Tag: bailout

On Friday morning, George W. Bush announced he would allow the Treasury Department to use a small fraction, $13.4 to $17.4 billion, of the $700 billion financial bailout to help automakers GM and Chrysler.

While normally Bush would have just let the automakers go bankrupt, he explained in a televised speech before the U.S. markets opened. “But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action,” Bush said.

Then shortly after Bush’s finished his remarks, Treasury Secretary Henry Paulson announced that he needed more money. According to the Washington Post, Paulson noted that “that nearly all of the funds remaining at his disposal have now been committed for a loan to the nation’s automakers.”

The message being crafted is that helping the automakers forced the Bush administration to ask the second half of the bailout money. The message has been developing over the past two weeks.

My oh my, what an interesting week, and I don’t mean that in a good way.  From our trade deficit to our automakers on the brink of joining our domestic consumer electronics firms, things aren’t looking all that swell.  The latest indicators are showing, at least for November, what has been on everyone’s mind, the economy.  Some are saying, though that things will pick up, that the recession began a year ago and we’ll come through it by 2009.  We’ll see, when the average worker is able to stop worrying not just about making rent or that mortgage payment, but also putting food on the table, then I’ll agree.  Globally, like the United States, things for now look dim.  And like I said, the figures show it…which leads us to the Numbers!

This morning in Docudharma Times, Mishima noted that polls indicate —

That Americans believe that the big 3 shouldn’t be bailed out. Do they understand the residual effects it will have upon the economy if they are allowed to fail? It doesn’t appear so.

The “reasons” why many Americans do not support the bailout are mixed. I think these are the main “reasons” that I’ve heard:

• Anger over the Wall Street bailout

• Anger over Detroit vehicle selection (electric car versus SUV)

• Anger over rich automaker executives

• Anger over “overpaid” union workers

So, what’s behind this anger?

A posting the other day, quoting Chris Floyd on the machinations of the U.S. power elite, prompted a regular reader of mine to send a very interesting link to a story a friend of his worked on over the past few years.

As reported by Seattle Post-Intelligencer columnist Joel Connolly, Alejandro Tomas, a senior faculty member at Seattle Central Community College, has assembled a startling photo essay on one of the conclaves where the rich and privileged meet. The horse ride known as Rancheros Visitadores takes place every May in the Santa Ynez Valley near Santa Barbara, Calif. The event is one of those elite conclaves that take place annually. The best known is probably the Bohemian Grove gathering near the Russian River in Northern California.

Connolly describes the doings at Rancheros Visitadores, where no women are allowed (except maybe prostitutes):

Today we conclude our small series on General Motors.  As you can probably tell by now, I favor helping out the company.  The company has history of market incompetence, it not only failed to meet various customer demands.  Adding to this, it designed its product line in such a way that made it at times more at the mercy of the price of petroleum than anything else.  Saying this, there are reasons to keep GM alive.

In our first installment, we introduced you to the current battle for the fate of General Motors. We highlighted why they share some if not all of the blame for their current situation.  We talked about the various sides involved in one way or another with the situation of GM.  Today we tackle the big question, what many deemed “unthinkable” previously, what bankruptcy would mean for General Motors and you.

Cross-posted from Progressive-Independence.org.

According to Reuters, the wealthy are starting to feel the sting of what they’ve done to the American and global economies.

http://www.reuters.com/article…

Wealthy Americans like Morrison and Goldberg were relatively insulated from the global financial crisis until just a few months ago. Now, falling stock markets are slashing their investments, and some are even starting to panic.

“I’m a little angry that I didn’t trust my own gut, my own instinct to stay on the sidelines and wait,” said Goldberg, 57, an executive coach who lives in Washington. “I’m angry at myself.”

Of course, reaction to the financial crisis differs from person to person and even from husband to wife.

“My husband’s approach has been ‘Oh my God, I’ve got to sell, we’re mature people and there goes our retirement’,” said Morrison, 59. Morrison, who lives in Alexandria, Virginia, and runs a PR firm, has about $2 million in investable assets.

Why, they’re even having second thoughts about buying those extra yachts and private jets!

http://www.reuters.com/article…

GENEVA (Reuters) – The financial crisis is forcing the wealthy to rethink splurges like fancy cars and yachts, private bankers say, threatening to crimp the free-wheeling luxury goods spending bonanza of previous years.

Luxury brands had signaled they were weathering the global financial crisis better than others, with many saying they expected emerging markets in Asia and China to offset flat or declining sales elsewhere.

But investors have been looking for signs the credit crunch and dismal economic outlook are biting into purchases of luxury goods, and bankers to the wealthy say even the super-rich have begun to rein in spending as they fret over their shrinking portfolios.

It’s even gotten so commodities are going out of fashion!  See?

http://www.reuters.com/article…

GENEVA (Reuters) – Dabbling in commodities markets has fallen out of favor with the wealthy who are abandoning the sector in droves as energy and metal prices slide, private bankers say.

Commodity prices, which have surged for most of the past six years, have imploded over the last three months. Estimates by Citigroup and Barclays Capital put third-quarter losses in the asset class at between $50 billion and $60 billion.

“Commodities were in fashion at the beginning of the year and clients reduced their exposure mid-year,” said Bruno Lebre, head of investment at SG Private Banking, adding he had been advising clients to limit energy and metals exposure in their portfolios.

Rich people everywhere are starting to get skittish, and are now starting to heed the old adage, “don’t put all your eggs in one basket.”

http://www.reuters.com/article…

GENEVA (Reuters) – The world’s wealthiest are opening multiple accounts to help spread risk through the global financial crisis, their bankers say.

“Clients who had accounts with three institutions now have six accounts. Clients who had six accounts now have 12 accounts,” Gerard Aquilina, vice chairman of Barclays Wealth (BARC.L: Quote, Profile, Research, Stock Buzz), told the Reuters Wealth Management Summit in Geneva.

Aquilina said he even had one client with 21 accounts with 50 million British pounds ($88 million) in each of them.

You know the Second Great Depression is having a huge impact when even the ridiculously wealthy get nervous.  We’re supposed to take notice of this, because it’s not as though anyone else has been adversely affected by the financial meltdown, right?