39 Comments

1. Dave the Kapampangan:

“Obama administration reminds me of an irresponsible third-world regime, skirting the law and handing economic prizes to political cronies.” — welcome to the Chicago machine, James Glassman. But I wonder why the NYT, a renowned pro Oba-messiah propaganda mouthpiece similar to Pravda, finally saw fit to publish a dissenting opinion. Is NYT running out of money bilking the faithful or something?

May 31, 2009 - 10:55 am 2. Cowboy:

Even more disturbing to me than the bondholders getting the shaft at GM and Chrysler are Obama’s new fuel requirements. Up to now fuel standards were legislated. The orginal CAFE standards of the 1970’s, and Congress’ recent update of them no less than last year, were both argued through a legislative body. While I would argue that the result was poor, at least some deliberation was had and the process was subject to deliberation by a representative body of diverse interests. The same is said for California’s peculiar fuel standards, which did go through the state’s legislature.

This is how law ought to work in the United States.

Obama’s new fuel standards are imposed through the executive branch, piggy-backed on new regulatory powers he’s granted to the EPA regarding carbon dioxide emissions as a greenhouse gas. There can be no doubt about it: actions such as these expand the power of the executive branch and overstep the authority of the legislative bodies. Holes in the barrier between the two broaden each year, to the point where one can literally drive a truck through them.

This is not good. Through regulatory power grabs legislative roles are usurped, and through what is happening around the GM/Chrysler fiascos before the bankruptcy courts (and perhaps through another process typified by Sodomayer’s embrace of judicial legislating at the Supreme Court) judicial roles are usurped by wheeler-dealers in the White House. Presidential power is becoming increasingly dictatorial. The last century gave the notion of the “Imperial Presidency”, and trends along these line have accelerated today.

I note Rome’s Republic had what we sorely lack, a Cicero. And even that wasn’t good enough to thwart the Caesars. Americans continue along confident in the notion that their small-r republican principles are strong enough to withstand whatever any president may throw at them. I hope they are right.

Especially when we’ve got a crew in there with a sweeping agenda of “change” and break with America’s past, and ones who hold the attitude that “big crises are big opportunities.”

May 31, 2009 - 11:17 am 3. Herb:

I believe that one of the brokerage houses said Friday that the expected trading range for GM common was $0.01. That reflects the $50Bn in our money and the concessions by the UAW and all of the physical assets and goodwill.

Bondholders took 10% of next to nothing over first cut at nothing. But thats ok, they have Obama’s gratitude.

May 31, 2009 - 11:18 am 4. E. Nigma:

Obama’s gratitude and plenty of hot air to fill the tires. Check your pressure, it’s a plan.

I own a Ford, among my several cars. And I might by one again, someday, if I ever buy another new car (unlikely). But I don’t plan on buying a Chrysler or GM car again.

This is frankly ridiculous. We are becoming a banana republic.

One wonders what other political cramdowns are coming down the pike.

May 31, 2009 - 12:47 pm 5. blert:

I’m just waiting for H to push an enabling act through congress…

His multitude of czars can maintain control of the bureaucracy.

The tempo of edicts emanating from the Grifter-in-Chief demonstrates that America, Inc. is being run by a hive-mind.

Hence there is no POTUS without TOTUS.

………….

The spike in 10yr T’Note rates dropped the market value of residential real estate 15%. That is, the cash flow that would have sustained a 200,000 mortgage now can only support 170,000.

The rise in oil, gold, silver, copper, etc. represents a flight from the USD… NOT a surge in consumption-demand pressure. There is no limit to dollar flight once Ben steps up the press run.

Of course, the market already assumes that the foreign central banks, especially Japan, China and Taiwan shun Notes and Bonds. The market assumes that Ben stepped in to stop a complete rout. So America has a failed auction to match that of Britain.

The upheaval in the mortgage market is severe.

Consequently the refi engine is sputtering. Only ‘locked’ refi’s are being processed.

Globally, auto and steel production needs to contract. Bubbleated housing must crash. A slow climb down replicates the Japanese debacle: you can never get to the other side of the valley!

The proven workable solution was last demonstrated by President Harding. Why is it that his approach is never discussed?

The Harding Way: Cut spending, cut taxes, stop brainiac government meddling in the economy, cut government payroll.

The Harding Result: The Roaring Twenties.

If only Hoover had remembered what his boss had done nine years earlier the Great Depression would not even be discussed today.

BTW, H is resolutely determined to perfect us all. We are damned.

May 31, 2009 - 12:52 pm 6. blert:

Hoover invented the secular international non-governmental organization to feed the Dutch in the Great War.

Strangely, he did not follow his own template in the 1930’s. If he did he would have restricted himself to massive food aid to the unfortunate.

That wouldn’t have broken the bank and is the kind of operation he new how to scale up rapidly.

Instead, he began a policy of changing the rules of commerce through laws, taxes and executive orders that continues to this day.

The absolute rape of creditor priorities must have a drastic consequence.

At a minimum, the notion of a AAA credit is destroyed. The notion of American legal impartiality is devastated.

The lender has a vote and the rate spike is a vote of no confidence.

I smell inflation, super-inflation and then hyper-inflation.

Why? Official attitudes towards the dollar, private equity and the rule of law.

Crony capitalism is metastatizing.

We’re all Chicago now!

May 31, 2009 - 1:10 pm 7. Josh:

Whatever they get as individual bondholders must be set against how much they’ve undermin(e)d the claims of all bondholders in the future.

Y’know, I’m not sure that I agree with this. Arguably, all GM bonds and stocks are now worthless. Absent government intervention, would you think otherwise? There are no claims here to undermine.

ON THE OTHER HAND, with the Fed now monetizing debt and printing money at unprecedented speed (and in unprecedented obscurity), isn’t it we, every citizen and taxpayer, who are seeing our claims to solvency diluted?

May 31, 2009 - 1:19 pm 8. whiskey:

Future bonds will be … almost non-existent. Since there is no way any covenant can be written that’s enforceable, if there enough politically connected stakeholders. You can’t force people to lend and the US goes back to cash basis financing almost overnight. No unionized company will get credit or bonds. Their equity will of course be worthless as well.

Bottom line: no raising of capital.

The problem is that Obama and company are too stupid to realize this. Coming out of the hot-house, shake-down environment of Chicago, they’ve been able to shake folks down for decades as small time grifters. Now they’re in total charge, and are killing the goose that lays the golden eggs.

Obama’s long term bet in this instance is to create enough Blacks, Hispanics, Gays, SWPL Yuppies, and Women on the government payroll to maintain power (the Chavez route, Obama’s innovation being adding women to the Affirmative Action feeding frenzy).

Is this sustainable? No. A massive economic shakedown globally alone through foreign events (the downside of globalism) can collapse the economy to subsistence levels and create street riots for bread and gas, with Obama’s alliance coming out the loser (women are not good for street fights and there simply are not enough New Black Panther Party goons). Let alone several nukes wiping out US cities and Obama’s predicatable groveling response.

But wider, America’s political class and system has failed. Elites have always been at war with the populace, but never so explicitly aligned with foreign interests and so powerful. Nor have we ever seen the gender divide (which gives elites their demographic power) before.

America’s constitutional system is based on the assumption that most American voters remain invested in the good outcomes for all and support American Nationalism. This is not the case for corporations, for the elite that run the corporations, for the NGOs, and for huge swaths of the electorate, particularly non-Whites and women who remain allied against, explicitly, White men. Who are “the real enemy.”

May 31, 2009 - 1:46 pm 9. Gordon:

Cowboy–look what happened to Cicero. But he done good while he could.

Others–just remember: if you buy American, buy Ford. If GM/Chrysler don’t sell, the whole thing will fall apart.

What is going on in this country? How could this happen!! (ok, sorry–I’m better now)

May 31, 2009 - 1:51 pm 10. steeple:

Human beings are not freely portable, as we are bound to community, family, friends and where our traditions lie. While we can move, it generally takes a fairly healthy dose of incentive to do so.

Capital, on the other hand, flows quite freely. Just as a liquid like water, capital tends to “find its own level”. We are witnessing capital leave the US dollar denominated assets in order to seek either other markets or better stores of value (hard and soft commodities like metals, oil, grains, or precious metals). One great measure is that oil is priced over $60/barrel in an economy where GDP growth has been crushed over the past year. So while Congress was so quick to assert that speculators drove oil prices so high last summer, what would be their explanation for oil remaining so high despite a severe global recession? It certainly appears that capital, particularly that from Asia, is looking for a better store of value.

Changing the rules does have unintended and destructive consequences. I take a look at my own “One Hundred Trillion Dollar” note from Zimbabwe every day in order to not forget that.

May 31, 2009 - 1:51 pm 11. Scythianeedle:

At least the administration is not trying to hide is grotesque bias and readiness to pervert this country and turn everything upside down.

Department of Justice under pressure from POLITICAL appointees has dropped voter intimidation charges against so-called “New Black Panthers” who were dressed in uniforms and carrying night sticks in their hands, while standing at the entrance of a polling place in Philadelphia during the 2008 presidential election.

You can see video at Brain Shavings and connect to Fox and Youtube links of other videos at an article on Fox News.com dated 29 May 2009.

The Fox News article includes these descriptive bits, which President Barak Hussein Obama seems to regard as insufficient to warrant prosecution:

The complaint says the men hurled racial slurs at both blacks and whites.

A poll watcher who provided an affidavit to prosecutors in the case noted that Bartle Bull, who worked as a civil rights lawyer in the south in the 1960’s and is a former campaign manager for Robert Kennedy, said it was the most blatant form of voter intimidation he had ever seen.

In his affidavit, obtained by FOX News, Bull wrote “I watched the two uniformed men confront voters and attempt to intimidate voters. They were positioned in a location that forced every voter to pass in close proximity to them. The weapon was openly displayed and brandished in plain sight of voters.”
He also said they tried to “interfere with the work of other poll observers … whom the uniformed men apparently believed did not share their preferences politically,” noting that one of the panthers turned toward the white poll observers and said “you are about to be ruled by the black man, cracker.”

ElectionJournal.org has a number of videos on Youtube showing clear violations of polling place regulations and vote fraud.

In one Youtube video, someone with a camera is threatened by Philadelphia polling place personnel saying “You will get hurt.” The camera pans to the police car, and one of the documentary-makers approaches the police, who ignore him, as the polling place workers close the door.

There are always charges thrown against both sides in any election.

These are NOT accusations, they are DOCUMENTED videos.

Is this America? Or is it the Soviet Union under the KGB?

WTF, people?

In another Youtube video a pair of Philadelphia Police officers take the two Black Panthers into custody.

Evidently, they had absolutely no confusion about whether the law was being violated. Only the Department of Justice seems to be paralyzed in doing their office.

In Florida, private churches in the 2008 general election attempted to ban observers and campaign workers from their property. Evidently this is in violation of Florida voting laws, and those same churches in previous elections had allowed those people to stand at the legally defined distance from the polling place. Here’s a Youtube video of interviews with various observers & campaign workers in those incidents.

Anyone with a knowledge of the history of the Nazi Party in the 1930s will recall that Hitler specifically recruited violent felons to roam the streets intimidating anyone who was not an obvious supporter of the Nazis.

THIS MUST NOT BE IGNORED.

May 31, 2009 - 2:07 pm 12. blert:

Since money is created directly as a result of the banking system extending credit…

The impairment of creditor’s rights must result in constricted lending — constricted money growth. Okay, the money supply must necessarily contract as a result of H’s dictat against the creditors.

This fall in the money supply, then, is to be countered by a flood of fiat currency.

We’ve got Mugabe in the White House!

May 31, 2009 - 2:08 pm 13. blert:

We may yet fondly look back on these bankruptcies the same way as the Smoot-Hawley Tariff Act: the kind of meddling that transforms a depression into the Greatest Depression. /s

The consequence to roll-over corporate refinance is too terrible to contemplate.

AAA corporate America is going to founder: the market is going to instantly downgrade their credit due to political factors. Their customary financial advantage will be lost. Unfortunately, their business model utterly depends on access to the lowest cost credit.

Their only out is to contract their debt as fast as possible. Normally that is achieved by re-ranking the marginal business units within the corpus followed by triage. Lowering the head count will be policy.

Some of the most profitable firms today make non-essential items. As this Greatest Depression unfolds many will fold.

S&P earnings are going to consistently come in below expectations. Margin compression is going to be brutal.

Already we are seeing capital goods producers knocking off their prices 50%. (!!!)

Building contractors are bidding below cost. In my area, 24 bids chased a 4,000 square foot retail store build-out in a strip-mall! With those kind of numbers the house overhead spent on bid chasing explodes as a percentage of revenue. You’d have to run at the speed of light to stay in place. The event horizon becomes your treadmill.

The 50% contraction in credit card debt is aimed squarely at small businesses — a huge user of it.

Which brings me to the wacky birth/death model used by the BLS to fantasize about the unemployment rate and job creation. The labor statistics are bunkum. The official GDP numbers are manipulated — big time. Inflation has been much higher than the CPI. Medical outlays are wildly understated in the CPI.

We are floating on a sea of deceit. The tide must reverse.

It is strange indeed when Pravda has to preach anti-Marxism to America!

May 31, 2009 - 2:55 pm 14. Derek:

Josh: GM has assets and liabilities. The assets sold or liquidated or allocated to the bondholders is worth something.

In bankruptcy court they would be first in line. Not anymore.

So from now on the cost of borrowing through bonds has to cover the risk that the government by fiat will change the contractual arrangements.

And I don’t think the man at the top has the vaguest notion how it all works. As he said during the campaign, he prefers the 40,000 feet view.

Derek

May 31, 2009 - 2:57 pm 15. I'm Just Plain Dumb:

It will be interesting to compare “the big three” in 8 years. I suspect one will be doing really well on its own, two others will be continually receiving money from the taxpayers to ‘keep them competitive’.

May 31, 2009 - 3:32 pm 16. Triton'sPolarTiger:

Enough.

While I might one day find it advantageous to purchase a USED Chrysler or GM product from a private citizen, I will NOT hand even one trillion dollar bill to either outfit, so long as they are owned by the government.

Knowing as we do that the thing government hates above all else is competition, we may one day be in a situation were the only vehicles available for purchase are Chrysler or GM products.

I will become Amish.

May 31, 2009 - 3:33 pm 17. blert:

Well, at least the CDS insurance is there for the Big Boys.

I guess this means that AIG needs to pony up… again.

The real losers are the small investors who didn’t hedge in the CDS market.

Anyhow, we’re on the edge of the event horizon for Syn-CDOs.

GM
Chrysler
GMAC
Lehman Bros
AIG

We’re getting close to the trigger moment.

May 31, 2009 - 3:45 pm 18. Josh:

GM has assets and liabilities. The assets sold or liquidated or allocated to the bondholders is worth something.

You think that nets positive right now? After legal fees and years in court, I doubt it. Shocking, amazing, astounding, but unfortunately true. Remember, the feds are already into this for whatever, $20b, and market cap <<$1b. Pension liabilities alone are probably unmeetable.

blert: re AIG/CDS – ugh!

May 31, 2009 - 7:20 pm 19. Cadmus:

It is strange indeed when the Russians are giving advice on free markets to the US. But, before we get indignant, which we certainly should, let us remember that the Russians know more about Marxism than we do and they understand what damage it can do.

Obama’s actions are swiftly destroying the economic system that made this country great. The US became a global power not because Americans were genetically superior, but because we had a better system that allowed people to grow and prosper. That system attracted the world’s best and brightest (and sometimes not so good or bright), who contributed to the rise.

Now we have policies that are running people away. Money moves much faster. And, in a global economy, where more dollars exchange hands outside the US than inside, the world’s reaction could be devastating.

We already see many countries beginning to settle their international trades in their own currencies or that of another major country other than the US, including China, Brazil, and many countries in Asia and Europe. The talk about decoupling Oil from the dollar has accelerated. Many countries who peg their currency to the dollar – a major source of support for the value of the dollar – are considering un-pegging their currencies, if they have not already done so. And, so on.

The economy is largely based on faith in the stability and security of investments. Take that away and you have serious problem.

Here is the Pravda article. It is enlightening.

Cadmus

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.

Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.

First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.

Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.

Then came Barack Obama’s command that GM’s (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.

So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride.

Again, the American public has taken this with barely a whimper…but a “freeman” whimper.

So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.

The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.

The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

May 31, 2009 - 8:32 pm 20. Robohobo:

s-needle: “you are about to be ruled by the black man, cracker.”

Operative word is ruled. What they do not get that is in the near future as things fall to hell, anyone who has land will be the new rich. Why? Because they can then raise food. You cannot raise food in a 5th floor walkup.

Tomorrow, the last brick in the wall crumbles. The time of the US Republic is now officially over.

May 31, 2009 - 9:24 pm 21. blert:

Can I say it: Pravda FINALLY speaks truth!

May 31, 2009 - 9:27 pm 22. Doug:

Blert, what is CDS insurance?
Sad, incredible story about the contractors.
Decimating productive capital, large and small.

May 31, 2009 - 11:40 pm 23. Doug:

The 31-Year-Old in Charge of Dismantling G.M.
-
And now, from the mold of the Novice in Chief…
Outrageous.
Everybody acts like the Company that was selling as many vehicles Worldwide as Toyota was hopelessly uncompetitive.
(until now)
When in fact, they were doing just fine, except for
“Legacy Costs”
BHO Could have taken his Experiment in Healthcare out on the UAW “workers” at our expense (far cheaper than BHO OneCare for the entire nation)
…and let GM drop that anchor, hire some real labor, and get on with business.
Instead, we’ll get something that makes TARP look like a beauty queen.
…and lose one of the World’s Great Automakers.

May 31, 2009 - 11:45 pm 24. ledger:

They call him Barack “Neutron” O’Bomba:

“He destroys, Businesses, Shareholders, Bond holders, employees but leave the buildings standing.”

More to the point, Obama’s meddling with bondholder rights will cause other bond holders to think twice about extending credit to companies in the USA.

This will have the effect of raising interest rates, increasing inflation and driving business out of the USA.

Obama has done more economic damage to America that any other President in recent history.

Jun 1, 2009 - 12:42 am 25. Doug:

G.M.’s Road From Prosperity to Crisis – Interactive Timeline

Jun 1, 2009 - 4:13 am 26. Doug:

Deuce found this astounding Diversity Statement w/Turbocharged Multi-Media Boost
here:
“As goes General Motors, so goes the nation.“

Jun 1, 2009 - 4:20 am 27. oMan:

All very well to swear off GM and Chrysler products. I intend to back Ford (assuming it survives without bailout). But Ford will be facing a huge cost disadvantage: not only the re-set by its domestic competitors of their balance sheets through bankruptcy, but also their ongoing subsidies from the taxpayer. Because the government will not abandon its union friends if –when– they fail to run GM and Chrysler profitably. It will insist that all government vehicles be one of their “house” brands. Ford may be invited to waste its time bidding for that business, but I think will get none, or just enough to avoid litigation that the bidding is rigged. Beyond that incestuous supply-demand loop, the government will feed GM and Chrysler all sorts of subsidies. The overt ones we can complain about, pointlessly. The covert ones, likely far more damaging in size and scope, we can only guess at.

Bottom line, in this zombie movie, Ford is surrounded by unkillable cannibals.

Jun 1, 2009 - 5:44 am 28. aaron:

I can recommend a book by Barton Biggs called “wealth war and wisdom”. It’s a bit dry but describes periods of wealth destruction very well.

One of his conclusions was that in desperate times (ie wars) true wealth consists of some warm clothing, a place in the country away from urban strife, and food. These are far more valuable than any money.

Primal.

Jun 1, 2009 - 7:22 am 29. geoffgo:

A small historical footnote about GM:

My maternal grandfather Oliver O. Moore was one crazy SOB. In 1894 at age 14, he walked across the Genesee Vally Gorge (mini-Niagra Falls) in Rochester, NY on a “slackrope” set up for the The Great Blondin show (a touring high wire act), scheduled for that afternoon. Having been co-opted by this 14-year old, Blondin hired Ollie, who traveled with the troupe for two years around the US and Europe. No nets.

Being very mechanically-inclined, at age 16 Ollie signed on as an apprentice mechanic with Foster Steamer Co., a competitor of Stanley. At 18 (1898) he become chief mechanic. At the centennial celebration in 1900, Ollie drove the Foster Steamer to a win in the “Rochester 50″ (avg. speed 22mph).

Note: Rochester was the same size as Chicago, Cleveland and Detroit at the time.
Ollie met Durant (GM) at some race around 1908, and was persuaded to get into the auto dealership biz. Circa 1910, Ollie opened the first Buick dealership in Trenton, NJ. – second automobile dealership in the state.

His description of the sales process: These are “automobiles.” They burn a new fuel called gasoline. Sorry, there are very few “gas stations” – 2 in Trenton and surrounds. These autos run best on paved roads, of which there are 27 miles worth in the entire state of NJ. And yes, if you break down you’re on your own. The competition (carriage-makers) would tell prospective buyers that at least if your carriage broke down, you could ride the horse home. Hardy har. Snicker, snicker.

Ollie is credited with inventing the white line on the righthand side of our highways. NJ adopted his convention in 1912. How many lives is that worth? We have several rejections from the US Patent Office stating they aren’t going to award a patent on a white line, no matter where it’s painted.

When Durant was forced out of GM in 1920, Ollie sold his dealership (then moving an average 808 cars per year), and took a job as a chauffer!???

Skilled mechanic, fearless, large super-athletic guy, race car driver = bodyguard packing heat (no concealed carry rules then). His employer was Jay Guggenheim. Salary and per diem was twice what he cleared as an auto dealer. Post-WWI, from 1921 to 1928, Ollie drove Jay all over US, Europe and Russia, while observing this shrewd dealmaker do his thing during the pre-depression era.

Ollie loved the hat; but hated the jodphers and knee-high riding boots. Two cars, two .45s, an early Thompson w/5,000 rounds and a complete set of tools and spares went trans-Atlantic by steamship and then rail.

As Maxwell Smart would say: Ollie always “just missed” the brass ring by this much; and it depressed Ollie mightily. Over 25 patents and NO business sense. Sadly Ollie died in 1972, a broken drunk with lots of amazing memories of accomplishment, useful inventions and rubbing shoulders with titans.

With GM in bankruptcy, both Oliver O. Moore and Durant are surely rolling over in their graves.

Jun 1, 2009 - 8:10 am 30. Eggplant:

Okay, GM just went bankrupt, oil price hits a yearly high, consumer spending continues to fall, mortgage rates have gone up and the real estate market remains in free fall. In response to horrific news, the DJI goes UP! 215 points (2.5%).

This is NOT! the response of a rational “free market”.

Is this the work of the “Plunge Protection Team” (PPT) or is it a continuation of “Pump and Dump”?

What entity is buying into this market? Are they buying with freshly printed money? How long before someone notices that the emperor is nude?

Jun 1, 2009 - 9:54 am 31. oMan:

Geoffgo (#29). What an amazing story. There were giants in those days. You ever thought about turning this sketch into a biography? I’d read it…

Jun 1, 2009 - 9:55 am 32. Roderick Reilly:

#3. Cowboy:

“”"”Obama’s new fuel standards are imposed through the executive branch, piggy-backed on new regulatory powers he’s granted to the EPA regarding carbon dioxide emissions as a greenhouse gas.”"”"”

Good Lord, that’s right! Past CAFE standards were legislated by Congress, not by executive fiat! How lawless and crazy is that? I missed that completely, as, apparently, did most people. When the feds bailed out Chrysler back in 1980 or so, I don’t recall that the feds took over Chrysler. This Mob-like inistence that “we own you” because we lent you money is frightening, but not as scary as the fact that the mechanisms and institutions that are supposed to be in place to stop such corruption are doing nothing to prevent it.

Jun 1, 2009 - 10:19 am 33. Roderick Reilly:

“”"”"”6. blert:

Hoover invented the secular international non-governmental organization to feed the Dutch in the Great War.”"”"”"

Hoover also started the “Americans’ Right to Own a Home” craze almost single-handedly shortly after WWI. Thanks a bunch, “Progressive” Republican. Is Hoover being channelled by Colin Powell?

Jun 1, 2009 - 10:23 am 34. Roderick Reilly:

“”””Obama’s new fuel standards are imposed through the executive branch, piggy-backed on new regulatory powers he’s granted to the EPA regarding carbon dioxide emissions as a greenhouse gas.”””””

Again, pardon my civic ignorance, but don’t “new regulatory powers” have to be approved by Congress? And if they were approved by Congress, isn’t it that body that gets to “piggyback” additional requirements? Since when does a President get to create legislation?

I know, what a naive doofus I am.

Jun 1, 2009 - 12:02 pm 35. hdgreene:

Eggplant, another explanation for the DJI going up might be as an inflation hedge. Normally, such money would go into real estate but that may not have touched bottom yet (lots of foreclosures to go). Oil is going up, too. Gold, I believe, has recently ticked up. The dollar is trending down. A cheap dollar will make it easier to raise prices domestically and export more.

This is pure speculation. I wonder if companies are buying back their own stock? They could fear hostile take-overs with a lot of loose money sloshing around. Also, there are changes coming to cooperate governance that would give share holders more clout. And, likely, regulators.

Jun 1, 2009 - 2:01 pm 36. Cadmus:

GM and Citi have been replaced on the Dow, taking effect on June 8. A lot of index funds will have to rebalance their investments and shift money around, which would have a substantial effect on stock prices.

Citi however has jumped from below $1 on Friday to over $3 today. Go figure. What drove that? Speculation!!!

Cadmus

Jun 1, 2009 - 2:12 pm 37. blert:

CDS = Credit Default Swap…

IE when a debtor goes under, the swap writer pays off the bond at par — 100%.

In the Syn-CDO situation the first defaulters are picked up by the most junior tranches within the syndication — held by the creator of the SPV. ( Special Purpose Vehicle )

However, after the first seven or eight listed names in the underwriting pool default the pound of flesh comes from the naive investors in the syndication.

You then have a repetition of the sub-prime syndication melt-downs.

In both situations the investors were assured that they were not taking significant credit or political risk. The tranches were sold with AAA ratings. Hence, no one looked under the hood.

These crap-shoots are now becoming apparent — and there is no way out. Each Syn-CDO is going to resemble a smaller version of AIG — ’cause they were writing the exact same type of coverage in the very same market against the very same names. How well has that worked out for AIG?

Since February the yield spreads on unionized, politically touchy major investment grade credits have moved up significantly. After the dictats by H we should expect to see spreads ramp up.

BTW China only bought T-Notes and T-Bonds with recycled export proceeds. Now that American consumer imports have fallen greatly.
Consequently China no longer has hot money needing a home and is out of the long term market.

In the face of this H & Co intend to flog the market with paper. The result must be that Ben buys the long end with paper money while the Treasury is only able to auction short term paper. This means that Uncle Sam is now on a credit card and figures to pay the interest with the web-press.

This dynamic is exactly what happened to Weimar Germany between 1919 and 1923.

Citi may be rallying because the insiders now realize that her Syn-CDOs are filling her coffers upon the demise of GM.

BTW, the staggering tax loss carry-forward in the GM corpus makes it a prospect for a merger with Microsoft. The Good-GM is being kicked out as a 363 which I believe means that the tax basis of GM stays behind. GM has approximately $70 of losses per share. Since so many bondholders have been removed from the claimant schedule by way of the 363 deal it may be possible for the liquidated assets to be rolled into some note after which GM-Classic could be merged with a major corporate taxpayer. I’m sure Mr. Buffett has his phone ringing already.

Jun 1, 2009 - 3:06 pm 38. oMan:

So Blert (#37): what’s a guy to do? Buy gold? Oil? Canadian oil funds? Based on a lot of my surveillance and comments like yours, it’s clear that the dollar is no place to call home.

Jun 1, 2009 - 3:55 pm 39. geoffgo:

oMan@31,

Thanks for your comment. Ever try to have a serious conversation with a chronic alchoholic? Those are just some of the verifiable snips of Ollie’s life from newsclips and eyewitness reports, letters and documents on file.

The stories Ollie related while in his cups (semi-continually as he aged) are even more interesting and amazing; but are now nothing more than hearsay.

What a wild ride he had; but at a terrible cost to his family. My Mom and her sister pretty much kept us kids away from him, until we were old enough to handle the confrontation.

Jun 1, 2009 - 4:50 pm

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