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"Big Three bailout may be around corner"
09-05-2008, 10:28 PM
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#1
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Recycles dryer sheets
Join Date: Jan 2007
Posts: 222
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"Big Three bailout may be around corner"
Presidential election could bring Big Three bailout - Sep. 4, 2008
"Cole argues the loan package could be a relatively cheap alternative to the economic harm that would take place if one of the automakers were to fall into bankruptcy."
So are GM/Ford/Chrysler really too big to fail? I don't pretend to understand all the workings of the economy, but to me this seems like yet another case of privatizing the gains and socializing the losses. Also, if American taxpayers are going to bail them out, shouldn't we get some kind of guarantee that they can't send jobs overseas?
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09-06-2008, 02:33 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: May 2005
Posts: 17,239
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IIRC.... and I might not be.... but the last time they bailed out an automaker was in 1980 (ish)...
It was loans and the govmt was paid back with interest.... no loss...
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09-06-2008, 04:08 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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"It's different this time." It's always dangerous to say that but I think in the case of the auto companies it really is this time. The proverbial chickens are coming home to roost as far as the high cost retirement and health plans are concerned. That is what is killing GM and Ford. They have to make so much of a markup just to cover those for existing retirees that there's nothing left for product development or profit. Toyota and Honda's plants don't have a retiree burden and never will based on their personnel benefits.
If the government bails them out, all it will do is provide a bridge loan until the next cash crunch which will require another loan. This problem will only get solved when the auto companies and the UAW end the unsustainable retirement benefits or the companies go under which will also end them.
The bankrupt company could then come back without the retirement plans but the loss of customer confidence may be too much. I've believed for years that Chrysler, GM and Ford are doomed. It was just a question of how long the UAW will drag it out.
Remember the steel companies? The USW was more than happy to run almost every domestic producer into the ground. They wouldn't allow any "competitive improvements" in the contracts because they knew that would be the end of the union.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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09-06-2008, 07:02 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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I think this should be in the Soap Box section.
Don't mess with my pension and keep yer kids off my lawn! 
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09-06-2008, 07:13 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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 Quote:
Originally Posted by travelover
I think this should be in the Soap Box section.
Don't mess with my pension and keep yer kids off my lawn! |
I can't disagree. Our moderators don't police the off topic threads very well. I demand a refund! 
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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09-06-2008, 09:23 AM
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#6
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Recycles dryer sheets
Join Date: Jan 2007
Posts: 222
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Quote:
Originally Posted by travelover
I think this should be in the Soap Box section.
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I guess I don't understand why this one's off-topic but all the other financial news in this section (Fannie/Freddie, Bear Sterns, banks going under) isn't.
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09-06-2008, 10:16 AM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,327
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Quote:
Originally Posted by travelover
I think this should be in the Soap Box section.
Don't mess with my pension and keep yer kids off my lawn! |
Don't mess with my pension and keep yer kidscats off my lawn!
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09-06-2008, 10:23 AM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by CompoundInterestFan
I guess I don't understand why this one's off-topic but all the other financial news in this section (Fannie/Freddie, Bear Sterns, banks going under) isn't.
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My ox was Gored. Oh no, another hot button name! Eeeeek!
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09-06-2008, 03:18 PM
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#9
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Recycles dryer sheets
Join Date: Aug 2007
Posts: 433
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Where will the money come from to buy all those new vehicles?
Will the government loan out the necessary billions to busted purchasers too?
__________________
Consult with only myself as your adviser or representative. My thoughts should be construed as investment advice of the highest caliber. Past performance is but a pale shadow and guarantee of even greater results in the future.
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09-06-2008, 03:44 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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Oh, I thought the "big three" where: Fannie, Freddie and Sally ... my bad.
__________________
FIRE'd since 2005
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09-06-2008, 03:59 PM
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#11
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Recycles dryer sheets
Join Date: Aug 2007
Posts: 433
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Quote:
Originally Posted by tryan
Oh, I thought the "big three" where: Fannie, Freddie and Sally ... my bad.
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Not at all Sir. They are being socialized even as we speak.
Ya ain't seen nothin yet folks!!! 
__________________
Consult with only myself as your adviser or representative. My thoughts should be construed as investment advice of the highest caliber. Past performance is but a pale shadow and guarantee of even greater results in the future.
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