Market, GM and TARP Repayment
Submitted by
CalculatedRisk on Fri, 05/15/2009 - 12:07pm (233 comments)
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first?
Any banks going to fail tonight, or wait for the long weekend next week?
Isn't Memorial day when all the car dealers have big sales?
Why didn't they drop these dealerships earlier? Another example of weak management.
They could not because of the expense involved. Some kind of state rule.
can you guys be my BFF?
nova: Do you have more info? I'm amazed that there is that level of interference.
Why does GS have to pretend repaying TARP?
so GS pays back TARP via AIG
slick, blankfein, slick
Hooray, the system still works! Soon we will be free to have undercapitalized banks pay big executive bonuses again!
As soon as they get done paying back the TARP money, I know a New York Times reporter in Silver Spring who really needs a mortgage loan. Or he needs to be foreclosed. Or something.
I believe the grandson of the founder of Toyota is about to become king. Apparently he plans a house cleaning. GM and Chrysler are important. What I do not hear about a lot is what happens if Toyota and Nissan mothball their US plants except for token production?
In many ways they are as important to local economies as a US plant.
Unless the banks forego the FDIC debt backstops, they are not healthy. Our darling, Goldman Sachs, wants to repay the TARP, but still has more FDIC backed debt outstanding than they received from TARP. People need to know the facts.
We should insist that Lloyd Blankstein, Goldman's chairman, address this anomaly.
JP,
Google the shutdown of Oldsmobile and the payout to individual dealers. Auto dealers had big bucks to spend at the state level I guess.
i think that the GM would not have been able to drop the dealerships because of contract damages. there's no way anyone's gonna put up millions without some guarantee of duration. BK allows the debtor to cancel contracts and have the damages included as unsecured debt, which right now is going for about 1:100.
Guess that TARP money from GS will come in handy to hand back out to the insurance cos.
Hot off the press from the state of Virginia.
Total general fund revenues fell 19.7 percent in April compared to April of last year, the largest
monthly decline since May 2002. Most of the decline in April was due to a sharp drop in
individual nonwithholding and a jump in individual refunds. Since individual returns will
continue to be processed in May, and the number of payments received in advance of the May 1
due date fluctuates widely from year to year, it is important to consider April and May together
to assess growth.
On a year-to-date basis, total revenues fell 8.6 percent, trailing the revised annual forecast
approved on April 8, 2009 of a 7.3 percent decline. Collections of individual withholding,
nonwithholding, and recordation taxes are tracking their annual forecasts. Receipts of corporate
income taxes and sales taxes are lagging their forecasts, while individual refunds are up sharply from the same period last year.
http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2008-2009/revenueLetter-4-09.pdf
3 local dealerships to close down, one near my Ford dealership.
Google the shutdown of Oldsmobile and the payout to individual dealers. Auto dealers had big bucks to spend at the state level I guess.
It looks like those were fees associated only with the franchise termination, which is not the state level (other than the fact that it's a contract enforced in the state where the business is held.)
I agree with CR... This is weak management, not some sort of regulatory compliance.
so is this where government gets drowned in the bathtub?
Why not repay TARP? Since the government has already declared that you cannot fail, when not run right on the edge if the advantage is that you are free to dish out the bonus money without that pesky government oversight?
I prefer stabbed in the shower.
On the closing of local car lots
Kid sports is going to have trouble getting sponsers - just in time for the state, county, and school curtailment of sports programs and fields.
tool companies
uniform companies
advertising - local and national
racing
the financial people who processed this and what they consumed
retail space
unemployed people
loca tax base
and the hit to peoples spirit as thet drive down the road and see what used to be the American auto mile of dealerships.
I am surprised that JPM did not tell the government that it would repay the TARP in a certain way that did not involve returning anything.
individual nonwithholding
what, no capital gains in 2008? I wonder how much should have been paid because it was earned, but the individual just didn't have the money. i know an idiot that put the house proceeds into the stock market, but couldn't offset the losses because it was in different years.
Humming electrons, hither and yon.
It was state franchise laws.
When a brand dies, franchise agreements with dealers typically require automakers to buy back vehicles from the current model year, along with parts and special tools.
So do they have to give the vehicles back?
Hmmm, I've envisioning some big fires.
insure and burn, and we will TARP the insurers
Tarp was a sham or scam whichever, "This sucker is going down." Six months later they are paying it back, yeh.
"These are not the first banks to repay TARP funds (several smaller banks have already paid the money back). Goldman received $10 billion in TARP funds, and JPMorgan received $25 billion. "
In the same way an obese person only had 800 calories at OFFICIAL meals. OF course, all them late night AIG funnel snacks, and occasional box of Lehman CDS bars don't get counted...and don't make you pig like.
Things that make you go "Hmmmm?"
got this via e-mail today...
We told you that you'd be among the first to know about the changes coming to GMAC Bank. We're excited to fulfill that promise today with the news that GMAC Bank is now Ally Bank.
Not sure if it's anything more significant than "please call us anything but GM-something".
"This sucker is going down."
loved the way W cut to the chase
Yep, Elmer, just that once.
"GMAC Bank is now Ally Bank"
naming banks after detergent now, pure genius
i think that the GM would not have been able to drop the dealerships because of contract damages. there's no way anyone's gonna put up millions without some guarantee of duration. BK allows the debtor to cancel contracts and have the damages included as unsecured debt, which right now is going for about 1:100.
And each state is different - has slightly different interpretation of contract law. It is the closest thing states have to 'protectionism'...
At least they are not calling it Allah Bank... Are they in Detroit?
Pure something, anyhow.
@naming banks after detergent now, pure genius
gotta launder that TARP money. no the better analogy there would be the dryer, which just eats the TARP money like socks
Renaming GMAC to Ally, well that just epitomizes how meaningful the changes at the banks have been.
Reclassify stock already held in order to increase your capital ratios.
Rename the bank.
Same effect.
So, more than likely...
Dozens of high-placed people spent weeks trying to figure out how to best save GMAC, and changing the name seems to have been the highest priority?
They need to get rid of the ugly TARP funds in the vault to make room for all that sweet PPIP.
Take another little piece of my TARP now baby...
Timmay in drag begging everyone to take the free taxpayer monies.
YouTube -
Fiddling while Rome burned was prolly much more productive.
I believe the grandson of the founder of Toyota is about to become king. Apparently he plans a house cleaning. GM and Chrysler are important. What I do not hear about a lot is what happens if Toyota and Nissan mothball their US plants except for token production?
They will only do that if they no longer want to sell cars here... as long as they want to sell cars here they will assemble here.
I don't know how many times I have to make that point - even with UAW rates we are NOT more expensive than Japan & for 'mass market' models it is cheaper to assemble here than it is to bring in whole cars.
They will make parts all around the world including 'best cost countries' [BCC - the newest buzz word for 'sweat shops'] but it isn't always or even mostly the lowest cost option.
So might T idle plants here? Sure - but only if it gets so bad they can't sell here either.
it's a hell of a green shoot though
paid consultant to come up with stupid name
have to get new letterhead, etc.
new signage on buildings
business cards all around
few more of these and the GDP will be skying
We didn't lose any Chrysler dealers in the county, because Dodge is the only Chrysler marque around here, and all the ag guys buy the pickups.
There are two GM dealers, and at least the guy who sells GMC will make it, for the same reason.
But most everybody around here drives Japanacars and Deutschbuggies.
when does the MSM go bankrupt?
dryfly (profile) wrote on Fri, 5/15/2009 - 1:42 pm reply Ignore user
... as long as they want to sell cars here they will assemble here.
I don't know how many times I have to make that point - even with UAW rates we are NOT more expensive than Japan & for 'mass market' models it is cheaper to assemble here than it is to bring in whole cars.
They will make parts all around the world including 'best cost countries' [BCC - the newest buzz word for 'sweat shops'] but it isn't always or even mostly the lowest cost option.
So might T idle plants here? Sure - but only if it gets so bad they can't sell here either.
Mildly disagree. The US is becoming more like California; business hostile. I'm not sure any international is interested in investing real money in a nation where that might become stranded assets.
Are GS and JPM going to buy back all the securities they sold to
the Fed at book? Are they going to re-capitalize with money not
guaranteed by the FDIC, all the money, not just the money going forward?
~~~~
Total crap ... they walk away having sold crap to the Fed, probably Fannie and Freddie
and tens of billions in loan guarantees going forward ... Total Crap !
Ally? Folly? Silly.
"This sucker is going down."
loved the way W cut to the chase.
As much as I despise the man, I am beginning to sympathize with W more as time goes by. He clearly was a man of limited intellect who was being advised by truly evil men like Rumsfeld, Cheney, Wolfowitz, et al. I wonder how much differently I would have governed had I been in his place and had to confront these experienced politicians with hidden agendas on a daily basis. History will show he was a puppet that was in over his head. A disinterested and dangerous puppet, but a puppet nonetheless.
I guess "Axis of See No Evil" was taken already?
What's the Over/Under for "least costly option for FDIC" on BKUNA
(BK at the front of the ticker shoulda been a tip-off)
It's easy to pay back TARP when the federal reserve is holding all your toxic crap at face value.
W wasn't lucky enough to be Harding and leave on a high note on the high seize...
Harding only had 2 years to allow everybody to rob him blind.
AMF
"Dozens of high-placed people spent weeks trying to figure out how to best save GMAC, and changing the name seems to have been the highest priority?"
I thought they figured out the best way to save it was to finance Chrysler vehicles through GMAC also.
"Mildly disagree. The US is becoming more like California; business hostile. I'm not sure any international is interested in investing real money in a nation where that might become stranded assets."
From my point of view, business has become America-hostile. They say the truth is what it looks like from where you're standing, so there's always that. But frankly a great many localities who gave it up for Walmart, or Intel, or any number of major players have lived to regret it. Not able to pay for growth in municipal services because of the massive tax breaks, left with a dead facility seven years layer when the big boy moves on and net in the red on the investment, and so on.
Apparently Cheney is now going around trying to sabotage O, 'cause he thinks water boarding is indeed
torture. It must be hard to have been such a powerful eminence gris and then it's all gone.
BankU has another week of being a zombie, at least.
[Why didn't they drop these dealerships earlier? Another example of weak management]
I am not that excited about dealer closings. Dealer service centers close to home and reasonable cycle times for work was a plus for buying GM products. They might suffer as a result.
Though GM & Chrysler's management has been atrocious, saying that "bad management" is the reason many marginal dealerships have stayed open is a bit simplistic. Yes, in a rational world, many dealerships would have closed long ago. But, the dealers are protected in many states by strong franchise laws and have tremendous clout in state legislators. In many districts, the local auto dealer is one of the leading business-persons (and leading campaign contributor). Only bankruptcy or the prospect of imminent bankruptcy has allowed these necessary measures to be forced through.
"Take another little piece of my TARP now baby..."
Memories. Thanks, Kidbuck!
Tarp is to the Treasury as WMDs was to Defense......All a big scare tatic for the US Citizen.
What did treasuries do today? Is Jas a little richer or a little poorer.
"GMAC Bank is now Ally Bank"
Which alley is it in? Is it on wheels?
Mildly disagree. The US is becoming more like California; business hostile. I'm not sure any international is interested in investing real money in a nation where that might become stranded assets.
Rob - that just isn't so - I spent all day yesterday with senior execs of a VERY large global mfgr... they have no problem working around any perceived 'hostility' our gov't might pretend to put forward... we even offered to put a plant in Mexico for them to feed their plants down there... they looked at our domestic costs and said 'Maybe someday so as to better serve our facilities down there - right now you are competitive here in the Midwest even shipping into Mexico - focus on growing that first'.
Granted our plants are NOT in California... but since when is Wisconsin, Illinois & Minnesota low cost low tax states? By what measure?
So why are MNCs still trying to grow offshore - because in the long haul THAT is where the consumers will be... NOT in Des Moines, Sacto or Charlotte. When Toyota get's to that place in their head then they too will put a lot more resources into 'ROW' and a lot less into 'USA'. That day isn't far off but it isn't due to 'gov't hostility' it is due to their growing purchasing power... And besides our bureaucrats are FAR less hostile than China, Europe, Canada, NZ, Australia, Russia and even India. I talk to people operating out there & they all say that.
Oops... thought I had double posted and edited to fix it. Accidentally edited my comment out of existence.
just caught up on a few threads of past posts:
thanks for sharing the personal insights hans, Samdog, and dryfly.
duke of con dao, I'll reply to you one of these mornings before it is too late there
Maybe we could all pitch in by going to our local GM dealer and test-drive one of their fine vehicles, and play possum and act as if we are interested in buying one (I think not), get the dealerships' spirits up a bit, and help fight off morale hazard amongst the salesmen?
The Bush II administration drowned it in the stabbed it in the shower.
Now the banksters are drowning it in the bathtub just to be sure.
Happy friday everyone....
No more MEW.
Bob Dobbs (homepage, profile) wrote on Fri, 5/15/2009 - 1:57 pm reply Ignore user
"Mildly disagree. The US is becoming more like California; business hostile. I'm not sure any international is interested in investing real money in a nation where that might become stranded assets."
From my point of view, business has become America-hostile. They say the truth is what it looks like from where you're standing, so there's always that. But frankly a great many localities who gave it up for Walmart, or Intel, or any number of major players have lived to regret it. Not able to pay for growth in municipal services because of the massive tax breaks, left with a dead facility seven years layer when the big boy moves on and net in the red on the investment, and so on.
That's very interesting. I see exactly the same thing and call municipal favoritism and taxes so high they need side deals and development subsides as form of business hostility.
Arbit that really would be mean.
And I really mean it, you should be a comedy writer, or a stand up comedian.
Your comic brain works really fast.
I am not that excited about dealer closings. Dealer service centers close to home...
Several GM dealers around here closed over the last year when GMAC showed up with trucks and took all their inventory away... as a result the remaining dealership service department is always really busy... I used to be able to just wander in there on a whim and get a lube/oil/filters, now I have to make an appointment... No big deal, but the really bad part is 1)the donuts go really fast and 2)the waiting room is jammed with snifflers and sneezers.... At least I can still get service and parts, for now...
Car salemen are people too. . . . Well, they usta be anyhow.
"but since when is Wisconsin, Illinois & Minnesota low cost low tax states? By what measure?"
No shite. The heating bills during the August to June sub absolute zero winter months alone are enough to choke a squirrel.
dryfly,
Without revealing any personal/professional information, could you rattle off a few names or a basket of 'large global manufacturers'? I can only think of a handful, and they're either conglomerates or specialized -- just want to know if I'm thinking along the same lines.
Wow repo men squared, taking from the dealerships.
liz,
i'm just a Juvenal Delinquent..
I'm off to eat Chinese food.
I wanna see some failures by the time I get back.
And I really mean it, you should be a comedy writer, or a stand up comedian.
Your comic brain works really fast.
Speaking of which, has anyone seen Elvis and AMF in the same room together?
I am not that excited about dealer closings. Dealer service centers close to home and reasonable cycle times for work was a plus for buying GM products. They might suffer as a result. - bearly
Absolutely.
lawyerliz,
We've gone from $800bn MEW per year at peak, to losing $1tn of housing wealth per quarter. That's the crux of it. There is no possible ponzi with the capacity to absorb this
I wanna read him. And Cicero's letters.
Now, Chinese!!!
I saw Elvis selling some scrap glod @ a pawnshop the other day, his cape was rather ragged.
Comrade Misean is Dope (profile) wrote on Fri, 5/15/2009 - 2:07 pm reply Ignore user
"but since when is Wisconsin, Illinois & Minnesota low cost low tax states? By what measure?"
No shite. The heating bills during the August to June sub absolute zero winter months alone are enough to choke a squirrel.
Squirrel sighting! Must be BFF! Knurd!
Actually I was thinking about Leader O earlier this week talking about international tax avoidance. Tell Honda they cannot export their profit disguised as high invoice prices for Japanese sub-assemblies and they'll shutter US assembly plants faster than you can say Maquiladora.
Without revealing any personal/professional information, could you rattle off a few names or a basket of 'large global manufacturers'? I can only think of a handful, and they're either conglomerates or specialized -- just want to know if I'm thinking along the same lines.
In my neck of the woods:
Eaton
Caterpillar
Deere
Sauer Danfoss
Honeywell
Emerson
GE
Etc.
another green shoot
Great Exuma at Emerald Bay Four Seasons Resort Great Exuma
Bahamas: Four Seasons resort in Exumas closing - Taiwan News Online
GMAC Bank just changed its name to Ally Bank.
traderwalt (profile) wrote on Fri, 5/15/2009 - 2:14 pm reply Ignore user
GMAC Bank just changed its name to Ally Bank.
Ally Banka of the 19 Thieves shouts "Open Timothy!" and the Treasury doors swing aside.
Rob Dawg (homepage, profile) wrote on Fri, 5/15/2009 - 2:12 pm
Actually I was thinking about Leader O earlier this week talking about international tax avoidance. Tell Honda they cannot export their profit disguised as high invoice prices for Japanese sub-assemblies and they'll shutter US assembly plants faster than you can say Maquiladora.
He's talking about US companies working tax avoidance. I don't think he gives a hoot about a company HQ'd in Japan.
But if it helps validate your worldview, go for it.
I have to believe that "Ally" is short for Ally Baba and the 40 thieves, no?
"We've gone from $800bn MEW per year at peak, to losing $1tn of housing wealth per quarter. That's the crux of it. There is no possible ponzi with the capacity to absorb this. " EHP
you mean timmay doesn't have a chance, we'll never get rescued from the well?
Arbitrage_Macht_Frei (profile) wrote on Fri, 5/15/2009 - 2:17 pm reply Ignore user
I have to believe that "Ally" is short for Ally Baba and the 40 thieves, no?
I thought so a full 30 seconds before you did.
Arbitrage_Macht_Frei,
maybe it's more in the vein of alli, the diet drug that makes you go......
U.S. Government Sees Dead People, Cuts Them Stimulus Checks ....
U.S. Government Sees Dead People, Cuts Them Stimulus Checks - The Consumerist
That's very interesting. I see exactly the same thing and call municipal favoritism and taxes so high they need side deals and development subsides as form of business hostility.
I think we're on different planets, where the laws of nature work differently. You must live on the one where tax cuts can grow the federal budget out of deficit. Or close to that.
Rob Dawg'
Very funny.
riot- the unbeatable high: explosively, ally/alli:: unexpectantly go, ready or not., diaper-quality diarhea.
ally/alli:: explosively, unexpectantly go, ready or not., diaper-quality diarhea. (bad cut/paste, sorry)
Thank you so much for planting that image in my brain...
http://www.AllyBank.com
"Who we are
We are Ally Bank, built on the foundation of GMAC Financial Services. And with that experience we’ve learned that these times demand change and a new way of doing business. So we’re taking banking in a new direction."
someone there has a sense of humor
built on the foundation of GMAC
also note the domain allybank.com was registered back on March 25 --
Actually I was thinking about Leader O earlier this week talking about international tax avoidance. Tell Honda they cannot export their profit disguised as high invoice prices for Japanese sub-assemblies and they'll shutter US assembly plants faster than you can say Maquiladora.
Then buying Honda's here in NAFTA Zone will no longer be an option [and they won't have this market].
BTW - assembling in Mexico doesn't allow them to escape 'transfer pricing' issues... inside NAFTA Zone tax treatment is surprisingly similar - in Asia & EU, not so much.
And they didn't move the plants here to do us a favor - they did it because it was the low cost option AFTER Plaza. Everyone thinks it was risk of 'quotas'... it was Plaza that made it imperative that they operate here. Quotas were the sword held over the Plaza negotiations though - I admit that.
We will go through the same process with the RMB - CCP either play nice or lose their ass on USD denominated reserves - A or B, pick one
BTW - I look at Mexico & Maquiladores today like people in the NE USA circa 1960 looked at 'low cost labor' in Alabama... the integration is moving so fast it makes my head spin. I know others here disagree but it's happenin'...
The difference between China/Japan & Mexico is the managed currency exchange... when Japan & China really let it go then we have a chance to actually WORK with them... until then it is all phony. As a result companies like Toyota & Honda have to be here or will lose out totally. They know that all too well.
Bob Dobbs (homepage, profile) wrote on Fri, 5/15/2009 - 2:19 pm reply Ignore user
That's very interesting. I see exactly the same thing and call municipal favoritism and taxes so high they need side deals and development subsides as form of business hostility.
I think we're on different planets, where the laws of nature work differently. You must live on the one where tax cuts can grow the federal budget out of deficit. Or close to that.
Huh? I see playing favorites, picking winners, onerous taxes to the point that you need to shop for government intervention, etc. as antithetical to a healthy business climate. Sure somebody "wins" for the moment but whenever government hands intrude it is always a less than zero sum game.
O/T: watched this TED Talk, Ideas about India, Nandan Nilekani's ideas for India's future | Video on TED.com
Found it insightful, everyone from Lucifer and joe6pack should like it for its direct ideas.
Got me to think about other things though:
- changing business models to work in a world without credit scores or bank guarantees
- education. It has been the sheltered sector for 6 decades. What will the post-reform system look like
- demographics. Birth rate has been inversely proportional to GDP per capita. I would simplify that to be because of the high opportunity cost of having a child in developed countries, or direct costs outstripping the rise in income. Once we stabilize, will the birth rate jump back up in developed countries? The other end of demographics is aging. How much effect would a lower economic output shorten the lives of populations (less money for medical care, more stress and other risk factors)
- attitudes. What will be the attitudes towards business, entrepreneurs, and globalization in various countries? Will they roughly flip: America warms to globalization, India retreats from it? Factory owners in China face vilification, where they are venerated in Spain?
Let GM fail and let companies pay back their TARP funds - its that simple. I think an opinion letter from Cliff Aness (AQR Capital) explains it best: Why President Obama was wrong for scolding hedge funds over Chrysler « Twenty Something Sense
Dryfly:
Does the violence in Mexico affect business there at all, or is it completely contained amongst the drug cartels? Just curious.
I think we're on different planets, where the laws of nature work differently. You must live on the one where tax cuts can grow the federal budget out of deficit. Or close to that.
Not on different planets but different points on the Laffer Curve... both statement are potentially 'true' or 'false' depending on where you are on that curve...
EHP: education. It has been the sheltered sector for 6 decades. What will the post-reform system look like
Education/training is a favorite place to hide/warehouse the unemployed.
"I wanna see some failures by the time I get back"
My picture is on my site!
"Not on different planets but different points on the Laffer Curve."
I think it's safe to say that the Laffer curve is pretty optimized at this point.
Movement in either direction reduces tax income.
Does the violence in Mexico affect business there at all, or is it completely contained amongst the drug cartels? Just curious.
Affect business? YES!!! Enormously so... so much so that even Mexicans don't want to work in TJ, Juarez, etc. - so if you are going to site a plant nowadays they get them away from the border and deeper into the country where the drug trade & body trafficers aren't as entrenched [say Guadalajara or Monterrey or Leon].
dryfly,
There is no such thing as the Laffer Curve, it's a term used to epitomize a narrow theoretical argument
http://www.clangmann.net/2007_July_13/OECD_Corporate_Laffer_Curve1.jpg
I'd love to see JPM/GS repay TARP but since they get so much back door financing it doesn't matter.
Public-Private Partnership... Angels and Demons.
Rob - that just isn't so - I spent all day yesterday with senior execs of a VERY large global mfgr... they have no problem working around any perceived 'hostility' our gov't might pretend to put forward... we even offered to put a plant in Mexico for them to feed their plants down there... they looked at our domestic costs and said 'Maybe someday so as to better serve our facilities down there - right now you are competitive here in the Midwest even shipping into Mexico - focus on growing that first'.
Granted our plants are NOT in California... but since when is Wisconsin, Illinois & Minnesota low cost low tax states? By what measure?
Would this change if taxes are raised to actually cover expenditures?
Governments in the US have been getting sort of a "free lunch" because of the illusion people had that they were saving. In fact they were literally just giving away their wealth to business and finance. This boosted profits, spending and taxes as a result. The cost is a disillusioned, impoverished working class.
The real crisis now is that all forms of government have been subsisting off of a fictitious tax base and may have to start taxing real incomes to continue operating.
That might change attitudes toward operating a business in the US.
Life is so much easier when you can pay people with confetti and they don't care.
I previously mocked the bulls by coining "The Great Pre-Recovery" but now our absurd reality catches up as an analyst actually uses the "pre-recovery" term.
Mine: Not One Cent: The Great Pre-Recovery and other Orwellian Newspeak
Bloomberg: Treasuries Fall as Reports Show Improved Manufacturing Outlook - Bloomberg.com
dryfly (profile) wrote on Fri, 5/15/2009 - 1:42 pm
They will make parts all around the world including 'best cost countries' [BCC - the newest buzz word for 'sweat shops'] but it isn't always or even mostly the lowest cost option.
The current phrase in my business seems to be 'lower cost geographies' As in 'we need to locate our resources in lower cost geographies. to be competitive.'
Affect business? YES!!! Enormously so... so much so that even Mexicans don't want to work in TJ, Juarez, etc.
I know so many people in south Texas that all say the same thing:
"Don't go to Mexico. Even the cops there are dangerous."
Sympathize with him? Are you kidding?
Tim waiting for 2012
They won't repay TARP, they'll just shift assets to dump more 'reserves' (overvalued junk these days) on the Federal Reserve. Sure it costs a bit more, but you would be a fool not to at these rates Federal Funds Chart
Your ex-TARP bonuses will cost more than the interest for a year
double post redaction
This guy, Aaron Task, has been writing some doomer articles lately, linked from the Yahoo! finance page. Here is the latest -- "The Worst Is Yet To Come."
broward,
hah!!!
chrysler released dealer closings,gm did not.
biz journals has list warning pdf 40 pages
Dryfly:
I just got back from AZ. I hung out with an old friend who has a lot of family in Mexico. He was very pessimistic about the country's prospects. He thought the government there was losing its grip on the country. However, it is hard to separate anecdote/hysterical MSM reports from the truth. Do you think Mexico is in danger of becoming a failed state (you seems to have some good insight into conditions there)?
"great pre-recovery"
Late to the party.
Trend Search
Nuke,
4 from socal found murdered in mexico just (reported) this a.m.
i think it was in tj....
4 from socal found murdered in mexico just (reported) this a.m.:
Were they drug runners or bystanders?
Economic Week in Review: Recovery signs not as evident
There are no obvious signals the United States is ready to pull
out of the recession, although the news isn't as bad as it was
a few months ago. Although the recent economic news has been less
fearsome, signs of recovery remain scarce. Job losses continue to
mount, consumers are spending less, and inflation signs remain
mixed. Among the more positive signs are a reduction in business
inventories and evidence that the long slide in industrial
production may be reaching a bottom. For the week, the S&P 500
Index fell 5% to 882.9 (for a year-to-date total return of -1.2%).
The yield of the 10-year U.S. Treasury note fell 15 basis points
to 3.14% (for a year-to-date increase of 89 basis points).
To read Vanguard(R) Economic Week in Review in its entirety, go to:
http://www.vanguard.com/visit/econweek051509
Monterrey Hit By Drug Violence
What did treasuries do today? Is Jas a little richer or a little poorer.
Awwww... please leave Jas alone during these difficult times.
Nuke
Keep in mind Cantarell is exceeding expectations with its accelerating decline. Tends to happen in manually pressurized fields quickly as it is. With both volume and price down, I don't know what their budget looks like... as if they had no other bills to pay. Also expect corn prices to go on a moonshot sooner or later, traders tend to get bored when they're the only ones dancing in a half empty club with no attractive prospects
There is no such thing as the Laffer Curve, it's a term used to epitomize a narrow theoretical argument
Yes and no.
The concept of the Laffer Curve is best made by the boundary conditions...
At tax rate = 0%, tax revenue = 0 [no taxes are asked for]
At tax rate = 100%, tax revenue = 0 [no one works]
In between is a maximum revenue point BY DEFINITION, on either side of maximum tax revenue decreases... also by definition. Doesn't say anything about the curve shape or scale...
So where is the maximum & does going all the way up to that point increase social good? Obviously going beyond it does NOT increase social good [less revenue]. Question then becomes where is the maximum?
Looking at a bunch of different countries with all kinds of different exclusions & loop holes tells you little. You would need to do a controlled experiment with ONE system then vary the rate to see what happens. Only work on a college black board or econ blog - not in the real world - but is worthy of understanding.
"Don't go to Mexico. Even the cops there are dangerous."
And it goes without saying:
If only Mexico had aggressively devalued its currency in the past the country would have a much stronger economy today and none of the problems they currently have.
Oh, wait...
I don't care who you are, that's funny!
I just got back from AZ. I hung out with an old friend who has a lot of family in the USA. He was very pessimistic about the country's prospects. He thought the government there was losing its grip on the country. However, it is hard to separate anecdote/hysterical MSM reports from the truth. Do you think the USA is in danger of becoming a failed state (you seems to have some good insight into conditions there)?
Monterrey Hit By Drug Violence
But less so than TJ, Juarez, etc.
Person I was with yesterday grew up in Monterrey - said exactly that. Also said there is drug violence in S Chicago where some of the plants she visits are located. Neither S Chicago or Monterrey are anywhere NEAR as bad as TJ or Juarez. It is all relative.
Looks like I'll be going to Monterrey in a few weeks - HOPEFULLY be able to report back.
other food for thought:
Treasury, for now, gets to retain power of TARP funds repaid. If they can finance the banks via the Fed or FDIC, they'll want to. There are many new children it is looking after, and it doesn't have the time nor patience to apply to congress for welfare. Insurers, automakers, trucking companies, ... If some BHCs can bottle feed, that's what they're going to do.
I think the approval of insurers to access TARP is a reversal of the position that "repayment would shame more-insolvent banks", or the "it's not fair to get out of TARP shackles, while raiding the Treasury fridge for FDIC debt guarantees"
"Ally Banka of the 19 Thieves shouts "Open Timothy!" and the Treasury doors swing aside."
That was great, Dawg! Thanks.
Granted our plants are NOT in California... but since when is Wisconsin, Illinois & Minnesota low cost low tax states? By what measure?
I managed the Monterrey Mexico plant for a US company based in Wisconsin. The costs to run the plant in Mexico were about the same. Rent was actually higher ($0.65/ sqft/month vs $0.35 in WI), electricity and telephone also. Direct labour was was about 40% of the WI cost, but indirect and administrative labour was about 90% of WI cost. Also, transportation, and customs added around 5% to 7% to costs. Additionally, support services, maintenance, and locally purchased MROs were more expensive than in the US. In all, it was a wash, or even slightly more expensive than building the parts in the US. The only reason for being there was that our only customer was 2 km away, and they wanted their suppliers close.
In my experience, for capital intensive, precision manufacturing, areas like the midwest are still cost competitive over Mexico and China. Direct labour is not the cost driver that it was 40 years ago.
If there was 40 thieves and 19 of em' are accounted for, where's the other 21?
Repay the TARP funds.. pay massive bonuses based on non-recurring windfall profits.. then ask for TARP funds when the s#1t hits the fan a second time.
Anything I'm missing ?
OT, but I figured someone here might know. Anyone know why Peter Viles isn't blogging for LA Land anymore?
Nuke:
"Does the violence in Mexico affect business there at all, or is it completely contained amongst the drug cartels? Just curious."
Nuke, there are kidnappings (for ransom) of higher ups/executives from the maquiladoras quite frequently. They try to keep it pretty quiet.
Many corps. have well defined rules while traveling, offer transportation in bullet proof cars, etc.
I don't know how many times I have to make that point - even with UAW rates we are NOT more expensive than Japan & for 'mass market' models it is cheaper to assemble here than it is to bring in whole cars.
=========
dryfly - so is there anything to the concern today that GM will import cars assembled in China for sale in USA?
Do you think Mexico is in danger of becoming a failed state (you seems to have some good insight into conditions there)?
Risk? Absolutely... Think likely? Not yet.
BTW - the day Mexico becomes a 'failed state' is the day we do 'El Anschlus'. It won't be an option - elites on both sides of the border will 'demand' it. Separatists here on this forum notwithstanding.
dryfly
It's a narrow theoretical argument. There are many additional vectors, as evidenced by the chart I posted of real world data. Unfortunately, we do not have the luxury to run ceteris paribus experiments. Meaning you need much more practical data/feedback when determining an optimal/sustainable taxation/spending regime. It's akin to denying unemployment is high right now, solely because that's not in keeping with the taylor rule and low inflation.
Unlike the Taylor rule, the Laffer curve is at least an order of magnitude looser. Which is why I say it doesn't exist, as the data results in a blob. It's nothing more than a term which refers to a narrow/extreme concept on tax rate vs tax revenue.
For those who thought justice in this world was impossible:
Yankee Stadium's Ugly Start - WSJ.com
Yankee Stadium's Ugly Start
Cheap Home Runs, Empty Seats and Lopsided Losses Have Some Asking, 'Can a Stadium Fail?'
"If there was 40 thieves and 19 of em' are accounted for, where's the other 21? "
They're already on inside "working" at the treasury.
Although I'm not sure if that should not be "Looting" instead of "Working".....
dryfly - so is there anything to the concern today that GM will import cars assembled in China for sale in USA?
GM has been talking about that for 5-10 years... I'm sure they will try but only because none of the people at the top in GM know how to make cars... all they know how to make are deals and that badly. Meanwhile the rest of the world will continue to move capacity here but ONLY the capacity they can sell here - cost out in dollars & sold in dollars. Currency risk covered.
Check out the video of Nixon
they have over on the Wounded Bear Blog.
cops are supposed to be dangerous.
the day Mexico becomes a 'failed state' is the day we do 'El Anschlus'.
Today Mexico !! Tomorrow... Canada Oh.. except for Quebec the French can have them.. !!
dryfly (profile) wrote (in reply to...) on Fri, 5/15/2009 - 2:53 pm reply Ignore user
... the day Mexico becomes a 'failed state' is the day we do 'El Anschlus'. It won't be an option - elites on both sides of the border will 'demand' it. Separatists here on this forum notwithstanding.
You are unfortunately correct. Even worse we won't be doing them a favor and are likely to visit on out military exposure to practices we could be decades purging thereafter.
Hey at least all that cheap corn from the failed ethanol boondoggle can be put to humanitarian uses.
"It's nothing more than a term which refers to a narrow/extreme concept on tax rate vs tax revenue."
It's unlikely that significant revenue can be extracted after many decades of tweak-work by congress.
See California, 2009 as empirical example.
Nearby auto row, 2 blocks long, has now lost 3 of 4 dealers, and if Nissan closes dealers or the franchisee gives up, it could be 4 out of 4, but there will still be 1 car at each location - the 24 hour security watch. So much for Friday night California cruisin.
Pre-recovery can be used in many topics including medical addiction, although I did find a 1994 real estate article that used it.
also, I am making a point of singling out the Laffer curve, because Arthur Laffer is an idiot beyond belief. Last I heard of him he moved to Tennessee, because of their taxes, to start a hedge fund last year before things got bad. I hope they have good unemployment because I don't think it worked out so well for him
'El Anschlus' - I will have to redo all my spreadsheets in the 'Namero'...
Education/training is a favorite place to hide/warehouse the unemployed.
I think the Department of Defense and the "new" Peace Corps round out the top three.
dryfly (profile) wrote (in reply to...) on Fri, 5/15/2009 - 4:49 pm reply Ignore user Monterrey Hit By Drug Violence
But less so than TJ, Juarez, etc.
Person I was with yesterday grew up in Monterrey - said exactly that. Also said there is drug violence in S Chicago where some of the plants she visits are located. Neither S Chicago or Monterrey are anywhere NEAR as bad as TJ or Juarez. It is all relative.
Looks like I'll be going to Monterrey in a few weeks - HOPEFULLY be able to report back.
I live here in Monterrey. I was in Juarez for 2 years also, moving back to Monterrey a year ago. The drug violence in Monterrey is very tame compared to Juarez. The higher-ups live here, and they tend to keep lower profiles. In Juarez, they fight over the access to the borders. The power vacuums that have been left as the army clears out one cartel are quickly filled by another.
The problems in Juarez have been that when the traffiers can't move drugs, they turn to other crimes to support themselves. Hence, an increase in kidnappings, extortion, car theft etc. Many of the extortions are directed at business owners because they have more money (duh). I've known other expats that have been kidnapped,
Give me a call when you get to Monterrey. We can go out and sample some cabrito and tequila.
EHP
Good point. But it doesn't replenish a depleted TARP fund for real capital needs in the future. BHO on Conan and Tim in front of Congress in a few months to ask for more money.
I managed the Monterrey Mexico plant for a US company based in Wisconsin. The costs to run the plant in Mexico were about the same. Rent was actually higher ($0.65/ sqft/month vs $0.35 in WI), electricity and telephone also. Direct labour was was about 40% of the WI cost, but indirect and administrative labour was about 90% of WI cost. Also, transportation, and customs added around 5% to 7% to costs. Additionally, support ser....
In my experience, for capital intensive, precision manufacturing, areas like the midwest are still cost competitive over Mexico and China. Direct labour is not the cost driver that it was 40 years ago.
:: ::
That is what we see too - the only reason we would mfg in Mexico would be to support factories w/in a short proximity of that facility in Mexico. There are many millions of dollars of potential sales to be made that way... and the biggest irony is if we do that we'll increase the employment in the Midwest plant MORE than we will add in Mexico [our customers' corp contacts, engineers, etc. are all up here]... they just want actual make & inventory close by for response & service. Makes sense - we won't fight it.
But even the contacts at the Mexican plant have no issue w/ the parts coming from the Midwest if that is the better route - just make it work. We are NOT being ideological about this either way.
It was refreshing to hear that kind of common sense - I haven't heard a lot of that until this recession woke folks up.
Why didn't they drop these dealerships earlier?
State law and local law prohibits centralized control of car dealerships in most instances. The reason is because of the large amount of tax revenue that car dealers generate in sales for the cities. Porsche North America some years ago tried to centralize control of their dealers (we're talking much smaller than any large carmaker) and they failed miserably.
Do any of you have any idea the scorn Mexicans have for Mexican-Americans born and raised here (who adore everything Mexican, but have never been there, or been once or twice) when they show up down Mexico way?
Kidbuck:
Thanks to the recession we have become very selective as of late. In the Navy, NO waivers are allowed for new recruits. We have also tightened disciplinary and physical standards.
Give me a call when you get to Monterrey. We can go out and sample some cabrito and tequila.
Might just do that! Look you up via Hoocoodanode email okay?
Comrade Misean is Dope (profile) wrote on Fri, 5/15/2009 - 4:30 pm
"In the same way an obese person only had 800 calories at OFFICIAL meals. OF course, all them late night AIG funnel snacks, and occasional box of Lehman CDS bars don't get counted ..."
_ _ _
"late night AIG funnel snacks, and occasional box of Lehman CDS bars"
Good one.
"State law and local law prohibits centralized control of car dealerships in most instances."
Hmmmm....such laws seem to promote it.
Oh, you mean control by the people who pay for them. Sorry my mistake.
OT, but you'll all be happy to know that the arseface NYTimes reporter/maroon who penned the "My Personal Credit Crisis" article, has managed to get his turdblossom to hit the top of the most emailed list for the website. Hurrah.
And if you're reading this Edmund, yes, you're a douchebag. And a sellout. And if I were your boss Id fire you on the spot.
Hope you and your book fail miserably. Oh wait, one out of two arleady. Battin' .500.
"NO waivers are allowed for new recruits."
Times are hard when the Navy bans Village People.
Thanks to the recession we have become very selective as of late. In the Navy, NO waivers are allowed for new recruits.
what about the army's cannon fodder?
Broward:
We hit our FY09 recruiting goals in December. The recruiters are spending the rest of the year chillin'.
On tonight's Nightline:
'Recession Apocalypse': Preparing for the End of the World
Economic Survivalists Hunker Down for Doomsday; Recession Triggers Movement Toward Self-Sufficiency
By JEREMY HUBBARD and ELIZABETH STUART
BUSKIRK, N.Y., May 15, 2009—
In the serene hills of rural upstate New York, Kathie Breault is hunkering down for doomsday. It's not an all-out Armageddon that the 51-year-old grandmother is convinced of, but an imminent economic apocalypse.
A few years ago, Breault began reading about what happens when the world surpasses "peak oil" -- a point where we will use more oil than we can produce.
"I was afraid that any day that oil would disappear, that gas would start to disappear, that I wouldn't be able to get to work, I wouldn't have money, I wouldn't have food that I needed," she said. "It was frightening -- the picture that was painted."
Breault and a growing number of so-called "economic survivalists," are convinced that when oil supply wanes, the world will head for calamity; governments and the global economy will dissolve into chaos and collapse, the group believes, changing life as we know it.
Army is in a simiar position. The biggest turn was in the National Guard. They are cutting guys loose because they are above their allowed end strength.
"'El Anschlus' "
Strange concept. Except for an alternate history novel, do you really expect that to happen? It's not 1930. Mexico is not 1930s Nicaragua, or even 1970s Panama. And what could we say to Russia about Georgia? Would a US occupation of Mexico definitively break the budget?
Keep going...
At least Austrians spoke approximately the same language as the Germans, and many shared the same politics, although the Prussian saying:
A Bavarian is someone who is half way between an Austrian and a man.
"Hey at least all that cheap corn from the failed ethanol boondoggle can be put to humanitarian uses."
The lobbyists are trying for 15% ethanol. The automakers are objecting (warranty concerns on cars rated for 10% ethanol) and UL is concerned (they certified pumps for 10% and say that new testing will be required for 15%).
Ethanol Industry's 15% Solution Raises Concerns - NY Times
I saw Elvis selling some scrap glod @ a pawnshop the other day, his cape was rather ragged. - AMF
Warren Zevon - Werewolves of London
Looking at a bunch of different countries with all kinds of different exclusions & loop holes tells you little. You would need to do a controlled experiment with ONE system then vary the rate to see what happens. Only work on a college black board or econ blog - not in the real world - but is worthy of understanding.
Dry, to put it more simply, the Lafffer curve is both true and trivial, now if someone could tell us what the revenue maximization point on the curve is, then it might have some utility. I suspect we are still on the left hand side of the curve, but back under Ike, we were far to the right hand side. The problem with the Laffer cuver types is that they ALWAYS seem to think that we are too far to the right hand side. Also i have never really understood their infatuation with the top marginal rate, dont the incentive effects also apply to normal working people as well as the people pulling down 8 figure comp packages?
Do you think Mexico is in danger of becoming a failed state
I doubt it. You have to remember that Mexico is a country that has a long history of revolutions, economic crises, and political crises. Through it all, the country has held together. Todays problems are no worse than others that the country has faced in the past 200 years.
Most adults in the country have already lives through at least one economic crises in 94. Many have been through 2 or 3. People aren't as scared of it as Americans are. The family is much stronger here, and provides much of the safety net that would be provided by the government in the US. Generally people are not up their necks in debt either. The federal, state and municipal governments work reasonably well, no better or worse than in the US.
Arthur Laffer: The End Of Prosperity
Funny that a guy complains about intervention in the economy when the tax reductions that he espoused were the result of gov't intervention in the economy.
Strange concept. Except for an alternate history novel, do you really expect that to happen? It's not 1930. Mexico is not 1930s Nicaragua, or even 1970s Panama. And what could we say to Russia about Georgia? Would a US occupation of Mexico definitively break the budget?
Intentionally 'strange concept'.
Pavel - if it happens it wouldn't be an occupation - and I'm not saying it will happen just that it might [it will only happen IF Mexico goes fully 'failed state' instead of current 'flirt with' failed state]... but if it happens it will be because Mexicans demand it too. You can't believe how many of them have spent time up here - more than we'd ever guess. They won't tolerate a total collapse - they let TJ & Juarez go 'native' but won't put up with it elsewhere...they would flood the border and overwhelm any effort to stop them. The US would be dragged in whether we like it or want it. That's why I refer to it as 'El Anschlus'... it will be more real than the original 'Anschlus'.
I hope it never happens but half expect it.
Dirk van Dijk (profile) wrote on Fri, 5/15/2009 - 5:18 pm
I hear ya - agree.
"... .they would flood the border and overwhelm any effort to stop them."
They are no match for the aural and thermal weapons that could be used against them. With those they could be beaten back, remotely, by weapons operators as far away as D.C. Those weapons will undoubtedly find their way into the "virtual fence" along the border.
I'm gettin hungry, wheres my Pizza party?
dryfly (profile) wrote on Fri, 5/15/2009 - 5:07 pm reply Ignore user Give me a call when you get to Monterrey. We can go out and sample some cabrito and tequila.
Might just do that! Look you up via Hoocoodanode email okay?
I look forward to it.
"They won't tolerate a total collapse - they let TJ & Juarez go 'native' but won't put up with it elsewhere...they would flood the border and overwhelm any effort to stop them. The US would be dragged in whether we like it or want it. That's why I refer to it as 'El Anschlus'... it will be more real than the original 'Anschlus'."
dryfly: I'm not well acquainted with Mexico, so I've lost you here. Who are 'they'? What does 'flooding the border' mean?
The federal, state and municipal governments work reasonably well, no better or worse than in the US.
Exactly.
I always hear the line... "But there is corruption in Mexico - especially the 'locals'!!" Somehow it makes me think of alderman in Chicago... the city with the broad shoulders... some might call it corruption, others might call it 'local support'.
The drug cartels are a whole other thing though - funded and ruthless unlike their [or our] previous garden variety crooks. Those guys could end up being a game changer but if it is - it won't be just in Mexico - that was my point.
Thing to keep in mind about Mexico
4 High wages compared to rest of Latin America.
When does MX get a piece of the TARP action from BHO ?
I believe someone said that the Son of Toyoda is about to be crowned king, I would have to confirm that, Though Toyota always publicaly welcomed the competition from American auto makers and proclaimed that they only wished to "make the overall pie bigger, not obtain a larger slice of the existing pie", it now appears that Toyota is preparing the death blow... with huge cash reserves and innovative production and engineering. New orders have gone out to tooling suppliers and die makers in Japan are now in high gear, though production has waned and many facilities are at reduced production levels, Toyota is pulling back the final arrow to pierce GM's heart....
In case you were worried about your favorite bank CEO...
"Statement from the FDIC Office of Public Affairs, "The Bloomberg story referencing Chairman Bair's discussion of management and board changes is misleading and does not provide the proper context of her comments. Chairman Bair said that management changes could happen based on the capital plans that an institution must submit to the government. She did not refer to CEOs specifically and the comment was in the context of capital plans submitted by the institutions. Chairman Bair also did not suggest the federal government will remove the bank CEOs.""
dryfly: I'm not well acquainted with Mexico, so I've lost you here. Who are 'they'? What does 'flooding the border' mean?
The average hard working middle class Mexican - and there are a lot of them.
I was in Quintana Roo - state where Cancun is located bu we were a full six hours drive away from there in Chetumal and nearby locales. Mostly diving and ruins but I also spent time at the local university & an industrial park BS w/local business leaders. It was surprising to see how many of them had either worked in the US or had family in the US - they even knew people I knew at factories I called on in Illinois & Wisconsin!
Oh and I don't speak Spanish - most everyone spoke pretty fair English if they were middle class. Better than you would hear in a LA's barrio. better neighborhoods too - way better.
It was eerie. Those folks write off the violence in TJ & Juarez like we write off violence in S Central or S Chicago... it doesn't effect them.
But if it get's so bad that it does - do you think they are going to stay? Or are they going to head north and move in with cousin Juan working in Elgin?
If their society breaks down [definition of a failed state] - many, many of them will head north. It will force our hand and make 'close cooperation' a necessity.
Like I said - I don't think that will happen but it could.
Tim waiting for 2012 (homepage, profile) wrote (in reply to...) on Fri, 5/15/2009 - 3:36 pm
Thing to keep in mind about Mexico...
2. major sources of revenue from the US remittances...
Remittances. This is where I expect the first cracks in their social structure. Hungry, displaced remote entire villages descending en masse on the major urban centers.
I always hear the line... "But there is corruption in Mexico - especially the 'locals'!!"
Some people always mention the traffic police. YES.... they are corrupt. But, on the other hand, I kinda appreciate being able to pay my traffic fines on the side of the road, and, at a negotiable discount!!!
"The lobbyists are trying for 15% ethanol."
Oh, geez. They just want to compound the error.
Wouldn't it be easier to TARP the Ethanol producers then to do any more damage to the food supply and the existing fleet of gasoline engines?
Once you start a subsidy, it sure takes on a life of its own, doesn't it? The bogus profits go to pay for lobbyists, who beg for more subsidies, or in this case, requirements that you buy their product.
Even the Soviets knew that Ethanol is for drinking.
Some people always mention the traffic police. YES.... they are corrupt. But, on the other hand, I kinda appreciate being able to pay my traffic fines on the side of the road, and, at a negotiable discount!!!
LOL... when we were driving from Cancun to our friends place where we were going to stay - he recommended having a cooler full of cold beer for the check points... just open and offer politely he said, it is awful hot out on there waiting at the topas... just remember, it isn't a bribe, it is a courtesy. We zipped right on through all of them and got freindly smiles all the way.
If you want to know how much influence the Drug Cartels of Mexico have here in the US, I can relate a story that happened in the good ole early 90s. In an effort to take the War on Drugs to another level after some border skirmishes spilled over around Brownsville Texas, the US Army in coordination with the border patrol used AH-64 Apaches helicopters to identify (from a distance) drug traffickers coming across the border. The Apaches were able to locate and identify not only vehicles carrying drugs and weapons, but also illegals being brought over by cartels and gangs, the so called human traffickers... The information was then relayed to special Border Patrol units working with the Army, and they actually made an arrest. No one saw the Apaches. Within the first three months, the program was so successful, the War on Drugs actually looked winable or at least containable to certain higher ups. Then something happened. Congress members suddenly started raising issues of posse comitatus, even though they weren't briefed on the mission. Also, the locations of our helicopters were suddenly known to the cartels, and jeeps with .50 cals started shooting at our birds. Army did not have rules of engagement. They couldn't fire back. Whole program deemed too dangerous, and dropped. So understand heavily armed vehicles were crossing the border in the early 90s and the US government didn't do a thing. The corruption is on both sides.
Thread music
.
"The lobbyists are trying for 15% ethanol. The automakers are objecting (warranty concerns on cars rated for 10% ethanol) and UL is concerned (they certified pumps for 10% and say that new testing will be required for 15%)."
Cars run just fine on 15%. Modern injected cars can run on even higher amounts. The problem is splash blending. Few computer controled blending operations at distribution to gas stations. The problem is Ethanol can not be shipped in petroleum pipeline . Splash blending is extremely crude and very inaccurate. Lots of stations now sell as E10 but past experience we found 20%+ and no problems in fuel injected cars. I run splash blended E10 in my new MBZ that requires premium but living at altitude between 3200 and 6000 feet there it is exceptable.
Warranty concerns may be game playing.
When the Nikkei index from its 1990 top at 39000 is overlayed on the 4 bears chart, it raises the possibility that while the S&P may already be half-way down to a comparative bottom, it also may be only 8% into the time to bottom, 19 months so far versus 221 months so far in the NIK225 18.4 year decline.
The corruption is on both sides.
Bingo.
OT-old data from Ned Davis
Diminishing Returns for Debt-Financing
by the Decade
Date Range Decade Change in GDP $ Decade Change in Debt $ GDP/DEBT
12/31/1949-12/31/1959 248.00 336.60 0.74
12/31/1959-12/31/1969 491.40 748.91 0.66
12/31/1969-12/31/1979 1655.90 2786.29 0.59
12/31/1979-12/31/1989 2923.80 8565.45 0.34
12/31/1989-12/31/1999 3935.20 12471.72 0.32
12/31/1999-06/30/2007* 4255.20 21263.22 0.20
MEAN 0.48
MEDIAN 0.47
I wonder what the table would look like if extended to 03/31/2009.
NW
peAK
I think I agree we might not fall to far from the March lows but there will be no point in being in equities because stock returns will never equal the comparative yield in the ten year treasury.
C'mon, who's up first. Georgia or Kali for the first BFF?
Or do we have a darker horse?
C
A quiet Friday....
The FDIC must be too busy with their board meeting to close any banks
Counterpointer (profile) wrote on Fri, 5/15/2009 - 4:02 pm reply Ignore user
C'mon, who's up first. Georgia or Kali for the first BFF?
Or do we have a darker horse?
IMO the only reason Zion's is still walking is because the FDIC doesn't think it can afford to take it down.
"He who despairs over an event is a coward, but he who holds hope for the human condition is a fool."
Albert Camus, from The Rebel
Meanwhile the ultimate liability to the taxpayer continues to increase.
Dawg - could never figure why they hadn't been minced into the holy goneburger months ago.
Anyhow, what about some RMBS securitization fun while we wait? Apparently Citi and BoA have been sitting on a sh!tpile! And Bear doesn't look too good either! Oh, wait. Them? Shurely shome mishtake.
Fitch Slashes Prime RMBS to Junk : HousingWire || financial news for the mortgage market
C
I've got to leave work a little early... I can't wait around for our bank failures tonight..... although I have to tell you, reading about California's troubles gives me a little spring in my step. So, that's something.
No failure.
Certainly not Broward.
Fill up on them double C securities!!
In response to the 20's crash and bank corruption the SEC was created. We need a new beefed-up super agency with an international jurisdiction and armed. A SEC+. It will be a collection of the the elite from the FBI, the CIA, Army special ops and the Men in Black
http://upload.wikimedia.org/wikipedia/en/6/65/MIBseries1.jpg
Oh yeah there will be some finance guys in there too somewhere...
Dawg writes ""Remittances. This is where I expect the first cracks in their social structure. Hungry, displaced remote entire villages descending en masse on the major urban centers. ""
I know everyone has forgotten about this, but the above already happened. Remember NAFTA? Wiped out the individual farmer and rural shopkeeper's ability to make a living.... they went to the cities to find work, couldn't... then went to the US.
That's when Mexican immigration became a 'problem'.
And, it was forseen by everyone who was honest about the trade treaty.
Just sayin'
Did Hoops go to school or stay with the law firm?
Illegal immigration became a problem in the 60's when we stopped enforcing the laws. It always spikes in a booming economy.
dryfly, its "topes" and there has been a crackdown on la mordida in the cancun area, so caution is advised. i have driven in mexico for many years and have yet to pay a bribe. and despite the many stories, i have found the federales and ejercito to be polite and professional.
Last I heard from Hoops he gave notice and will be out of the firm at the end of the month... didnt say anything about school though...
Remittances. This is where I expect the first cracks in their social structure. Hungry, displaced remote entire villages descending en masse on the major urban centers.
Rob Dawg, you need to come here to Mexico to see what things are really like. Shake yourself out of your American suburban lifestyle and broden your vision of the world.
The villages that you refer to ( and there are hundreds of them) are mostly inhabited by women and old men. The working age men went to the US. Hungry...doubt it, they raise chickens, goats, cows etc and pick nopales to eat. They won't starve. Displaced.. Why? They have a house (or shack) that they own, the rest of the family is there, and the city is no better than the village. Won't happen like you see it.
I do agree that the lack of remittances is a problem because it is a major source of USD reserves. It affects the forex. And that leads to a whole host of other problems, but those problems are far removed from the villages that you refer to.
"Counterpointer (profile) wrote on Fri, 5/15/2009 - 7:08 pm
Anyhow, what about some RMBS securitization fun while we wait? Apparently "
Ha! Scanning down the page quickly, "RMBS securitization" caught my eye.
I suppose I'm not the first, but for a second Treasuries as "RMB-securitized debt obligations" came to mind. As in RMB = ren min bi (The People's Money).
Signing off.
Have a great w/e everybody.
--SD
Failure
My brother might disagree, I was supposed to have a website up and working for him by now.
I was going to use Drupal but decided I didn't want to goof with the learning curve for a one-off simple site.
Samdog - nice play.
C
I don't even know what a Drupal is.
Comrade Dazed and Amused (profile) wrote on Fri, 5/15/2009 - 4:26 pm reply Ignore user
Remittances. This is where I expect the first cracks in their social structure. Hungry, displaced remote entire villages descending en masse on the major urban centers.
Rob Dawg, you need to come here to Mexico to see what things are really like. Shake yourself out of your American suburban lifestyle and broden your vision of the world.
The villages that you refer to ( and there are hundreds of them) are mostly inhabited by women and old men. The working age men went to the US. Hungry...doubt it, they raise chickens, goats, cows etc and pick nopales to eat. They won't starve. Displaced.. Why? They have a house (or shack) that they own, the rest of the family is there, and the city is no better than the village. Won't happen like you see it.
I do agree that the lack of remittances is a problem because it is a major source of USD reserves. It affects the forex. And that leads to a whole host of other problems, but those problems are far removed from the villages that you refer to.
Recall that I live near Oxnard so much of this rural Mexico you describe has come to me. You are correct with but one thing. Those subsistence lifestyles with the missing working age males are in no small part supported by remittances. Remittances are second only to oil revenues in their economy. From this end I can tell you that flow of funds is way down. Ask yourself why rural America abandoned the farms when they supposedly could have fed themselves. History rhymes.
Problems in Guatemala...
A Video from the Grave Sends Guatemala into Crisis - TIME
YouTube - Asesinato Rodrigo Rosenberg 1 (English Subs)
"A quiet Friday...."
Too quiet.
Hey GS why don't you have a suckle off Ben Bernanke's zipple?
Approaching 6PM Mountain and 5PM Pacific. Do we need to tap a keg?
[because stock returns will never equal the comparative yield in the ten year treasury. ]
OMG! The yields are likely to spike, but offset by dollar devaluation. Once equities get clobbered the next time I will push 1/2 my chips in, to commodities shares.
Treasuries are for B&B Indian Dopes.
Interesting cold war files from a KGB agent...
Cold War International History Project : Documents : The Vassiliev Notebooks
Shadow - if there's FBI help arriving, then the trouble's just beginning.
C
3. Oil production declining. Will become an oil importer within 5 years or so.
Very key point. Mexican production (as well as North Sea) is about to do an Acapulco Cliff Dive. Nothing coming online that's going to remotely replace it.
Imagine losing the 3 largest sources of your national GDP within a 5 year span.
US is used to thinking in terms of having allies as neighbors. Maybe not the case going forward.
Imagine losing the 3 largest sources of your national GDP within a 5 year span.
You mean FIRE in the USA?
Following on black cat's earlier comment, I'd agree that the failure to purge the dealer network is more the result of dealer franchise protection laws than bad management. Paul Ingrassia at the Wall St. Journal has been doing lots of opinion pieces on this over the last year, and from what he says, state dealer franchise protection laws require huge payments for termination. This is a legacy of the oligopolistic Big 3 of the 1950s, when a 90% collective market share was assumed to be eternal and the only question was how the politicians would split up the spoils between management, labor and dealers. Given the political influence of auto dealers (they're in every legislative district in the country, with $ to contribute to politicians), an earlier aggressive termination effort might have only resulted in a toughening of the laws. (Though GM did shut down Oldsmobile several years ago.)
What we're seeing now is probably good bankruptcy planning. GM sends out the termination notices, the huge termination fees are triggered by state law, GM goes into Chapter 11, the termination fees are clearly prepetition unsecured debt, and they get paid off at a penny on the dollar in the form of new GM common stock. I think that Chrysler sent its termination notices after filing its post-Chapter 11 petition, which strikes me as riskier, but maybe they were comfortable that the dealer termination fees would be treated as unsecured claims rather than some sort of superpriority state government claim, or maybe there was no money in the till to pay them anyway, so it didn't matter.