Banks are getting handouts, why not GM, Ford - DFWstangs Forums
 
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post #1 of 12 (permalink) Old 08-05-2008, 06:44 PM Thread Starter
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Banks are getting handouts, why not GM, Ford

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Detroit's three automakers are urging Congress to make as much as $35 billion to $40 billion in low-cost loans available during the next two to three years to assure that the companies survive long enough to retool and build a new generation of fuel-efficient vehicles.
http://www.freep.com/apps/pbcs.dll/a...401/1002/rss02

Everyone is latching on to the government teet.
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post #2 of 12 (permalink) Old 08-05-2008, 07:22 PM
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Fuck why not ???? All we need to do is print some more money and the problem goes away .
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post #3 of 12 (permalink) Old 08-06-2008, 12:24 AM
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Bank failure transmits the wrong economic message.

Failure of ford? Eh... whatever. After all, everyone knows that american cars suck, right?

Its all political.

But, having said that, I would also have to say that the average 3rd grader could see that the day of the SUV was coming to an end, and that investment was needed to be made in fuel efficient cars. Further, as far as ford is concerned, they *already* have models made in Europe that are highly fuel efficient - how about selling some of them over here?

<--no sympathy for US automakers that had their heads up the SUV ass, making thousands on each one, and short selling their future for quick profits.
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post #4 of 12 (permalink) Old 08-06-2008, 07:26 AM
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Originally Posted by mikeb
...and short selling their future for quick profits.
But isn't that the business model across the board in America? I see it with my company
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post #5 of 12 (permalink) Old 08-06-2008, 08:59 AM
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Originally Posted by Fox466
But isn't that the business model across the board in America? I see it with my company
Yes it is. I believe that business schools must be teaching that philosophy now, because "the next quarter" and "making the stockholders happy" and "making my bonus" > long term business planning among the young execs. Hell, how many companies even have a current 5 year business plan anymore?

The path to personal riches involves stripping a company down to junk (thus making the financials look good for awhile) and getting your performance bonus for making your numbers, and then exercising your golden parachute on the way out as the company fails. One of my customers is going through that process at the moment, and from my viewpoint they are killing the company; I can see the evidence.
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post #6 of 12 (permalink) Old 08-06-2008, 09:09 AM
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All I learned in getting my BBA in Finance was for the Executive's job was to make shareholders happy. Nothing more nothing less. As long as shareholders are happy that was it.
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post #7 of 12 (permalink) Old 08-06-2008, 10:03 AM
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Quote:
Originally Posted by mikeb
Yes it is. I believe that business schools must be teaching that philosophy now, because "the next quarter" and "making the stockholders happy" and "making my bonus" > long term business planning among the young execs. Hell, how many companies even have a current 5 year business plan anymore?

The path to personal riches involves stripping a company down to junk (thus making the financials look good for awhile) and getting your performance bonus for making your numbers, and then exercising your golden parachute on the way out as the company fails. One of my customers is going through that process at the moment, and from my viewpoint they are killing the company; I can see the evidence.
You forgot the endgame. The stock price plunges and you either declare bankruptcy and rip off a new batch of shareholders or the company gets bought by private equity, waits a few years and goes public again. It happens all the time.

Companies don't need the government teet to survive, they rip off the American people (shareholders) without the need for a middle man.

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post #8 of 12 (permalink) Old 08-06-2008, 10:21 AM
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GM and Ford are looking for low interest loans. That implies they'll be paid back.

Wasn't money simply given to the banks?

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post #9 of 12 (permalink) Old 08-06-2008, 10:39 AM
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I think the difference with the banks is that it involved trillions of dollars of individual American debt. and I think there was some worry that if the US government didnt pick up that tab, another government (china or dubai) would have.
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post #10 of 12 (permalink) Old 08-06-2008, 11:03 AM
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Quote:
Originally Posted by Sgt Beavis
GM and Ford are looking for low interest loans. That implies they'll be paid back.

Wasn't money simply given to the banks?
What the hell do they need loans for? Ford has $26 billion in cash.
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post #11 of 12 (permalink) Old 08-06-2008, 12:37 PM Thread Starter
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Quote:
Originally Posted by Sgt Beavis
GM and Ford are looking for low interest loans. That implies they'll be paid back.

Wasn't money simply given to the banks?
Low interest loan means a loan below market value for the given company, which lowers their cost. There is no free lunch. Some one is paying the cost for that lower interest rate loan.
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post #12 of 12 (permalink) Old 08-06-2008, 12:55 PM
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Originally Posted by thesource
Fuck why not ???? All we need to do is print some more money and the problem goes away .
thats what am sayin...problem solved!!

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