russians…..
Joe I don’t know about you but I had high hopes today for the market to close in the black. After the interest rate cut it was nice to see the market jump like it should but very disconcerting to see it close down.
Now we will have to see what the overnight markets do.
Another confusing day Glenn. I also thought the rate cut would send things up, but at the risk of trying to sound like I know what the heck is going on, it appears to me the surge *yesterday* was the anticipation of the 0.5 cut.
When .5 was etched in stone it did not have much effect.
(49) Well I think the disturbing news of 401k matching going away from some of our biggest employers is driving this somewhat.
But how can you blame the large companies when it looks like Pelosi and crew want to take over the whole 401k scenario?
RE: Markets – we’re going to pitch and yaw for a bit would be my guess. There are plenty of folks out there still invested who have given up on stocks and will sell into any decent rally – hence large rallies followed by give-backs. Counter-acting that is all the cash we know is sitting on the sidelines from all the previous selling – hence the massive rallies when stocks get too cheap.
The market will turn in a lasting way before the recession is over if historical precedent follows, but you’ll need better evidence that housing is bottoming; credit is thawing; and that earnings have stopped falling before we get a rally that lasts. My guess is those 3 things will only clearly be identifiable in hindsight.
The market is speaking loud and clear on this one.
Worst drop across the markets in history for day after election.
Year Dow S&P Nasdaq President elect
2008 -5.05 -5.27 -5.53 Barack Obama
2004 +1.01 +1.12 +0.98 George W. Bush
2000 -0.41 -1.58 -5.39 No decision: G.W. Bush v Al Gore*
1996 +1.59 +1.46 +1.34 William Clinton
1992 -0.91 -0.67 +0.16 William Clinton
1988 -0.43 -0.66 -0.29 George H. W. Bush
1984 -0.88 -0.73 -0.32 Ronald Reagan
1980 +1.70 +1.77 +1.49 Ronald Reagan
1976 -0.99 -1.14 -1.12 James Carter
1972 -0.11 -0.55 -0.39 Richard Nixon
1968 +0.34 +0.16 — Richard Nixon
1964 -0.19 -0.05 — Lyndon Johnson
1960 +0.77 +0.44 — John Kennedy
1956 -0.85 -1.03 — Dwight Eisenhower
1952 +0.40 +0.28 — Dwight Eisenhower
1948 -3.85 -4.15 — Harry Truman
1944 -0.27 0.00 — Franklin Roosevelt
1940 -2.39 -3.14 — Franklin Roosevelt
1936 +2.26 +1.40 — Franklin Roosevelt
1932 -4.51 -2.67 — Franklin Roosevelt
1928 +1.20 +1.77 — Herbert Hoover
1924 +1.17 — — Calvin Coolidge
1920 -0.57 — — Warren Harding
1916 -0.35 — — Woodrow Wilson
1912 +1.83 — — Woodrow Wilson
1908 +2.38 — — William Taft
1904 +1.30 — — Theodore Roosevelt
1900 +3.33 — — William McKinley
1896 +4.54 — — William McKinley
The unfolding nightmare…
Fed Issues over $2 trillion in loans and refuses to identify who received.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
So we have over $1 trillion in Congressional bail-out. Congress wants to spend another few hundred billion.
The Fed has given out $2 trillion in loans…
I figure we have another $1.5-$2 trillion to give away before we begin to the see the light of day.
This is complete insanity.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide
AIG is working a new angle to screw the taxpayers even more. They are just using the bailout funds for leverage while they figure out how to get a better deal.
The government should have let them fail and they should let GM go, etc…no more bailouts.
http://www.clusterstock.com/2008/11/aig-we-re-already-planning-to-screw-the-taxpayers-more
Joe..check this out…the lobbyist are swarming all over the bailout. This is just bad business no matter how you slice it.
http://www.iht.com/articles/2008/11/12/business/12lobbying.php
Glenn I’m worried about the lobby swarm as well. Even with all the Govt players like Paulson and Bernake acting *honestly* and in good faith as they are, the amount of cash sloshing around is unparalled in modern history. If only a fraction of one percent of the bailout is misdirected we are talking billions of dollars.
Transparency is the key – *every single transaction*, *every dime* of tax money spent needs to flow online in itemized fashion (yes, you bet your bullets I’d include CIA, NSA, etc). There are only a tiny number of transactions that should be kept secret (e.g. paying a spy). For that few billion you’d have a separate top secret clearance ombudsman who’d have access and report to taxpayers that things were in order). Otherwise we should see every damn thing.
Unbiased folks are saying GM is a simple thing to handle as a structured bankrupcy where the company comes back as a leaner operation no longer encumbered with all the obligations.
OR We all get to pay for GM’s legendary failures, bloated benefits, and overall incompetence.
Gee, I’ll take door number ONE please.
(57) I figured they would just make GM a bank and then give them the money for the bail-out…LOL
Unbelievable…I still can’t believe they did that with American Express.
All of this “uncertainty” of who gets saved and who doesn’t is really messing with the markets…
Watch the job losses now…
DOW down another 4%…geesh…
Now Barney Frank wants to nationalize the US Auto industry. Gee let’s have Barney completely finish ruining this country.
We find out that no one has been appointed to the oversight committee for monitoring the bail-out. Interesting…they run wild with our money and there is no check and balance.
How does a Yahoo get to be trashed for bad decisions but GM doesn’t?
Joe you should lobby for bail-out money for Yahoo since you were directly affected by Yang’s bad decisions…
Only in America…
(57) Joe – checks and balances are still working:
http://online.wsj.com/article/SB122660438304425269.html?mod=testMod
Detroit got itself into this mess, bailing them out will solve nothing. Until the drastically rework their relationship with the UAW, and totally upend their approach to the marketplace, it will just be postponing the inevitable.
As Boehner states in the article:
“Spending billions of additional federal tax dollars with no promises to reform the root causes crippling auto makers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy…”
The UAW caused them to defeat raising mileage standards and to become overly reliant on pickups and SUVs? The UAW made GM’s Luntz be a total moron?
This is getting totally out of hand…this is seriously twisted. Another government program with no oversight going to be horribly abused. Let’s wake up…the government never gets it right.
The Hartford buys S&L, will apply for federal funding
The Hartford Financial Services Group said today it has applied to become a savings and loan holding company and applied to participate in the U.S. Treasury Department’s Capital Purchase program. Click here to read more.
In conjunction with the filing, The Hartford said it has signed a merger agreement to acquire the Sanford, Fla.-based parent company of Federal Trust Bank for approximately $10 million. The deal will satisfy a key eligibility requirement for participation in the federal capital purchase program.
“We are taking these actions as a strong and well-capitalized institution looking for maximum flexibility and stability,” said Ramani Ayer, The Hartford’s chairman and chief executive officer.
Analysts have raised questions about The Hartford’s capital position in light of several problem investments and its large variable annuity business, and its stock has fallen sharply in recent weeks.
But shares of the Hartford-based insurer leaped on the news this afternoon, rising more than 30 percent to $13.68.
Now the Fed has pledged more than $7.4 trillion to was frozen credit. That is literally half the value of everything produced last year.
This is getting completely out of control and Bernanke and Paulson are dropping money like mad men.
They promised transparency and oversight and NONE of that is happening.