WinkyDog

By John Paul (jpaul@wsbt.com)
The President of the United Auto Workers rejects the notion the Union was responsible for the bailout rejection from the Senate. The receptionist from the UAW Local 5 said officials declined to comment, adding that the union did not want to get in the middle of the national issue. They did stress that they were concerned about employees and jobs.

Once the Obama Administration takes office, the UAW will have a powerful ally against the Big 3.

Bush handed the Union a huge victory today.  Their stalling paid off.

Democrats, who don’t understand that unless car sales return to the levels they were at before the financial crisis, automotive companies cannot survive with current labor and legacy costs.  They beleive the Big 3 can save themselves by producing more expensive, smaller, greener automobiles.  Cars that people have not wanted to buy, in sufficient numbers, in the past.

Washington will not force the UAW to renegotiate their contract.  Detroit is doomed, sooner or later.

It’s too bad that the Big 3 don’t have negotiators as skilled, and daring, as Gettelfinger.

An industry that could never sustain itself in the first place, needs more money than they’ve already gotten from the American Taxpayers.  On top of that, they would like to destroy the Auto Industry and worsen the food shortage while they’re at it.

From WSJ:

First, it was Wall Street. Then Detroit auto makers. Now, the nation’s ethanol producers, who have hit a rough patch with the drop in ethanol prices, are seeking help from Washington.

The Renewable Fuels Association, a trade group for the U.S. ethanol industry, has spoken with staff members from Capitol Hill and President-elect Barack Obama’s team and “provided them with some ideas on how to craft the language of” an economic recovery package, said Matt Hartwig, a spokesman for the RFA.

Hartwig said RFA has suggested a number of steps including setting up a $1 billion short-term credit facility so ethanol producers could finance current operations; a $50 billion federal loan guarantee program to finance investment in new renewable fuel production capacity and supporting infrastructure; and a requirement that any auto maker receiving federal aid only produce new vehicles that can run on any blend up to 85% ethanol, beginning with the 2010 model season.

The price of ethanol has dropped with the price of oil, squeezing producers’ profit margins. Critics note that the U.S. ethanol industry already benefits from a number of fairly generous federal subsidies, including a tax credit paid to gasoline producers for blending gasoline with ethanol; a federal renewable-fuel standard that sets a minimum amount of ethanol to be blended into gasoline; and a 54-cents-per-gallon tariff on imported ethanol.

The RFA is one of many business groups looking for help in the financial stimulus legislation expected to move through Congress early next year. It’s not clear how much support RFA has for its proposals; calls to several senior lawmakers close to the industry weren’t immediately returned.

“We’re not asking for a specific bailout, but rather, as a trade association, we’re providing ideas to an incoming Congress and a new administration about ways to bolster the domestic renewable fuel industry,” Hartwig said. “We’re doing what all trade organizations are doing - providing the Obama administration with ideas.”

UPDATE: Hartwig calls back to add that his group offered ideas to the Obama team after being approached by a transition representative seeking the RFA’s input on what should be included in an economic recovery package; “We are not, I repeat, not asking for anything or lobbying for anything,” Hartwig said.

Posted December 12th, 2008 at 10.25am in Entrepreneurship.
With the Senate’s rejection of a bailout for Detroit’s ailing automakers, there now comes word that President Bush is actively considering using funds allocated by Congress for the Trouble Asset Relief Program (TARP) to prop up the automakers for the time being. Such action would be wrong legally, wrong economically, and counterproductive to turning around these troubled businesses. And by opening the door to such open-ended use of taxpayer money for virtually unlimited uses, a unilateral decision to employ TARP funds would jeopardize George W. Bush’s legacy as a friend of the taxpayer.
Until now, the Bush administration has resisted repurposing TARP funds for industrial policy, though this morning comes word that the Treasury may have reversed course. TARP, administration officials have said, was intended to shore up the stability of the financial markets and stave off economic collapse, not to inject capital into failing non-financial businesses. Moreover, only $15 billion remains of the initial $350 billion in TARP funds disbursed by Congress.
More problematic, Treasury lacks the statutory authority to direct TARP dollars to the automakers. While the statute, passed by Congress in October, grants the secretary extremely broad discretion to decide how to employ the funds, it clearly limits the recipients to “financial institutions.” And the definition of that term is quite clear:
FINANCIAL INSTITUTION- The term ‘financial institution’ means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.
This doesn’t leave much room for interpretation.
In this case, due to the enumeration of included institutions in the statute, the term “any institution” is necessarily defined, in part, by the list that follow it: “bank, savings association, credit union, security broker or dealer, or insurance company.” An automaker is unlike any of these things, being a manufacturer of goods, not a financial intermediary.

WASHINGTON (Reuters) - Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

“The results, I confess, were somewhat surprising, and not in a good way,” said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

“Put simply, it shows that over half of mortgage modifications seemed not to be working after six months,” he said.

[...]

Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.

The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.

Regulators speaking at an OTS-housing forum did not provide any explanations for the causes behind the data.

“We don’t know the answers yet, but these are the types of questions that we have begun asking our servicers in detail,” Dugan said.

[...]

Of coarse they know the answer.  No one was taken advantage of by evil lenders.  It was the borrowers that took advantage of the mortgage providers.  And the government rewarded them with special modifications, while those who work had and pay their bills got nothing.

People who had no business owning a home, who had no way of paying for their homes, lined up to get mortgages, pushed by liberals who think that home ownership is as much of a Right as health care and a high paying job.

None of this is a secret.  Every politician knows it.  Each one of the Presidential candidates knew it.  But no one will, or would, voice it, because they had votes to buy.

America needs to get back to rewarding excellence and achievement, not the opposite.

Due to crushing labor and legacy costs, as well as government regulation and mandates, the Big Three automakers have been operating much like someone living paycheck to paycheck.

As long as Americans were buying cars, they were just making it.  However, once the credit markets froze, and the public came to realize how bleak the economic future appeared, auto sales plummeted.

Making little to no money on much of their domestic auto sales, it has proven impossible for the automakers to sustain viability.  GM new car sales fell 41% in November.  However this was not the fault of GM products or Management decisions.  Toyota’s sales declined 34% in the same period.  It was solely the result of the credit crunch.

Senator Dodd led the fight to stop any regulation or oversight of Fannie Mae and Freddy Mac, when many where warning of the consequences of doing nothing.  So with so much blame for the Credit Crisis resting on his shoulders, I would like to see Chris Dodd offer his resignation right next GM CEO, Rick Wagoner.

Mr. Wagoner may be guilty of bowing to the Unions and government regulation.  And he is certainly at fault for so many utterly uninspiring automobiles that come off of General Motors assembly lines.  But Rick Wagoner, and the other automotive CEOs, are not responsible for the current financial crisis, that has slashed new auto sales nearly in half.  That blame falls to the Senators and Congressmen that protected and promoted the sub-prime mortgage debacle, and they should face consequences far more serious than the loss of their jobs.

WinkyDog asks: Doesn’t D.C. have an “Anti-Panhandlers” law on the books?

The CEOs of the Big Three automakers reportedly flew private luxury jets to Washington to plead for a $25 billion taxpayer bailout to save their debt-ridden industry — ringing up tens of thousands in charges even as they cried poverty.

Recipients of eight-figure bonuses in 2007, the corporate cowboys used their executive perks — which for GM’s Rick Wagoner include the run of a $36 million Gulfstream IV jet — to arrive in style as they went begging before Congress.

Wagoner, whose flight reportedly cost $20,000 round-trip — about 70 times more than a commercial airline ticket — told Congress he expected about $10-$12 billion from the requested bailout.

“This is a slap in the face of taxpayers,” Tom Schatz, president of Citizens Against Government Waste, told ABC News. “To come to Washington on a corporate jet, and asking for a handout is outrageous.”

Joined by Robert Nardelli of Chrysler and Alan Mulally of Ford, Wagoner told the Senate that a collapse in Detroit could cost 3 million jobs in just a year and put the hurt on communities across the country.

But the prospective bailout is getting held up in the Senate, where lawmakers don’t appear keen to save the ailing industry. “Just giving them $25 billion doesn’t change anything,” Sen. Jon Kyl, R-Ariz., told FOX News. “It just puts off for six months or so the day of reckoning.”

Common Sense and Accountability rears its head.  Thank you Mr. Kemper…

Thanks to Michelle Malkin:

November 3, 2008

Mr. Henry M. Paulson, Jr.

Secretary of the Treasury

1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Paulson:

As I reflect on the financial crisis that has gripped our nation, I feel compelled to write to you.

Government action was clearly needed to help shore up the nation’s financial institutions. I applaud you for taking quick action. However, I am gravely concerned with the actions that have been taken and their long-term implications for both our industry and the impact these measures will have on the moral fiber of our future leaders.

First, the rescue was more of a bailout. Its results will have made the large institutions larger and harder to manage and regulate. Secondly, as the system is repaired, these institutions which took such actions to bring the system down will be rewarded with new capital and clean balance sheets at the taxpayers’ expense. Meanwhile, financial institutions such as UMB will be penalized for operating with sound principles. Our first order of business is to protect our depositors’ liquidity. As a result of your actions, those who abused the system get stronger and those who protected their shareholders’ interest and those of the Deposit Insurance Fund will pay the price.

Lastly, I think it is inappropriate to use taxpayers’ funds to inject into healthy private enterprises. What message are we sending our future leaders? Is there no reward for doing the right thing? It seems there is only penalty. The reward seems to be for the reckless.

I believe that under a new administration, the CPP will become a political issue. I am afraid the new capital being used to shore up balance sheets and make acquisitions will not be looked upon favorably, as its original intent was to free up liquidity for extending credit.

Please while you go about the hard work of repairing our nation’s financial system, do not overlook the opportunity to restore dignity and respect for sound and responsible business principles.

If you don’t stand up for the good guys, who will?

Thank you for your consideration.

Yours very sincerely,

Mariner Kemper

Chairman & Chief Executive Officer
UMB Financial