G.O.O.D

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: Reuters

Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.

The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.

The borrowed money would be repaid once the assets of that failed bank are sold.

“I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses,” Chairman Sheila Bair said in an interview with the paper.

Bair said such a scenario was unlikely in the “near term.” With a rise in the number of troubled banks, the FDIC’s Deposit Insurance Fund used to repay insured deposits at failed banks has been drained.

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