You can’t kill the $700b federal bailout bill– sorry, “rescue package” with a stick. And now that it’s ballooned from two pages to over 400, the auto industry lobbyists have wet their beak. Automotive News [sub] reports that “House Financial Services Committee Chairman Barney Frank, D-Mass., confirmed this week that under the plan, the Treasury Department would have authority to buy securities backed by automotive loans. Automotive loans are not as troubled as mortgages, but in the current climate investors are unwilling to buy the securities, effectively cutting off the flow of credit, industry lobbyists say.” In other words, Uncle Sam is going to assume responsibility for billion of bucks in bad paper written by domestic automakers and their agents to move the metal, so that the feds can “free up” the credit market and enable automakers to write more bad loans to boost their bottom line. There ought to be a law. Or, in this case, not.
Find Reviews by Make:
Read all comments
Good for GM, Ford, and Chrysler.
There’s a difference between the Wall Street firms and Automakers. Automaking is a more “honest” business, and for all the bad moves the Big 3 made, outright deceit is something they really can’t be accused of. They didn’t repackage bad debt to dupe investors. They didn’t do a lot of the bad things that the finance firms did.
Can we change the headline to:
“Taxpayer Bailout to Bail Out Automakers’ Bad Loans”
So is there anything in this law the prevents them from turning around and making a bunch a new bad loans (with the knowledge that they can foist them on the taxpayers)?
This is a terrible idea. Atleast with the mortgage bail out rescue package the paper is backed up by real-estate, which over the long term is considered an appreciating asset, and will have the potential to return atleast a little bit of the bail-out money. The auto paper is secured by automobiles which are depreciating and worth little to nothing in a few years.
Just another 25 billion down the ol rat-hole.
Great, instead of individual companies going bankrupt the whole government will. Maybe the Feds can ask the Chinese for loans to bail out country in a few years time ?.
yankinwaoz :
Good point! I haven’t heard anything that says that the credit rules will be reformed or that the lenders will be unable to get further assistance.
this explains everything:
http://www.invertired.com/quimu/videos/25/34
No consequences for bad decisions when you’re “too big to fail.” What utter crap.
Heard on the radio a brilliant comparison comparing the financial mess to a huge fire. When someone dials 911 for help, the government sends the arsonists. After all, the people that created this mess are the ones with all the great ideas on how to fix it.
Thanks to Paulson, Frank and Dodd. Assholes.
And again, the number of people fired for this financial catastrophe: zero.
Wow, there it is on page 300 of 451:
SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN
WOODEN ARROWS DESIGNED FOR USE BY
CHILDREN.
A tax exemption for makers of children’s toy wooden arrows in the emergency bailout bill. Clearly the Congress appreciates the magnitude of the crisis facing the US (but there is always time for pork!)
Where is the incentive to not loan money to likely deadbeats. While companies might have an incentive not to make loans to deadbeats their employees don’t. Sales staff and finance employees all have incentive (commissions) to lie and make make deadbeats look more crdit worthy than they are. This will simply start the same process over again that got everyone in trouble in the first place.
The repossessors and debt collectors are gonna be pissed!
Sounds great, as long as the Feds repo any car that is behind on payments (y’know, to protect those American tax dollars!) and turns them into the new fleet vehicles for members of Congress and the Treasury. Love to see Harry Reid tooling around in an Avenger. Maybe he could zest it up with some “certain wooden arrows designed for use by children” sticking out of the front, Road Warrior-style.
So much for the government buying assets that will have a return on the dollar in the future (and other crap laid out by the assclowns in D.C.), what are taxpayers supposed to do with bad paper on hundreds of thousands of SUV’s? I guess the toe tag sales really will pay off for the 2.8, inasmuch as we taxpaying fools will make them whole.
Hey, don’t forget the $190 million for the Puerto Rico rum makers in the “emergency” rescue bill, or the subsidies for stock car racing tracks.
As the Russian comedian once said: “What a country!”
Morea: I agree, so much for McCain’s promises to stop pork barrel spending, he voted for this load of garbage. I am not a Democrat by any stretch of the imagination but what an idiot, after that big spill in the debate about naming names of politicans who approve such crap, and then a few days he does the same thing. Time for the old folks home John.
Don’t know about you, but I wouldn’t buy a used car from Barney Frank.
Would somebody please put the stopper back into the sink drain?
http://marketplace.publicradio.org/pdf/senatebillAYO08C32_xml.pdf
I agree – amazing how urgent this crisis is yet they pin pork to it. Amazing how perfect our two candidates are but yet both signed the mess.
Why didn’t either of them stand up and fight this? Prove their value to the voters?
Meanwhile I have this sneaking suspicion that this bailout – be it the Wal-Street version or the Detroit version is just dealing a bigger problem…
I say let it fall apart which will educate a bunch of people and we’ll start over.
Of course – the people who need the most education will be comfortably isolated from the mess by multi-million dollar bank accounts.
And again, the number of people fired for this financial catastrophe: zero.
Of course – the people who need the most education will be comfortably isolated from the mess by multi-million dollar bank accounts.
Why is it so difficult to look in a mirror?
We had a housing bubble because people in the U.S. thought housing prices would continue to go up for ever. They didn’t.
Because we (the U.S. people) were stupid greedy people took advantage of us.
So if you want someone to blame just look into a mirror and see one of the people who decided not to have common sense.
Paulson is doing a very good job.
If you bought furniture, appliances, and cars on long terms, no money down terms or no interest till 2010 please look into a mirror. Look into a mirror to see the guilty person if you use more than one credit card and don’t pay it off every month. Look into a mirror if you do not have a savings account able to keep you going for 6 months.
So if you want someone to blame just look into a mirror and see one of the people who decided not to have common sense.
This is cute but what about those who play by the rules? Why should they be taxed to pay for those who were greedy/stupid/careless?
My proposal is that everyone who is not behind in the mortgage on the house in which they live should get 10% of the remaining loan paid off by the Federal government. Why? 1) Reward those who play by the rules, it will strengthen the country 2) It will inject much needed capital into the markets through a mechanism that will stabilize the system but still penalize the holders of bad debt.