G.O.O.D

Source: CNSNews.com

The total value of the bailouts undertaken by the federal government in 2008 now exceeds the combined cost of every major war the United States has ever engaged in, according to a comparison of war costs calculated by the Congressional Research Service (CRS) and the value of the bailouts as calculated by Bloomberg News or Bianco Research.

According to CRS, all major U.S. wars (including such events as the American Revolution, the War of 1812, the Civil War, the Spanish American War, World War I, World War II, Korea, Vietnam, Iraq and Afghanistan, but not the invasion of Panama or the Kosovo War), cost a total of $7.2 trillion in inflation-adjusted 2008 dollars.

According to Bloomberg, the federal government has made commitments worth a total of $8.5 trillion in the bailouts of 2008. That includes actual expenditures as well as loan and asset guarantees.

Bianco Research puts the total value of the bailouts at $8.7 trillion.

The $296 billion spent on World War II, America’s most expensive war, would be $4.1 trillion adjusted to today’s dollars, according to the CRS report from June.

The adjusted cost of the Civil War would be $60.4 billion for both the Union and the Confederacy combined. The inflation-adjusted cost of the Vietnam War would be $686 billion. The cost of the current Iraq war up to last June was $648 billion, while the adjusted cost for Afghanistan to that point was $171 billion.

The total cost of the American Revolution was a relatively inexpensive $1.8 billion.

“World War II was financed by savings, the American people’s savings, when Americans bought war bonds,” said Olivier Garret, CEO of Casey Research, who analyzed the value of the bailout compared to the major U.S. wars and other major historical government expenses. “Today, families are in debt and government is in debt.”

A Bianco Research report cited in Politico puts the number for the total value of bailouts at $8.7 trillion and also affirms the value to be higher than the cost of all American wars and historic initiatives. A spokesman with Bianco Research could not be reached for comment as this story went to press.

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Technorati Tags: bailout, TARP

Source: International Herald Tribune

Even a U.S. government bailout could not save three of the last remaining plants in the United States still making sport utility vehicles.

Reeling from its financial problems and a collapsing SUV market, General Motors on Tuesday closed its factories in this city and in Moraine, Ohio, marking the passing of an era when big SUVs ruled the road. The moves followed the shutdown last Friday of Chrysler’s factory in Newark, Delaware, which produced full-size SUVs.

The last Chevrolet Tahoe rolled off the line here in Janesville shortly after 7 a.m. in the 90-year-old plant, which had built more than 3.7 million big SUVs since the early 1990s.

Most of the plant’s 1,100 remaining workers were not scheduled to work the final day, but many showed up for an emotional closing ceremony. Dan Doubleday, who had 22 years on the job, broke down in the plant’s snowy parking lot afterward.

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Technorati Tags: General Motors, SUV

Source: Reuters

The financial crisis is shattering global confidence, with three quarters of households cutting spending and consumers in emerging countries feeling especially squeezed, a survey showed on Tuesday.

While countries like China, India and Russia have helped fuel world growth in recent years, the survey of 22 states in November found consumer optimism in such emerging economic powers in “precipitous decline.”

“There’s a lot of doubt right now where growth is going to come from,” Clifford Young of Ipsos Global Public Affairs, the international market research and polling company that carried out the online survey, told Reuters in a telephone interview.

He said the survey, which included a whole range of rich, and emerging states, “put in check a lot of strategies of global companies that were banking on emerging markets. In addition it puts in check any notion of ‘decoupling.’”

Despite boasting a year ago that they were “decoupled” from the problems gripping developed markets, emerging stock markets are hovering near their lowest point in four years.

What started as a meltdown in the U.S. market for high-risk mortgages has engulfed the world, freezing access to credit, sparking bank collapses and requiring the bailout of whole industries and some entire countries.

“We expected things to be bad but it’s most striking in the two big emerging markets India and China,” Young said of the poll. “It’s not good news in the short to medium term.”

The poll found that global consumer optimism had nearly halved. Only 31 percent described the economic situation as very good or somewhat good in November compared with 55 percent who said the same thing in April 2007.

The largest falls in optimism, using this method, were in China, which plunged to 46 percent from 90 percent 18 months ago, and India, which dropped to 65 percent from 88 percent.

Many leading emerging markets export commodities. Flush with cash from soaring prices until six months ago, domestic demand helped to underpin growth. But now, the lag effect of falling demand and prices for oil, grains and industrial metals is being felt in these nations too.

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Technorati Tags: financial crisis, consumer spending

So the US taxpayer will foot the bill, and then have the opportunity to take out loans to buy the over priced crap vehicles the new state run Auto Industry will produce.  Not a bad deal…for them.  For us?  Prepare for a $50,000 Gen II Yugo.

Source: AFP

The US Treasury said Friday it is “ready” to avert the collapse of the Big Three US automakers until Congress can address their problems, a spokeswoman said Friday.

“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” Treasury spokeswoman Brookly McLaughlin said.

The announcement came shortly after the White House said it would consider tapping a 700-billion-dollar financial rescue fund administered by the Treasury “to prevent a collapse of troubled automakers” after lawmakers failed to pass an alternative.

“Given the current weakened state of the US economy, we will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers,” said spokeswoman Dana Perino, referring to the Troubled Asset Relief Program conceived to help financial services firms.

A 14-billion-dollar auto bailout effort collapsed in the US Senate late Thursday.

The House of Representatives on Wednesday had approved the White House-backed bill, crafted by Democrats, to rescue the ailing automakers.

The measure would have required the manufacturing giants to engage in restructuring to ensure their long-term survival and repayment of the government monies or face bankruptcy proceedings.

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Technorati Tags: US Treasury, auto bailout

Source: CNN.com

The collapse of negotiations could possibly doom General Motors to a bankruptcy and closure in the coming weeks, with Chrysler potentially following close behind.

While Ford Motor has more cash on hand to avoid an immediate crisis, its production could be disrupted by problems in the supplier base, as could the production of overseas automakers with U.S. plants such as Toyota Motor and Honda Motor.

The struggling automakers may get some money anyway.

As part of their effort to urge skeptical Republicans to back the deal, Bush officials made clear that if Congress didn’t act, the White House would have to step in to save Detroit from collapse with funds from the Troubled Asset Relief Program, according to the sources familiar with the conversations.

One of the sources said that a White House official made it clear to a GOP senator that would be the worst option, because the loan could go to the auto companies with few or no requirements along with it.
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The sources asked not to be named because of the sensitivity of private conversations.

Democrats pressed the White House from the start to help Detroit by using some of the $700 billion for the financial sector, but the White House and Treasury Secretary Henry Paulson refused.

“I would only hope that the president, who has worked so well with us for the past several weeks, would now consider using the TARP money,” Reid said after Thursday night’s vote.

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Technorati Tags: General Motors, Chrysler , bailout

General Motors Corp and Chrysler LLC

Source: Reuters

General Motors Corp and Chrysler LLC are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multi-billion dollar government bailout, Bloomberg reported, citing a person familiar with internal discussions.

In response to automakers’ bailout plea, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy — negotiated with workers, creditors and lenders — could be used to reorganize the sector without liquidation, Bloomberg said.

General Motors and Chrysler could not be immediately reached for comment by Reuters.

Industry executives and analysts say the immediate carnage from a bankruptcy of General Motors Corp, Ford Motor Co or Chrysler would spread throughout an industry that is bleeding cash in a global slowdown.

All three automakers have urged Congress to authorize $34 billion in loans and credit lines, saying they will restructure, and cut models, jobs and executive pay to remain viable.

The White House did not dismiss the industry’s $34 billion figure on Wednesday but said it was too early to say what it might support on an emergency basis.

Senate Majority leader Harry Reid wants to try to find a way to avert threatened bankruptcies in the U.S. auto industry with Detroit Three chief executives readying for a make-or-break hearing on Thursday on the bailout request.

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Technorati Tags: General Motors, Chrysler