# Detroit bailout



## Xusein (Sep 27, 2005)

On first glance, Detroit doesn't deserve anything. Their business model is a failure, and their problems preceded the current financial crisis, especially GM. They've had problems for years, and one of them was the idiotic idea of putting all their money on SUVs, even when gas prices started to increase. 

The Hummer, for example, is one of the dumbest business decisions to think of, especially later on when it became a major dump on the health of GM. And Ford, with it's Excursion, or Chrysler with it's Durango...I don't feell sympathy for bad business decisions.

However, this could be worst time obviously for them to fall considering the current economic situation. And a lot of jobs nationwide are tied to their health. Leaving them bankrupt can make an already horrible situation even worse. Unemployment would skyrocket as they would have to cut lots of jobs to regain profitability and security. The effects of the big 3 going under can be awful and downright nasty.

So, I do think that the government should bail them out, with reservations. They have to make a 180 degree change to what they are doing, since it's not working. The transition can be painful, but long term, if they do make a genuine change and put even more effort in efficient vehicles, it can be worthwhile. It would be a shame to see these (once) great companies fall under. 

To be honest, I feel much less guilty for a bailout for them than these bank bailouts, which have not went to pains to receive these loans, and even less guilty for this sham $700 billion bailout that probably won't work. At least there is a chance of our money for Detroit going into something (although unlikely, and they're going to ask for more later on). The hundreds of billions that we give Wall Street is just being erased by the day. The actions of the government in recent weeks has been disgusting..."too big to fail", my behind.


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## hudkina (Oct 28, 2003)

Yes, because Toyota didn't develop the Sequoia, Highlander, or Tunda and Honda didn't develop the Pilot, Element, or Ridgeline. And Ford and GM certainly don't make fuel efficient cars like the Fusion, Malibu, Focus, and Cobalt...

A Hummer gets better fuel economy than a Bentley or a Ferrari, but I don't see you bitching about those companies making bad decisions. And really, the Hummer was always meant to be a high-end luxury buy. Nobody is expected to drive a Hummer back and forth to work any more than anyone expects people to drive their Ferrari. Hell the 8 cylinder, 4WD Toyota Sequoia has about the same fuel economy as the 8 cylinder, 4WD Hummer. So is Toyota the worst company ever for deciding to build a massive SUV that Americans want to drive?

Also, the 2009 Chevy Malibu and Saturn Aura get better fuel economy than the comparable Camry and Accord. And who even drives a Prius besides hollywood types? Most people want trucks, and even today the best selling cars in the U.S. are still trucks. The Big 3 weren't "stupid" for building vehicles that people want to drive, and it's not just them who are seeing huge drops in sales. In November, both Honda (-32%) and Toyota (-34%) saw bigger declines than Ford (-31%). Honda recently announced it intends to produce 180,000 less cars than it expected to this year. Ironically, the only Toyota vehicles that saw sales increase from last year were the gas-guzzling Toyota Sequoia and the Lexus LX. Prius sales are down nearly 50%.

The Big 3 aren't doing bad because they produce large trucks, they're doing bad because nobody is buying cars right now. That includes foreign brands.


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## tablemtn (May 2, 2006)

Sure, but you don't see Toyota and Nissan going to the US Congress and begging for taxpayer money... 

A structured bankruptcy is really the only sensible exit for GM and Chrysler. Ford can probably make good use of a bridge loan due to its cash reserved. Chrysler deserves nothing at all - they aren't even a public company; they are privately owned by Cerberus Capital Management. Cerberus actually HAS enough money to bail out Chrysler on its own, but it would rather have US taxpayers do that for them.


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## hudkina (Oct 28, 2003)

You do realize these are loans right? That means that the U.S. taxpayers will get back their money plus interest... And the reason they're asking the government for loans is because no private banker is willing to loan the money to them.


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## tablemtn (May 2, 2006)

> That means that the U.S. taxpayers will get back their money plus interest.


In theory. However, it's entirely reasonable to suspect that GM and Chrysler might go bankrupt anyway, in which case, the loan repayment will be heavily modified in the resulting bankruptcy deal. 

Chrysler is Cerberus's problem. They bought up Chrysler and took it out of the hands of shareholders. They literally own the thing. Now they need to own UP to their obligations.


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## hudkina (Oct 28, 2003)

Yes, because no privately-held company has ever sought loans...

BTW, for those who think that the Big 3 were too busy making SUVs to care about selling cars, here is the sales data for GM and Toyota through Nov. 2008.

So far, GM has sold about 2.73 million vehicles in the U.S. in 2008. The percentage break-down is as follows:
Cars - 46%
Pick-ups - 26%
SUVs - 12%
Crossovers - 11%
Vans - 5%

Toyota has sold about 2.08 million vehiclesin the U.S. in 2008. The percentage break-down is as follows:
Cars - 62%
Pick-ups - 13%
SUVs - 6%
Crossovers - 14%
Vans - 5%

If you add together the total number of cars and pick-ups, you get about the same percentage. And even if you only look at cars, Toyta (1.28 million) and GM (1.26 million) have sold about the same number of cars so far. In fact, if you take into account the all important mid-size car, Toyota Motors has sold about 485,000 mid-size cars, while GM has sold about 468,000 mid-size cars. That's not all that much of a difference considering how many people think the American brands rely too heavily on their SUVs.


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## Astralis (Jan 28, 2007)

10ROT said:


> To be honest, I feel much less guilty for a bailout for them than these bank bailouts, which have not went to pains to receive these loans, and even less guilty for this sham $700 billion bailout that probably won't work. At least there is a chance of our money for Detroit going into something (although unlikely, and they're going to ask for more later on). The hundreds of billions that we give Wall Street is just being erased by the day. The actions of the government in recent weeks has been disgusting..."too big to fail", my behind.


hno: You're wrong on this one.

Too big to fail is reserved only for financial sector bc it's crucial for economy - without healthy financial sector economy can't function but it can function without any other sector alone (for example autoindustry). If your economy doesn't produce cars it can simply import them (in many cases it's better to import some goods rather than producing it) but if your economy doesn't have healthy financial system no other nonfinancial company can get money for its business activities (no matter if we're talking about debt or self financing).


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## Joop20 (Jun 29, 2004)

I guess the Big 3 have themself to thank for this whole situation. While other car manufacturers around the world have made their supply chain more efficient, increased their spend on innovation, and made their cars more fuel efficient, the Big 3 were all to happy to sit still and sell their gas-consuming SUVs. I don't know whether this happened because there was no long-term vision at these companies, whether they shut their eyes to developments in the auto market, or whether it's just the result of bad leadership. 
Having said that, if even one of these 3 auto manufacturers would go bankrupt, that would be a catastrophy for many people. I don't really understand why 700 billion was spend on a bailout for the financial sector, 13 billion for car manufacturers is too much to ask?


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## Jaeger (May 11, 2006)

Astralis said:


> hno: You're wrong on this one.
> 
> Too big to fail is reserved only for financial sector bc it's crucial for economy - without healthy financial sector economy can't function but it can function without any other sector alone (for example autoindustry). If your economy doesn't produce cars it can simply import them (in many cases it's better to import some goods rather than producing it) but if your economy doesn't have healthy financial system no other nonfinancial company can get money for its business activities (no matter if we're talking about debt or self financing).


The US isn't going to have a healthy financial system if the Auto Industry disapears. One in ten US Workers are directly or indirectly employed as a result of the industry and the knock on economic effect would fuel the US housing crisis even further, with former car workers unable to afford mortgage repayments. At the same time businesses in local areas such as shops would suffer as would spending on goods and services within the wider economy causing ever greater depression. The billions spent helping the US Car industry would probably have to be spent on welfare programmes to support the masses put in to poverty and unemployment by the collapse of the auto industry, whilst further help would be needed for the banks and lenders, as houses prices and mortgage repayments collapse even further.

http://www.telegraph.co.uk/motoring...nate-puts-one-in-ten-US-jobs-on-the-line.html

America spends billions on Defence, and wouldn't allow strategic national industries such as the Defence Industry to go to the wall, it is constantly subsidised, and the US Space Programme costs tens of billions of dollars every year, and the same is true for many other areas of the US Economy.

It is easy for people here to simply suggest the car industry be allowed to collapse but the human factor, the unemployed workers, the families, the communities destroyed and the wider economic implications are often forgotten.

America needs to help it's auto industry go through change, but to allow it to collapse would be catostrophic both for both the US and World economies at a period when we are already facing major economic upheavel.

People here have also talked about Europe, in Europe the Common Agricultural Policy supports farmers and likewise auto industries have been subsidised throughout Europe (and the world), indeed Britain may yet have offer Government loans to the likes of Jaguar and Land Rover. I am also sure the French will be supporting Citroen, Renault and Peugeot, whilst I don't think the Germans will allow BMW, Mercedes or VW to disappear nor will the Italians allow Fiat, Alfa Romeo, Iveco etc to go. The European Airbus programme will also be subsidised, would America allow Boeing to go bust??.

Talk of not supporting the US Car Manufacturing is misguided, it does need change but it can not be allowed to disappear.

hno:



Joop20 said:


> I don't really understand why 700 billion was spend on a bailout for the financial sector, 13 billion for car manufacturers is too much to ask?


Well Said :applause:


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## philadweller (Oct 30, 2003)

My biggest issue with the bailout is that the fat cats will get the money. I would not mind if the bailout helped laid off workers or any of the workers for that matter. Those CEO's already have it made, why add to their gravy train?


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## Jaeger (May 11, 2006)

philadweller said:


> My biggest issue with the bailout is that the fat cats will get the money. I would not mind if the bailout helped laid off workers or any of the workers for that matter. Those CEO's already have it made, why add to their gravy train?


To allow the Auto Industry to collapse would hit many millions of ordinary Americans and result in even greater problems in the financial industry in terms of the resulting house repossesions and loans these workers can no longer pay back. The result would be the money leant to the Auto Industry could well end up being leant to financial institutions and fat cat bankers, brokers and mortgage lenders.

There will always be fat cats, even Communist countries had party members with special privilidges such as big houses, their own shops and even party car lanes in cities. "All Animals are equal but some Animals are More Equal than Others".

If you watch Michael Moore's Roger and Me (about his native Flint in Michigan), you can clearly see the poverty and despair caused by the closure of such industries for local communities, whilst CEO's will just go elsewhere or retire with their large pensions and pay offs. It is the car workers and American Working Man or Woman who will be hit hardest should the auto industry be allowed to collapse not the CEO's.


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## hudkina (Oct 28, 2003)

*philadweller*, where do you get your info from? What makes you think this is going to "fat cats"? The CEOs have stated they'll do their job for $1. The money isn't lining anyone's pockets. It's to help the companies pay for daily operations while they try to weather the current economic storm. This IS helping the little guy by keeping hundreds of thousands of people employed.


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## Xpressway (Dec 2, 2006)

The U.S govt. is doing everything in function of getting more money from taxes.

If the auto makers fail, the world economy would get a severe hit and the govt. would get even less tax money. The bailout is basicly an investment for preventing an even bigger loss.

pd: I'm really angry at the auto makers and financial sector, its like a drug we became dependant of and now we can't leave it (going cold) because it can even kill us if we do.


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## Xusein (Sep 27, 2005)

Astralis said:


> hno: You're wrong on this one.
> 
> Too big to fail is reserved only for financial sector bc it's crucial for economy - without healthy financial sector economy can't function but it can function without any other sector alone (for example autoindustry).


"Too big to fail" is reserved for *nothing*. The conditions of the financial sector is the signal of a hangover after the party ended. Wall Street got too drunk. Don't see why I, as a taxpayer who has nothing to do with this crisis, have to foot the bill for these crooks. Should I be paying for another party for AIG or another golden parachute for another bank CEO out there?

The fact that it won't function, because the cheap credit train got stuck on the tracks, should be the problem that we should try to solve...to try to fix ourselves out of this, as well as more regulation and overhead to these financial companies. Not throwing more and more printed money at the situation, while not saying anything else. 



> If your economy doesn't produce cars it can simply import them (in many cases it's better to import some goods rather than producing it) but if your economy doesn't have healthy financial system no other nonfinancial company can get money for its business activities (no matter if we're talking about debt or self financing).


The US needs to produce things to succeed and get out of this spiral. The fact that we're so dependent on a sector (the financial industry) that doesn't create anything of value or wealth is disturbing. Importing ourselves out of our problems did not work, did it?


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## Xusein (Sep 27, 2005)

This is what I am talking about. Wall Street sickens me more than Detroit does.


Link: http://www.nytimes.com/2008/12/14/business/14gret.html



> *Blank Check for Banks, Pink Slips for Detroit *
> By GRETCHEN MORGENSON
> Published: December 13, 2008
> 
> ...


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## philadweller (Oct 30, 2003)

Maybe its time to pull the plug on the Space Shuttle and worry about what is happening on the land.


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## polako (Apr 7, 2005)

No company should ever be bailed out. Companies that are unprofitable because they failed to adjust to the changing market conditions should go into bankruptcy, merge with others or go out of business. It's simple as that. Ex. Lehman Brothers. It was bought by Barclays.
Same thing with the Big Three. GM and Chrysler should go into bankruptcy, go through the pain of restructuring and after which they should merge(another painful restructuring). Ford is doing ok and it will probably survive as an independent company(but not without some restructuring).

This is also a good time for GM to start thinking about scrapping some brands. I think that Pontiac, Saturn and Buick should be gone by 2010, they are just really bad brands. The rest of the brands should be strenghtened.


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## Astralis (Jan 28, 2007)

Jaeger said:


> The US isn't going to have a healthy financial system if the Auto Industry disapears. One in ten US Workers are directly or indirectly employed as a result of the industry and the knock on economic effect would fuel the US housing crisis even further, with former car workers unable to afford mortgage repayments. At the same time businesses in local areas such as shops would suffer as would spending on goods and services within the wider economy causing ever greater depression. The billions spent helping the US Car industry would probably have to be spent on welfare programmes to support the masses put in to poverty and unemployment by the collapse of the auto industry, whilst further help would be needed for the banks and lenders, as houses prices and mortgage repayments collapse even further.


Some of them can find another job instantly and some of them can wait a bit for economy to create some new jobs and then get themselves employed. The money intended to go to autoindustry would go somewhere else what would fuel creating new jobs in a long-term. And the other thing, I never said Government shouldn't do anything to prevent autoindustry from falling down but that definitely doesn't include just simply throwing money. The best way is through selective credit policy from FED. Except that autoindustry should restructure its business, revitalize their management system including replacing many ppl and so on.



10ROT said:


> "Too big to fail" is reserved for *nothing*. The conditions of the financial sector is the signal of a hangover after the party ended. Wall Street got too drunk. Don't see why I, as a taxpayer who has nothing to do with this crisis, have to foot the bill for these crooks. Should I be paying for another party for AIG or another golden parachute for another bank CEO out there?


You're not paying that, trust me. You're paying TARP program who is intended to neutralize troubled bank assets and therefore stabilize financial system. And the other thing, you have nothing to do with the crisis but your faith (job, pay, earnings, and so on) is depending on the result of this crisis. If financial system collapses and Goverment does nothing to prevent that a long-term depression is guaranteed bc in that case companies have no opportunities of geeting money for financing their business opportunities. And that's not all. You as a part of population in that case have no opportunities of getting a new car, new home or whatever bc financial system is in deep shit and noobody can get loans from any bank. Think about this scenario.



10ROT said:


> The fact that it won't function, because the cheap credit train got stuck on the tracks, should be the problem that we should try to solve...to try to fix ourselves out of this, as well as more regulation and overhead to these financial companies. Not throwing more and more printed money at the situation, while not saying anything else.


It's always like that, regulation is tighter during the crisis and it loosens afterwards, or to be exact it liberalizes afterwards. You are attacking FED and their policy but instead of doing that you could really try to think what would happen if they did nothing .



10ROT said:


> The US needs to produce things to succeed and get out of this spiral. The fact that we're so dependent on a sector (the financial industry) that doesn't create anything of value or wealth is disturbing. Importing ourselves out of our problems did not work, did it?


For the first sentence I agree. But the key thing here is - US needs to produce goods which can be competetive in global markets and the way things are now cars are definitely not that type of goods.
US economy is not dependent on financial industry (except that it its core sector and that it can't function without it - but this is the characteristic of every economy in the world) it's mostly dependent on retail industry, i.e. consuming.


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## Jaeger (May 11, 2006)

Astralis said:


> Some of them can find another job instantly and some of them can wait a bit for economy to create some new jobs and then get themselves employed. The money intended to go to autoindustry would go somewhere else what would fuel creating new jobs in a long-term. And the other thing, I never said Government shouldn't do anything to prevent autoindustry from falling down but that definitely doesn't include just simply throwing money. The best way is through selective credit policy from FED. Except that autoindustry should restructure its business, revitalize their management system including replacing many ppl and so on.



In the middle of a recession people find it difficult finding work full stop, and for 10% of the US Workforce to suddenly find a job in the middle of a major recession would be unrealistic at best.

Without these loans much of the US Auto-Industry may well end up in recevership, and the chances of creating enough spending (on goods such as cars) during a major recession when banks are reigning in their lending and customers are unwilling to borrow due to their own long term financiual concerns and job prospects means that an increase in demand is unlikely.

The US Government loans are essential to helping the US Car industry through change which will involve streamlining and restructuring. As for the Federal Reserve adopting a selective credit policy, how exactly is this going to help create the instant demand in the US Car Market needed as opposed to Government bridging loans in order which will art least prevent these companies going under and further adding to the current cycle of economic depression and woe. GM alone accounts for over 5% of the total US Economy and it alone going in to liquidation would be catostrophic in terms of the US and Global Economies.

Furthermore you mention selective credit control, but don't go in to detail, would you use the Federal Reserve (tax payers monies) to try to kickstart the economy through an increase in credit, or would you use credit controls to reign in spending, both scenarios having potential problems. 

http://books.google.co.uk/books?id=...&hl=en&sa=X&oi=book_result&resnum=3&ct=result

The rest of the world such as the Europeans will be supporting their car industries, and for the US not to offer bridging loans of $14 Billion to it's own industry would be madness.

By the way the last person I would trust for long term economic advice is an Inverstment Banker, it is investment bankers with their short term profits systems and annual bonuses based on short term trading results that have helped fuel this economic crisis in the first place. 

The difference between what goes on behind a list of prices on a computer screen and what goes on in the real world and industry is quite stark, with many in industry are therefore very wary of the financial sector.


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## Get Smart (Oct 6, 2008)

the big 3 do not deserve any public money


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## bayviews (Mar 3, 2006)

polako said:


> This is also a good time for GM to start thinking about scrapping some brands. I think that Pontiac, Saturn and Buick should be gone by 2010, they are just really bad brands. The rest of the brands should be strenghtened.



The way that things look now, those brands might be gone within a few months! 

Seriously though, I agree with all that's been said about the checkered history, missed opportunitiues, SUVs/Humvees & poor management of the Big 3 automakers. 

And nope, I'm not happy with all these corporate bailouts, not when these CEOs have increased their take from 30 times the average American worker to more like 300 times, & Corporate American & their political servants have been preaching/treating the American people 30 years to survival of the fittest social darwinism. 

That being the case, the Feds have bailed the Wall Street bankers & billionaires, which have brought us little but speculation & bubbles bursting. 

Seems like the auto sector, a key sector of the US manufacturing should get equal consideration. If GM & Chevy collapse, that's hundreds of thousands of autoworkers out on the street & decades of steeper decline for Detroit & other struggling cities mostly in Mid-America. 

With any bailouts, whether Wall Street or Detroit, there needs to be tight federal oversight to make sure they don't go back to the same old ways. It's because of the chipping away of regulation & the lack of government oversight that the US is in this mess today. 

I agree, if the US is going to remain the biggest economy, we really need to refocus on making stuff rather than personal consumption & financial speculation. 

Frankly, Washington might be the capital of the most powerful country the world has ever seen. But it functions like a very small town. Its all about who you know, rather that what you know, which is why this whole thing collapsed. 

In truth, a good part of the real reason that Congress bailed out Wall Street is because if it went down, so would many of their relatives, freinds, cronies & lobbyists who made a killing in that sector. 

I get the sense that a lot of the reason they haven't done anything for the auto sector is because they don't know many, if any autoworkers, or others who work in manufacturing. If they did, why have been sending so many of what's left of our manufacturing jobs overseas? 

Tell me it isn't so!


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## Astralis (Jan 28, 2007)

Jaeger said:


> Furthermore you mention selective credit control, but don't go in to detail, would you use the Federal Reserve (tax payers monies) to try to kickstart the economy through an increase in credit, or would you use credit controls to reign in spending, both scenarios having potential problems.


I mentioned it in my previous posts. Selective credit policy is meant to stimulate banks in giving loans for buying US produced cars which would eventually stimulate auto sales and improve income statements of autoindustry. BTW everything in economy has potential problems. It's based on the principle nothing ventured, nothing gained or to be precise - there're not that many things you can improve without having some side effects. The only question is whether these side effects are more or less significant than the original action.



Jaeger said:


> The US Government loans are essential to helping the US Car industry through change which will involve streamlining and restructuring. As for the Federal Reserve adopting a selective credit policy, how exactly is this going to help create the instant demand in the US Car Market needed as opposed to Government bridging loans in order which will art least prevent these companies going under and further adding to the current cycle of economic depression and woe. GM alone accounts for over 5% of the total US Economy and it alone going in to liquidation would be catostrophic in terms of the US and Global Economies.


The basic problem is that they are seeking help in form of a bridge loan in the wrong place - Government and in fact they should be seeking bridge loans from banks. For having that you need to have a healthy and stable financial system and that's the reason why biggest financial institutions need to be prevented from going bankrupt in the first place.



Jaeger said:


> uch as the Europeans will be supporting their car industries, and for the US not to offer bridging loans of $14 Billion to it's own industry would be madness.


Of course they will. They've been doing it for a long time now, no reason to stop now. All of that is wrong - subsidizing autoindustry, agriculture and so on.



Jaeger said:


> By the way the last person I would trust for long term economic advice is an Inverstment Banker, it is investment bankers with their short term profits systems and annual bonuses based on short term trading results that have helped fuel this economic crisis in the first place.


This crisis is a product of sth else other than invesment banking. All of this has its source in 9/11 and economic shock it has caused then and afterwards paritally in form of shifting expenditures into defence programs instead of education, infrastructure spending and so on. The most evident reason of this crisis are economic cycles and market imprefections in combination with economic shocks. Moreover it's not sth extraodinary and it's not that bad as it seems right now. Basically if you go up by more than you deserve it's logical that at one point in time you'll need to fall down to balance that growth.


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## Jaeger (May 11, 2006)

Astralis said:


> I mentioned it in my previous posts. Selective credit policy is meant to stimulate banks in giving loans for buying US produced cars which would eventually stimulate auto sales and improve income statements of autoindustry. BTW everything in economy has potential problems. It's based on the principle nothing ventured, nothing gained or to be precise - there're not that many things you can improve without having some side effects. The only question is whether these side effects are more or less significant than the original action.


So you want to stimulate loans, at a time when we have just gone through a credit crisis, and given that we are entering a recession and much of the population doesn't even know if there job is secure, do you think it sensible to encourage loans. Furthermore at a time of recession the last thing most people want to do is to take out a loan in case they do lose their job, and not providing support through loans to the car industry just makes the problem worse for a good 10% of the US working population. Finally the banks have argued that to force them to give loans would punish savers and pensioners, as interest raes would inevitable be cut.



Astralis said:


> The basic problem is that they are seeking help in form of a bridge loan in the wrong place - Government and in fact they should be seeking bridge loans from banks. For having that you need to have a healthy and stable financial system and that's the reason why biggest financial institutions need to be prevented from going bankrupt in the first place.


The financial institutions are against being forced to provide loans at the current time, they themselves are already counting the cost of the credit crunch. The British Government has announced this week it will be offering bridging loans to UK Car produces, and a $14 Billion US Loan is a drop in the ocean compared to hundreds of billions being paid out to support banks thanks to the activities of reckless and greedy bankers, who leant far more than the banks could safely afford.



Astralis said:


> Of course they will. They've been doing it for a long time now, no reason to stop now. All of that is wrong - subsidizing autoindustry, agriculture and so on.


I don't see BMW, Mercedes or other European Car makers on their last legs like GM and I disagree, supprting your national industry in times of crisis is sensible.



Astralis said:


> This crisis is a product of sth else other than invesment banking. All of this has its source in 9/11 and economic shock it has caused then and afterwards paritally in form of shifting expenditures into defence programs instead of education, infrastructure spending and so on. The most evident reason of this crisis are economic cycles and market imprefections in combination with economic shocks. Moreover it's not sth extraodinary and it's not that bad as it seems right now. Basically if you go up by more than you deserve it's logical that at one point in time you'll need to fall down to balance that growth.


This has nothing to do with 9/11 and more to do with banks lending money to home owners who couldn't afford the repayments, and when the property market in the US started to crash and negative equity started to set in, the banks reeped the whirlwind they had caused themselves. Thr easy credit society saw the banks lend money far beyond a sensible level, and mortgages were given to people without proper deposits or earning levels. This was the main cause of the present crisis, and it has had a ripple effectcausing massive banks to collapse as their share prices tumbled as the city brokers sold their bank shares in a frenzy of panic, and companies such as Freddie Mac went bust, followed by major banks around the globe and the collapse of stock.


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## Oaronuviss (Dec 11, 2002)

philadweller said:


> Maybe its time to pull the plug on the Space Shuttle and worry about what is happening on the land.


Probably the best idea anyone came up with all week.
Really though, there are much more important things to grasp these days than a Space program.


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## mhays (Sep 12, 2002)

That would be both symbolic (not much money), a downer (like the country is giving up), and counterproductive (the space program not only gives concrete benefits, but is a major factor in what country(s) will be prominent in the coming decades.


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## Jaeger (May 11, 2006)

Watch Top Gear's Honda FCX Clarity from last Sundays Programme here -






The FCX Clarity may just offer the solution to the future energy crisis and it's virtually 100% environmentally friendly.

http://www.telegraph.co.uk/motoring/environment/2749557/Honda-FCX-Clarity-Car-of-the-century.html


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## Astralis (Jan 28, 2007)

Jaeger said:


> So you want to stimulate loans, at a time when we have just gone through a credit crisis, and given that we are entering a recession and much of the population doesn't even know if there job is secure, do you think it sensible to encourage loans. Furthermore at a time of recession the last thing most people want to do is to take out a loan in case they do lose their job, and not providing support through loans to the car industry just makes the problem worse for a good 10% of the US working population. Finally the banks have argued that to force them to give loans would punish savers and pensioners, as interest raes would inevitable be cut.


That's right. What FED did yesterday is really stimulating for interbank lending. FED is targeting FED funds rate at 0-0.25 %. After stabilizing interbank lending again, you can count on boosting loans for companies and population. That's the basic thing in here and FED is doing a great job. If you ask me Bernanke should be voted a man of the year in business for dealing with this crisis in a best possible way.



Jaeger said:


> The financial institutions are against being forced to provide loans at the current time, they themselves are already counting the cost of the credit crunch. The British Government has announced this week it will be offering bridging loans to UK Car produces, and a $14 Billion US Loan is a drop in the ocean compared to hundreds of billions being paid out to support banks thanks to the activities of reckless and greedy bankers, who leant far more than the banks could safely afford.


As I said financial system is the only part of economy which is privileged to get direct government help in time of crisis and reasons for that are stated previously. No need to repeat myself.



Jaeger said:


> I don't see BMW, Mercedes or other European Car makers on their last legs like GM and I disagree, supprting your national industry in times of crisis is sensible.


They would have probably been down a long time ago without government aid. Hipotheticaly, let's say the big 3 get the aid in form of a bailout... what if (and there is a strong possibility of that) they come back for more after 2 weeks or so? What would you suggest for Governement to do then?



Jaeger said:


> This has nothing to do with 9/11 and more to do with banks lending money to home owners who couldn't afford the repayments, and when the property market in the US started to crash and negative equity started to set in, the banks reeped the whirlwind they had caused themselves. Thr easy credit society saw the banks lend money far beyond a sensible level, and mortgages were given to people without proper deposits or earning levels. This was the main cause of the present crisis, and it has had a ripple effectcausing massive banks to collapse as their share prices tumbled as the city brokers sold their bank shares in a frenzy of panic, and companies such as Freddie Mac went bust, followed by major banks around the globe and the collapse of stock.


No offence, but your reply proves that you are not fully acquainted with the roots of this crisis. What you're saying now is more like a consequence of the cause and not a cause itself.


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## Jaeger (May 11, 2006)

Astralis said:


> That's right. What FED did yesterday is really stimulating for interbank lending. FED is targeting FED funds rate at 0-0.25 %. After stabilizing interbank lending again, you can count on boosting loans for companies and population. That's the basic thing in here and FED is doing a great job. If you ask me Bernanke should be voted a man of the year in business for dealing with this crisis in a best possible way.


Low interest rates are not going to save the car industry, they weon't create demand in an economy already in the depths of recession. Low interest rates discourage savings, and may make the situation worse, with banks having a lower savings to loans ratio, thus reducing their lending capabilities.



Astralis said:


> As I said financial system is the only part of economy which is privileged to get direct government help in time of crisis and reasons for that are stated previously. No need to repeat myself.


The Banks and Financial industry were privilidged to receive lots of tax payers money, however it seems the same courtesy does not apply to the US Car Industry, which is merely trying to secure a bridging loan of $14 Billion. The US Car Industry contributes directly and indirectly over $1 Trillion Dollars or 10% of US GDP.





Astralis said:


> They would have probably been down a long time ago without government aid. Hipotheticaly, let's say the big 3 get the aid in form of a bailout... what if (and there is a strong possibility of that) they come back for more after 2 weeks or so? What would you suggest for Governement to do then?


What happens if rhe banks come back for more. The Car Industry needs help, to allow 10% of the US Economy to collapse would be catostrophic for the US and World Economy. The Banks have had hundreds of billions of dollars, and may yet need more. The Car Industry is just asking for $14 Billion and it is hypothetical to suggest that it will ask for more, it would also be open to further debate if it asked for more, and perhaps the Government would need to take over the running of such as strategically important industry if it was to do so.




Astralis said:


> No offence, but your reply proves that you are not fully acquainted with the roots of this crisis. What you're saying now is more like a consequence and not a cause.


No offence but anyone who thinks that the current crisis has more to do with 9/11 than the easy credit years & US sub-prime property crisis as the real cause is talking complete nonsense.


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## Paddington (Mar 30, 2006)

hudkina said:


> Yes, because Toyota didn't develop the Sequoia, Highlander, or Tunda and Honda didn't develop the Pilot, Element, or Ridgeline. And Ford and GM certainly don't make fuel efficient cars like the Fusion, Malibu, Focus, and Cobalt...
> 
> A Hummer gets better fuel economy than a Bentley or a Ferrari, but I don't see you bitching about those companies making bad decisions. And really, the Hummer was always meant to be a high-end luxury buy. Nobody is expected to drive a Hummer back and forth to work any more than anyone expects people to drive their Ferrari. Hell the 8 cylinder, 4WD Toyota Sequoia has about the same fuel economy as the 8 cylinder, 4WD Hummer. So is Toyota the worst company ever for deciding to build a massive SUV that Americans want to drive?
> 
> ...


What people don't understand is that the Hummer cost GM little to nothing. There were no $4 billion platforms or $2 billion engines that went into Hummer. For the H2 they made some slight modifications to the Tahoe and contracted production outside, and for the H3 they built it off the Colorado (on the same assembly line in Louisiana). 

Basically it used existing production capacity and technology that GM (and their partners) already had. It's a not whole lot different than making the Tahoe, and then also making the Suburban. It was basically a "bonus" model to better utilize existing capacity, and it sold well for it's time. It's not something GM bet their whole future on, like the media makes it out to be. If Hummer goes, the only ones that would be affected would be the sucker dealers that built new showrooms for it.

And like you point out above, Toyota gets a pass for tripping over themselves to open up multiple SUV/truck facilities over the past few years, as did Nissan.


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## Paddington (Mar 30, 2006)

Jaeger said:


> Watch Top Gear's Honda FCX Clarity from last Sundays Programme here -
> 
> 
> 
> ...


Not really. Where are you going to get hydrogen from? On Earth, hydrogen can't be harvested the same way oil can. It has to be produced from something, with a lot of energy invested, which necessitates that oil/coal/whatever on the other end be burned to make it. It's circular reasoning.

GM has prototype hydrogen vehicles too, BTW. It's a technology that I doubt will come to pass in my lifetime.


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## Jaeger (May 11, 2006)

Paddington said:


> Not really. Where are you going to get hydrogen from? On Earth, hydrogen can't be harvested the same way oil can. It has to be produced from something, with a lot of energy invested, which necessitates that oil/coal/whatever on the other end be burned to make it. It's circular reasoning.
> 
> GM has prototype hydrogen vehicles too, BTW. It's a technology that I doubt will come to pass in my lifetime.


Hydrogen is the most abundant of the chemical elements, constituting roughly 75% of the universe's elemental mass. You don't have to produce it, it's already there. Why would we need to produce a substance that is not just more abundant than oil, but the most abundant element in the entire universe.

Try actually watching the video next time.

Btw Honda's FCX will be the first such vehicle in actual production and not some blueprint or proposal.





:nuts:


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## Paddington (Mar 30, 2006)

Yeah I know a little bit about hydrogen. I have a Chemistry degree from an Ivy League University. 

There could be tons of hydrogen in the stars and elsewhere, but that doesn't make it easily accessible. Nor is the hydrogen that's locked up in H20 molecules in the ocean easily accessible, because it takes a lot of energy to get it out.

A lot of the commercially produced hydrogen that's used now actually comes from hydrocarbons (natural gas, oil, etc.)


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## Jaeger (May 11, 2006)

Paddington said:


> Yeah I know a little bit about hydrogen. I have a Chemistry degree from an Ivy League University.
> 
> There could be tons of hydrogen in the stars and elsewhere, but that doesn't make it easily accessible. Nor is the hydrogen that's locked up in H20 molecules in the ocean easily accessible, because it takes a lot of energy to get it out.
> 
> A lot of the commercially produced hydrogen that's used now actually comes from hydrocarbons (natural gas, oil, etc.)





> Revolutionary Hydrogen Extraction Technique Can Replace Gasoline in Engines
> 
> New technique revolutionizes hydrogen and gasoline cars
> 
> ...


http://www.reuters.com/article/scienceNews/idUSN1739378820070518

http://cleantech.com/news/2482/hydrogen-Jerry-Woodall-Purdue-aluminum-gallium

http://news.softpedia.com/news/Revo...e-Can-Replace-Gasoline-in-Engines-54810.shtml


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## Paddington (Mar 30, 2006)

That's the most irresponsible thing I've ever read, written by English majors with no science background misinterpreting the words of a mediocre professor from Podunk-U trying to get his 15 minutes of fame with a pathetic "invention" that he's trying to spin into something more than it actually is.

Ever hear of the conservation of energy? 2H2 + O2 <--> 2H202. If you go from H20 to H2 and O2, and then back to H2O there is no gain of energy. This guy's invention is no more than a type of unconventional battery that is made instead with an unstable, high energy aluminum/gallium combination, with the potential energy in it liberated by water, which then separates into hydrogen and oxygen, and then reacts again to form water. But how do you think they got that energy into the aluminum in the first place? Essentially he's discovered nothing else than perhaps an easier way to transport hydrogen, but which doesn't answer the basic question of "where does the energy come from?"

Just take my word for this: there will not be widespread hydrogen cars in your lifetime, because there is no cheap source of hydrogen. I 100% guarantee this.

BTW: Just to be on the safe side, I googled this guy, his invention, and read some scientific forums to see what people say. Yup, they think he's a moron with a worthless "invention". A year later, and I'm still not seeing Mr. Woodall's new energy revolution. I don't see Exxon Mobil quaking in their boots either.


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## Jaeger (May 11, 2006)

Paddington said:


> That's the most irresponsible thing I've ever read, written by English majors with no science background misinterpreting the words of a mediocre professor from Podunk-U trying to get his 15 minutes of fame with a pathetic "invention" that he's trying to spin into something more than it actually is.
> 
> Ever hear of the conservation of energy? 2H2 + O2 <--> 2H202. If you go from H20 to H2 and O2, and then back to H2O there is no gain of energy. This guy's invention is no more than a type of unconventional battery that is made instead with an unstable, high energy aluminum/gallium combination, with the potential energy in it liberated by water, which then separates into hydrogen and oxygen, and then reacts again to form water. But how do you think they got that energy into the aluminum in the first place? Essentially he's discovered nothing else than perhaps an easier way to transport hydrogen, but which doesn't answer the basic question of "where does the energy come from?"
> 
> ...









> Hydrogen Breakthrough Could Open the Road to Carbon-Free Cars
> 
> 
> PN: 35/07
> ...




I think I will side with SHEC's Project Co-ordinator Professor Peter Edwards of the University of Oxford on this matter rather than your analysis.

http://www.epsrc.ac.uk/ResearchHighlights/Energy/Guide/Hydrogen.htm

http://www.epsrc.ac.uk/ResearchFund...unding/SUPERGEN/SustainableHydrogenEnergy.htm




> http://www.guardian.co.uk/technology/2007/jun/28/it.guardianweeklytechnologysection1
> 
> Currently researching new methods of storing hydrogen, Professor Peter Edwards of the University of Oxford also finds *Woodall's* research innovative. "What they're talking about is hydrogen that's stored in water and, in a way, that's the ultimate store," he says. "In theory, you don't have a carbon penalty but there's always a hidden carbon cost." A litre of water contains the equivalent of 1,366 litres of hydrogen - which provides the same energy as 0.4 litres of petrol.
> 
> ...


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