Thread: Chrysler, GM discuss merger, acquisition

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This has been boiling around in the trade papers for a while. Personnally the only thing that Chrysler has to offer GM is the Jeep nameplate and maybe some plant assets and foreign contracts. Many may have not noticed that during the financial market bailout wrangling just over a week ago a $25 billion loan authorization slipped through separately for "loan guarantees" to the US auto makers. With GM stock in the toilet because the market has no fundamental faith in the management team I wouldn't be surprised to see a Chapter 7 bankruptcy, the assets sold off for a song and a new company emerge from the ashes. Kiss the UAW/pension/and other costly agreements goodbye. Of course the pension stuff is backed up by our tax dollars so punch the cash register again! The other alternative given the foolishness we're permitting, and based on polls we seem determined to make even worse, "the government" would step in to support it's union masters and "save" the company...............afterall "it's too big too fail".

GMAC got itself in a pickle when it bought Ditech, the mortgage lender. The probable partial reason this deal is holding is they want to see what kind of program will result from the BIG bailout deal so they can figure out how to play the game. Instead of just letting failures fail we turn to a socialist central committee model that only prolongs the agony and constrict the healing that would naturally occur in a free market. We've learned nothing from the lessons of the 1930s!

This will shed some light on the subject

http://video.google.com/videoplay?do...05277695921912

Originally Posted by Bob Parmenter

This has been boiling around in the trade papers for a while. Personnally the only thing that Chrysler has to offer GM is the Jeep nameplate and maybe some plant assets and foreign contracts. Many may have not noticed that during the financial market bailout wrangling just over a week ago a $25 billion loan authorization slipped through separately for "loan guarantees" to the US auto makers. With GM stock in the toilet because the market has no fundamental faith in the management team I wouldn't be surprised to see a Chapter 7 bankruptcy, the assets sold off for a song and a new company emerge from the ashes. Kiss the UAW/pension/and other costly agreements goodbye. Of course the pension stuff is backed up by our tax dollars so punch the cash register again! The other alternative given the foolishness we're permitting, and based on polls we seem determined to make even worse, "the government" would step in to support it's union masters and "save" the company...............afterall "it's too big too fail".

GMAC got itself in a pickle when it bought Ditech, the mortgage lender. The probable partial reason this deal is holding is they want to see what kind of program will result from the BIG bailout deal so they can figure out how to play the game. Instead of just letting failures fail we turn to a socialist central committee model that only prolongs the agony and constrict the healing that would naturally occur in a free market. We've learned nothing from the lessons of the 1930s!

Again you've hit the nail on the head.... Some players in corporate America have become just like so many individuals... Waiting for the government to fix everything.....Welcome to Socialism.

Not trying to be a conspiracy theory guy, but I have to wonder just who or what has the money and power to pull off all this manipulating that is going on in the financial world?????? I guess we'll know when we see who's left standing when this is all over....

If I get greedy, make some foolish financial decisions, live on credit, and fail miserably nobody would come along to bail me out.....Why shouldn't businesses---or for that matter government entities---have to play by the same rules??? No company is too big to fail, well that's what I thought anyway... I guess with enough propping up and a large enough influx of cash they won't fail.

If a company can't supply a product or service and market it in a profitable manner then they are going to fail....why should it matter if it's a sole proprietorship company with no employees or a giant corporation???? We should all be held accountable for our decisions and actions, right????

I don't know, I don't understand any of it anymore. My vote is still going to "None of the Above".... I do know that I'm fed up with finger pointing and name calling. Negativity is not going to resolve the economic situation we're in now.

Hey! I'm going to lay back and let the government tax those darn rich people and give me everything I need!!!

Originally Posted by Dave Severson

Not trying to be a conspiracy theory guy, but I have to wonder just who or what has the money and power to pull off all this manipulating that is going on in the financial world?????? I guess we'll know when we see who's left standing when this is all over....

I tend not to believe in conspiracy theory as it is most often presented, it's any easy fall back for those who are prone to whining "I'm a victim, wah wah". I'm thinking here in the sense that most often it means a handful of powerful people gather around a table and hatch a plot, have a defined objective and an itemized "war plan" step by step.

That being said, I believe in a "conspiracy" (no meeting just a majority held understanding based on common experiences) of belief forming rules that play on human nature. A positive example would be traffic control. If we start from a correct observation that chaos would result if say a thousand drivers went out on the road without a set of rules that in most part are understood by all, and benefit all. Thus we end up with driving on the right hand side of the road, red means stop, person to the right has the right of way, etc. etc. Even though the rules are in place some people will ignore them or worse be allowed to be ignorant of them, and bad things can happen. But on occasion some drivers get away with breaking the rules and become emboldened to either keep braking that rule, til they pay a price, or even worse, break more of the rules in an unconscious attempt to see how much they can get away with.

Bazillions of books will be written going forward enumerating how we got to where we are in our financial markets. Some of them will be grossly wrong in their analysis, others will be accurate............but of couse the key to their value will be if anyone pays attention and acts accordingly. Unfortunately we're likely to end up with a government working largely from one perspective where the discenting voices will not be heard. Given the complexity of the matter we can't effectively cover all the contributing factors, but I would say the general consensus is that the subprime lending market was the 800 # gorilla that tipped the market scales. The simple matter of it is that no matter whether you think the intentions that led to a proliferation of subprime mortgages were good or not, the decision to "make housing affordable" in that way was a dumb idea. Common sense should dictate that lending money to people who haven't demonstrated a good history of being able to pay their bills is idiotic. Worse, allowing somebody to participate in borrowing money when they don't "have any skin in the game", is further idiocy. Now people who lend money commercially don't last long if they are idiots. Since this happened on such a wide scale, and was participated in by folks/businesses who had a history of not acting like idiots, the first thing we should do is ask ourselves what changed to cause these people/institutions to shoot themselves in the foot. The obvious answer (to me anyway) is, someone changed the rules. Just like, using the earlier example, if the highway rules were changed to make stopping at stop signs optional (some would argue that a certain level of anarchy has already resulted in that )we would eventually have total chaos as more and more people chose to play the game that way. In the case of subprime mortgages, rather than the rules being changed removing prudent "laws/regulations" (yeah I know some of you driven by your political party loyalties and in the tank media echo chambers think "deregulation" was the only cause ..............listen carfully, those who make that charge either don't give specifics about which regulations were undone, or the few that do point to the deregulation of banks in 1999. I would point out that that specific deregulation helped Wells Fargo, US Bank, B of A , and JP Morgan to withstand large subprime mortgages, whereas the investment banks not covered by that regulation are the ones that failed........but let's not let the truth get in the way of a good demogaguery)it was changing the rules to encourage lending to high risk borrowers that launched the torpedo. You might think that prudent lenders would resist such "encouragement", however, facing threats of lawsuits, judicial harrassment, further odious regulation, and other manner of political extortion many of them caved. In fact, they were not only urged to make weak loans, they were given goals. So, ask yourself what you would do if you were forced to do something that wasn't exactly in your best interest? The human nature thing is to try to make the most of it, remove as much of the pressure as you can, and pass the buck............or in this case, billions of bucks. So, as happened, you bundle the turd that was forcefully put in your pocket with the good stuff and sell the whole bundle hoping that the buyers will believe there's more than enough good stuff to make up for the bad. The second party in the transaction is motivated to do the same and moves it along. Of course, again these guys aren't normally idiots, they all knew there were turds in the pile, and the politicians who started the dominoe fall with the "affordable housing" measures/mandates, knew it too, so the politicians tweaked two government supported entities (GSEs) to offer a clearinghouse to take these turds off the commercial markets hands. HOORAY, bye bye risk (well, for the individual bundlers at step one anyway). So Fannie Mae, and Freddie Mac acted as a money laundering agency, and just like their Mafia equivalent they had to hide what they were doing. So we end up with political appointees like Franklyn Raines getting $90+million dollar bonus packages for running this scam and cooking the books.............and glory be he has some influencial and powerful congressmen running interference for him. Just to put a point on it, the hated Ken Lay, late of Enron and the human race, would have gone to prison had he not died, for doing the same thing. Do you think Raines will go to prison? Will we be consistent about enforcing our laws?

Are you incensed about a powerful congressman getting favorable loan terms that Joe six pack can't get from the biggest subprime loan maker, and is the leading receiver of campaign contributions from the above mentioned GSEs? If those aren't bribes from interested/benefiting parties, what are they? Will these political operatives ever pay a price for their contribution to this part of the market colapse? I don't think so since last week they were lauded as the "saviors", and are part of the "bailout" design. Many of you have been propagandized into believing that only businesses are evil, you say it on here over and over. While there are some who are (in reality a very, very small minority), you ignor those elected officials (and their appointee dupes) who wontanly manipulate the law to enhance their own power and wealth. Not only are we in a financial funk, but we who allow these criminals to be exempt from consequences are morally bankrupt as well.

You're right Jay, many of these crooked pols need to be fired, and as is so often true, government is not the answer for that...........we are!