Everyone’s favorite feel-good broadsheet, SubPrime Auto Finance News, reports that 13 members of congress have written a letter to Fed Chairman, Ben Bernanke, and Treasury Secretary, Tim Geithner, requesting another raid on TALF, the Term Asset-Backed Securities Loan Facility. The congressional bagmen “applaud the joint efforts of the Federal Reserve Board and the Department of Treasury to promote liquidity in consumer loan markets through the Term Asset-Backed Securities Loan Facility.” Because making $200B available was an interesting start. “However,” continue the servants of the public trust, “we are concerned that the program may not sufficiently address the problems facing the domestic automobile industry.” Oh dear.
“Unlike many other Federal Reserve facilities which allow any investment grade collateral to be pledged, the TALF program is currently limited to only AAA-rated assets. In light of the uncertainty facing the automobile industry, it appears that the major rating agencies are reluctant to deem any portion of a loan to an auto dealer as AAA. Unfortunately, this means that the domestic auto finance companies are unable to use the TALF program to accommodate dealer floor-plan financing.”
OK, we’re in a crisis caused by poor lending standards. What we need now is for the Fed and the Treasury to step up where our subprime lenders have failed us. News of the demise of the US auto market is overrated. Check please?
“We appreciate Federal Reserve Chairman Bernanke’s recent statement that he is willing to revisit this issue. Given the urgent nature of the crisis in the motor vehicle industries, we encourage you to consider finding a way to ensure adequate financing for dealer floor plans as soon as possible,”
According to SPAFN, this latest masterpiece in the bailout beg/threat oeuvre was signed by Representatives Gary Peters, Thaddeus McCotter, Barney Frank, Paul Kanjorski, Brad Miller, Donald Manzullo, Emmanuel Cleaver, Ron Klein, Mary Jo Kilroy, Joe Donnelly, Andre Carson, Dan Maffei and David Scott.
If that wasn’t so funny it would be sad. Oh wait…
…or you will start to see dealerships going belly up from sea to shining sea. Please remind me again, how is it that the banks got hundreds of billions without even a half-assed reason, GM and Crysler got billions without any real plan—although lots of whining—, and the people that have pretty much played by the rules are getting kicked in the nuts? It’s happened in the housing industry, and now it’s happening in the car biz as well. i guess the royal screw is just making its rounds.
Re superbadd75:
Car dealers getting screwed…? Sounds like Karma to me.
Seriously though, decades of crummy customer relations are coming back to haunt dealers. You can argue the rightness or wrongness of a dealer bailout – but there is no sense of urgency or even pity from the general population for these companies – and that can’t be much of a surprise to anyone.
McDoughnut: I agree, lots of car dealerships have done their fair share of fleecing customers, and there should be no tears shed for those guys. By and large, however, I don’t think your average dealership lives to screw customers over. I’ve worked at dealerships for premium marques since I got into the car business —except for a brief stint at a Jeep store. What an f-ing nightmare!— and never felt bad about any of them. Granted, I think higher end stores treat clients better on all levels, but I feel the general rule is the same. A customer that is educated, knows what they want, and has a decent idea of how to negotiate, can get a good deal at almost any car dealership. Of course there are exceptions, I’ve walked out of a few places myself, but I think that the reputation of most auto dealers is an example of a few bad apples spoiling the whole bunch. And that being said, I think GM and Chrysler getting help while their dealers struggle is a crying shame.
Mary Jo Kilroy..what a surprise. The dictionary has her picture under both “Peter Principle” and “one-term”.
Well, I guess somebody has to take the torch from Ms Frank eventually.
Otto: I found something! [pulls a briefcase from the ground]
Wiggum: [opens it] It’s just a piece of paper.
Homer: It’s mine! [reads] “Frightfully sorry, but there is no hidden
treasure. I have already used this time to escape from your
jail. Fondest wishes” — oh, I can’t make out the signature!
Quimby: Keep digging. We’re bound to find something!
They do as Quimby suggests, until there are only a few of them at the
bottom of a hole forty or fifty feet deep.
Quimby: I guess we’re not going to find anything.
Otto: Um, how are we going to get out of here?
Homer: We’ll dig our way out!
Wiggum: No, dig _up_, stupid.
— “Homer the Vigilante”
Thad McCotter called the Bailout Bill “American Socialism” on the floor of the House.
Thanks for the memories