With the GM IPO having succeeded so well this past week, the critics and nay-sayers have had to change tunes. I don't know that I really see the government investment in GM's bankruptcy and restructuring as a "bailout". I see more as the kind of strategic government intervention that helps the economy that a good … Continue reading GM, Banks, Bailouts and Incentives
Earlier this week General Motors, the new post-bankruptcy GM, issued it's Initial Public Offering. Initial signs are very encouraging in several ways, which I'll describe. But first let's take a note. Only 20 months, less than two years, The conservatives and tea party types were howling for GM to go bankrupt and for the government … Continue reading The GM Tale
Just sayin'... Citigroup's "Massive" Tax Break by CalculatedRisk on 12/15/2009 11:11:00 PM The WaPo has an article about a tax break for Citigroup: U.S. gave up billions in tax money in deal for Citigroup's bailout repayment The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and … Continue reading Even when banks pay back, they get bailed out.
Steven Pearlstein of the The Washington Post explains via this story in the Hamilton Spectator why the run-up in the stock exchange of the last 6 months isn' t necessarily a good thing. Instead of being a predictor of good times to come, the run-up in the stock market is more likely the latest in … Continue reading TheSpec.com – BreakingNews – New bubble created by U.S. policy
In economics, "games" are not about recreation and fun. Instead, "gaming" a system is figuring out how to get around the intent and profit by out-smarting the rules. It looks like the Geithner-Summers plan to bailout the banks and get rid of their "toxic assets" is ripe for gaming. From Jeff Sachs of Columbia Univ … Continue reading The Geithner-Summers Plan: Let the games begin
Joseph Stiglitz (Nobel economist) writes in the NY Times (registration may be req'd) how the the Obama/Geithner plan is bad for taxpayers and ordinary citizens. This is not real capitalism folks, it's gamed capitalism for the oligarchs. The main problem is not a lack of liquidity. If it were, then a far simpler program would … Continue reading “Ersatz Capitalism”, a.k.a. Crony Capitalism, aka Lemon Socialism, aka Obama Plan for Banks
Right now, for GM to avoid a bankruptcy filing, it has to get concessions or "sacrifice" from the "stakeholders". In plain terms this means the union and the bondholders. The union has already stepped up to the plate. It has sacrificed and offered additional sacrifice contingent on the bondholders. So far, though, the bondholders haven't … Continue reading Why GM will almost certainly go bankrupt.
GM has a problem. It's not the cars or the union. GM needs to get it's costs down as required by the govt loan terms. The union has agreed to it's share of the restructuring. Waggoner is now gone. What's left and what's blocking GM's turn-around are the the banks and bondholders. They refuse to … Continue reading Why GM could still go bankrupt: Banks & AIG are the problem
Yesterday the Obama admin forced GM CEO Rick Waggoner to resign as a condition of continued support for GM's restructuring. Yet, the administration has not yet demanded any of the banks change management (except AIG & Fannie last Sept), despite the banks using 18-20 times as much bailout money. Several folks have asked me why? … Continue reading Why GM’s CEO is out, but no bank CEO is gone
Market manipulation is alive and well on Wall Street. Calling all suckers: Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon We're not quite as healthy as we thought we were. Oops. (WSJ) J.P. Morgan Chase Chief Executive James Dimon said...that March was a little tougher than the first two months of the year....Bank of America...CEO … Continue reading Calling All Suckers: Big Banks Pull off the Ultimate Bait & Switch