kapkomet Posted March 31, 2009 Share Posted March 31, 2009 QUOTE (NorthSideSox72 @ Mar 31, 2009 -> 11:25 AM) I disagree. In fact, I think its been an interesting thing to note that this Congress-President party majority thing was way overblown, because Congress has wanted to do things their way, and Obama has had to follow along or oppose them on some things. When the AIG thing blew up, it was (AT FIRST) the White House that propogated the whole thing. Barney then went and ran with it. He knew damn well what he was doing. Link to comment Share on other sites More sharing options...
mr_genius Posted March 31, 2009 Share Posted March 31, 2009 QUOTE (StrangeSox @ Mar 31, 2009 -> 06:45 AM) What? http://www.prlog.org/10183069-french-gover...ry-bailout.html The French bailed out their auto industry. pfft, you call that a bailout. not even 10 billion. thats 5 times less than what we already have given in auto bailouts. Link to comment Share on other sites More sharing options...
StrangeSox Posted March 31, 2009 Share Posted March 31, 2009 (edited) QUOTE (mr_genius @ Mar 31, 2009 -> 02:05 PM) pfft, you call that a bailout. not even 10 billion. thats 5 times less than what we already have given in auto bailouts. Renault and Clio aren't exactly the same size as GM. edit: a Clio is a Renault. I was thinking of Peugeot/ Citroen. Edited March 31, 2009 by StrangeSox Link to comment Share on other sites More sharing options...
Y2HH Posted March 31, 2009 Share Posted March 31, 2009 QUOTE (StrangeSox @ Mar 31, 2009 -> 02:10 PM) Renault and Clio aren't exactly the same size as GM. Not even close. Link to comment Share on other sites More sharing options...
mr_genius Posted March 31, 2009 Share Posted March 31, 2009 QUOTE (StrangeSox @ Mar 31, 2009 -> 02:10 PM) Renault and Clio aren't exactly the same size as GM. you've convinced me. i'm on the bailout bandwagon now. free money for everyone! if we would just give every American a million dollars it would completely get rid of poverty in the US and end the recession. i don't see how this can possibly go wrong. Link to comment Share on other sites More sharing options...
StrangeSox Posted March 31, 2009 Share Posted March 31, 2009 (edited) QUOTE (mr_genius @ Mar 31, 2009 -> 02:17 PM) you've convinced me. i'm on the bailout bandwagon now. free money for everyone! if we would just give every American a million dollars it would completely get rid of poverty in the US and end the recession. i don't see how this can possibly go wrong. That wasn't my point. I was refuting your point that "even the French are against this!" because the French did the exact same thing. Yes, they spent less, but that's because their industry is considerably smaller. I didn't say whether I agree with it. Edited March 31, 2009 by StrangeSox Link to comment Share on other sites More sharing options...
StrangeSox Posted March 31, 2009 Share Posted March 31, 2009 GM May Not Have Time for Bond Swap Outside Bankruptcy Link to comment Share on other sites More sharing options...
mr_genius Posted March 31, 2009 Share Posted March 31, 2009 QUOTE (StrangeSox @ Mar 31, 2009 -> 02:42 PM) That wasn't my point. I was refuting your point that "even the French are against this!" because the French did the exact same thing. Yes, they spent less, but that's because their industry is considerably smaller. I didn't say whether I agree with it. The EU has spent considerably less on bailouts and 'stimulus'. They aren't doing what the US is doing. Link to comment Share on other sites More sharing options...
Balta1701 Posted March 31, 2009 Share Posted March 31, 2009 The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s. New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008. Hey, 2k5, remember the good old days, when we were guessing whether this would cost $1 or $3 trillion? Link to comment Share on other sites More sharing options...
Balta1701 Posted April 1, 2009 Share Posted April 1, 2009 Simon Johnson had an excellent piece in the Atlantic while I was gone, arguing 2 key points...the immediate path out of this requires nationalizing the worst-off banks, and the financial industry has built itself into a permanently unstable spinning top that goes for a while and comes tumbling down. But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them. Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel. But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside. (This chart shows Wall Street rapidly increasing as a share of the economy over the last 20 years or so as the American public has been convinced to dump more and more funds in to their hands. Bigger version at link) At the root of the banks’ problems are the large losses they have undoubtedly taken on their securities and loan portfolios. But they don’t want to recognize the full extent of their losses, because that would likely expose them as insolvent. So they talk down the problem, and ask for handouts that aren’t enough to make them healthy (again, they can’t reveal the size of the handouts that would be necessary for that), but are enough to keep them upright a little longer. This behavior is corrosive: unhealthy banks either don’t lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and as it does, bank assets themselves continue to deteriorate—creating a highly destructive vicious cycle. To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards—contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted April 1, 2009 Author Share Posted April 1, 2009 QUOTE (Balta1701 @ Mar 31, 2009 -> 10:27 PM) Simon Johnson had an excellent piece in the Atlantic while I was gone, arguing 2 key points...the immediate path out of this requires nationalizing the worst-off banks, and the financial industry has built itself into a permanently unstable spinning top that goes for a while and comes tumbling down. (This chart shows Wall Street rapidly increasing as a share of the economy over the last 20 years or so as the American public has been convinced to dump more and more funds in to their hands. Bigger version at link) I certainly hope that people realize this whole mess isn't JUST Fannie and Freddie, or JUST poor regulations, or JUST poor reg agencies, or JUST greedy bankers, or JUST high risk uncleared financial instruments, or JUST consumers leveraging themselves beyond any level of reason... its all of them. Link to comment Share on other sites More sharing options...
StrangeSox Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (NorthSideSox72 @ Apr 1, 2009 -> 08:14 AM) I certainly hope that people realize this whole mess isn't JUST Fannie and Freddie, or JUST poor regulations, or JUST poor reg agencies, or JUST greedy bankers, or JUST high risk uncleared financial instruments, or JUST consumers leveraging themselves beyond any level of reason... its all of them. Too many people are too set in their ideologies to consider how the real world works. Link to comment Share on other sites More sharing options...
Y2HH Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (StrangeSox @ Apr 1, 2009 -> 08:21 AM) Too many people are too set in their ideologies to consider how the real world works. Anyone who thinks like that is an idiot, plain and simple, therefore they aren't even worth discussing it with. Link to comment Share on other sites More sharing options...
Balta1701 Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (Y2HH @ Apr 1, 2009 -> 06:24 AM) Anyone who thinks like that is an idiot, plain and simple, therefore they aren't even worth discussing it with. So you're saying there's some 535 people we shouldn't discuss it with? Link to comment Share on other sites More sharing options...
southsider2k5 Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (Y2HH @ Mar 31, 2009 -> 10:29 AM) That's the point. It's not supposed to be easy. So when you do it, successfully, don't throw it away because you like taking stupid risks, etc. Like I said, I sympathize with those who were forced into this, but you know what, f*** them, too...they knew what they were doing and they lost in the end, and they cost a lot of people a lot of money while getting (and staying) very rich. They exposed themselves and their entire industry and the people won't soon forget. So out of curiousity, I take it you have no credit cards, no loans, and no mortgage, along with a job that you can never lose? If not, you are taking many of the same risks as an individual that these companies took as corporations. Most people live 1-2 paychecks away from being destitute in this country, because they have no savings, and they have leveraged themselves in much the same fashion by over extending themselves with credit. If they lose their jobs, much like these banks lost their income flows when people quit paying their mortgages, they are in the exact same situation as these corporations going to the government with their hats in their hand. Link to comment Share on other sites More sharing options...
southsider2k5 Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (Balta1701 @ Apr 1, 2009 -> 11:00 AM) So you're saying there's some 535 people we shouldn't discuss it with? Awesome. Link to comment Share on other sites More sharing options...
kapkomet Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (southsider2k5 @ Apr 1, 2009 -> 11:44 AM) So out of curiousity, I take it you have no credit cards, no loans, and no mortgage, along with a job that you can never lose? If not, you are taking many of the same risks as an individual that these companies took as corporations. Most people live 1-2 paychecks away from being destitute in this country, because they have no savings, and they have leveraged themselves in much the same fashion by over extending themselves with credit. If they lose their jobs, much like these banks lost their income flows when people quit paying their mortgages, they are in the exact same situation as these corporations going to the government with their hats in their hand. All I know is it is a damn good thing I had some savings because of the assholes I worked for fired me. I haven't tapped my 401K yet and I've been off 4 months now. I may have to in a couple of months... but people really need that 6 months that everyone talks about. If you have a family, it's really hard because of COBRA. That s*** kills. If I didn't have that, I would be able to get through until almost fall. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted April 1, 2009 Author Share Posted April 1, 2009 QUOTE (kapkomet @ Apr 1, 2009 -> 12:42 PM) All I know is it is a damn good thing I had some savings because of the assholes I worked for fired me. I haven't tapped my 401K yet and I've been off 4 months now. I may have to in a couple of months... but people really need that 6 months that everyone talks about. If you have a family, it's really hard because of COBRA. That s*** kills. If I didn't have that, I would be able to get through until almost fall. As I understand COBRA, you get to keep your insurance, but pay the full rate charged to the company you had previously worked for. So yeah, its an increase in costs, a big one probably. But the alternative is worse, right? Having no insurance, or having to buy private individual insurance, which is probably more costly than COBRA. Or am I misunderstanding? Link to comment Share on other sites More sharing options...
kapkomet Posted April 1, 2009 Share Posted April 1, 2009 QUOTE (NorthSideSox72 @ Apr 1, 2009 -> 12:52 PM) As I understand COBRA, you get to keep your insurance, but pay the full rate charged to the company you had previously worked for. So yeah, its an increase in costs, a big one probably. But the alternative is worse, right? Having no insurance, or having to buy private individual insurance, which is probably more costly than COBRA. Or am I misunderstanding? You're right on. I just mean to say it's extremely pricey. The problem with going with another insurance company is you lose all your pre-coverages and a ton of your privacy rights for nearly the same money. A lot of people don't know that, and it can really screw you in the future because you will lose your pre-coverages on your next employee plan, potentially. I'm paying $1600+ a month. That drains the account in a hurry. Now, my plan is waaaaaay better then most coverages which makes it more expensive. But, the privacy part played a large role in me keeping the COBRA. Link to comment Share on other sites More sharing options...
Balta1701 Posted April 1, 2009 Share Posted April 1, 2009 Another great piece by Taibbi tracking the progress of the debacle from the deregulation through AIG and the bailouts. Worth your time if you have 15 minutes or so. I'll excerpt the conclusion. The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner — himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm — picked a former Goldman lobbyist named Mark Patterson to be his top aide. In fact, most of Geithner's early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called "bad bank" that would systemically relieve private lenders of bad assets — the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits. God knows exactly what this does for the taxpayer, but hedge-fund managers sure love the idea. "This is exactly what the financial system needs," said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, there aren't many people who don't run hedge funds who have expressed anything like that kind of enthusiasm for Geithner's ideas. As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below. The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40. "But wait a minute," you say to them. "No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what's left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?" But before you even finish saying that, they're rolling their eyes, because You Don't Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they're on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests. Good luck with that, America. And enjoy tax season. Link to comment Share on other sites More sharing options...
mr_genius Posted April 1, 2009 Share Posted April 1, 2009 742,000 jobs lost in March http://www.reuters.com/article/newsOne/idUSTRE5303F820090401 Link to comment Share on other sites More sharing options...
Balta1701 Posted April 2, 2009 Share Posted April 2, 2009 This is a complicated point but it's a key one. A key part of Timmy's strategy for how to deal with the financial debacle is his "Stress Test", where he's applying a projection of the future economic straits to the banks and asking if they have enough funds to weather the worst case scenario. If they don't, then they're in major trouble. If they do, then they just need some temporary help. The government has been kind enough to make available the data they're using for their worst case scenario stress tests. Keep in mind, those numbers are barely a month old. In addition, today a NGO, the Organisation for Economic Co-operation and Development (OECD), released new numbers for its projections for U.S. growth over the next few quarters. They're in this graph. The red bars are the NGO numbers. The Blue bars are Geithner's "Worst Case Scenario" from his stress test, the thing that it should be unthinkable for the banks to have to survive. You can find full data at the included link and more images, including bigger, legible ones. The key thing to take away here...the OECD estimate for economic performance over the next 2 years is either the same as or significantly worse than Geithner's worst case scenario that the banks have to survive. A number of people have suggested that Geithner's stress test isn't stressy enough. If the OECD is right, then the Treasury Department is seriously underestimating the funds that the major banks will need to survive. And Geithner's plans for how much money the banks need to be able to raise without the government stepping in and taking control are based entirely on those stress tests. If one were so inclined, one might suspect that they were deliberately weakening their "Stress Test" so as to avoid having them give genuine rationalizations for nationalizing the banks, and instead they're just hoping that we'll get lucky and grow our way above the bottom line. Link to comment Share on other sites More sharing options...
southsider2k5 Posted April 3, 2009 Share Posted April 3, 2009 It seems like the major hedge fund players are already learning from their banking cousins about trusting the Obama administration... http://www.businessinsider.com/henry-blodg...ers-ppip-2009-4 Ray Dalio, who runs one of the largest hedge funds in the world, wrote a letter to his investors explaining why Bridgewater wants no part of Tim Geithner's trash-asset-purchase plan. He says that he thinks most big funds will decline to participate, leaving PIMCO, Blackrock, and a few others to run off with the taxpayer loot (and later be bashed for it). We've excerpted the letter below. Much of it is a sophisticated analysis of the plan's economics, which is hard to follow if you're not obsessed with the PPIP. But here's Dalio's bottom line: The only way the plan can work is if the investors buy the assets at low prices, the banks sell them at high prices, and the taxpayer covers the difference. Dalio is worried that, eventually, taxpayers will figure that out. While we were initially considering participating in the Legacy Securities PPIP program, we decided against it based on how it is designed. Some of our investors asked for our reasoning, so we will explain it to you all. Let’s start with the deal economics. In digging into the specifics, we learned that the program is not as attractive as it initially appeared to us. As you know, unlike many others, we don't think that most of these assets are all that cheap because we think that the debt problems will be worse than most others expect, we believe that the legal foundations of creditor rights will be in jeopardy and we think that liquidity in this environment is worth a lot. With these considerations, we find some of these assets a bit cheap, but not cheap enough to buy. When the program was announced we were originally interested because with the non-recourse leverage (i.e. the ability to put the bad loses back to the government) we thought some of these assets could go for cheap enough prices to lead us to buy. However, as things now stand, very little leverage is actually being offered via the "Legacy Securities PPIP." The non-recourse leverage that Treasury is offering is only 1:1, though the PPIP Fact Sheet does allude to the potential that this may be re-levered in some unspecified way through the TAL F Program (no details on this are currently available). So, unless the leverage ends up being a lot greater than 1:1, the program offers little value to us (as the put has little value). Additionally, it now appears that participants will essentially be short an unspecified call option to the government in the form of warrants that must be issued by all PPIP chosen funds in order to comply with EESA (the legislation that created TARP). Therefore, without knowing the amount of leverage that will ultimately be provided (and for now looks pretty small), or the strike price of the warrants participating funds are short, we don’t have enough information to even assess the value of the program in aggregate. Incidentally, this contrasts with the clarity being provided on the Legacy Loan PPIP which clearly offers non-recourse leverage of at least 6:1 and potentially as much as 12:1. This gives the put option real value (which we described in last Monday's wire), though we aren't interested in illiquid loans. Additionally, we have concerns about the execution of the Program. As we see it, the government is essentially creating a new asset class (these assets with the leverage/put attached) and severely limited those who can buy it, which will substantially limit demand and increases the perceived risk of collusion. The way the buying is envisioned, two different types of buyers will be created -- one with a very limited number (e.g., five) of managers who have access to leverage/put via PPIP, and the rest who don’t. So, unless you're one of the five, you won't get the benefits, and being one of the five has strings attached that make it difficult to act as a fiduciary. Though we don't understand why that was done, we presume that it was for good, unavoidable reasons, but it makes us not want to participate and it makes us question the breadth of interest that we will see in the program. That is because those who are selected as PPIP Managers (i.e. these five funds) will be in conflicted positions because the Treasury has expectations of how these managers should behave (like they should buy large amounts) because the whole program's success hinges on how these five behave, yet, at the time of applying to be one of the five, they presumably don't know the pricing and terms, or even exactly what will be sold. We couldn't, and we wonder how other managers can, make commitments to be one of the five without knowing these things. We could not make assurances to both the government and our investors. It would require the investors to have a lot of blind faith, especially as the managers are clearly in a conflict of interest position because they have both the government and the investors to please and because they will get their fees regardless of how these investments turn out. Then there is the issue about the political risk, which we are more concerned about because there will be such a limited number of managers being allowed to participate in this program that it raises possibilities (or at least perceived possibilities) of them colluding because they all know each other. Either these investments will make a lot of money for their investors or the government will lose a lot of money -- in either case, there will be reasons for politicians to complain and to focus on the five winners to see how they "abused" the system. Additionally, quite frankly, the plan isn't straightforward. Essentially it is to let private investors (especially these "funds") buy these assets cheaply (which is the only reason they might be interested) and to simultaneously let the banks sell them at high prices (which is the only way they will sell them) at the expense of the taxpayer. So it gets around the transfer pricing problem because the public doesn't understand the value of the leverage/non-recourse loan. We don't like the political/profile risks. If this plan gets scrutinized, which seems likely, there's a lot about it that could cause controversy. Maybe we are misunderstanding it, but from what we seem to understand, given all of these issues, it looks to us like the sort of thing that the S.E.C. and other regulators wouldn't allow if those of us in the private sector did it. Anyway, as it now stands, we don't want to participate for these reasons. Link to comment Share on other sites More sharing options...
kapkomet Posted April 3, 2009 Share Posted April 3, 2009 So, it's a taxpayer bailout, again. The bulls*** is essentially that they are trying to pass it off as something different. Link to comment Share on other sites More sharing options...
southsider2k5 Posted April 6, 2009 Share Posted April 6, 2009 So one of my local reps has actually introduced this bill. Good for him. Like I said before, a bailout plan that actually works towards fixing a problem in the auto industry, aka no one buying cars. Finally this is a bailout plan that I can at least respect. Instead of blinding throwing money into the hole and not addressing the underlying problems, this plan at least makes an effort to fix one problem, and that is to sell more cars. http://donnelly.house.gov/apps/list/press/...s/CarsAct.shtml Washington, D.C. -U.S. Reps. Joe Donnelly (D-South Bend) and Fred Upton (R-St. Joseph) have co-sponsored bipartisan “cash for clunkers†legislation to take older, less fuel efficient cars off the road and stimulate new car sales. The bipartisan Consumer Assistance to Recycle and Save (CARS) Act, H.R. 1550, will provide consumers a $3,000 to $5,000 incentive to turn in vehicles that are eight years or older and purchase more fuel-efficient vehicles or to obtain a transit voucher. President Obama voiced support for the program to boost the auto industry on Monday. “Not only will this legislation provide a much-needed boost to our auto industry, but it will also help us achieve energy independence while creating local jobs,†Donnelly said. “In this tough economic climate, it is essential that we provide every incentive to help folks buy cars and put people back to work. I look forward to working with my colleagues in Congress to get this bill passed.†“The first step on the road to recovery is to get Americans back in the showroom buying cars again, and this bill will do just that,†said Upton. “I am heartened with the Administration’s recognition that we must address consumer incentives to boost the auto industry as car sales have plummeted across the globe. Cash for clunkers will immediately boost flagging auto sales, stimulate the economy and put folks back to work, not to mention we’ll dramatically reduce emissions and our dependence on Mideast oil with more fuel efficient vehicles on the road.†The CARS Act is modeled after Germany’s scrap program which led to a 21% surge in auto sales in February 2009, compared to a 22% decline in the United Kingdom for the same period. Similar programs have now been implemented in 12 European countries and have helped drive up auto sales across the continent. In the legislation, new car purchases that qualify for this incentive must achieve a minimum of 27 miles per gallon on highways, while new trucks must achieve a minimum of 24 mpg for highway driving. The bill provides graduated incentives based on greater fuel efficiency. The legislation also offers transit vouchers in exchange for older, high emission vehicles. The CARS Act provides consumers with a voucher to trade in older vehicles in exchange for newer, more fuel efficient models that are built in the United States and North America. The amount of the voucher ($3000 to $5000) depends on the new vehicle's fuel efficiency and where it is assembled. Vehicles built in the U.S. receive a slightly higher voucher than those assembled in other parts of North America - this also includes foreign transplants that build cars here in addition to Ford, Chrysler and General Motors. The bill also provides a $7,500 voucher toward the purchase of a new plug-in hybrid electric vehicle assembled in the U.S. from 2011 to 2016. Link to comment Share on other sites More sharing options...
Recommended Posts