The Democrat Thread

[kapkomet]

Hard assets = something to provide collateral, vs. paper assets = nothing to provide collateral. There's one fundamental difference, but the government wanted control of the bankruptcy process so they could control where the money went.

 

That's okay, keep drinking the dips*** koolaid - it's too easy to buy that there was absolutely no money anywhere. Klapse!

[Balta1701]

I would really love one single example of a company able to obtain substantial funding between the fall of Lehman and the passage of the stimulus with no assistance or guarantee by the fed. I'll even take a company that was no where near bankruptcy and only needed billions, rather than tens of billions.

[kapkomet]

I would really love one single example of a company able to obtain substantial funding between the fall of Lehman and the passage of the stimulus with no assistance or guarantee by the fed. I'll even take a company that was no where near bankruptcy and only needed billions, rather than tens of billions.

 

Any company that had a line of credit?

 

Oops.

[Balta1701]

Any company that had a line of credit?

 

Oops.

I'm waiting.

[Balta1701]

Here's one I didn't even know. In November 2008, the FDIC launched a $340 billion guarantee program where, through banks that they deal with, they essentially guaranteed the entire corporate bond/debt market, so that it wouldn't completely collapse. Not only did I miss that one completely, I didn't even know the FDIC could do that.

 

But yeah, go ahead and tell me how standard corporate financing was easy to obtain with no government guarantee. Let alone for a company that was $30 billion in the hole.

[StrangeSox]

You are delusional.

 

 

Hard assets = something to provide collateral, vs. paper assets = nothing to provide collateral. There's one fundamental difference, but the government wanted control of the bankruptcy process so they could control where the money went.

 

That's okay, keep drinking the dips*** koolaid - it's too easy to buy that there was absolutely no money anywhere. Klapse!

See above.

[southsider2k5]

I would really love one single example of a company able to obtain substantial funding between the fall of Lehman and the passage of the stimulus with no assistance or guarantee by the fed. I'll even take a company that was no where near bankruptcy and only needed billions, rather than tens of billions.

 

Stop using Lehman. It is a terrible example.

 

First off Lehman was no where near the size or scope of the financial industry that GM was of the auto industry. You might be able to use a Goldman Sachs, but then again, the financial industry has many, many, many more firms than the auto industry. Second Kap hit the physical assets. Third is the scope of the debt that the auto industry owed to the banks. If those were to become worthless, more banks would have gone under. Forth, Lehman still essentially exists today. Just like the failure of pretty much any other firm than the one Obama wanted fail apparently, there has never been an issue moving customers, funds, and assets to another firm in a financial bankruptcy. Lehman's customers never had a blip, and many of their employees were absorbed right along with the firm. Fifth, for obvious reasons you can't transfer an automotive firm that easily, or else it would have been done.

 

They are different styles of business, and thus can't be read in the same manner. I wish you could understand that.

[Balta1701]

Stop using Lehman. It is a terrible example.

I didn't in that post. I used it as a "Day". The phrase was "Between the fall of Lehman and the stimulus package".

 

Because the Fall of Lehman led directly to the credit market freeze. Thus, it is an entirely logical starting point for the credit freeze.

[southsider2k5]

I didn't in that post. I used it as a "Day". The phrase was "Between the fall of Lehman and the stimulus package".

 

Because the Fall of Lehman led directly to the credit market freeze. Thus, it is an entirely logical starting point for the credit freeze.

 

Honestly you have those things reversed, and I still don't think you understand the differences between the businesses and the different treatments that the industries would have gotten.

[Balta1701]

Autonation is the nation's largest network of auto dealers.

Dear Editor:

 

As far as Mitt piece in yesterday’s Detroit News it was truly reckless, detached from reality, and dishonest. I also think it’s very bad politics, especially in Michigan.

 

It was Bush that stepped in with the “Bailout” of GM & Chrysler in the fall of ’08, not Obama. So that is just dishonest and W just said it at NADA; “he would do it again.” That circumstance trumped philosophy and he prevented a depression and 20% unemployment.

 

Secondly, Mitt’s assertion that private financing “DIP” was available in fall of ’08 into ’09 is fantasy. Everyone knows we were in the midst of the greatest financial meltdown since the 1930’s.

 

Finally, Obama’s Auto Taskforce did do a good job killing all the sacred cows. There was dramatic pain for all.

 

What more can I say, it is very disappointing.

 

Mike Jackson

 

Chairman & CEO

 

AutoNation

LL: What do you think of Mitt’s assertion that private financing “DIP” was available in fall of ’08 into ’09?

 

MJ: That is pure fantasy and you have to ask, what he was doing in ’08 and ’09 that he did not see this.

[southsider2k5]

Autonation is the nation's largest network of auto dealers.

 

Somehow I doubt a used car dealer fits into the same situation as the auto makers.

[StrangeSox]

Why does it seem like the only people who insist a private bankruptcy was possible are conservative market evangelists and not anyone actually associated with the industry?

[StrangeSox]

Also Autonation isn't "a used car dealer." You remain deluded.

[southsider2k5]

Why does it seem like the only people who insist a private bankruptcy was possible are conservative market evangelists and not anyone actually associated with the industry?

 

Because all of the people associated with the industry are still busy trying to justify the gift of billions of dollars.

[StrangeSox]

Because all of the people associated with the industry are still busy trying to justify the gift of billions of dollars.

 

 

Why was Ford begging the government to give billions to their competitors if private bankruptcy was really available? Why does the current CEO of Autonation and former CEO of MB-USA say that the idea that conservative market evangelists keep putting forward are "fantasy?"

 

Why does no one outside of the closed circle of conservative economics support the idea that a private managed bankruptcy was possible?

[southsider2k5]

Why was Ford begging the government to give billions to their competitors if private bankruptcy was really available? Why does the current CEO of Autonation and former CEO of MB-USA say that the idea that conservative market evangelists keep putting forward are "fantasy?"

 

Why does no one outside of the closed circle of conservative economics support the idea that a private managed bankruptcy was possible?

 

Stop and think about that for a second. If things did get worse, Ford could have needed the money themselves. That's why they wanted that line open.

 

 

[StrangeSox]

Hell, I can even find something from some Chicago boys that clearly indicates that the DIP credit markets were non-existent and that government loans were necessary to prevent an unstructured and catastrophic liquidation.

 

http://faculty.chicagobooth.edu/luigi.zing...itorials/gm.pdf

 

First, financing must be available during the restructuring. In normal times, this

debtor-in-possession (DIP) financing would typically be provided by financial

institutions. However, obtaining DIP in the current environment is a risky business. The

market for the provision of DIP is dominated by a few players, and it is not clear how

many of them are willing to lend now. JP Morgan, for instance, has several billion of DIP

financing tied up with Delphi, GM’s main supplier of parts, which has been in

bankruptcy since 2005. It is doubtful that JP Morgan will be willing or able to double up

its exposure to the automobile industry. At the same time, GE Capital and Citigroup, who

provided the DIP finance for the Chapter 11 bankruptcy of United Airlines, are unlikely

to become the financiers of GM because they have problems of their own. Without DIP

financing, however, Chapter 11 would lead immediately to liquidation — not a

liquidation driven by market forces, but a firesale due to the current dislocation of the

financial markets.

In this case, given the frictions on the credit market, it would be justified for the

government to provide DIP financing. This loan would be very different from the one

proposed by GM executives and unions. By being senior to all the existing debt it would

be relatively safe for the government.

Edited February 17, 2012 by StrangeSox

[southsider2k5]

Hell, I can even find something from a Chicago boy that got the situation wrong (GM is recovering now, which he did not predict) but still clearly indicates that the DIP credit markets were non-existent and that government loans were necessary to prevent an unstructured and catastrophic liquidation.

 

http://faculty.chicagobooth.edu/luigi.zing...itorials/gm.pdf

 

Given the choice between liquidation and finding more money, the market would have found more money. I said it then, and I will say it now.

[StrangeSox]

Your statement is equivalent to an appeal to arcane magic.

[southsider2k5]

Your statement is equivalent to an appeal to arcane magic.

 

As opposed to everyone with self-interests at stake? Great you have all of the people who depended on this money saying that the really, really needed the money. Speaking of arcane magic, I'm sure we are going to get lots of stories out of the auto industry that contradict that the auto-industry needed the money.

[StrangeSox]

As opposed to everyone with self-interests at stake? Great you have all of the people who depended on this money saying that the really, really needed the money. Speaking of arcane magic, I'm sure we are going to get lots of stories out of the auto industry that contradict that the auto-industry needed the money.

 

If other options that didn't result in catastrophic liquidation were really available, why were GM's and Chrysler's competitors begging the government to give them money?

 

What self-interest did these UofC business prof's have in advocating for a structured government-financed bankruptcy because private DIP wasn't a possibility?

 

You've already admitted in your previous post that you really are appealing to magical outcomes based entirely on ideology. No matter how absurd the position of "private equity for a Chapter 11 bankruptcy" can be shown to be from various sources across political and economic spectrum, you're sure that God The Market would have found a way. You're holding anun falsifiable position.

 

[southsider2k5]

If other options that didn't result in catastrophic liquidation were really available, why were GM's and Chrysler's competitors begging the government to give them money?

 

What self-interest did these UofC business prof's have in advocating for a structured government-financed bankruptcy because private DIP wasn't a possibility?

 

You've already admitted in your previous post that you really are appealing to magical outcomes based entirely on ideology. No matter how absurd the position of "private equity for a Chapter 11 bankruptcy" can be shown to be from various sources across political and economic spectrum, you're sure that God The Market would have found a way. You're holding anun falsifiable position.

 

I addressed this one already too. They got WAY better terms from the Feds than they would have anywhere else.

[HuskyCaucasian]

Congressional Birth Control Hearing Involves Exactly Zero People Who Have a Uterus

This was posted on Facebook by the husband of a friend of mine. He kind of has a point here:

Leaders of the Catholic Church (and the other faiths). If you really stand by your principals and oppose abortion and the contraception mandate. Excommunicate the Catholic Reps and Senators that support them. Otherwise, your arguments are just show.

[Balta1701]

I addressed this one already too. They got WAY better terms from the Feds than they would have anywhere else.

"Asserted without evidence" is not "Addressed".

[StrangeSox]

I addressed this one already too. They got WAY better terms from the Feds than they would have anywhere else.

 

Which "one?" I made three separate points there.

 

You've asserted that the market simply would have found a way, that an unstructured liquidation of GM and Chrysler was impossible. There's no contemporaneous support for this position. They wouldn't have gotten any terms from anyone else.