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More bailout $$ for AIG & possible $$$ to auto industry

Discussion in 'Political Rants' started by dalzilla, Nov 11, 2008.

    Nov 11, 2008
  1. dalzilla

    dalzilla Dormant account

    Occupation:
    Purchasing manager
    Location:
    Known center of universe-Texas!
    Morning rant...short because heading to work.:D

    Looks like we (US gov on behalf of taxpayers) are going to dump more money into AIG with more favorable terms (longer to pay off; 5 instead of 2 years, lower interest rate, take more shares of stock in exchange). So obviously the first go-round was not very well thought out or they wouldn't have to go back to the drawing board. (Still fuming at the AIG execs/members who went on a $400K "retreat" to relieve the "stress". Shoot, I'd do a $400 retreat happily). Reason still is can't afford to let the US largest re-insurer afford to fail yadda, yadda, yadda.

    Automakers: Big 3 asking for $x billion each. Fill in the blank for the x because I've heard way too many numbers to know which one is right. If they fail, trickle down theory going to affect many people. That I can support. What I am having trouble with is the would/will this bailout to automakers go to support the life-time health care/pensions for older workers? How about newer workers? What's the unions take on this?

    I for one would LOVE guaranteed medical coverage when I retire. Reality: "aint' gonna happen". Pensions: gone way of the dinosaurs. What I have to look at when I retire is what's my 401K worth, what is the pittance I'm going to get from SS, if anything at all, how the HELL am I going to pay for any medical catastrophe, etc. :mad:

    Just not really very sympathetic to the auto industry and not supportive of the unions.

    If you wish, talk amongst yourselves :D
     
    1 person likes this.
  2. Nov 11, 2008
  3. GGW Laurie

    GGW Laurie Dormant account

    Occupation:
    Self Employed
    Location:
    In the Beautiful South !!
    ...................its a mess we are facing as a country right now, bail outs for this, bail outs for that, i am deeply troubled over all this as i watched the news myself this morning and its just sickening.........hence my siggy below:)........................laurie
     
  4. Nov 11, 2008
  5. Pinababy69

    Pinababy69 RIP Lisa

    Occupation:
    Crusader
    Location:
    Toronto, Ontario - Canada
    Isn't AIG the company that went and had a big $400,000 party after the last bailout package? IMO, everyone at the executive level should have been let go, and with no golden parachute package either. Bring in all fresh blood. I mean it is the taxpayer's money they're playing with here right?

    As to the auto industry...I can't comment, I don't know enough about it.

    As a taxpayer, I'm all for helping "people" in my own country...but that means people that need it. Not some fatcat who is driving around town in a Jaguar and earning 1M plus a year. I know that's not what the money was meant for...but who oversees this stuff?

    I'm gonna have to start studying economics, and reading up. I'd really like to have more of a grasp on this.
     
  6. Nov 11, 2008
  7. winbig

    winbig Keep winning this amount.

    Occupation:
    Bum
    Location:
    Pennsylvania
    AIG? :rolleyes:

    As far as bailing out GM, I'm all for it. Do you realize how many hundreds of thousands of people would be out of work, from GM alone, if they were to go under? Or how many other business would have to close as a result?
     
    1 person likes this.
  8. Nov 11, 2008
  9. GGW Laurie

    GGW Laurie Dormant account

    Occupation:
    Self Employed
    Location:
    In the Beautiful South !!
     
  10. Nov 12, 2008
  11. jas2587

    jas2587 Ueber Meister

    Occupation:
    none
    Location:
    FL
    instead of bailing out the automakers
    why don't they just lower their prices
    you know it didn't cost 25K to build them

    they can help theirselves an their
    employees by lowering the cost of
    the vehicles where they are affordable
    instead of sitting on their car lots
    drawing dust


    Cindy
     
  12. Nov 12, 2008
  13. winbig

    winbig Keep winning this amount.

    Occupation:
    Bum
    Location:
    Pennsylvania

    Ooooooooooook......so how do you expect them to stay afloat in the meantime?

    Of course it doesn't cost $25K to build them, and yes, they need to build more fuel efficient cars, but you're forgetting the non-direct production cost - safety testing, R&D, etc, etc, etc.

    Lowering prices and building more "green" cars are long-term solutions, and aren't going to get them out of the immediate need for money right now.

    Hell, they even canceled going to the LA auto show, just so they could save some money. That sure beats the )#*$@$ out of AIG and their parties ON TAXPAYERS' DOLLARS; the most recent one being less than a week ago.
     
  14. Nov 12, 2008
  15. dalzilla

    dalzilla Dormant account

    Occupation:
    Purchasing manager
    Location:
    Known center of universe-Texas!
    Adding more of my two cents :)

    AIG executive was on CNBC yesterday doing some "spin control"; said it wasn't the executives who went to the $400,000 retreat; that it was independent agents. He was pressed on the issue and did admit that some upper management did attend :rolleyes: Point remains: no way AIG should have spent any $$$$ on fun when they are in the tank.

    I do believe the carmakers are too big to be allowed to fail; as I said in first post the trickle down impact on their failure would be catastrophic. There have just got to be some incentives for them to return to profitability quickly and some penalties if they continue to fund large executive bonuses with our money.

    Question: Do any of you all believe the autoworker's union is going to roll over on concessions? That is going to be significant obstacle to freeing up some case. I don't see where in this industry the union is needed. I believe unions are needed where the work is inherently dangerous and the pay notoriously low. Don't think auto mfg is dangerous or lowpaid.
     
    1 person likes this.
  16. Nov 12, 2008
  17. Pinababy69

    Pinababy69 RIP Lisa

    Occupation:
    Crusader
    Location:
    Toronto, Ontario - Canada
    I'm pretty sure the AIG guy was on Larry King last night as well Dalzilla, but I feel asleep and missed it. I figured it would be "spin" anyway.....thanks for the update. And I agree, they have no business "partying" on taxpayer's money, while people are losing homes and savings. Sickening.
     
  18. Nov 13, 2008
  19. RobWin

    RobWin closed account

    Occupation:
    Who knows?
    Location:
    A Vault!
    Paulson Says Troubled Assets Will Not Be Purchased

    Paulson Says Troubled Assets Will Not Be Purchased

    Wednesday, November 12, 2008
    By Martin Crutsinger, Associated Press


    Washington (AP) - Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.

    Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.

    He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.

    Paulson said that 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.

    "This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said.

    The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was "not the most effective way" to use the $700 billion bailout package, he said.

    The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill.

    Paulson said the administration is exploring other options, including possibly injecting more capital into banks on a matching basis, in which government funds would be supplied to banks that were able to raise money on their own.

    The bailout money also should be used to support efforts to keep mortgage borrowers from losing their homes because of soaring default levels, he said.

    A proposal to have part of the bailout funds used to guarantee mortgages that have been reworked to reduce monthly payments for borrowers is an approach the administration continues to discuss, but Paulson did not announce that it would be adopted. Federal Deposit Insurance Corp. Chairman Sheila Bair has pushed for that approach.

    Speaking of the first-ever summit of leaders of the Group of 20 major industrial and developing countries, Paulson said this weekend's meeting needs to focus first on how to repair the financial system as a way to bolster the global economy.

    Paulson praised a new set of guidelines issued Wednesday by the Federal Reserve and other bank regulators, saying that they addressed a crucial issue of making sure that banks continue to lend at adequate levels.
     
  20. Nov 13, 2008
  21. NASHVEGAS

    NASHVEGAS Banned User - flamming, disrespecting admin,

    Occupation:
    LOL
    Location:
    MERS
    The original AIG bailout was for $85B and occurred exactly one day after Paulson said no more bailouts and let the free markets function as intended and thus c'est la vie to Lehman the day before.

    Then exactly one day after the AIG $400K wing ding story broke, AIG's bailout funding was increased another $38B for a total bailout cost of $123B.

    Then as the OP mentions the AIG bailout restructuring with more favorable loan terms and the additonal increase in bailout funding. I understand (what is now actually the 3rd increase in bailout funds) to be an additional $27B for a new total of $150B.

    So who really knows what the final tally will be and AIG's credibility is zilch as just a few days before the emergency bailout, AIG ,iirc, pulled a Skilling by misrepresenting it's exposure to credit swaps by almost 90%. Thus, I assume Club Fed will eventually have some AIG members.

    The above said I believe I understand the bail or not bail ramfications of AIG and of course it can be argued either way but I know what decision I would have made.

    At this point, imo the housing industry problem (not near rock bottom) being properly addressed, restoration of the financial (no W it is not fixed) industry and the return to a positive individual savings rate of personal income which as recently as the 90's averaged around 8% of personal income versus the current 0% or actually negative savings rate in recent years are all primary.

    Regardless, the continuing bailouts et al are leading to what "old school" financial money manager Jim Rogers termed as a "hyper-inflation holocaust" .
     
    2 people like this.

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