GM Bailout Surprises

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A good read: 9 Bailout Surprises From GM and Chrysler

I’ve been paying attention mostly to GM and didn’t realize just how bad Chrysler was doing.  It sounds like they’ll be done fairly soon.

The most aggravating thing for me is that GM did absolutely nothing until the government stepped in.  Taking a look back, they’ve been losing money for years.  The current recession had been visible for years prior, so that wasn’t a surprise.  Why did GM wait until it secured public money to finally come up with a restructing plan?

Anyone who runs a company as big as GM and can’t predict the current mess at least 2 years ago shouldn’t be there.

Atheism as hatred?

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This is absolutely ridiculous:Atheist ads on OC Transpo in limbo, because of their argument.  They claim:

“When statements are said that God probably does not exist, this is an implied statement of hatred towards all those who do believe that God exists.”

What a bunch of idiots and hypocrites.  First, if you can’t accept someone who has an opposite view as yourself then move to a country that doesn’t allow free speech.  Maybe Iran or Saudi Arabia.

Second: OK fine, let’s accept your argument.  It logically follows that statements that a God does exist are an implied statement of hatred to those who don’t believe it.  You better get busy taking down all public references to the Bible, crosses, religious artwork, etc.

That auto bailout seems to be working great, right?

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Already $25 billion into the bailout and what happens?  Shedding 50,000 jobs and asking for another $14B.

Automakers Seek $14 Billion More in Aid

It wasn’t difficult to predict they’d be back for more.  Neither is it difficult to predict there will be more still.

If we’re investing so much money into these companies, the taxpayers (Americans and Canadians) should get a stake in them, similar to some of the financial bailouts.  Maybe a change in management would be more productive than more public money.

Graphing the recession

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I love graphs.  Maybe it’s a geek thing.

Anyways, I ran into a few graphs of job losses in this recession.  I believe the first two are produced by the US government and the last is sourced in the image. All were found via DailyKos.

I saw this one first, and it scared me:

The slope of that line is definitely scary.  If jobs keep being lost at that rate for the next quarter I’d guess we’re in for a whole lot of trouble.

Next, I ran into the graph below.  When the other post-WW2 recessions are plotted this one still looks very bad:

However, it seems someone was smart enough to plot the job loss data as a percentage of population.  Now this recessions looks fairly mediocre.

This graph makes me feel pretty good, actually.  This is a small indication that we’re not closing in (yet) on depression-level disaster.

One caveat is that the definition of job losses has changed over the years, and I’m not sure if these graphs take that into account.

Canadian banks are faring better than their American counterparts

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Interesting read: The Canadian Solution

I hadn’t known our banks are now rated the “healthiest in the world.”  The difference in leverage ratios is pretty large: 18:1 in Canada and 26:1 for US banks.  TD Bank was 15th largest in the world a year ago, now is 5th since all their competition shrank.

Another interesting tidbit he brings up is that Americans claimed they needed the looser regulation on mortgages so more people could own homes, fueling the economy.  Turns out, even with tighter regulation, a higher percentage of Canadians own homes than Americans.

Execs get to keep their pay but auto workers do not

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Saw this in an article over at DailyKos:

“Republicans have protested any limits on CEO salaries and despite an ongoing string of outrages, they still defend the astronomical figures handed out as being what it takes to get “the best.”"

If this is true it’s the absolute worst kind of hypocricy: blatant and in-your-face.  These are presumably the same people who fought to put worker pay cuts in the auto bailout package.  But, no so much for their rich buddies.

Further, I don’t understand why the White House and Congress are playing soft-ball on the bonus pay issue with banks getting bailout money.  Everyone keeps giving speeches saying they’re mad about it, but why not get tough?  Even if it’s not legally possible to get already-paid bonus money back, make it clear they can’t pay any more and definitely make it a provision of any future government money.

Buying banks, but not buying them

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Great column on the continuation of the bailout of the financial sector: Bailouts for Bunglers

And I especially love the quote:

“taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right”

Bingo.  Further down:

“But bank stocks are worth so little these days — Citigroup and Bank of America have a combined market value of only $52 billion — that the ownership wouldn’t be partial: pumping in enough taxpayer money to make the banks sound would, in effect, turn them into publicly owned enterprises.

My response to this prospect is: so? If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found?”

I completely agree that governments are normally not the best choice to own or run businesses, but I think the alternative is worse here.  The AIG bailout seemed more reasonable in that sense since the government took majority control.

Separately, I don’t know what to think of the stimulous package.  But, since Krugman likes it I’ll assume it’s OK!