NorthSideSox72 Posted March 19, 2009 Author Share Posted March 19, 2009 QUOTE (Balta1701 @ Mar 19, 2009 -> 03:56 PM) Simple question...would you buy a car from a bankrupt company? I'd love an explanation of how exactly a car company survives bankruptcy. And especially how it would do so in this particular credit market where financing is so hard to get from anyone except the government. Well, I specifically answered the question about financing already. A car company in bankruptcy has happened before (Chrysler twice I think, and maybe Ford once), and they survived. Also, a car company survives bankruptcy by still covering all warranties, and by standing on stage with the feds saying that they are intact, with financing, and moving forward. Link to comment Share on other sites More sharing options...
kapkomet Posted March 19, 2009 Share Posted March 19, 2009 QUOTE (lostfan @ Mar 19, 2009 -> 01:09 PM) Oh, I can't see this... Link to comment Share on other sites More sharing options...
lostfan Posted March 19, 2009 Share Posted March 19, 2009 QUOTE (kapkomet @ Mar 19, 2009 -> 05:34 PM) Oh, I can't see this... "Kapkomet has jumped the shark" lol Link to comment Share on other sites More sharing options...
kapkomet Posted March 20, 2009 Share Posted March 20, 2009 I like it. Link to comment Share on other sites More sharing options...
Cknolls Posted March 20, 2009 Share Posted March 20, 2009 http://www.politico.com/news/stories/0309/20203.html Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 20, 2009 Share Posted March 20, 2009 Oops and oops again. http://hotair.com/archives/2009/03/20/obam...tarp-oversight/ Obama violating law on TARP oversight? posted at 8:55 am on March 20, 2009 by Ed Morrissey Send to a Friend | Share on Facebook | printer-friendly Has the Obama administration broken the law on TARP? It appears that it has violated a major law on oversight — by failing to provide any. When Congress first created the TARP program, it insisted on oversight over the actions of the Treasury Secretary, rejecting the Bush proposal to allow Henry Paulson unlimited and unsupervised authority over $700 billion of taxpayer money. They created the Financial Stability Oversight Board (FINSOB), comprised of the Treasury Secretary, the Chairman of the Federal Reserve Board, the Chairman of the Securities and Exchange Commission, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency. The law requires the board to meet on a monthly basis, but during the Bush administration it met at least every other week to review actions in relation to the bailouts. Interim Assistant Secretary for Financial Stability Neel Kashkari testified before the House Financial Services Committee on December 10th about the oversight (emphases mine): In addition to the normal oversight provided by Congressional committees of jurisdiction, the Congress established four important avenues of oversight: one, the Financial Stability Oversight Board; two, the Special Inspector General; three, the Government Accountability Office; and four, the Congressional Oversight Panel. I will review Treasury’s interaction with each body in detail. First, we moved immediately to establish the Financial Stability Oversight Board, which, by law, includes: the Secretary of the Treasury, the Chairman of the Federal Reserve Board, the Chairman of the Securities and Exchange Commission, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency. The law required the first board meeting to take place within fourteen days. We moved very quickly, and the Oversight Board met within four days. At that initial meeting, the members of the Board selected Chairman Bernanke to be Chairman of the Oversight Board. The law requires the Board to meet once a month, but it has already met four times in the just two months since the law was signed, with numerous staff calls between meetings, and expects to meet again this week. We have also posted the bylaws and minutes of the Board meetings on Treasury’s website. In addition, the Oversight Board has interacted with other oversight bodies, such as the GAO and the Congressional Oversight Panel. The listing of board minutes can be found on the Treasury’s website. However, according to this list, the last FINSOB meeting took place on January 15th of this year — five days before Barack Obama’s inauguration. The meeting was conducted via conference call. It was the last meeting in which former Treasury Secretary Henry Paulson participated. According to this, current Treasury Secretary Tim Geithner has yet to participate in the oversight function Congress mandated by law. Despite receiving hundreds of billions of dollars in additional TARP funds, it appears that the current administration has performed zero oversight over it. Not only does that beg the question as to what Tim Geithner is actually doing as Treasury Secretary, it also makes it appear that Congress has no desire to protect the money it’s shoveling into the West Wing of the White House. I have contacted the White House for any comment they may have on this matter, and I will update readers when they respond (via HA reader Morgen). Update: John at Verum Serum finds an interesting excerpt from the November 2008 FINSOB meeting: Treasury officials and Members then reviewed and discussed the restrictions that would apply to AIG under the terms of the investment, including restrictions on corporate expenses, restrictions on lobbying, and limitations on executive compensation that would apply under EESA, as well as the additional limitations that would apply to senior executive compensation and bonuses. In addition, AIG would be required to comply with certain corporate governance requirements, including the formation of a risk management committee under the company’s Board of Directors. So Treasury knew about the bonuses in November 2008. Maybe if they’d held the FINSOB meetings, Obama wouldn’t have been gobsmacked by them. Update II: Here’s a better link to the FINSOB meeting minutes archive. Link to comment Share on other sites More sharing options...
Cknolls Posted March 20, 2009 Share Posted March 20, 2009 Oversight......Oversight....... We don;'t need no stinking oversight.. Link to comment Share on other sites More sharing options...
Texsox Posted March 23, 2009 Share Posted March 23, 2009 Riddle me this, something I've been pondering for a while and have not reached a conclusion. It seems that over the past year there is a demand that most Americans, from autoworkers to CEOs, from government workers to baseball players, take huge pay and benefit cuts. Almost every time we read about salaries, some form of cutbacks seem to be called for. Even if this was possible, what does this do long term? It doesn't seem that long ago that rising wages were considered a good thing. So we magically cut back everyone's wages 10%, what is the benefit? Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 08:04 AM) Riddle me this, something I've been pondering for a while and have not reached a conclusion. It seems that over the past year there is a demand that most Americans, from autoworkers to CEOs, from government workers to baseball players, take huge pay and benefit cuts. Almost every time we read about salaries, some form of cutbacks seem to be called for. Even if this was possible, what does this do long term? It doesn't seem that long ago that rising wages were considered a good thing. So we magically cut back everyone's wages 10%, what is the benefit? If the whole economy is growing, it can sustain rising costs. With the whole pie shrinking, all it does it make the snapback bigger. Link to comment Share on other sites More sharing options...
Texsox Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (southsider2k5 @ Mar 23, 2009 -> 08:11 AM) If the whole economy is growing, it can sustain rising costs. With the whole pie shrinking, all it does it make the snapback bigger. OK. But why take three steps back? Honest question(s). Did salaries rise too far? And it seems that everyone points to everyone else as making too much. It seems the ripple effect of salary cuts would make things worse, force more people into bankruptcy, foreclosures, less capital available for savings, investments, etc, Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 08:16 AM) OK. But why take three steps back? Honest question(s). Did salaries rise too far? And it seems that everyone points to everyone else as making too much. It seems the ripple effect of salary cuts would make things worse, force more people into bankruptcy, foreclosures, less capital available for savings, investments, etc, Would it be better for you an an individual to have your net costs going up when your income is going down? Its not any different for coporations versus individuals. When net income is shrinking, you can't have your costs going up, and expect to be in business, well unless you are the government. Link to comment Share on other sites More sharing options...
Texsox Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (southsider2k5 @ Mar 23, 2009 -> 08:20 AM) Would it be better for you an an individual to have your net costs going up when your income is going down? Its not any different for coporations versus individuals. When net income is shrinking, you can't have your costs going up, and expect to be in business, well unless you are the government. You also can't have your costs remain the same and your income going down, which is what these wage cuts would do. Link to comment Share on other sites More sharing options...
lostfan Posted March 23, 2009 Share Posted March 23, 2009 The Treasury said it's gonna buy off the toxic assets (I guess that's what the TARP was originally supposed to do before it turned into a massive loan/recapitalization program)... 2K5 I recall you saying, in so many words, that you supported the government doing this? Link to comment Share on other sites More sharing options...
Texsox Posted March 23, 2009 Share Posted March 23, 2009 At least for the home loans, it doesn't feel much different than most other government home ownership programs. Link to comment Share on other sites More sharing options...
mr_genius Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 08:04 AM) Riddle me this, something I've been pondering for a while and have not reached a conclusion. It seems that over the past year there is a demand that most Americans, from autoworkers to CEOs, from government workers to baseball players, take huge pay and benefit cuts. Almost every time we read about salaries, some form of cutbacks seem to be called for. Even if this was possible, what does this do long term? It doesn't seem that long ago that rising wages were considered a good thing. So we magically cut back everyone's wages 10%, what is the benefit? There are more people in the country than there are jobs. Unemployment is going to hit 10% nationally, meaning a glut of people looking for work and an employers market for anyone actually looking to hire. In situations such as this wages will drop, simple supply and demand. Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (lostfan @ Mar 23, 2009 -> 09:25 AM) The Treasury said it's gonna buy off the toxic assets (I guess that's what the TARP was originally supposed to do before it turned into a massive loan/recapitalization program)... 2K5 I recall you saying, in so many words, that you supported the government doing this? I do support it. I think it is the quickest way to free up the capital markets. Unfortunately with the lynch mob mentality that has been taken towards Wall Street and the financial sectors, I think it will be too little, too late at this point. I think banks are pretty much going to be afraid to do much of anything at this point for fear of being paraded in front of Congress. Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 08:34 AM) You also can't have your costs remain the same and your income going down, which is what these wage cuts would do. I would argue that losing your job has a more adverse affect than a paycut does. Link to comment Share on other sites More sharing options...
Texsox Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (southsider2k5 @ Mar 23, 2009 -> 09:55 AM) I would argue that losing your job has a more adverse affect than a paycut does. Sure. But we then get to my original thought, the pay cuts would be adverse. Certainly to the family and their creditors it is adverse. It would seem it is also adverse to their towns, counties, and cities. Are there any winners? If, for example, we cut autoworkers salaries 25%, is it a victory for anyone, or just a smaller defeat? Link to comment Share on other sites More sharing options...
lostfan Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 11:47 AM) Sure. But we then get to my original thought, the pay cuts would be adverse. Certainly to the family and their creditors it is adverse. It would seem it is also adverse to their towns, counties, and cities. Are there any winners? If, for example, we cut autoworkers salaries 25%, is it a victory for anyone, or just a smaller defeat? I'm going to borrow 2K5's logic to make an analogy here - you can give up 5 runs in the 7th, but if you finish the 9th and have more runs, you still win the game regardless. Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 10:47 AM) Sure. But we then get to my original thought, the pay cuts would be adverse. Certainly to the family and their creditors it is adverse. It would seem it is also adverse to their towns, counties, and cities. Are there any winners? If, for example, we cut autoworkers salaries 25%, is it a victory for anyone, or just a smaller defeat? This doesn't work in a vaccuum. If a company needs a cost reduction, and needs to cut 25% they are cutting 25% of wages, whether that is through a total # of jobs, or through an accross the board wage cut. Instead of a quarter of the workforce having no job, while three quarters keeps their full wages, they just cut everyone by the same amount. Looking locally, this was going to happen in one of the main steel mills here, and the union actually went in and asked for the wage cuts versus the job losses. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted March 23, 2009 Author Share Posted March 23, 2009 QUOTE (southsider2k5 @ Mar 23, 2009 -> 10:52 AM) This doesn't work in a vaccuum. If a company needs a cost reduction, and needs to cut 25% they are cutting 25% of wages, whether that is through a total # of jobs, or through an accross the board wage cut. Instead of a quarter of the workforce having no job, while three quarters keeps their full wages, they just cut everyone by the same amount. Looking locally, this was going to happen in one of the main steel mills here, and the union actually went in and asked for the wage cuts versus the job losses. IMO, the smart management move in those sort of situations is usually a hybrid. Stop hiring for open positions, offer some early retirements, allow jobs that are vacated to remain open, lay off some of your weakest performers, cut entry salary on the positions you absolutely need, bring down bonus and other executive plus-one compensation, find non-necessary operational costs to be cut... all those things first, then whatever is left, if you still need to cut, you make those tougher choices about job cuts versus pay cuts. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted March 23, 2009 Author Share Posted March 23, 2009 Sales of existing homes spiked unexpectedly in Feb, by 5%+. Prices still plummeting. Looks like we are shedding inventory a little faster as people continue to drop prices, so, that's a sign of progress for now. Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (NorthSideSox72 @ Mar 23, 2009 -> 11:12 AM) IMO, the smart management move in those sort of situations is usually a hybrid. Stop hiring for open positions, offer some early retirements, allow jobs that are vacated to remain open, lay off some of your weakest performers, cut entry salary on the positions you absolutely need, bring down bonus and other executive plus-one compensation, find non-necessary operational costs to be cut... all those things first, then whatever is left, if you still need to cut, you make those tougher choices about job cuts versus pay cuts. There were many steps before they got to this point FWIW. Many of the things you suggested as a matter of a fact. Link to comment Share on other sites More sharing options...
Texsox Posted March 23, 2009 Share Posted March 23, 2009 So there are no winners, all that would be happening is spreading out the losses. Link to comment Share on other sites More sharing options...
southsider2k5 Posted March 23, 2009 Share Posted March 23, 2009 QUOTE (Texsox @ Mar 23, 2009 -> 11:18 AM) So there are no winners, all that would be happening is spreading out the losses. Yup. Link to comment Share on other sites More sharing options...
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