If the Prince is interested in some other investments, I've go some Nigerian lotto winnings I'd be willing to share. Of course, there is the 1% finders fee...
Something is wrong, or very unwise, about the definition or institution of Incorporation, in terms of the removal of individual accountability, and the corruption of the company that incorporated. But I've never understood the issues well enough to discuss it.
GM made cars, then they sold their soul to become a corporation (ultimately an (evidently) corrupt one), whose product was profit for the shareholders- not cars. This is why they went to hell.
Something is wrong with this legal entity, the "corporation".
ewbie 101,
What is the alternative to a corporation? Should each of GM's stockholders be subject to being sued? What should GM's motive be, if not profit? Do you think that foreign companies exist only to provide employment for the masses?
I read Krugman, and he's said that the problem with the Big 3 going bankrupt is that there's no guarantee that they could get, in this credit environment, the interim financing bankrupt companies usually get. And if they couldn't, and went Chapter 7, the loss of business would bring down the entire web of auto parts suppliers, leading to even more job losses, and perhaps make it difficult or impossible for anybody to make cars in this country for a while.
That scenario would be the only reason that I'd consider throwing the Big 3 some money. Anyone care to support it/poke some holes in it?
They posed as an auto manufacturer, but had gradually become a financial institution: "Buy our debt instrument, and get a free car" was closer to the truth. Am I right?
Bob, there are a few international car manufacturers here in the US, as of course you know.
The least I can say about GMAC's petition is that, if approved, they'll be under more stringent accounting standards. And if that's correct, I question whether they would prove to be insolvent under the new rubrics.
Something is wrong with this legal entity, the "corporation".
While I don't go so far as to propose getting rid of corporations, I will say that they've grown far too powerful and been essentially given the same (if not more) rights than the individual.
Many corporations are now trans-national and could give a you-know-what about America.
Why not? It seems that any corporation with enough free cash flow or access to credit can.
As an aside, it will be interesting to see if the regulatory free-for-all that seems to have taken over survives the Bush administration. I am starting to suspect that it will.
Tarpin Ben is my name friend,
Live between yachts and I sure would be obliged,
If you'd share your 401k,
I know it may sound strange to you,
but wait till my song is sung and my story is told,
you might come to understand.
Just why I'm old and bent and devil sent and running out of time,
When long ago I held a royal flush in my hands
I was a marked to fantasy fool, derivative black pool spendin,
robbin my own town
Thought I'd lost my blues,
Payin FDIC dues,
Thought I'd found a lie to suit my style,
He I sit I'm just Tarpin Ben, the robber man,
Not long, tall, or handsome.
REL writes:
newbie 101,
What is the alternative to a corporation?
I don't know.
Maybe... Instead of issuing stock, profitable companies should husband their profits in-house, and not expand until they can afford to pay (or finance) on their own merits.
Or... classify the purchase of stock as gambling, period.
What is the alternative to a corporation? Should each of GM's stockholders be subject to being sued? What should GM's motive be, if not profit? Do you think that foreign companies exist only to provide employment for the masses?
REL
I think I am with Newbie 101, except maybe further out.
Looking at our economy for the last 100 years or so, I think it is also fundamentally unsound.
It depends on bubbles. Increases in productivity also work but nowhere as well as bubbles. We either have to have a growing internal population or an expanding trade export ability. Lacking either of those, we can inflate a debt bubble and get by for a generation or maybe 2. Then we collapse and give it back.
If this current mess goes deep enough maybe some fundamental changes will emerge.
Instead of issuing stock, profitable companies should husband their profits in-house, and not expand until they can afford to pay (or finance) on their own merits.
That's actually what companies used to do; it's called retained earnings. Then a bunch of shareholders sued claiming that retaining earnings was a breach of fiduciary duty because there were better alternative returns on investment.
This is lame. The execution of TARP was never for corporations to bend over backward to get the money. Did Hank or Ben pitch this to Congress? "Troubled corporations will all become bank holding companies to get access to the sugar".
It doesn't matter what the intent of either HP/BB or Congress intended. The only relevance is whether the letter of the law permits it. Generally, the law should have been backdated to only allow BHC as of X date. But seeing that the EESA was an 11th hour thing, someone overlooked it.
Bob, I think that speaks to my point and yours as well - there's a sound auto manufacturing culture in the US not dependent on the usual three.
The Asian and German firms are not requesting handouts and are scalable to meet probable future demands here.
It's sad to see the GM/Ford/Chrysler execs saying many of the right things in recent testimony - and I feel they did say some very reasonable things lately - but their recent history really argues against perpetuating the way they conduct themselves when not in fear and panic mode.
This is lame. The execution of TARP was never for corporations to bend over backward to get the money. Did Hank or Ben pitch this to Congress?
Anyone who's ever been a parent knew how this would play out. Here is an analogy:
"OK kids, whichever one of you can spin around like a monkey gets a lollipop!"
Watch 'em spin!
Human beings are taught that fairness is a fundamental aspect of a civilized society. Once you start "playing favorites", you lose all credibility as a parent.
This entire crisis was manufactured so that the "chosen few" banks could take over everyone else - just watch the forced mergers and takeovers that will rock 2009.
Citi and GMAC are not invited to the table, and B of A is so mismanaged that it has set itself up to be whacked like Lehman, Bear Stearns, and others...
As of last night, they didn't have the votes in Congress to bail out GM, so now the thugs are just grabbing the money. Sure, the executives' use of private jets on the way to Washington was very inappropriate, but this was never a bailout of GM--it's a bailout of the United Auto Workers union.
It's very simple, if you let GM go bankrupt, it's going to get really ugly. If you can stomach another million "good" mortgages go into foreclosure as a result of letting GM go bankrupt -- have at it. If you, like me, are a bit concerned that letting yet more mortgages go bad will continue to spread our financial crisis even deeper, the we "bail" (loan) them out. Nobody here is suggesting that we are going to "save" GM for the long haul. They are pathetic, they are losers, and until America wakes up, kicks the MBAs out of the f'n boardroom, we're going to see this mess for years. That's all I have to say about that.
cgp,
Those mortgages were all overpriced anyway. If the workers cannot pay than we just get closer to the "actual price" instead of the "distorted by financial hoopajoops" price.
Do you want honesty in the market or more Candyland. We have been in a Candyland economy for the past 10 years.
Basel Too writes:
That's actually what companies used to do; it's called retained earnings. Then a bunch of shareholders sued claiming that retaining earnings was a breach of fiduciary duty because there were better alternative returns on investment.
Basel Too | 11.20.08 - 9:55 am | #
If that is true, then maybe right there is where the government became in effect the owner of the corporation. The "automaker" lost control = sold their souls to stockholders, falling into the web of their ally, the biggest money-handler, the government.
I repeat, making automobiles was reduced to a front for a financial institution, a lie backed (and enforced if your post is true) by the government.
There may enough sentiment on both sides of the aisle for Congress to provide a Debt In Possession Chapter 11 bridge loan, keeping the company out of liquidation and preserving many of those jobs.
Apparently it requires Firefox 3.0, so you may have to update your browser or install it from scratch. I've always used Firefox so it was not a big deal.
YLSP: If the mortgages are overpriced, then we want to discover that over a long, protracted slow down, not an immediate snap. If things snap again, more banks fail, and liquidity dries up again, and we've actually wasted the large amount of money we've put down already to try and shore up some liquidity.
burnside: I'm not familiar with it, but I'll look it up. Hell, maybe I'll even suggest it to our fine congressperson.
burnside - yeah, I was also thinking that they might turn that $25 billion loan into a DIP facility. Makes a lot of sense - if they do go BK, who else is going to provide the DIP financing to facilitate a chapt 11 rather than a chapt 7.
Hopefully the light has turned on in somebody's head and this notion gets put forward. It at least has a chance of success. We may be positioning toward that even now. When all hope is gone, ...
I don't think Treasury is going to play along with GMAC's move to become a bank holding company.
trading comment - I am waiting, perhaps foolishly, for SPX to rally back to about 720 before getting back into SDS. I might not get an entry with that kind of outlook.
I also agree with Burnside's proposal. Do a BK, make the shareholders and debt owners take the appropriate hit, but provide DIP financing to save the company, which still has more value than its components would. Fair, efficient, and avoids the nasty trade issues from a standard bailout. I note this is basically how we all think the bank bailouts should have been handled, too.
Subject: *SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*PAULSON: TARP PIRATE EQUITY IS AN INVESTMENT, WILL PAY OFF
*KASHKARI SAYSSOMALI PIRATES ARE FUNDAMENTALLY SOUND
*Moodys upgrade Somali Pirates to AAA
*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD VERY LOW
PARTIC PATION
*SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK
*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK
*FED
AGREED OCT. 29 TO TAKEWHATEVER STEPS NEEDED FOR SOMALI
PIRATES
first
TARP for Cerberus. Gimme a break.
third
At this point, the only good part about TARP is that we wasted "only" $350 Billion.
Is anyone truly surprised?
Isn't the TARP window "closed"?
Let them fail. Enough.
This has been in the works for quite some time.
The question is what is the standard by which you accept it as a bank holding company, and which is the standard by which you reject it?
It's cliched now but I can't resist.
We're all bank holding companies now.
An obvious attempt to do an end-around Congress.
Given that there no longer appears to be any semblance of order to our government, with the rules changing by the hour, who can blame them for trying.
The original Treasury spin on TARP was this was 700bn the Treasury was going to get back, maybe with a profit. What is the Treasury saying now?
Note: the above question is highly rhetorical...at this point super-secret decoder pens are being used....nothing transparent.
GMAC becomes a bank, then loans the UAW enough money to buy GM, then the employees own the company and everyone goes home happy.
THE END.
tomorrow I will read you the story of the 3 little pigs...
So when do we get the "you were right, we were wrong" from all the people who agitated that this bailout was the way we "had" to go?
Saudis to the rescue!
Saudi Prince Alwaleed Ups Stake In Citi (C)
If the Prince is interested in some other investments, I've go some Nigerian lotto winnings I'd be willing to share. Of course, there is the 1% finders fee...
"What is the Treasury saying now?"
All gone. Does not work. Whocouldanode?
I think they've got something on this Alaweed fellow.
Tarp me baby,
Tarp me baby,
All night long...
Something is wrong, or very unwise, about the definition or institution of Incorporation, in terms of the removal of individual accountability, and the corruption of the company that incorporated. But I've never understood the issues well enough to discuss it.
GM made cars, then they sold their soul to become a corporation (ultimately an (evidently) corrupt one), whose product was profit for the shareholders- not cars. This is why they went to hell.
Something is wrong with this legal entity, the "corporation".
ewbie 101,
What is the alternative to a corporation? Should each of GM's stockholders be subject to being sued? What should GM's motive be, if not profit? Do you think that foreign companies exist only to provide employment for the masses?
This thing is exceeding the poor expectations of even its harshest critics.
I'm forming the bank of Dan-in-PA.
Insufficient deposits, over leveraged on assets not worth their paper value, and significant cash flow problems.
I NEED ME SOME TARP TOO!!!!!
In related news, GMAC management today announced its endorsement of John McCain for president.
Whores. All of them.
I read Krugman, and he's said that the problem with the Big 3 going bankrupt is that there's no guarantee that they could get, in this credit environment, the interim financing bankrupt companies usually get. And if they couldn't, and went Chapter 7, the loss of business would bring down the entire web of auto parts suppliers, leading to even more job losses, and perhaps make it difficult or impossible for anybody to make cars in this country for a while.
That scenario would be the only reason that I'd consider throwing the Big 3 some money. Anyone care to support it/poke some holes in it?
They posed as an auto manufacturer, but had gradually become a financial institution: "Buy our debt instrument, and get a free car" was closer to the truth. Am I right?
Even worse than the corporate structure is the LLC scam. A total license to steal.
Let China buy the big 3. Kung Fu Panda rules. SNARK.
Remember to aim before you fire. GMAC's majority owner is.... Cerberus.
Bob, there are a few international car manufacturers here in the US, as of course you know.
The least I can say about GMAC's petition is that, if approved, they'll be under more stringent accounting standards. And if that's correct, I question whether they would prove to be insolvent under the new rubrics.
Something is wrong with this legal entity, the "corporation".
While I don't go so far as to propose getting rid of corporations, I will say that they've grown far too powerful and been essentially given the same (if not more) rights than the individual.
Many corporations are now trans-national and could give a you-know-what about America.
See:
Hidden corporate history
Also look up the 14th amendment.
A good start at reform would be to make it illegal for corporations to lobby the government.
Can Walmart finally open up a bank?
holy mother of god.
srs was at 110 a couple of weeks ago. $250 this morning...
"burnside writes:
Bob, there are a few international car manufacturers here in the US, as of course you know."
They use U.S.-made parts as well. Not the entire car, of course, but a substantial portion.
"That scenario would be the only reason that I'd consider throwing the Big 3 some money. Anyone care to support it/poke some holes in it?"
There is a whole web of auto parts suppliers that are getting the job done profitably. Honda, Toyota, Mercedes...
The big 3 are awful and should go away.
Keep only one if you must.
Can Walmart finally open up a bank?
Why not? It seems that any corporation with enough free cash flow or access to credit can.
As an aside, it will be interesting to see if the regulatory free-for-all that seems to have taken over survives the Bush administration. I am starting to suspect that it will.
To the tune of Spider John-
Tarpin Ben is my name friend,
Live between yachts and I sure would be obliged,
If you'd share your 401k,
I know it may sound strange to you,
but wait till my song is sung and my story is told,
you might come to understand.
Just why I'm old and bent and devil sent and running out of time,
When long ago I held a royal flush in my hands
I was a marked to fantasy fool, derivative black pool spendin,
robbin my own town
Thought I'd lost my blues,
Payin FDIC dues,
Thought I'd found a lie to suit my style,
He I sit I'm just Tarpin Ben, the robber man,
Not long, tall, or handsome.
I'm just Tarpin Ben with your money in my hand,
Takin ransom
Basel..Holy finacial armageddeon..
I've been a perma bear, tired of it..
the market keeps going down and were all in heaps of trouble..
good to be in cash right now...
REL writes:
newbie 101,
What is the alternative to a corporation?
I don't know.
Maybe... Instead of issuing stock, profitable companies should husband their profits in-house, and not expand until they can afford to pay (or finance) on their own merits.
Or... classify the purchase of stock as gambling, period.
What is the alternative to a corporation? Should each of GM's stockholders be subject to being sued? What should GM's motive be, if not profit? Do you think that foreign companies exist only to provide employment for the masses?
REL
I think I am with Newbie 101, except maybe further out.
Looking at our economy for the last 100 years or so, I think it is also fundamentally unsound.
It depends on bubbles. Increases in productivity also work but nowhere as well as bubbles. We either have to have a growing internal population or an expanding trade export ability. Lacking either of those, we can inflate a debt bubble and get by for a generation or maybe 2. Then we collapse and give it back.
If this current mess goes deep enough maybe some fundamental changes will emerge.
Krugman never saw a bailout he didn't like. He must be angling now for the Nobel Prize in Bailouts.
Instead of issuing stock, profitable companies should husband their profits in-house, and not expand until they can afford to pay (or finance) on their own merits.
That's actually what companies used to do; it's called retained earnings. Then a bunch of shareholders sued claiming that retaining earnings was a breach of fiduciary duty because there were better alternative returns on investment.
Corporate law is a clusterf*ck.
This is lame. The execution of TARP was never for corporations to bend over backward to get the money. Did Hank or Ben pitch this to Congress? "Troubled corporations will all become bank holding companies to get access to the sugar".
YLSP:
It doesn't matter what the intent of either HP/BB or Congress intended. The only relevance is whether the letter of the law permits it. Generally, the law should have been backdated to only allow BHC as of X date. But seeing that the EESA was an 11th hour thing, someone overlooked it.
shades of gramm-leach-bliley all over agai
Bob, I think that speaks to my point and yours as well - there's a sound auto manufacturing culture in the US not dependent on the usual three.
The Asian and German firms are not requesting handouts and are scalable to meet probable future demands here.
It's sad to see the GM/Ford/Chrysler execs saying many of the right things in recent testimony - and I feel they did say some very reasonable things lately - but their recent history really argues against perpetuating the way they conduct themselves when not in fear and panic mode.
Throw the switch.
This is lame. The execution of TARP was never for corporations to bend over backward to get the money. Did Hank or Ben pitch this to Congress?
Anyone who's ever been a parent knew how this would play out. Here is an analogy:
"OK kids, whichever one of you can spin around like a monkey gets a lollipop!"
Watch 'em spin!
Human beings are taught that fairness is a fundamental aspect of a civilized society. Once you start "playing favorites", you lose all credibility as a parent.
They are not being welcomed to the table by the Mafia Syndicate of Banks led by the JPM and GS Kabal.
Bernanke, Paulson and Bair Testify – But Can We get a Witness? « Your Mortgage or Your Life…
This entire crisis was manufactured so that the "chosen few" banks could take over everyone else - just watch the forced mergers and takeovers that will rock 2009.
Citi and GMAC are not invited to the table, and B of A is so mismanaged that it has set itself up to be whacked like Lehman, Bear Stearns, and others...
As of last night, they didn't have the votes in Congress to bail out GM, so now the thugs are just grabbing the money. Sure, the executives' use of private jets on the way to Washington was very inappropriate, but this was never a bailout of GM--it's a bailout of the United Auto Workers union.
It's very simple, if you let GM go bankrupt, it's going to get really ugly. If you can stomach another million "good" mortgages go into foreclosure as a result of letting GM go bankrupt -- have at it. If you, like me, are a bit concerned that letting yet more mortgages go bad will continue to spread our financial crisis even deeper, the we "bail" (loan) them out. Nobody here is suggesting that we are going to "save" GM for the long haul. They are pathetic, they are losers, and until America wakes up, kicks the MBAs out of the f'n boardroom, we're going to see this mess for years. That's all I have to say about that.
Ummm-m-m, where do I find the form to become a bank holding company? Is it on-line?
BTW, I've been on an extended hiatus from posting here, and just downloaded the new CR companion thing.
I like it, but one small suggestion ... can we get it to play a laugh track when a new Sebastian or O-Joe post arrives?
cgp,
Those mortgages were all overpriced anyway. If the workers cannot pay than we just get closer to the "actual price" instead of the "distorted by financial hoopajoops" price.
Do you want honesty in the market or more Candyland. We have been in a Candyland economy for the past 10 years.
What is the new CR companion thing? I looked on the home page and didn't see it.
Basel Too writes:
That's actually what companies used to do; it's called retained earnings. Then a bunch of shareholders sued claiming that retaining earnings was a breach of fiduciary duty because there were better alternative returns on investment.
Basel Too | 11.20.08 - 9:55 am | #
If that is true, then maybe right there is where the government became in effect the owner of the corporation. The "automaker" lost control = sold their souls to stockholders, falling into the web of their ally, the biggest money-handler, the government.
I repeat, making automobiles was reduced to a front for a financial institution, a lie backed (and enforced if your post is true) by the government.
cgp:
There's an alternative.
There may enough sentiment on both sides of the aisle for Congress to provide a Debt In Possession Chapter 11 bridge loan, keeping the company out of liquidation and preserving many of those jobs.
But I haven't seen it proposed anywhere.
Sorry. Debtor in Possession.
Burnside has it right. It is also the answer to Krugman's problem -- posted by posted by Bob Dobbs -- of GM's finding lending in this climate.
An aside: sp back to 1998 levels.
Why, thank you Zack.
But everyone's moved on to graze in fresh pastures. New post.
CR companion is an add-on for Firefox that lets you rate and filter the comments.
link
Apparently it requires Firefox 3.0, so you may have to update your browser or install it from scratch. I've always used Firefox so it was not a big deal.
I wanna be a bank. Give me TARP.
YLSP: If the mortgages are overpriced, then we want to discover that over a long, protracted slow down, not an immediate snap. If things snap again, more banks fail, and liquidity dries up again, and we've actually wasted the large amount of money we've put down already to try and shore up some liquidity.
burnside: I'm not familiar with it, but I'll look it up. Hell, maybe I'll even suggest it to our fine congressperson.
burnside - yeah, I was also thinking that they might turn that $25 billion loan into a DIP facility. Makes a lot of sense - if they do go BK, who else is going to provide the DIP financing to facilitate a chapt 11 rather than a chapt 7.
Hopefully the light has turned on in somebody's head and this notion gets put forward. It at least has a chance of success. We may be positioning toward that even now. When all hope is gone, ...
I don't think Treasury is going to play along with GMAC's move to become a bank holding company.
trading comment - I am waiting, perhaps foolishly, for SPX to rally back to about 720 before getting back into SDS. I might not get an entry with that kind of outlook.
Heh, already used to the 7 handle.
Make that 820.
I also agree with Burnside's proposal. Do a BK, make the shareholders and debt owners take the appropriate hit, but provide DIP financing to save the company, which still has more value than its components would. Fair, efficient, and avoids the nasty trade issues from a standard bailout. I note this is basically how we all think the bank bailouts should have been handled, too.
Subject: *SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*PAULSON: TARP PIRATE EQUITY IS AN INVESTMENT, WILL PAY OFF
*KASHKARI SAYSSOMALI PIRATES ARE FUNDAMENTALLY SOUND
*Moodys upgrade Somali Pirates to AAA
*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD VERY LOW
PARTIC PATION
*SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK
*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK
*FED
AGREED OCT. 29 TO TAKEWHATEVER STEPS NEEDED FOR SOMALI
PIRATES
RoR: Forum