GM faces rapid collapse without aid

[Ze]

Here comes the crack-whore Paulson/Bernanke/Greenspan economics. The amount they have stepped up the money supply already will be enough to tank the USD out. Probably by the end of the next quarter.

*fixed*.

Did it do anyone any good?

Well I'm sure somebody made a mint of it (well apart from the politicians in perks/donations/bribes). John Q Public got fucked over though.

[IMOA]

Lets not get the reason we got into the mess confused with the solution. I fully agree that the "keep borrowing, as long as the economy keeps growing we're fine" bullshit line that was peddled greenspan for so many years is a massive contributer to where we are now however to stop this from becoming an enormous hole in the ground that is what is needed.

Someone mentioned the depression before, one of the main contributers to how long and how deep it was (and how we needed a world war to get out of it) was that at the beginning the government contracted their spending and that magnified the problem. Governments do need to spend now which is a massive problem for the US as their economy is already up the shit. It will be very hard for a long time there.

That said

I think the banking bailouts went way to far, while the management of the big 3 isn't great it's better than what went on in the financial sector and the government will get much better value from money given to the big three than they will get to the financial sector. Keeping 1000 workers on 60k a year spending 95% of that on local businesses is way more important than keeping 1 banker who collected 60mill in bonuses last year in a job.

Likewise, the big 3 need a kicking. I spent 6 months consulting to one of the big three in 2006/7 and I left deeply unimpressed with the way they ran things. They need to get their collective heads out of their arses and accept that given the speed at which they can tear up money maybe they aren't gods gift to the automotive industry.

[Captain_Slow]

Can I just clarify, for the record, that I wasn't actually advocating printing more money...just noting that, when you've got no more room to move on interest rates, that's pretty much the next logical step for increasing money supply.

I've actually had a hard time convincing myself that bailing out the banks, the big three, or anyone else is actually a good idea - my usual view would be "that's the way the market works, if you fail you fail". But this doesn't look like the time or place to take an ideological hard line...

[rj_astra]

But this doesn't look like the time or place to take an ideological hard line...

Exactly... watch people change their minds once it really starts to hit home here (australia). Everyone will have a hand out to the government then.

[EfiOz]

Not me. I'm heading for the hills to start my own chapter of the Montana Militia.

[Ustasa]

Keeping 1000 workers on 60k a year spending 95% of that on local businesses is way more important than keeping 1 banker who collected 60mill in bonuses last year in a job

No no. We can't have that. If we don't keep the banker in a job so that he can drive his lambo the world will explode and the universe will self-destruct.

Didn't you know that?

[rj_astra]

I think i just heard that Toyota has reviewed its profit forecast to a $1.5+Billion loss!

http://www.iht.com/articles/2008/12/...s/22toyota.php

[TonyJZX]

is it just me does it seem like all these companies ran on the notion that sales would ALWAYS be good and the economy would always be buoyant?

i mean if you run a business you would think you would factor in a 10-15-20-25% decline in sales?

no?

my gut feeling is that if your company cannot sustain a decline in sales you probably deserve to go under?

[Ze]

Lets not get the reason we got into the mess confused with the solution. I fully agree that the "keep borrowing, as long as the economy keeps growing we're fine" bullshit line that was peddled greenspan for so many years is a massive contributer to where we are now however to stop this from becoming an enormous hole in the ground that is what is needed.

Someone mentioned the depression before, one of the main contributers to how long and how deep it was (and how we needed a world war to get out of it) was that at the beginning the government contracted their spending and that magnified the problem. Governments do need to spend now which is a massive problem for the US as their economy is already up the shit. It will be very hard for a long time there.

The thing is the yanks have kept spending all the time.

When will they stop? and if they are going to spend money , who says GM is worth it (I know the banks weren't).

[IMOA]

They're worth it right now because of how fucked up the economy is. In 5 years time, when things are a bit more stable, when other work opportunities exist, when other manufacturers are in a position to make capital investment, maybe less so.

You've got to look at how US society is structured to properly understand the impacts. Health care is linked to employment, education derives a big chunk of it's funding at the local level, most workers are on at will contracts, the minimum wage is not enough to live on, social security is mostly "self" funded and the safety net is pitifully low and already they're talking 10% unemployment rates. When things turn the wrong way they go backwards real fast and so at least some bailouts become the lesser of two equals.

And yes, I agree, providing a base level of social services through such an inefficient and indirect tool as these bailouts is a monumentally stupid idea. Good luck convincing them of that though, when we talked about medicare even though I paid a fraction of what they paid for health care and got a much better service they still thought I was an idiot for suggesting that maybe our system works better.

[EfiOz]

But that's their crackonomics at it again. We don't have a functional social security or health system anymore so we have to shovel money into bailing out corporations when the going gets tough, most of which evaporates into thin air.

Look at how well it has worked with the financial sector bailout already. No ones lending anything and their has been massive layoffs. Citigroup dumped 50,000 in one hit.

Having a job will be of no benefit when your pay packet isn't worth anything.

Good news for us is US made stuff is about to get a whole lot cheaper.

[Roadsailing]

too bad the two biggest things the US makes is fat people and fucking stupid TV shows then i suppose.

[MartyHusseinXF]

Good news for us is US made stuff is about to get a whole lot cheaper.

Are you sure your anti-american viewpoint isn't biasing your opinion somewhat?

US Gov Bonds are still very popular amongst some very smart people..

[EfiOz]

Not much of a market for either, unfortunately.

[EfiOz]

Are you sure your anti-american viewpoint isn't biasing your opinion somewhat?

US Gov Bonds are still very popular amongst some very smart people..

Until the Chinese decide to cash them in to "prime" their own economy. An economy who's growth rate is already starting to tank since Walmart aren't buying millions of lawn chairs this year.

Once the US Treasury has to start stumping up the cash to back these bonds (which the "smart" people are buying) then the brown icky stuff will hit the fan. They have nothing to actually back these up except for a printing press. No cash in the bank so to speak. Once they start churning money out again to prop up these bonds the combined effect with the trillions in bailouts (Forbes puts it at over USD4t) AND the cost of keeping a hundred thousand or so troops in the ME will be catastrophic for the USD. The smart money says they will devlaue by as much as 75% over the next 3-4 years.

The Obama administration will pour petrol on the fire by ramping up guv spending, etc with money they don't have as well.

Ever seen what a run on a bank looks like? Well imagine a run on a country.............

I'm not anti-US, either. I just think what America is meant to be and what it is are two disappointingly opposite situations.