Category Archives: Corporate Bailout

GM’s plan…read it and weep.

You can review it here. (pdf) Thanks to EmptyWheel for hosting the plan on Firedoglake’s servers. The boys from Detroit are getting grilled as I write this, by the banking committee.

Jon Tester asked one of them if they can guarantee that this will be the only bailout money they will need considering the economy.

The exec said no, he can’t make that guarantee. Of course he can’t..and neither can the financial institutions.

No one can guarantee shit…unless it’s a guarantee that it’s gonna get worse before it gets better.

That, you can probably take to your bank…if it’s still operating or hasn’t been bought out by a bigger fish in that pond.

The UAW is willing to take a hit as well:

From the New York Times: “At a news conference in Detroit, the U.A.W.’s president, Ron Gettelfinger, said that his members were willing to sacrifice job security provisions and financing for retiree health care to keep the two most troubled car companies of the Big Three, General Motors and Chrysler, out of bankruptcy.”

If the Big Three are allowed to go into Bankruptcy, they will die. No one will buy a vehicle from a company in Bankruptcy. But will people buy a vehicle from them anyway?

I don’t know the answers and neither does anyone else.

Finally..someone in Congress asks WTF about the bailout of Bear Stearns!

Today, Wednesday, Bennie Bernanke will be facing some Congress critters that plan to ask him wtf is up with the $30 Billion welfare check to bailout Bear Stearns. From the NYT link:

Taken together, most experts say that what the Fed has done in the last several months is unparalleled in modern times. Indeed, the Bear Stearns deal relied on a provision of the Federal Reserve Act not used since the 1930s. As a result, investment experts, many Americans and most members of Congress are bursting with questions.

Mr. Bernanke has yet to explain, for example, exactly how he negotiated the Bear Stearns deal, how he decided to accept the $30 billion in dubious collateral, who set the share price for Bear Stearns and what role was played by Treasury Secretary Henry M. Paulson Jr., a former Goldman Sachs executive.

On Wednesday the Fed chief begins two days of testimony, his first opportunity to answer some of these questions. They are certain to focus not only on Bear Stearns but also on why the Fed and others let things deteriorate to the point of crisis, and whether their actions should serve as a precedent or guideline for the future of regulation of the financial sector.

Must see TV on Cspan..I will hunt down the internet link if anyone is interested..and you should be you know..

Bear Stearns shareholders don’t like "The Deal"

They want more. Well, too damn bad I say, let the damn bank collapse then. Gawd this crap is jacking my jaw, would they rather get nothing? From the NYT:

The sweetened offer is intended to win over stockholders who vowed to fight the original fire-sale deal, struck only a week ago at the behest of the Federal Reserve and Treasury Department.

Under the terms being discussed, JPMorgan would pay $10 a share in stock for Bear, up from its initial offer of $2 a share — a figure that represented a mere one-fifteenth of Bear’s going market price.

Greed..its such a nasty thing. It will blind people to the truth. And the truth of the matter is that Bear Stearns shareholders are going to get the sharp end of the way or another.

I would be happy if our tax dollars stayed out of JPMorgan’s hands. To hell with Bear Stearns shareholders, it sucks to be them but its really not our problem. Corporate Bailouts are not the job of the federal government for Christs sake!

Bear Stearns has gone from $159 a share down to $2 in a years time. It puts into perspective why their shareholders are highly peeved..but still..why should our country’s tax dollars save them? We have to put food on our tables, buy medications and put gas in our cars. WaPo has some interesting numbers for the average Joe and Jill American:

By the end of 2007, 36 percent of consumers’ disposable income went to food, energy and medical care, a bigger chunk of income than at any time since records were first kept in 1960, according to Merrill Lynch.

Less trash is being set on the curbs of Mesa, Ariz., where surging home foreclosures are leaving more houses empty. That means fewer homeowners paying the city $22.60 a month for pickup. And William Brown, the city’s solid-waste management director, says people aren’t throwing out as many appliances and bulk items, like furniture. They’re sticking with what they have.

Nearly 9 million households now have upside-down mortgages, and for the first time ever, aggregate mortgage debt is bigger than the total value of homeowner equity–bigger by $836 billion, according to research by Merrill Lynch.

Simply put..we, as a nation, can’t afford to bail out Bear Stearns..or any other Corporation. They should be left to twist in the wind, and sink or swim on their own merits…just like the American taxpayers who are struggling make ends meet right here and now.

UPDATE: It’s a go..the new offer is for $10 bucks a share. Of course that news sent Bear Stearns stock upwards..even though it has billions in debt at this point, of which the federal government will be responsible for $29 Billion of it..with OUR tax dollars. Fucking outrageous!

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Fed approves bailout money to shore up Financial markets

Its not a small loan either..$30 Billion. Of course “the people” won’t be seeing any of that money..just those Corporations that got greedy and fucked themselves..from the NYT:

Hoping to avoid a systemic meltdown in financial markets, the Federal Reserve on Sunday approved a $30 billion credit line to engineer the takeover of Bear Stearns and announced an open-ended lending program for the biggest investment firms on Wall Street.


After a weekend of intense negotiations, the Federal Reserve approved a $30 billion credit line to help JPMorgan Chase acquire Bear Stearns, one of the biggest firms on Wall Street, which had been teetering near collapse because of its deepening losses in the mortgage market.

Someone explain to me how using our tax dollars to save greedy investors is a good thing..anyone? No one is worrying about the elderly on fixed incomes, the working poor or the disabled in the same boat. Oh..thats right..they get a whopping $600 bucks in two bad.

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