We Spent More Than $50 Billion And All We Got Was This Lousy Perfume

Unbelievable.

New GM to launch fragrance line

It’s not the smell of the interior of a new luxury model, the whiff of gasoline or even the aroma of burning rubber.

It’s much more. It’s the luminous fresh scent from grapefruit and camomile and a mix of geranium, tarragon and cinnamon – plus sweet spice and incense.

Think of “Cadillac, the new fragrance for men.”

Sputtering General Motors Co., just out of a quick drive through bankruptcy court, will soon be using its iconic Cadillac brand to sell a line of fragrance for men.

Beauty Contact Inc., a Dubai-based cosmetic company and holder of the fragrance licence, said yesterday it will launch the Cadillac line in stores this fall to mark the brand’s 100th anniversary.

“Cadillac, the new fragrance for men is part of the recent Cadillac renaissance: Hot new products and redesigns that capture the mantra of life, liberty and the pursuit,” said Alwyn Stephen, a Beauty Contact director.

“Our fragrance is a relevant extension of the Cadillac lifestyle.”

The line includes a spray, aftershave lotion, deodorant stick, hair and body wash. Some products will come in translucent glass bottles with sleek metal caps. The retail price for a 100 millilitre bottle of the eau de toilette fragrance will be $73.

“The design pays tribute to the opulence and extravagance of past eras, as well as the luxury and ease of today,” the firm added.

But marketing expert Alan Middleton, a York University professor, said it’s a bad example of brand extension and indicative of a troubled company. In the past, GM has licensed fragrances for Hummer, Chevrolet and Corvette.

“Anybody who knows anything much about branding would know this is about as bad an idea as when Roots tried to brand an airline,” Middleton said.

“Neither Porsche nor BMW nor any other transportation brand that has tried this silliness has been very successful.”

This is what we paid tens of billions of dollars for? This is how Obama runs a car company? They can’t even make the damn perfume in the United States! Oh yeah, remember Chrysler, the car company that Fiat bought and that the American taxpayer owns a chunk of?

Fiat 2nd-Quarter Net Loss EU168 Million; Analyst Est EU158.4 Mln

Fiat SpA, the Italian carmaker that took control of Chrysler LLC, reported a net loss of 168 million euros in the three months ended June 30, compared with net income of 604 million euros a year earlier, it said in a statement today.

That was higher than the average estimate of five analysts compiled by Bloomberg, which showed a 158.4 million-euro loss.

See also:
Fiat swings to loss as demand suffers
Fiat Reports Second Consecutive Loss on Truck Sales
Fiat CEO Says Chrysler Listing Will Take Time, Maybe 2.5 Yrs
Fiat’s Issue Is Debt, Not Profit

All in all, I think our ridiculously large investment in bailing out Chrysler and GM is being managed quite well and will turn out to be the best money taxpayers have ever spent, don’t you?

/it probably won’t even end up costing us much more than $100 billion or so, give or a take a few billion here or a few billion there

Back To The Moon

NASA heads back to the moon

Nearly 5-1/2 years after former President Bush decided to send US astronauts back to the moon by 2020, America is set to launch the first mission supporting that goal.

The Lunar Reconnaissance Orbiter (LRO) and a companion spacecraft are set for launch Thursday aboard an Atlas 5 rocket. The $504-million mission is scheduled to take off as early as 5:12 p.m. Eastern Standard Time.

After a four-day journey, and another 66 days of testing and easing the spacecraft into its final orbit, the LRO will circle the moon some 31 miles above its surface, building the most detailed atlas yet of Earth’s companion. The data will help planners figure out where to send astronauts when it’s time to put boots back on the lunar surface.

After the first year, the orbiter will continue working for an additional year or two with emphasis on answering basic questions about the moon – about the composition of the moon’s “seas” and highlands, and its geologic history written in the rocks exposed in crater walls.

“This is exploration and science working together,” says Mike Wargo, the National Aeronautics and Space Administration’s (NASA) chief lunar scientist.

The orbiter will gather images of objects as small as 18 inches across, build contour maps of the lunar surface accurate to within about three feet, and map surface temperatures at different latitudes and through the moon’s subtle seasonal changes. It will gather information on radiation hazards from the sun, from cosmic rays from deep space, and from energetic neutrons those rays kick up when they strike the lunar surface. It will also map the distribution of surface minerals.

From the standpoint of establishing lunar outposts, a key task is hunting for water ice that may lurk in the permanent, frigid darkness at the bottom of craters at the moon’s poles. Past spacecraft have yielded evidence of water. But the signs have been vague.

That’s why the mission includes some fall fireworks. In October, the orbiter’s companion craft, the Lunar Crater Observing and Sensing Satellite (LCROSS), is destined for a lunar smack-down. The craft – actually a guidance-and-instrument package mated to the Atlas rocket’s upper stage – will steer the stage toward a head-on collision with the bottom of a polar crater. One NASA scientist has likened it to a VW bug pushing a school bus.

At the right moment, the package will release the spent upper stage and follow it down, measuring the results as the collision kicks material from the dark crater floor back into sunlight. Scientists say they expect the plume to extend to some four miles above the crater rim. Shortly after the upper stage augers in, the guidance package also will end up as rubble on the crater’s floor.

“This is the crescendo event,” says Dan Andrews, the project manager for LCROSS.

Space-based telescopes, the Lunar Reconnaissance Orbiter, India’s lunar orbiter, and several ground-base observatories will try to tease out the material’s composition with an eye toward capturing the signatures of water ice, if it’s there. The event also is likely to be visible to amateur astronomers with the right-sized telescope.


See also:
Lunar Reconnaissance Orbiter
En Route to Moon!
Mission Overview
Lunar Reconnaissance Orbiter: NASA Returns To The Moon With First Lunar Launch In A Decade
Lunar Reconnaissance Orbiter
USGS Astrogeology Returns to its Lunar Roots With LRO
Public Can ‘Participate’ In NASA’s Lunar Mission
Moon orbiter faces many risks
NASA Mission to Survey Moon for Return of Astronauts
Moonstruck: Tagalong Probe to Blast Moon in Search for Water
Catherine Peddie, Deputy Project Manager
ASK Talks with Cathy Peddie
Atlas V: Countdown 101
Atlas V

/and hey, coming in at a measly $504 million, the cost of the LRO/LCROSS mission is statistically insignificant compared to the tens of billions we’ve wasted on bailing out Chrysler, GM, and the UAW, and the LRO/LCROSS mission is infinitely more worthwhile

The Banks And Car Companies Are Not Enough!

Obama must have more power, more control! He must reign over everything, the entire U.S. economy belongs to him! You cannot be trusted with capitalism and free markets. Obama knows best and Obama has spoken.

New Foundation, New Stability

Over the past decades, government has often haphazardly weakened and jettisoned the regulations on the financial sector that were designed to bring stability to the economy. The result has been what the President refers to as a “bubble and bust” economy, leaving American families at the whim of greed and excess far beyond their control and hundreds of miles away. As the President said today, it is indisputable that this peril was a leading contributor the economic breakdown America has seen over the past years.

Today marked a culmination of a months-long process in which the President consulted with the most expert and experienced regulators, leaders in Congress, and his entire economic team to craft a revamping of the system, a “new foundation” on which our economy can grow for decades to come. Many of them joined him today as he announced the principles they had agreed upon.

The President began his remarks by diagnosing the problem:

In recent years, financial innovators, seeking an edge in the marketplace, produced a huge variety of new and complex financial instruments. And these products, such as asset-based securities, were designed to spread risk, but unfortunately ended up concentrating risk. Loans were sold to banks, banks packaged these loans into securities, investors bought these securities often with little insight into the risks to which they were exposed. And it was easy money — while it lasted. But these schemes were built on a pile of sand. And as the appetite for these products grew, lenders lowered standards to attract new borrowers. Many Americans bought homes and borrowed money without being adequately informed of the terms, and often without accepting the responsibilities.

Meanwhile, executive compensation — unmoored from long-term performance or even reality — rewarded recklessness rather than responsibility. And this wasn’t just the failure of individuals; this was a failure of the entire system. The actions of many firms escaped scrutiny. In some cases, the dealings of these institutions were so complex and opaque that few inside or outside these companies understood what was happening. Where there were gaps in the rules, regulators lacked the authority to take action. Where there were overlaps, regulators lacked accountability for their inaction.

. . .

The President concluded by making clear the necessity of the solution:

There’s always been a tension between those who place their faith in the invisible hand of the marketplace and those who place more trust in the guiding hand of the government — and that tension isn’t a bad thing. It gives rise to healthy debates and creates a dynamism that makes it possible for us to adapt and grow. For we know that markets are not an unalloyed force for either good or for ill. In many ways, our financial system reflects us. In the aggregate of countless independent decisions, we see the potential for creativity — and the potential for abuse. We see the capacity for innovations that make our economy stronger — and for innovations that exploit our economy’s weaknesses.

We are called upon to put in place those reforms that allow our best qualities to flourish — while keeping those worst traits in check. We’re called upon to recognize that the free market is the most powerful generative force for our prosperity — but it is not a free license to ignore the consequences of our actions.

This is a difficult time for our nation. But from this period of challenge, we can once again tap those values and ideals that have allowed us to lead the global economy, and will allow us to lead once again. That’s how we’ll help more Americans live their own dreams. That’s why these reforms are so important. And I look forward to working with leaders in Congress and all of you to see these proposals put to work so that we can overcome this crisis and build a lasting foundation for prosperity.

And, of course, Obama has a detailed plan for tightening his grip on the free market system.

Financial Regulatory Reform: A New Foundation

We must act now to restore confidence in the integrity of our financial system. The lasting economic damage to ordinary families and businesses is a constant reminder of the urgent need to act to reform our financial regulatory system and put our economy on track to a sustainable recovery. We must build a new foundation for financial regulation and supervision that is simpler and more effectively enforced, that protects consumers and investors, that rewards innovation and that is able to adapt and evolve with changes in the financial market.

In the following pages, we propose reforms to meet five key objectives:

(1) Promote robust supervision and regulation of financial firms. Financial institutions that are critical to market functioning should be subject to strong oversight. No financialfirm that poses a significant risk to the financial system should be unregulated or weakly regulated. We need clear accountability in financial oversight and supervision. We propose:

• A new Financial Services Oversight Council of financial regulators to identify emerging systemic risks and improve interagency cooperation.

• New authority for the Federal Reserve to supervise all firms that could pose a threat to financial stability, even those that do not own banks.

• Stronger capital and other prudential standards for all financial firms, and even higher standards for large, interconnected firms.

• A new National Bank Supervisor to supervise all federally chartered banks.

• Elimination of the federal thrift charter and other loopholes that allowed some depository institutions to avoid bank holding company regulation by the Federal Reserve.

• The registration of advisers of hedge funds and other private pools of capital with the SEC.

(2) Establish comprehensive supervision of financial markets. Our major financial markets must be strong enough to withstand both system-wide stress and the failure of one or more large institutions. We propose:

• Enhanced regulation of securitization markets, including new requirements for market transparency, stronger regulation of credit rating agencies, and a requirement that issuers and originators retain a financial interest in securitized loans.

• Comprehensive regulation of all over-the-counter derivatives.

• New authority for the Federal Reserve to oversee payment, clearing, and settlement systems.

(3) Protect consumers and investors from financial abuse. To rebuild trust in our markets, we need strong and consistent regulation and supervision of consumer financial services and investment markets. We should base this oversight not on speculation or abstract models, but on actual data about how people make financial decisions. We must promote transparency, simplicity, fairness, accountability, and access. We propose:

• A new Consumer Financial Protection Agency to protect consumers across the financial sector from unfair, deceptive, and abusive practices.

• Stronger regulations to improve the transparency, fairness, and appropriateness of consumer and investor products and services.

• A level playing field and higher standards for providers of consumer financial products and services, whether or not they are part of a bank.

(4) Provide the government with the tools it needs to manage financial crises. We need to be sure that the government has the tools it needs to manage crises, if and when they arise, so that we are not left with untenable choices between bailouts and financial collapse. We propose:

• A new regime to resolve nonbank financial institutions whose failure could have serious systemic effects.

• Revisions to the Federal Reserve’s emergency lending authority to improve accountability.

(5) Raise international regulatory standards and improve international cooperation. The challenges we face are not just American challenges, they are global challenges. So,as we work to set high regulatory standards here in the United States, we must ask the
world to do the same. We propose:

• International reforms to support our efforts at home, including strengthening the capital framework; improving oversight of global financial markets; coordinating supervision of internationally active firms; and enhancing crisis management tools.

Nowhere in the President’s remarks or in his new regulation plan will you find any mention, let alone an admission, of the government’s primary role in causing the latest financial collapse. Fortunately, IBD tells it like it was.

Regulation Nation

Regulation: The White House wants to impose sweeping new rules for the financial industry to prevent another meltdown. Unfortunately, it was government — not the private sector — that was to blame.

Citing a “culture of irresponsibility” that it says helped cause last year’s financial crisis, the White House on Wednesday released an 88-page report that proposes major changes in America’s financial system. The Associated Press aptly called it “the greatest regulatory transformation since the Great Depression.”

Among the reforms put forward were a new, pumped-up Federal Reserve with greater powers to regulate and oversee the entire financial system, a new consumer credit watchdog to oversee home loans and credit cards, and new rules and oversight for hedge funds and exotic securities, such as credit default swaps and collateralized debt obligations, which some blame for making the financial crisis worse.

It’s nice to see that our government is so concerned about not repeating the errors of the past. But our advice comes from an ancient proverb:

“Physician, heal thyself.”

The White House’s financial regulation proposal blames “gaps in regulation” for our financial crisis. Wrong. It was in fact government misregulation and miscalculation that created our financial crisis — not private businesses. The record on this is quite clear.

As economic historian Lawrence White of the University of Missouri has written:

“The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of ‘creative’ nonprime lending followed Congress’ strengthening of the Community Reinvestment Act, the Federal Housing Administration’s loosening of down-payment standards, and the Department of Housing and Urban Development’s pressuring lenders to extend mortgages to borrowers who previously would not have qualified.”

Add to that Fannie Mae and Freddie Mac — created and regulated by acts of Congress — which together at one point controlled nearly half of the nation’s $12 trillion mortgage market. The two quasi-private entities served as the grand financial engine by which Congress would boost homeownership.

It worked well for a while. And we can’t fault the intent to help people. But the failure was one of too much government — not too little, which is the rationale for the new financial regulation regime sought for Wall Street and the banks.

As for the Fed’s new powers, we happen to believe the central bank has done a reasonably good job responding to this crisis — though as many others have noted, the vast expansion of the U.S. money supply in the last year poses a future inflationary threat.

But we don’t think the Fed needs enhanced powers. Far from it. It’s too powerful already. Giving it virtually unbridled control over our financial system without having to directly answer to the people is a danger to free market capitalism.

Many have argued that the Fed’s slashing of interest rates from 6.25% in 2001 to 1% in 2003 — following a stock market meltdown, a recession, the 9/11 attacks and the start of the War on Terror — was too much and led to the housing market bubble.

Now, strangely, many of the same people advocate giving the Fed even more power. It makes no sense.

If the White House really wants to fix our ailing financial system, it would do well to start by repealing what remains of TARP, undoing the government’s takeover of our auto industry and halting the fraudulent and wasteful $787 billion “stimulus” program.

Then you might see a real economic recovery take place.

See also:
Obama Defends Financial Overhaul
Geithner: Govt. Needs Better ‘Crisis Management’ Tools
In huge change, Obama’d strip Fed of credit card oversight
Obama: ‘A sweeping overhaul’
Historic Overhaul of Finance Rules
Obama Lays Out ‘Sweeping Overhaul’ of Financial Rules (Update3)
Not Everyone Is Cheering Fed’s New Role
New financial rules: Major changes for big, small
Obama unveils ‘sweeping overhaul’ of financial regulations

The truly ironic part is that most of Obama’s free market control plan has to go through Congress to become law, those most responsible for the financial mess in the first place. Can you just imagine what hideous manner of bull[expletive deleted] regulation will come out the other end? How much additional U.S. government oppression can free enterprise take before major corporations will just say enough already and reincorporate in another country with a more business friendly environment?

/one thing I know for sure from daily first hand stock trading experience, between Obama’s encroachment into the private sector economy and his out of control government spending, he’s spooking the ever loving [expletive deleted] out of the markets

He’s Melting!

Ever since Obama won the Democrat nomination, the mainstream media has been totally in the tank for him and working hard day to day to prop him up as the best U.S. President of all time. Here’s the latest tongue bath.

Newsweek’s Evan Thomas: Obama Is ‘Sort of God’

Newsweek editor Evan Thomas brought adulation over President Obama’s Cairo speech to a whole new level on Friday, declaring on MSNBC: “I mean in a way Obama’s standing above the country, above – above the world, he’s sort of God.”

Thomas, appearing on Hardball with Chris Matthews, was reacting to a preceding monologue in which Matthews praised Obama’s speech: “I think the President’s speech yesterday was the reason we Americans elected him. It was grand. It was positive. Hopeful…But what I liked about the President’s speech in Cairo was that it showed a complete humility…The question now is whether the President we elected and spoke for us so grandly yesterday can carry out the great vision he gave us and to the world.”

Barf.

See also:
Newsweek Editor Evan Thomas: Obama Is “Sort Of God”

Well, the American public has a decidedly different opinion of the Obama god. The more they see of him, the less they are liking him and his policies. That new president smell is wearing off. He’s losing ground every week.

Daily Presidential Tracking Poll

The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 34% of the nation’s voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-four percent (34%) Strongly Disapprove giving Obama a Presidential Approval Index rating of 0. That’s the highest level of strong disapproval and the lowest overall rating yet recorded (see trends).

The President’s ratings have slipped since General Motors filed for bankruptcy to initiate a new government bailout and takeover. Just 26% of Americans believe the GM bailout was a good idea and nearly as many support a boycott of GM products. It remains to be seen whether the dip in the President’s numbers is a temporary reaction to recent news or something more substantive.

The Presidential Approval Index is calculated by subtracting the number who Strongly Disapprove from the number who Strongly Approve. It is updated daily at 9:30 a.m. Eastern (sign up for free daily e-mail update). Updates also available on Twitter.

Overall, 54% of voters say they at least somewhat approve of the President’s performance so far. Forty-six percent (46%) disapprove. For more Presidential barometers, see Obama By the Numbers and recent demographic highlights.

See also:
Obama’s approval index hits zero

And Obama’s not the only prominent Democrat who’s popularity is flagging.

Cheney is More Popular with Public Then Pelosi

Nancy Pelosi has to hate these new numbers from Gallup. The Speaker of the House is less popular with the American people then one of her biggest enemies and political rivals: Dick Cheney. Gallup shows that 37% of Americans have a positive opinion of of Cheney, while only 34% have a positive opinion of Speaker Pelosi.

The former Vice President has been an active voice for the past administration and their anti-terror policies lately, calling many of the moves that Obama has made dangerous to our country’s safety. Cheney’s chief complaint has been Obama’s criticism of the Bush administration’s use of enhanced interrogation techniques, tactics which Cheney asserts, kept our country safe over the last seven years of their administration. Pelosi has been an ardent opponent of the enhanced interrogation techniques, recently being at the heart of a scandal over her accusations that the CIA lied to Congress about the use of these techniques even though proof from the intelligence organization and other committee members says otherwise.

Vice President Cheney does still have slightly higher unfavorable ratings then the Speaker, but his popularity is treading up and hers is trending down in recent months, a sign that Pelosi’s harsh style of management, and recent scandals may be wearing on the American public. Republicans may and should use Pelosi as a campaign lightning rod in 2010 just as Democrats used Cheney and Bush as motivators for their voters in the 2006 and 2008 election cycles. In fact, her greatest contribution in the next two years may not be her work on Capitol Hill but her use as a central punching bag for the GOP to focus Americans attention on the perils of one party rule in our nation’s capital.

That’s gotta hurt!

See also:
Cheney and Pelosi Have Poor Ratings in Common
A race to the bottom – Cheney versus Pelosi
Cheney, Pelosi, Obama: A Tale of Three Ratings

Of course, to break through the pervasive media bias and Democrat talking points working in tandem to label Republicans as the “Party of No“, the GOP is going to have to work hard to advance alternatives and make sure the American people are aware of their efforts. It won’t be easy because the Democrats and the media are working against them. Remember when Obama and the Democrats taunted Republicans to offer an alternative to Obama’s obscene budget? Well, the Republicans did offer an alternative budget proposal, even though, as the minority party, it wasn’t their responsibility to do so.

See also:
The GOP’s Alternative Budget
Two Budgets: A Comparison
Graphs and Charts on the Republican Alternative

So, after having their bluff called, did the Democrats seriously consider the Republican alternative? Hell no, the same day the Republicans proposed their alternative, the Democrats totally ignored it, gave it no consideration, and proceeded to ram the abomination that is Obama’s budget through Congress unchanged, without a single Republican vote. So much for bipartisanship.

However, to their credit, the Republicans aren’t giving up.

House Republicans offer up a $23 billion list of spending cuts

Responding to a challenge from President Barack Obama, House GOP leaders are offering up a roster of more than $23 billion in specific spending cuts over the next five years.

The proposed cuts, which were to be sent to the White House on Thursday, bear little resemblance to the dramatic proposals Republicans unfurled when they took over Congress 14 years ago.

Rather than proposing, for example, the elimination of the Education Department, as they have in the past, Republicans are suggesting killing a program that pays for building sidewalks, bike paths and crossing guards as part of the Safe Routes to Schools program. That would save $183 million a year.

The Associated Press was provided a look at the plan, which flows from a White House tiff between Obama and House GOP Whip Eric Cantor of Virginia.

In April, Cantor praised Obama for instructing Cabinet secretaries to produce $100 million worth of commonsense cuts this year. Obama’s cuts were met with a lot of derision for being merely a drop in the bucket as the government faces extraordinarily large deficits, and Cantor said the president could do a lot better. Obama told him to come up with suggestions.

The result is a list of 37 specific program cuts that would save taxpayers more than $23 billion over the next five years and more than $5 billion in the first year alone.

Granted, $23 billion in specific spending cuts isn’t going to save us from Obama’s $3.6 trillion “Bankrupt America” budget, but at least it’s a substantial savings compared to Obama’s laughable $100 million in cost cuts. In any case it’s a start, the “Party of No” is at least trying to save the taxpayers some money.

Will the mainstream media report on this new Republican proposal to reduce spending, will Obama and the Democrats ignore it and sweep it under the rug, like the Republican budget alternative?

/stay tuned, hopefully, between Obama’s weak foreign policy and his out of control deficit spending, the American electorate will eventually figure out that they made a mistake, it seems the polls are already starting to point in that direction

GM Goes Bankrupt, Sun Rises In East, Sky Doesn’t Fall

As widely predicted and telegraphed, the once unthinkable finally became reality today.

GM Files Bankruptcy to Spin Off More Competitive Firm

General Motors Corp., the largest manufacturer to go bankrupt, filed for court protection with a government-financed plan intended to create a viable company that can compete in world markets.

The U.S. government will extend $50 billion of loans to the 100-year-old automaker and plans to convert that into a 60 percent stake in the reorganized company, according to a filing in U.S. Bankruptcy Court in New York. GM today missed a deadline to show that it could reorganize outside of court and reported debt of $172.8 billion, more than twice its assets.

“GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,” U.S. President Barack Obama said today. The government was becoming a “reluctant” owner of the automaker, Obama said, adding that his goal was to “take a hands-off approach and get out quickly.”

GM, the largest carmaker until its 77-year reign ended last year, surpassed Chrysler LLC as the largest manufacturer to file for bankruptcy. Detroit-based GM plans to launch a new company in 60 to 90 days, armed with vehicles from its Cadillac, Chevrolet, Buick and GMC units for the U.S. market. The court will supervise the sale or liquidation of unprofitable brands, such as Saturn and Hummer, and at least 11 unwanted factories.

Interim Loan

The automaker won approval of a plan to auction its assets and interim approval of a $15 billion loan from the U.S. and Canada to keep the company going until it can complete the sale, which it plans to do in July.

GM said it has more than 100,000 creditors, and that unsecured creditors will recover some assets in the reorganization. Company operations outside the U.S. weren’t included in the petition.

The case was assigned to U.S. Bankruptcy Judge Robert Gerber in Manhattan, who also presides over the bankruptcies of Lyondell Chemical Co. and BearingPoint Inc. He presided over the bankruptcy of Adelphia Communications Corp. as well.

“Today marks a defining moment in the reinvention of GM,” said company President and Chief Executive Officer Fritz Henderson. “The economic crisis has caused enormous disruption in the auto industry.”

GM listed in its petition as top creditors Wilmington Trust Co., representing bondholders owed $22.8 billion; International Union, the United Automobile, Aerospace and Agricultural Implement Workers of America, owed $20.6 billion; and Deutsche Bank AG, representing bondholders owed $4.44 billion. The Unofficial GM Dealers Committee, which said it represents more than 6,000 GM dealers in the U.S., filed a notice that it will take part in the bankruptcy litigation.

A Matter Of Law

Economy: With General Motors’ long-awaited “pre-packaged bankruptcy” finally here, America is on the verge of a new era — one where government, not investors and consumers, is the final arbiter of success.

GM’s bankruptcy pushes bondholders aside in favor of the U.S. government and the UAW. Though bondholders hold $27 billion in debt, they’ll get just 10% of stock.

How’s that compare with the other “stakeholders?” For spending $50 billion to bail out GM, the government will get 60% of the equity in the new GM; the UAW, which along with other unions gave millions to Democrats, will be repaid for its loyalty with 17.5% of the stock for $10 billion of unsecured debts.

So the government, with roughly two times what private bondholders have on the table, gets a stake five times bigger. And the union, with about a third as much “invested,” gets a 70% bigger stake. Even the Canadian government, with its $9.5 billion “invested,” ends up with 12%.

They call it “restructuring.” We call it theft. Never in our memory has there been a more thorough, systematic effort to disenfranchise the shareholders and bondholders of a major American firm.

It will make investors — domestic and foreign alike — think twice about investing in an American stock or bond in the coming years. Why invest if your money and rights as an investor can be arbitrarily stripped from you, as they were in GM’s case?

But our real issue with this isn’t that people will lose money. It’s that we don’t believe the government’s actions are even legal.

The White House has basically been manipulating GM into bankruptcy since early this year, putting 31-year-old Brian Deese, a Yale law student, in charge of GM’s restructuring. “It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism,” the New York Times said with tongue in cheek (we think).

It used to be that the “rules of American capitalism” came from 200 years of U.S. case law, the Constitution and legitimate federal regulation. But no more. Instead, the job’s been given to someone not yet out of law school. This shows shocking contempt for GM, once the world’s pre-eminent industrial company, for American capitalism and the rule of law.

We don’t think this travesty passes constitutional muster and hope to see it vigorously challenged in federal court soon.

Our Constitution is very specific. It limits the executive branch’s rights to those enumerated therein. The rest it grants to the people and the states. It also requires due process under the law, especially when government “takings” are involved.

That’s why in 1952, when President Harry S. Truman tried to seize control of the U.S. steel industry during a debilitating strike, the Supreme Court made him back down. And Truman had a real emergency on his hands: the Korean War.

We pored over Article II of the Constitution, known as the Executive Powers Clause. Nowhere is the White House granted the right to override the time-tested bankruptcy process, to use Treasury money raised by taxing Americans to buy or bail out companies, to fire CEOs, to micromanage corporate policy, or to abrogate lawful contracts made by private parties.

Yet, our government has done these things and more — leading to a corrupt GM bankruptcy. The damage to our system of corporate capitalism and the rule of law is severe. Next stop: Federal court?

See also:
GM Collapses Into Government’s Arms
General Motors files for bankruptcy
GM declares chapter 11 bankruptcy
World’s Largest Company Files For Bankruptcy Protection As GM Makes It Official
General Motors may follow Chrysler’s path to quick exit from bankruptcy

So, this travesty of a probably illegal boondoggle taxpayer funded GM bankruptcy, alarmingly prophesied as the loosing of the seventh seal of the Apocalypse, was filed in U.S. Bankruptcy Court in New York today. What were the dire and scary consequences? Did the economy fall off a cliff into the abyss? Was there panic in the streets? Did dogs and cats start living together, was there mass hysteria?

Hell no! Wall Street and the equities markets not only totally ignored the GM bankruptcy, all the major stock market indices soared, tacking on gains of 2 1/2-3% each, having their best session in months! Personally, I had a great day!

/so, once again, all the Chicken Littles were wrong, GM should have been put into bankruptcy six months ago, it would have saved the taxpayers $20 billion that has all since been flushed down the GM/UAW toilet, never to be seen again

If It’s Friday It Must Be Time To Transfer More Taxpayer Money To The UAW

Oh yeah, it’s late Friday afternoon of the Memorial Day weekend, time to tell the taxpayers how much more money Obama just flushed down the auto bankruptcy toilet, hoping you won’t notice.

U.S. Lends Additional $4 Billion to Ailing GM as Bankruptcy Looms
GM says it received 4 bln dlrs more from US Treasury

General Motors Corp. said Friday that it has borrowed an additional $4 billion from the Treasury Department, meaning the automaker has now accepted $19.4 billion in loans from the U.S. government.

GM started taking government money in December and said it intended to borrow $2.6 billion more by June 1 and an additional $9 billion after that. But in a regulatory filing Friday, GM said it needed $1.4 billion sooner than originally forecast.

The company didn’t publicly disclose how it will use the money but said it provided the information to Treasury officials, and they considered the loan acceptable.

“We appreciate President Obama’s and his administration’s ongoing support of GM and the domestic U.S. auto industry as we undertake the difficult but necessary actions to reinvent our company,” the company said in a written statement.

And remember, the plan is to forgive these “loans” in bankruptcy, which GM will most likely declare next week. The UAW thanks you for the direct transfer payments, have a nice long Memorial Day weekend!

See also:
GM borrows another $4 billion from Treasury
GM borrows additional $4 billion from government
GM gets $4B in new federal aid
GM Bankruptcy Filing Moves Closer Amid Sale Plans, Union Deals
Report: General Motors bankruptcy expected as early as next week
GM bondholders dig in, gird for bankruptcy
UPDATE:GM Bondholders Lobby US Lawmakers To Oppose Treasury Backed Deal
GOP Lawmakers Push Geithner on GM ‘Main Street’ Bondholders’ Behalf
UPDATE:GOP Lawmaker Presses For More Oversight Of Auto Bailout
Auto Task Force Wages ‘War on Capital,’ Lawmakers Say (Update2)
Lawmakers want Obama to slow down on GM, Chrysler
Lawmakers urge Obama to slow auto task force
Lawmakers worry about auto job losses…GM borrows more money…New…
Lawmakers want Obama to slow down on GM, Chrysler
UPDATE 2-Fiat already concerned for ‘deteriorating’ Chrysler
The UAW Says Thanks Taxpayers!

/anyone else think these government sponsored “auto bailouts/bankruptcies” were a really bad idea, aren’t going to go well, will cost taxpayers more than they could ever imagine, and it’s all a criminal waste of money because Chrysler and General Motors will never be able to survive anyway?

It’s Deja Vu All Over Again

Gee, for someone who says he doesn’t want to run car companies, Obama sure seems to like to collect them.

GM bankruptcy plan eyes quick sale to government

If General Motors Corp files for bankruptcy, as widely expected, its healthy assets will be quickly sold to a new company owned by the U.S. government, a source familiar with the situation said on Tuesday.

The source, who was not cleared to speak with the media and would not be identified, said the U.S. government would pay for the assets by assuming the automaker’s $6 billion of secured debt and forgiving the bulk of the $15.4 billion of emergency loans that the U.S. Treasury has provided to GM.

The government is negotiating the terms on which it will assume GM’s secured debt and might make an the offer to holders of the debt that is far superior to the one made to Chrysler LLC’s secured lenders, the source said.

Chrysler filed for bankruptcy in April and has proposed paying its secured lenders about 28 cents on the dollar.

The new GM is likely to distribute stock in the company to GM’s unions in return for concessions on wages and benefits, the source said.

The percentage of stock given to the unions, bondholders and other creditors whose debt is not repaid by new GM has not been determined, the source said.

In addition, the government would extend a credit line to the new company, the source said.

The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.

The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs as sales have plummeted in recent years.

See also:
GM shows signs that bankruptcy filing is coming
GM says still hasn’t made deals with Treasury, UAW
GM bankruptcy would be complex, painful

So, to recap, the U.S. government is going to buy GM, turn a large ownership stake over to the UAW, the taxpayers are going to take it in the shorts for the $15.4 billion of loans already made to GM, and then, to add insult to injury, we’re going to loan the new government/union owned company even more money. Can you say Chrysler redux, only on a much larger scale? Did anyone ask you if you wanted to spend tens of billions of your tax dollars to buy and run two of the three major U.S. car companies just so the UAW can keep their overpaid jobs and gold plated health care and pensions as payback for supporting Obama?

/this isn’t Venezuela, is this Venezuela?

Auto Bailouts In A Nutshell

Dennis Sevakis sums it up succinctly.

Bye-bye sanctity of contracts

As property rights are flushed, you can fuggedaboutwhat’s in your contract. After all, you wouldn’t want to be a”hold-out” member of a “cabal” of “dissident lenders” now, would you? A Saturday Washington Times article includes some terribly prejudiced phrasing (perhaps tongue-in-cheek?), but is a good summary of the structure of the Chrysler bankruptcy “deal” that included the collapse of the secured lenders.

The hold-out lenders charged that Mr. Obama, who had called them “speculators” and questioned their patriotism as well as blamed them for the bankruptcy, used undue political pressure, even though they were pursuing their legal rights in bankruptcy court, where the claims of such secured lenders normally prevail.

“After a great deal of soul-searching and quite frankly agony, they concluded they just don’t have critical mass to withstand the enormous pressure and machinery of the U.S. government,” said Thomas Lauria, the group’s lead attorney.

The White House’s auto task force asked the lenders to accept about 33 cents on the dollar for $6.9 billion of loans and offered them no equity in the company, while unions were given a 55 percent majority stake in exchange for expunging $4.6 billion of debt to a retirement fund.

Oh, what wonders one can accomplish by having a friendly, (sym)pathetic judge! And, when you’ve got ’em by the cajones, their hearts and minds are sure to follow! IMHO this is just about the most egregious abuse of government power of all time. How long before the Obamachine just takes dissidents out back and threatens to shoot them? Nah, they’ll never dispense with all the legal formalities, will they?

But do keep in mind, that we have no dollars for more F-22s and such. Must tighten our defense belt, folks. But there’s billions available to “save” Chrysler — now and in the future. And Obama is only just getting started.

Praise the Prez and pass the subsidies!

/couldn’t have said it better myself

More Taxpayer Money Down The Drain

And you thought the Chrysler bailout was a bad deal for taxpayers. Watch Obama crow about how proud he is of himself for cutting a drop in the bucket $17 billion from his $3.5 trillion budget.

See also:
Obama touts $17 billion ‘lot of money’ budget cuts
Obama seeks $17 billion in U.S. budget savings

But wait, what about General Motors, the too big to fail company that we’ve already shoveled $15.4 billion into, how is our taxpayer investment in that going? The answer is, not good. We could have let GM go bankrupt back in November, but no, that was unthinkable! Well, guess what, GM will be in bankruptcy by the end of the month and if you think we’re ever going to get our $15.4 billion back you’re crazy.

GM Posts $5.98 Billion Loss Amid Steep Drop in Revenue

General Motors, facing the prospect of bankruptcy, posted a loss of $5.98 billion for the first three months of this year as revenue continued to slide because of the economic crisis and slumping auto sales.

GM’s losses were offset somewhat by the company’s restructuring efforts and by an infusion of loans from the federal government, the automaker said yesterday.

GM has until the end of the month to cut costs further and win stakeholder concessions. If it fails, the government will likely force it into bankruptcy protection.

GM lost $9.78 per share, compared with a loss of $5.80 per share, or $3.28 billion, a year earlier. Cash on hand totaled $11.6 billion — approaching the minimum reserves needed to continue operations.

Revenue fell 47 percent to $22.4 billion, compared with revenue of $42.4 billion in the same quarter last year, as GM cut production. Ray Young, GM’s chief financial officer, warned that such a drop could be dangerous.

“Once you start losing revenue, you get yourself into a vicious circle in which you cannot recover,” he said. Talk about bankruptcy has pushed customers even further away from dealerships, Young said.

See also:
G.M., Leaking Cash, Faces Bigger Chance of Bankruptcy
US would facilitate GM bankruptcy, if needed -Geithner

And just what is soon to be bankrupt GM doing with our $15.4 billion in taxpayer money, besides paying for gold plated UAW retirement and health care benefits? Can you say insult to injury?

GM hosts fleet buyers at spa in scaled back event; critics unmoved

Just weeks before a deadline that could send it into bankruptcy, General Motors is entertaining 500 of its biggest customers at a luxury spa and golf course in Arizona.

GM, (GM) which has borrowed $15.4 billion from the U.S. government in the past six months, shipped in 150 cars and trucks to the event this week at the Sheraton Wild Horse Pass Resort & Spa, and paid for airfare and hotel lodging for 90% of the guests.

The affair is scaled back from previous years, says GM spokesman Terry Rhadigan. Guests have to pay for their own golf outings, he says, and most of the days are packed with informational sessions on GM’s 2010 product line. The guests are GM’s fleet and corporate customers, which accounted for 27.6% of GM’s business in 2008. Fleet customers can buy dozens of vehicles at a time.

Well, hey, at least they made the taxpayer funded junket bingers pay for their own golf. And now look at what GM is planning to do after we finish paying for their bankruptcy.

Under Restructuring, GM To Build More Cars Overseas

The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company’s new jobs will be filled by workers overseas.

According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double.

The proportion of GM cars sold domestically and manufactured in those low-wage countries will rise from 15 percent to 23 percent over the next five years, according to the figures contained in a 12-page presentation offered to lawmakers in response to their questions about overseas production.

As a result, the long-simmering argument over U.S. manufacturers expanding production overseas — normally arising between unions and private companies — is about to engage the Obama administration.

Essentially in control of the company, the president’s autos task force faces an awkward choice: It can either require General Motors to keep more jobs at home, potentially raising labor costs at a company already beset with financial woes, or it can risk political fury by allowing the automaker to expand operations at lower-cost manufacturing locations.

“It’s an almost impossible dilemma,” said former labor secretary Robert B. Reich, now a professor at the University of California-Berkeley. “GM is a global company — so for that matter is AIG and the biggest Wall Street banks. That means that bailing them out doesn’t necessarily redound to the benefit of the U.S. or American workers.

“More significantly, it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?”

That’s exactly the ~$30 billion dollar question, why are we bailing out these two car companies that bleed money like hemophiliacs? The answer to that is easy, so Obama can protect the UAW as much as possible. You can already see that from the progress of the Chrysler bankruptcy. The Obama car czar Steven Rattner, is literally bullying a deal throgh bankruptcy court that heavily favors the UAW interests by trampling the Constitutional rights of more senior lien holding creditors. It’s a big, disgusting sham so far, expect the General Motors bankruptcy to be just as bad and probably much worse.

/and remember, while, on one hand, Obama brags about cutting $17 billion, much of it cuts in defense programs, less than 1/2% of his stupeniously bloated $3.5 trillion budget, the largest in American history by a wide margin, keep in mind that, on the other hand, he’s going to flush about $30 billion down the road to bankruptcy toilet bailing out his UAW buddies at Chrysler and GM and you’re paying for it

Back At The Trough Again

As predicted, like clockwork, Chrysler and GM are begging for another bailout.

Chrysler asks govt for $5 billion more in loans

Chrysler LLC on Tuesday told the U.S. government it needs even more taxpayer money to survive. General Motors is expected to do the same. Acknowledging that industry conditions are worse than expected when it made the case in December for a government bailout, Chrysler requested an additional $5 billion in government loans. It originally said it would need $3 billion more. The company had previously received $4 billion from the Treasury Department.

GM needs up to $30 billion in aid to avoid failure

General Motors Corp (NYSE:GM – News) said on Tuesday it could need a total of up to $30 billion in U.S. government aid — more than doubling its original aid — and would run out of cash as soon as March without new federal funding.

The request for additional aid from the top U.S. automaker came in a restructuring plan GM submitted to U.S. officials on Tuesday.

The GM restructuring plan of more than 100 pages was posted on the U.S. Treasury Web site

See also:
Chrysler Restructuring Plan for Long-Term Viability
General Motors Corporation 2009 – 2014 Restructuring Plan

Chrysler has already received $4 billion and is now asking for an additional $5 billion after originally estimating that they would need $3 billion. GM has already received $13.4 billion and is now asking for $30 billion after originally estimating that they would need $18 billion.

So, both companies are still bleeding cash like they have a severed aorta and neither company met today’s deadline to obtain concessions from the recalcitrant UAW.

See also:
Chrysler, UAW make progress in talks-source
Source: GM, UAW closing in on concession deal

Will we let these obviously insolvent and unprofitable companies fail and proceed to Chapter 11 bankruptcy to reorganize like 99.9% of the other companies that find themselves in untenable economic positions? Hell no! It’s bailout mania season in Washington, expect the Bad Business Enabler Cavalry to ride your tax dollars to the rescue! Well, actually your tax dollars were all already spent a long time ago, so they’ll have to borrow or print the money and you or your children or grandchildren will just have to pay for it all later, with interest.

Will Obama stop the craziness? Hell no, Giddy Up!

Obama to appoint panel for auto recovery

It will take more than one “car czar” to help get the embattled U.S. auto industry back on track, President Barack Obama has decided.

Instead, his administration is establishing a presidential task force to direct the restructuring of General Motors Corp. and Chrysler LLC, a senior administration official said Sunday night.

Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers will oversee the across-the-government panel, the official said, speaking on the condition of anonymity because no announcement has been made.

So, assume the position and prepare to bend over again for the Detroit Duo and the UAW!

/you know, I can understand bailing out the major banks, because if the international banking system fails the entire global economy will crash overnight, however, if GM and Chrysler go into Chapter 11 bankruptcy reorganization, you’ll still be able to buy a car the next day