I wonder whether the media referring to rightfully pissed off citizens of this country as pitchfork-wielding local hick goons helps or hurts the situation? What’s the upside?
I think that, Eric Massa‘s vocal support of the bill notwithstanding, the idea of taxing the bonus money from AIG is remarkably bad policy on any number of levels. But the suggestion that “risk-averse” companies might not take part in bailout efforts because of the punitive measures such as these is fatuous on the face of it.
I thought that the reason we needed to pass the initial bailout bill was because the only other alternative was the collapse of banks across the country and a collapse of our economy along with them? If that’s the case, what alternative do companies have besides participating in the bailout efforts, other than collapse? I’m thinking that if the answer is anything other than collapse, they probably shouldn’t be stepping up to suck the teet of Washington, should they?
Hard to know which bullshit coming out of Wall Street is the correct bullshit to listen to. My vote would be not to listen to any of it.
Yep. AIG executives got lots of bonuses, some as much as a million dollars, after they got bailed out by the government. You betcha, it’s wrong. But where has all this outrage been while everybody else has been getting bailed out and bonused at the same time? Why is a tenth of a percent of our money so important now?
Just think what the difference might have been by now if the national television media, flushed with indignation now, had shown half that concern four months ago? They’re driving the story now and we’re expected not to wonder if things might have been different.
It now appears as though the legal obstacle to forbidding the payout of bonuses was ferreted into the bill by an unknown party. Unknown for now, but you can bet their name will be known by the end of the day.
Because, of course, that’s important.
In response to some of the concern out there about Saturn’s potential demise, Saturn has sent out an email to it’s customers. They say that the idea may be for Saturn to go it’s own separate way, not to vanish as we fear:
Today, we confirmed that Saturn and GM would further investigate one of those options: a spin-off of an independent Saturn Distribution Corporation.
The Saturn Distribution Corporation already exists as an indirect subsidiary of GM. It’s the entity with which our retailers currently have their franchise agreement. An independent Saturn would still have its great retailers, and it would continue to source current products from GM through 2011. If successful, SDC at that point would source products from other manufacturers.
The goal—from a product perspective—would be to find future vehicles that match the Saturn Brand: fuel-efficient, safe, reliable and affordable. From a retailing perspective, we would build on our core strength of unmatched customer service. The same hassle-free experience that is a hallmark of the brand could be taken to even higher levels.
This leaves open the question of what they do to manufacture cars without GM’s backbone. The implication is that they would outsource elsewhere, but where?
GM is in trouble. OK, I get that. GM needs to make sacrifices. OK, I get that.
But why the hell are they getting rid of Saturn? This is their best product line by far and the most affordable. Many people shy away from GM cars – and besides, they’re boring anyway – but they love their Saturns.
I think it shows the worthiness of GM that when pushed to make any decision at all, they make the one that will cost them the most. I was going to buy an Aura as soon as I got a new job. Now, I will be looking elsewhere.
OK, clips of this speech have been all over the news nets for the last two days. It’s the one where Barack Obama announces plans to limit executive pay for companies receiving federal tax dollars. Its an important speech, even if the plan itself is quite toothless in its conception. It’s an act of pure social justice that demands executives benefiting from our largess should be expected to show a measure of humility in the process.
But never mind all that. Check out the window behind him:
Is that plastic sheeting on those windows? Am I meant to understand that the White House is being weatherized by wrapping up the windows in plastic? No wonder the new prez has been slow to discuss policy publicly: he’s probably got a golf ball sized blister on his hair dryer hand.
Don’t tell me he isn’t serious about weatherizing and energy efficiency!
Well, too late. Because Bank of America already spent your cash on a “NFL Experience” carnival outside the Superbowl last night. If you hurry, you can probably still get some day-old hotdogs and old napkins that are swirling around on Dale Mabry Highway in Tampa.
I understand the justification that they used: that they already had an obligation to the NFL. But I think under the circumstances, if they said to the NFL, “what do you say we tone this down? Save some cash? Maybe bring half the big-titted beer girls to the show? Or maybe just half the tits?” the NFL would probably have understood just fine. Maybe I’m naive.
We keep going round and round about “how do you value toxic assets?” meaning that bailing out banks means buying up failed assets worth less than their paper value. This is the “bad bank,” thing you may be hearing a lot about. So, how do we gauge the value of these assets? We know the value has plummeted, but when the entire economy is depressed, the asset is worth even less than it would normally be. What exactly is a fair price?
We’re not talking about one or two, but millions of them. And how do we know that the government’s not going to get ripped off by unscrupulous banks trying to recoup their losses?
Well, how about we take some people who are unemployed and put them to the task of valuing the assets? We should have that process over lickety-split, no shit. And we’d put some people to work in the process.
While we’re all in a tirade about bank executive bonuses being dealt out, it’s worth noting as Felix Salmon does, that “bonuses,” are often the leftover of salary held in reserve all year long. What’s that you say? That means that in your regular paycheck every week/bi-weekly/month, a certain percentage of your income as a banker is being withheld to be paid out as a “bonus” at the end of the year. Plus the actual bonus money, of course. But some of that $18 billion so much in the news lately is what you’d expect to be paid as any other employee who gets a salary.
It is equally worth noting that Detroit union workers are taking a hit on their paychecks this year to help deal with the looming crisis there, and thus it’s entirely reasonable for taxpayers to expect a similar sacrifice from someone making $100,000 a year. But fair is fair, a fact is a fact, and despite the unfortunate name and odd policy, some of this money is actually a fair paycheck. Take it for what it’s worth.
Let’s say you have a job where you get paid $20 an hour. In a forty hour week, you get paid $800, right? Forget the taxes and stuff, your gross is 40 x $20.00 = $800.
Now, if you spend $20 on a new CD, that leaves you with $780.00. On the other hand, if you cut out an hour early from work on Friday, you’ll only get paid for 39 hours, thus 39 x 20.00 = $780. Either way, you get $780.
So it doesn’t matter if you cut your revenue or spend extra money: twenty bucks is twenty bucks. And when you hear from Republicans that spending money in the Obama stimulus package will increase the debt, remember that their alternative – cutting taxes by the same amount – will also increase the debt by leaving us with less to pay it off with. You’re either spending more money (stimulus) or you’re cutting revenue (tax cuts). Whatever other discussions are of value, this one’s pretty much garbage.
We finally figure out the obvious and start buying banks, Gene Simmons buys a record company, and masturbation becomes a healthy ((not to mention natural and zesty)) enterprise in this latest of news roundups for DFE. Lets whip out some stories, shall we?
- Buying jets with bailout money is for pussies. How about this: take bailout money, then host a conference call filled with influential business leaders and lobbyists to try to break the back of the Employee Free Choice Act. Why not take taxpayer money and then use it to spend on lobbying politicians? And so you can break the bank of the unions that fight for the taxpayers you just bilked?
- The Obama Administration sees the banking industry sliding farther and farther into trouble and it’s beginning to look more and more obvious that some “nationalization,” or the government buying a controlling interest in distressed banks, may be necessary. As a side note, see Dean Baker for why shareholders of bankrupt banks actually make out quite well in such a scenario. Hint: a few bucks for paper worth nothing is a good thing.
- Corning expects that of the 3,500 jobs they’re cutting back across the enterprise, 650 of them will be local jobs. Bad news, people. I feel for ya.
- Peanut butter recalls continue. It was reported last night no less than twelve incidents at the offending company where testing revealed traces of salmonella and they sent the stuff to market anyway.
- Gene Simmons announced on his website that he’s starting up a new Universal Records company in Canada, eh? Can’t wait to see Gene in full KISS regalia on the Canadian $5!
- It’s been a long couple months for Toyota. In addition to posting it’s first annual loss in its history, now they need to recall a million vehicles for defective seat belts.
- Calling all mad hatters! If you thought the salmonella outbreak in peanut butter was fun, get ready for the long-term effects of corn syrup laced with mercury. Yessiree, Bob! Bad news: you may go insane or this may have something to do with the increase in Autism. Good news: you’ll more easily be able to find your way home after you’re diagnosed with mercury poisoning.
- People are flocking to small business ownership as a way to avoid the layoffs going around right now. Why you would think that selling pizza would be a way to save yourself is beyond me, but interesting, nonetheless.
- Finally, mixed news for the porn industry: studies show that masturbation among teenagers increases the risk of prostate cancer, yet masturbation among the 50-something set actually decreases it. I guess based on the bell curve, I’m free to whack it whenever I want.
It’s another interesting day for news here at DFE, so I thought I’d take a moment to point out some articles to watch for the day:
- Xerox will be laying off 275 workers here in Rochester, both at the Webster Complex (didn’t that used to be called the Wilson Complex?) and in the downtown offices. Anyone with information on the layoffs can contact me here with details. I’d appreciate it.
- Citi bank posted a big loss and now plans on splitting the company in two: Citigroup, which will be its traditional banking and Citi Holdings, which will handle it’s “riskier assets.” They’re hoping to minimize losses by dividing their assets up.
- Intel is reporting big losses in this quarter, a sign of just how hard the recession might hit consumer electronics markets this year.
- It’s a Microsoft Worm World again!! It’s been a few years since MyDoom and Klez virus hysteria, but the boys are back in town with a virus that attacks low-security networks and USB flash drives. It’s infected 3.5 million computers world wide. People, patch those systems up now!
- More tech news: “illegal” private downloads from peer to peer systems such as BitComet and others completely swamp the industry approved, industry profit downloads available from iTunes. Not sure how they quantify that, but here’s a question to ask: how many legal copies of albums got sold compared to cassette tape recordings? If cassettes didn’t bring down the music industry, why should we give a shit about downloads?
- President Elect Obama did a very long and wide-ranging interview with the Washington Post wherein he pledged that entitlement programs like Medicare and Social Security would be getting reformed during his term. Not a small order, that. But I’d rather trust him than Republicans. Wonder if they’ll float the investment angle again?