patrick.net

As predicted, good Republicans are mounting a stand against the automaker bailout. Taxpayers should not have to subsidize artificially high labor costs.

kewp,

I understand and agree with you. I am not for the bailouts per say, but I am just saying that Lexus would not be around if the Japanese had not bailed out Toyota in the beginning.

As far as established companies like the big 3, I say let them fail. The gov should help new car companies that may rise in from the ashes.

HAIKU: RELIEVED, '70s-STYLE BOOMER REALIZES IT WAS ALL JUST A BAD DREAM!

Crank the Led Z. and
pass the V. Take a big hit,
it's all about me...

I understand and agree with you. I am not for the bailouts per say, but I am just saying that Lexus would not be around if the Japanese had not bailed out Toyota in the beginning.

If Hitler did not invade Poland, the Baby Boomer generation would not be around.

I say give all the bailout money to Tesla, at least you can get something out of it.

Let the big 3 die, ok, on second thought, keep Ford around, they still build good trucks, I won't ever buy anything from GM or Chrysler anyway, let them die.

Why Tesla? Why any bailout at all?

I like Ford and I am a fan of Alan Mulally. Let him drive his Lexus!

Hah ...

Don't celebrate the Auto bailout stalling. All that is happening is political posturing. The Detroit bailout will happen. Which politician wants to be blamed for an economic collapse ? They don't care if the economy collapses or not. They simply don't want to be blamed for it.

Gemini (cars, transportation) Full Moon in Mutable Grand Cross tomorrow. Fasten your seat belts.

The Fed bottom line grew by $123Billion this past week. The bulk of that, $85B, was in "other assets", which I am assuming is where the Freddie, Fannie and FHLB bonds are hiding out. TAF also grew by $40B+, although the latest auction was not fully subscribed.
The Fed continued to pay down the Treasury supplemental account again this week by $36+B. Funding for the pay down and increasing the balance sheet came from deposits by member banks -- up by $143B.

Peter P,
If Columbus had not discovered the new world then we would not be having all these problems....

If Columbus had not discovered the new world then we would not be having all these problems….

If Adam was man enough to kill the snake...

For those who wanted (in a previous thread) to blame Barney Frank and democrats for subprime mortgages, have a look at his letter to the Editors of Wall St Journal.

http://www.huffingtonpost.com/rep-barney-frank/wall-street-journal edito_b_150350.html

I am totally fine with subprime mortgages if the defaulting homeowners get kicked out promptly and the lenders get no bailout from the taxpayers.

Justme,

Very interesting link you had, very convincing. (Plus, a nice picture of Jennifer Aniston wearing only a tie in a side ad).

Now consider $175 million in lobbying by Fannie/Freddie and thier acquisition of junk (whether called sub-prime or not). Why do you think Fannie/Freddie needed a bailout, if thier exposure to "sub-prime" was minimal? Didn't F&F's willingness to take so many loans off originators hands contribute to easy credit for lower quality borrowers and thus the housing bubble? Didn't Barney Frank strongly resist efforts to regulate Fannie/Freddie, even if he pats himself on the back for promoting affordable rental houses?

New York Times Sep 03
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

As predicted, good Republicans are mounting a stand against the automaker bailout.

I am way beyond caring. It is the equivilent of fighting over the deck chairs on the Titanic. I am looking out for my own little butt now. Bailout fataigue.

Stock drops excite. Gas prices excite. Now if Santa wants to drop real estate prices, that would be really exciting.

None of this stuff is going away any time soon, as long as real estate prices refuse to go down the bowl.

None of this stuff is going away any time soon, as long as real estate prices refuse to go down the bowl.

You will see real estate prices drop when your peers start losing their jobs left and right.

They were playing violins on the Titanic when it was sinking, right? I want my deck chair!

One of the things I find humurous about the TARP and the Financial system bailout was that part of it was predicated on 'the jobs it would save'. There was a lt of hoo-haa about 'do you know just how many people are IN that industry?' and 'do you want them all out on the street?'

Well.

Those banks TOOK the tarp money and they are laying off all of those people like crazy ANYWAY! That just sickens me.

Headset,

>>Didn’t F&F’s willingness to take so many loans off originators hands contribute to easy credit for lower quality borrowers and thus the housing bubble?

The reasonable thing to do here is to put the cart before the horse, and not vice versa.

F&F did _NOT_ CAUSE the subprime meltdown. They were collateral damage of the subprime meltdown, because they were to weak to resist the rising default levels

Why were they too weak? In big part because Bush and the Republicans pressured them into making more "affordable" loans than they should have.

Read the Barney Frank letter again, note that it was the Bush White House and the Republicans that wanted more "easy credit". I quite from Frank's letter:

For example, on February 18, 2002, at a hearing on the budget I said "I am in favor of trying to help lower-income people get the advantages of homeownership...but almost by definition, the large majority of poor people are going to need rental housing." On March 6, 2004, the National Journal reported that "When the FHA's plan to insure subprime loans was included in a Senate-passed appropriations bill, Frank...a staunch supporter of low-income housing, wrote a highly critical letter urging that the measure not be included ... Not only had the House committee not examined ...the proposal he said then, but the measure also offered no protection against lenders inappropriately steering people towards these high-cost loans. Nor did it offer safeguards to ensure that participants 'were fully suitable for homeownership.'"

That same year, when the Bush administration insisted that Fannie Mae and Freddie Mac raise the percentage of below-median income homeowner mortgages they bought, I was correctly quoted in a Bloomberg article on June 17th as saying that this would "do some harm," and the writer noted that "Frank's comments echo concerns...that the new goals will undermine profits and put new homeowners into dwellings they can't afford."

In other words, Frank worked for exactly the OPPOSITE of what the right-wingers are trying to blame him for. Surprosed? Not me.

Re: Auto Bailout.

Bush strangely enough is not going to trash what little is left of his legacy by being the president that killed the auto industry. He will give in and take the money from TARP if need be.

It amazes me how Republicans can spend 600B (or is it higher now?) on war and blodshed but get their panties all in a big-time principled twist if Detroit needs 14B to save itself. They have no sense of scale or proportion OR consequence.

By the way, if GM and Chrysler fail, I think we can fully expect martial law coming to at least one midwestern state, and not very long from now.

All this because the Republicans are all so hor*y to break the union, they cannot think straight anymore.

Uh, I did mean of course. "put the horse, before the cart".

Headset, you must have gotten a good laugh out of that one. :-)

I have a question for those in the search biz:

What does it really mean for Microsoft to "buy Yahoo's search business", as is being pushed by some shareholders?

I have to say, I cannot quite figure it out. Does it mean Yahoo does not have a search box on their home page anymore? Or that the search box will lead you to a Microsoft-operated server? Or that Microsoft will handle the business of selling the search advertising? Or what?

I'm just quite sure it is not quite what it sounds like. And that usually there is some ugly detail that is being left out.

Someone please enlighten me!

...usually MEANS...

If Adam was man enough to kill the snake…

Let the hero born of woman crush the serpent with his heel!

Bush is a LIBERAL. I cannot image a true Republican being capable of calling for such a bailout.

That's a nice strategy.

If a Republican President does something wrong, one can just re-define him as being Liberal and keep going. No blame for the party as a whole for choosing him as their candidate, or anything like that.

Should have thought of that earlier....wait...uh.... why didn't the war make him a Liberal, too?

why didn’t the war make him a Liberal, too?

The president who got us into the last world war was also a liberal.

Besides, who started the Vietnam War again? Liberal or conservative?

Sorry for being late. Now I really despise GWB.

I am extremely disappointed with Thad McCotter. He made a beautiful speech against the Wall Street bailout but now he is on the side of the automakers.

I would rather agree to helping the financial system instead of the defunct auto industry.

Of course, given a choice, I would never bailout anything.

Of course, Ron Paul is always Ron Paul. He is the Gold Standard of political integrity.

TOB,

There must be a little more to it than transferring queries and user information entered at Yahoo website to Microsoft?

Btw, I have no illusions about what google is up to.

Good one.

http://www.fdic.gov/bank/individual/failed/banklist.html

Bank Failure Friday.

>> As predicted, good Republicans are mounting a stand against the automaker bailout. Taxpayers should not have to subsidize artificially high labor costs.

I fully agree ...

By the way, I voted independent this time .....

http://www.nakedcapitalism.com/2008/12/deflation-has-become-inevitable.html

Thanks frank! Great article!

The issue is what we do about a form on coerced savings - 401ks. If your employer matches, then any investment not doomed to loss half of its value is still advantageous. Too bad cash is not an option in 401ks (and money markets are NOT cash - I think many/most will break the buck to 75% with the pending business failures).
If your employer halts matching the decision is easy. Stop contributing!

This article is as well written and accurate as any written in the last 2 years.

I was just tallying up the annual performance of Peter Schiff's recommended investment products over at Euro Pacific Capital:

RICI -50.00%
GLD -20.00%
HTE -65.00%
PWE -70.00%
PVX -65.00%
ERF -60.00%
MEAFX -20.00%
MERKX -12.00%

Why anyone still listens to this clown is beyond me.

GLD is actually down 20% from it's high this year. This is not a YTD return.

Yes, best to invest in Treasury MMFs if available.

One strategy might be to take a loan out against your 401k. Not sure what the rules are regarding this. It's something I plan to look into soon.

Bernhard Madoff: I'm wondering how much capital he had under management. All the news stories say 50B losses, but out of how much capital? He cannot possibly have lost or spent it all...

Schiff is correct in his thesis - he is just very wrong (so far) about what to do in the world he predicts. His gld may well pay off in the long run. His foreign investment - never. It is very clear there is no de-coupling.

As for buying short term treasuries and holding them to maturity. Yes. But, most do not have that as an option to their 401k. AND you would have to pick the time at which you stop that. Which I guess is pretty easy. When the DOW hits 4,500 it is a good time to buy. Bonds seem good, but who on earth can do their due diligence on which companies will survive the massive and underway contraction?

"His gld may well pay off in the long run."

Eventually, but he's been calling this for years. He has been grossly wrong in his prediction of inflation vs. deflation, among other things like decoupling as you mention. Based on his recent performance and predictions of the near future, I wouldn't bet a dime with him.

Not treasuries outright but money market funds consisting of only UST.

You can take out a loan against your 401k and pay yourself the interest (without any penalties). This can move a significant amount of your savings out of harms way while the market searches for a bottom (at least 50% more downward movement within the next 2 years, imo).