Category Archives: Business

Why Does Obama Want to Bankrupt Me?

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The pundits all expect that General Motors will file for bankruptcy protection on Monday.

Why?

We (used to) assume that people act to preserve their economic interests. Government acts to preserve the governors.

Given the horse puckey that has already gone on in the Wall Street-Pennsylvania Avenue continuum, I think I have it figured out why Barack Obama wants to bankrupt me:

  • 1. The Democrats need to generate demand for universal health care. Imagine that.
  • 2. Big bond holders bought credit swaps, the financial innovations that insure debt. Credit swaps pay off only in a formal default. Imagine that.
  • 3. Congress needs to shore up Social Security; all the calls to strip that pot of gold from their hands scared them silly. Imagine that.
  • 4. The Administration needs to be able to say, “See, this is what happens when you sell gas guzzlers; you go bankrupt.” They are already saying that about the Dodge Hemi. Imagine that.

1. One might think demand for universal health care would be, well, universal. Oddly it isn’t. That said, if half the country suddenly loses its benefits when the bankruptcy domino train rolls through, Democrats hope that changes. A GM bankruptcy almost guarantees that all those workers jump on the Medicare bandwagon.

2. Credit swaps pay off only in a formal default. Look at which Wall Street player whisper in President Obama’s ear to see how financial policy is formulated. A GM bankruptcy could guarantee the credit default.

3. Congress is not afraid that the Social Security will be bankrupt by 2050. Congress is afraid that the Social Security will become irrelevant within their elected terms. Congress absolutely cannot give up that “revenue” stream. A GM bankruptcy guarantees the Social Security revenue stream.

A GM bankruptcy means autoworkers now have 201Ks because the stock in their (former) 401Ks tanked. If GM shares are not wiped out and the company recovers, the autoworkers’ 401K’s will recover eventually. A GM bankruptcy means autoworkers and everyone else with GM stock in a retirement account is more than ever dependent on Social Security. I hope the UAW has finally discovered that a boughten politician doesn’t stay bought. And I hope that you, gentle reader, understand that bankrupting GM decimates my own personal retirement account.

4. Finally, the Administration needs to eliminate the popular gas guzzlers to push forward their Consumer’s Union vision of the perfect car: the 1985 Yugo. After all, it is not right to sell ten million popular cars and trucks. It is only right (should that be left?) to this Administration to sell about half a million Yugos. Or Fiats. A GM bankruptcy guarantees there won’t be anything else sold.

“Those cars are ugly,” Rufus said about the looming Chrysler-Fiat deal. “Americans may not remember all the problem cars Fiat made the last time they were sold here, but Americans don’t buy ugly.”

I dunno. The Democrats sold us first Al Gore and now Barack Obama so perhaps they can sell us Flea Flops, too. But I’ll betcha not one Congress Critter buys one. According to the Intert00b, Far Green darling, multi-millionaire Mr. Gore owns a giant 10 mpg Ford Expedition.

If I Had a Million Dollars

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Rufus steps to the mic with a guitar and a Karaoke machine. Is this thing on?If I had a million dollars
(If I had a million dollars)
I’d buy me some stock
(I would buy me some stock)
If I had a million dollars
(If I had a million dollars)
I’d buy me General Motors stock
(Maybe a nice Camaro or a Malibu)
If I had a million dollars
(If I had a million dollars)
I’d not buy a K-car
(A nice reliant automobile)
If I had a million dollars, I’d make a speech.
(Apologies to Barenaked Ladies)

Before we get started. let me thank the GM shareholders who have joined me here on the steps of General Motors World Headquarters. I also need to thank the networks, business, and automotive reporters for covering this event.

[Image]

And now, here’s Dick Harper who did have a million dollars before he traded it for a million shares of General Motors stock…

Thank you Rufus.

If you believe your company has been stolen from you by a conspiracy of politicians, union leaders, and other hoodlums, you’re right.

If you believe 316 people in Washington see the recession as a beneficial event that allows them to institute their grand plan that will sweep into your lives and bankrupt your children and your grandchildren’s grandchildren, you’re right.

If you believe you can’t do anything about it, you’re wrong.

There is a shared cultural belief inside the Beltway that General Motors makes lousy cars and needs to be taken down. That’s just wrong, too.

During his 1955 Senate confirmation hearings to become Secretary of Defense, Charles Erwin Wilson, then Chairman of General Motors, said “for years I thought what was good for the country was good for General Motors and vice versa.”

We certainly know now that what is bad for the country is bad for General Motors and vice versa.

I have a four-part plan to fix GM. It’s good for General Motors. It’s good for the country. Here’s what we need to do:

  • The Department of Justice needs to prosecute the UAW under Taft-Hartley as well as under United States antitrust laws. Heck Judge Harold Greene broke up AT&T with less grounds. Frankly, I think the D.O.J. should bring R.I.C.O. indictments but I’m afraid the evidence would get buried in a landfill somewhere.
  • The U. S. Congress needs to prosecute the Administration for Grand Theft (Autos). If lying under oath is grounds for impeachment, isn’t stealing the 600 million shares held by almost every pension fund, mutual fund, and individual investor in this country grounds for conviction?
  • The Department of the Treasury needs to force the banks to start making loans or they need to take the bank bailout money back and make the loans themselves.
  • The Main Stream Media needs to stop scaring people out of GM dealerships.

Unfortunately, none of that will happen unless we take action.

The Administration says it has reached a deal with GM.

The UAW says it has reached a deal with GM and the government.

GM’s bondholders say they got screwed.

Here are the deals:

  • The Administration has “lent” GM $19.4 billion dollars. The Administration will now “forgive” $10 billion of that for half of all GM stock.
  • The UAW will “forego” $10 billion of the $20 billion in cash payments owed to the UAW health-care trust for 39% of all GM stock.
  • The Administration says the bondholders must “abandon” $27 billion for just 10% of all GM stock.
  • The Administration says we existing shareholders can pound sand for just 1% of all GM stock.

If any publicly traded company (like GM, for example) had fragged their shareholders and creditors this way under law that was in place up through a couple of weeks from now, prosecutors wouldn’t have time to indict the directors under R.I.C.O. because said shareholders would have already burned down this glass-towered Detroit headquarters right behind me.

If I really had a million shares of General Motors stock, do you suppose anyone would really listen?

We drove the money changers from the Temples 2,000 years ago.
We drove the Princes from the parishes 400 years ago.
We drove the Kings from the land 200 years ago.

Somehow, they’ve all come back to haunt us.

Eminently Outrageous

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We got a chicken
in every pot from FDR.
We’ll get a moped with 110 year payback
in every garage from Obama.

General Motors CEO Rick Wagoner has been told to “resign” by Obama administration. Mr. Wagoner has served in that position for about eight years. The GM Board of Directors appointed him; GM shareholders like me accepted him.

NBC reports that a senior Obama administration official told the network that Wagoner was “asked to step down by the White House.” The Obama administration will announce the automaker’s request for additional government rescue loans, two people familiar with the matter said.

One of my correspondents has shouted that, “This…. is … an…. OUTRAGE!!!”

He’s right.

Apparently Mr. Wagoner is out because he failed to gain the concessions from the UAW that government officials had set as targets to justify further loans. Obviously, the administration has forgotten the UAW strikes that crippled GM just a year ago and the ongoing rancor the union projects.

Mr. Wagoner has a lot of faults — mostly that he is a bean counter, not a car guy — but this drive by the administration to take over GM is a backdoor attempt at eminent domain. They think by sneaking in the backdoor, they can nationalize the company without buying any land.

The legal doctrine of eminent domain allows a government to expropriate property within the law. Without the doctrine, taking property — whether your house or your farm or your business — is either a criminal or a revolutionary act.

Here’s my bottom line; if the Obamanation wants my GM stock, they can indeed buy it. Tanking the business then taking it over from behind is not just plain theft; it is cowardly theft.

Be warned.

If you own a small bank, or a farm, or a restaurant on Main Street, you could very well be next.

Oh, yeah. And rumor has it that the government-run GM new product line-up includes a license to build the Tata.

Are We Managing this Mess?

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Some neighbors call Roy Haynes “the World’s Cheapest Man.” I was outraged since I think of myself that way; I reckoned they missed a bet until I saw him dumpster diving on the local news. He dives every day. I do it only when I see something really good and then almost never if there are news cameras about.

Mr. Haynes says to live like “every year is a recession.”

Meanwhile, outspoken California food activist Alice Waters knows we have to make tough choices. She wants us to give up our Nikes to buy organic grapes. Never mind that organic grapes cost four times as much as the Chilean grapes on sale this week or that I have never been able to buy Nikes in the first place.

Methinks Mr. Haynes gets it more than Ms. Waters.

The lead recession story today is that A.I.G. released the names of dozens of the financial institutions they shuffled our bailout money to. We provided $12 billion each for Société Générale, and Deutsche Bank, and “smaller amounts to Barclays and UBS. Wachovia, a bank that is already defunct got $1.5 billion more defuncter.

Now I really can’t buy any Nikes.

National Economic Council chair Lawrence Summers appeared on Face The Nation to talk about it.

The NY Times cherry picked this quote from Mr. Summers’ 15 minutes in the spotlight, “There are a lot of terrible things that have happened … but what’s happened at A.I.G. is the most outrageous.” That irks me because Mr. Summers told Bob Shieffer that the government can’t do much to stop insurance giant’s payout of millions “because they [the bonusees] all have contracts.”

Mr. Shieffer reminded him that A.I.G. managed to cut salaries and bonuses and jobs for all their other people and that there were plenty of “financial wizards at Starbucks with their laptops open, looking for work.”

Mr. Summers, who, despite the NY Times article, apparently thinks the Administration is doing a good job managing this mess, had no reply.

In other news, “Financial fraud is focus of attack by prosecutors” as Bernie Madoff went to jail. Fortunately, it’s not just Mr. Madoff. Unfortunately it’s not Congress. “Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont — all stemming from home loan scams.”

I’m thinking the foot soldiers will go to jail but anybody with a bonus over a million bucks is home free.

I had a nice chat with bank president Rick Manahan last week. Mr. Manahan heads the Peoples Trust Company, a privately held community bank with branches in Enosburg Falls, Essex Town Center, Georgia (the town, not the state), St. Albans, and Swanton, Vermont. Like almost all “real” banks1 Rick has no toxic loans; unfortunately like almost all real banks he is now forced to stave off the regulatory nightmare sure to envelop the community banks. His bank will hold the funds for the CapCancer event this summer and will sponsor us as well.

The regulatory issue is a real one. Doctors’ offices have about 6 staff members per doc now because they have so many regulatory and insurance demands to meet. Banks already seem to have about a 1:1 ratio of employees to customers (I made that up) to meet their legal obligations. I don’t think we need to saddle them with more.

“Rules don’t work if people have no fear of them,” Barney Rubble said last week. I think Joe Stalin said it first.

Back to Mr. Summers. He is the (drummed out) Harvard president who said that women have lesser aptitude for work in the highest levels of math and science. The economics prof was Clinton’s Secretary of the Treasury and now heads Obama’s National Economic Council. He is one of more than two dozen members of the Obama inner circle who served in previous administrations.

Change?

I don’t think so.

I do think Mr. Summers must be the brains behind calling the 9,000 earmarks “old business.”

Are we managing this mess?

I don’t think so.

I had hoped I wouldn’t have to blog about this mess any more. I guess that really means I had hoped the people we elect to represent us were at least three quarters as smart as I am.

BROKEN NEWS

The President said today that he will do “everything possible” to get the $165 million of toxic A.I.G. bonuses back. Whoopee. All the pundits said today the checks have already been paid. It’s too late.

I don’t think so.

All it takes is a little tax change. Democrats called it a “windfall profits tax” when they wanted to do it to the oil companies. Now they can call it a “windfall bonus tax.” Set the rate at 100%.

All it takes is the political will to go against the very people who underwrote every congressional campaign this year.
Huh.

I don’t get it. I have spent most of a year hammering our Congress critters about how they just don’t listen and look at what happened. I floated this whacko “windfall bonus tax” and, for first time, they listened!

Let’s see if I have this right: The White House is still trying to “formulate a policy” and the Congress is scrambling to “implement new rules.” Sounds like no one in Washington deserves their bonuses, either.

On the other hand, Mr. Summers apparently still believes the Administration is doing a good job managing this mess. Must not be any female mathematicians on the team, innit.

1“Real” banks means the kind of community bank we used to have. These companies might be large, even statewide, depositories but they have concentrated on banking instead of getting into trouble with reinsurance and other playgrounds outside their areas of expertise.

For Sale, Cheap

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We all know about using Craigslist to find adult–some might say illicit–activities.

Fort Pierce, Florida, police arrested 35 people as part of a prostitution ring that used Craigslist to set up “dates” last September. Now, 40 states including Vermont have joined in an agreement with Craigslist to crack down on prostitution after Alexis Serrano, 23, of Shelburne, was charged with prostitution. Court papers show she was one of dozens of Vermont women who offered erotic services via Craigslist. Florida will not sign the new agreement.

Advertisers will need to provide valid telephone and credit card information to post erotic services ads. The website will provide that information to authorities if subpoenaed. Started in 1995, Craigslist has websites in more than 50 countries.

There could be other illicit activities associated with Craigslist.

I listed my Keyscar on the popular website last fall. It was a great ad with top notch copy and great pictures. I did not have to provide a credit card but I did include my phone number.

I didn’t expect to get half a dozen offers with certified checks for more than the asking price. The moral of this story is that many, many crooks will offer you a bogus certified check for more than the purchase price and ask you to pay the “overage” to their “shipping agent.”

Don’t do it. They will walk away with your goods and your money. You will walk away with a very small piece of art suitable for framing.

ramsey wrote:

Hello,

I was opportuned to see your advertised Car .So I picked interest in it, moreso with the full description that was attached to with the advert, kindly get back to me with your selling price. Also I will like to know if you will accept a banker draft or a certified personal cheque for the payment . Since I have not seen the pictures clearlly, I will like to know it’s present condition, Also tell me if the Car has ever been involve in any form of accident ? If yes, Don’t essitate to tell me the affected part.

Your fast responce will highly be appreciated .

Regards.

Donald Duke wrote:

Hello…

Thanks for your response to my mail and I want you to consider that its sold, pls do withdraw the advert from craigslist to avoid disturbance.I want you to know that I will be paying with a bank certified check and to also notify you that shipping funds will be included with the payment that is coming to you. so therefore.I will need you to provide me the following information listed below, so that I can ask my secretary to issue out the payment to you.

Full name to write on the check…………
Full Physical address to post the check…….
city………………….
state………………
zipcode………………..
Home & Cell Phone to contact you

*** Note that the payment will be shiped to your address via COURIER NEXT DAY SERVICE and I will like you to know that you will not be responsible for shipping I will have my mover coming over to your location for pick up after the receipt of the payment
Thanks

I am pleased to report that I did get a couple of legitimate nibbles on the car and did, in fact, sell it to a nice couple in Key West.

I am also pleased to report that I just bought a refrigerator via Craigslist.

Nothing ever goes quite as planned. A couple of years ago the 18 cu. ft. or so fridge my folks had used for umpty-ump years started making really loud graunching noises. Its doors sagged so the cold air kept running down the street. And it was a bit undersized for my liking. I watched the bulletin board at the Post Office and found a perfectly good used side-by-side for very little so I grabbed it and moved my folks smaller box outside to be the “bait fridge.”

It still makes a lot of noise so we don’t run it very often.

The perfectly good used side-by-side stopped making cold last week so I looked on cragislist for a replacement. See, I can’t suspend my disbelief enough to shell out more than the cost of a brand new Chevrolet 5.3 liter crate motor for a pretty white box that makes cold.

Sears had plenty of choices but nothing I could buy. A LG side-by-side, $1,300, a GE side-by-side, $1,600, a Kenmore 3-door “trio,” $2,000, another Kenmore 4-door, $2,700, and an 18 cu. ft. Kenmore top freezer bare bones box for $425.

As my friend “Bob” said, $1,200 is too much. $3,000 is mindless.”

I agree wholeheartedly.

With the economy crunched, I’m surprised there aren’t many newish used fridges on the market. After all, there are certainly thousands of newish used homes. I did see a one-or-two year old glory model LG refrigerator advertised in Key West for $1,500. That’s too much for a new one, let alone used.

Craigslist had a 3 year old Admiral listed for significantly less. The new-to-me fridge is in place. It is clean, well made, and in excellent shape.

The fridge was in the Stanley Switlik estate. That beautiful home sits on a some lovely Marathon acreage with water on three sides. D’Asign Source is designing and building a private home for the new owner.

I paid cash for the fridge.