Why Some Get a Bailout, Others Get Bluster

citi bank and gm and all the rest

Golly gee this isn't the same citi corp that has been raping consumers on credit cards for years is it? I guess part of the free bailout to these money grubbing charlatans will go towards increasing their mass mailing to consumers. Let them drop the interest rate on their consumer debt to the same amount they are paying on their bailout. Screw the unions. Why should we pay them $31 an hour to sit on their thumbs. I have been out of work for 6 months and no one is offering to bail me out. The foreclosures post is absolutely right but one thing a lot of people are missing is the looming massive business foreclosures as our retail industry unwinds. How would you like to be Circuit City's landlord right now. How can the landlord pay his mortgage if the tenants can't pay the rent on the malls. I think it is all backwards. The US Govt ought to declare bankruptcy and wipe the slate and start over. Get rid of the shy locks at the Federal Reserve etc.

Dug Fan of CO @ Nov 28, 2008 08:59:29 AM

Foreclosures

As noted, the root cause of this crisis are the foreclosures.. without immediate meaningful and true loan modification there will be not 2-3 million more foreclosures... but instead 4-5 or more millions. There are another million or so sub-prime mortgages that have yet to reach their 1st adjustment... the mortgage industry wrote these loans through the end of the 1st quarter of 2007... Tens of thousands the option ARM are reaching the maximum allowable negative accrual. This will result in the unlimited reset called for in the note... thereby resulting in possibly several million more defaults and foreclosure... EVERY loan held in the portfolio’s of WaMu, Wachovia, Downey Savings plus dozens of other banks fall into this category. Question, are the losses about to be incurred by Chase, Wells Fargo and US Bank on after their respective purchases of these banks, guaranteed by “we the people” even included within the TARP figures?

The immediate modification of every adjustable rate loan, with less than 3 years remaining before the next reset, into a 4%, 50 year loan will (no balance write down) will stop the vast majority of the defaults and foreclosures. Yes there will still be people who still fail... but that number will be dramatically less than now. Once the the panic of the foreclosures has been addressed, the industry can revisit these loans and put in place a more permanent solution... this cannot happen in the present atmosphere... No one seems to either understand or is paying heed to the effect that the foreclosures, and short sales are having on the counties and local governments whose primary source of income is real estate tax revenue. With the sale of each REO here in California, the average loss to the counties is approximately $3,300... and that is not only permanent... but compounded... now think schools, police and fire protection, emergency and social services and public works... now think lay-offs in government employments... cancellation of local contracts... resulting in more lay-offs... think not recession, but instead depression The problem in the auto industry has zero to do with being "green"... zero to do with quality... if that was the answer then explain the huge downturn at the supposedly better import dealerships... no, "Bob and Betty" are not about to run out and buy a new car when they don't know if they will even have a garage next week or that wall for the new plasma TV!!! Address the foreclosures and you address the entire economy...

The sad part is, that had congress understood the gravity of this situation 18 months ago, and listened the FDIC Chairman Sheila Bair, instead of Messer’s Bernanke and Paulson, none of this would have happened… but then again, what does a woman know about finances…

Stan Brody of CA @ Nov 28, 2008 07:28:33 AM

It's not a bailout

The bailout was to the banks, insurance companies and brokerages. GM only wants a loan that the banks were supposed to make with their bailout.

The automakers will repay the loans with good interest.

The banks, insurance companies & brokerages that got the bailout will not.

The UAW is the workers that make the autos. Without them, there would be no autos made. Throw them out and there will be no U.S. made autos.

If this posts twice, I hope someone will let me know how to prevent it. Thanks

HillbillyBill of TN @ Nov 26, 2008 07:16:28 AM

A bail out that would work for all of us

This is the best book ever on the subject of energy independence. Our country's economy has suffered a great deal due to the high cost of fuel this past year. The current lull in gas prices wont last long OPEC will see to that, they already cut production 1.5 million barrels a day and announced plans to cut it more. We must not get complacent about our energy crisis when the gas price dips. We need to invest in America's future and become energy independent. We could product clean low cost electricity and provide much needed new jobs. It is a win -win situation for our country. The last 168 BILLION dollar stimulus pkg did nothing for our economy. Why not invest instead in getting our country started on the path to energy independence, that money would have gone a long way towards that. The book has a cool web site that lets you look inside the book, read the back cover and look at the table of contents. Wilson even outlined a time plan and legislative agenda to get our country off oil. This is an amazing and much needed book I highly recommend this book for anyone who is worried about our economy and wants to see our country become energy independent. www.themanhattanprojectof2009.com

of FL @ Nov 25, 2008 22:46:36 PM

GM Is Viable But UAW Is Not!!!!

Rick

You dont know cars!!! Neither does the government.... Government is all paper and ink and nothing more...

The bottom line is that GM is viable only if UAW get booted out!! Simple as that....

GM doesnt really need the money once GM is allowed to boot UAW out!!

Gumby of CA @ Nov 25, 2008 11:51:31 AM

Why all columnists produce is bluster..

Rick, I have read several of your recent columns on GM. Glad to see you are still stuck in the 1980's re: GM. If all of us in the "real economy" held you clowns to the same standard as GM (one lousy piece of advice and you should never write again) you would all be out of work.

RLG of MI @ Nov 25, 2008 11:23:00 AM