It's OFFICIAL: GM it BANKRUPT and off of DJI.

[dirtylicious]

lol....1 car out of how many?

oooohh.

 

[ninjahood]

Originally Posted by ThunderChunk69

Originally Posted by ninjahood

they don't have to pick da f-150 just cause..they pick it cuz its one of da best trucks available.

its the best at its purpose,
Chargers,
Magnums,
+Crossfires
serve no purpose, they just have masculine names and marketing schemes

charger's name is obviously from its muscle car roots.

 

[kix4kix]

The American business model in general is flawed. Outsourcing jobs has exponential perks in short term, but Obama should put a stop to the tax breaks thatcompanies receive in this process.

 

[dirtylicious]

[h2]After 101 years, why GM failed[/h2]http://www.dailyfinance.c...ars-why-gm-failed/print/

General Motors (GM) was founded in September of 1908. On June 1, 2009, at 8 a.m. -- almost 101 years later -- it ceased to exist, and control was handed over to turnaround executive Al Koch. Thanks to $19.4 billion in loans and $30.1 billion more in debtor-in-possession financing, a huge amount of effort by the U.S. government and GM's management, unions, dealers, suppliers and bondholders, the effects of that failure will be terrible, but not catastrophic.

The U.S. will own 60 percent of the new GM, which will include Chevy, Buick, GMC and Cadillac. Canada will take 12 percent after lending GM $9.5 billion, the UAW 17.5 percent (as payment for $9.4 billion of its $20 billion in health care obligations) with warrants to buy 2.5 percent more, the bondholders 10 percent to as high as 25 percent through warrants, and old GM common shareholders roughly zero. Twelve to 20 more GM factories will close, 21,000 union workers will be fired, and 2,400 GM dealers will shut down.

To help other companies avoid GM's fate, it's worth exploring the five reasons that GM failed:

1. Bad financial policies. You might be surprised to learn that GM has been bankrupt since 2006 and has avoided a filing for years thanks to the graces of the banks and bondholders. But for years it has used cars as razors to sell consumers a monthly package of razor blades -- in the form of highly profitable car loans.

And the two Harvard MBAs who drove GM to bankruptcy -- Rick Wagoner and Fritz Henderson -- both rose up from GM's finance division, rather than its vehicle design operation. (Read more about GM's bad financial policies here.)

2. Uncompetitive vehicles. Compared to its toughest competitors -- like Toyota Motor Co. (TM) -- GM's cars were poorly designed and built, took too long to manufacture at costs that were too high, and as a result, fewer people bought them, leaving GM with excess production capacity. (Read more about GM's uncompetitive vehicles here.)

3. Ignoring competition. GM has been ignoring competition -- with a brief interruption (Saturn in the 1980s) -- for about 50 years. At its peak, in 1954, GM controlled 54 percent of the North American vehicle market. Last year, that figure had tumbled to 19 percent. Toyota and its peers took over that market share. (Read more about GM ignoring the competition here.)

4. Failure to innovate. Since GM was focused on profiting from finance, it did not really care that much about building better vehicles. GM's management failed to adapt GM to changes in customer needs, upstart competitors, and new technologies. (Read more about GM's failure to innovate here.)

5. Managing in the bubble. GM managers got promoted by toeing the CEO's line and ignoring external changes. What looked stupid from the perspective of customer and competitors was smart for those bucking for promotions. (Read more about GM's managing in the bubble here.)

GM's failure after 101 years is an indictment of American management in general. It highlights the damage to our economy that results when finance becomes the tail that wags the economic dog. And it shows what happens to any company that rests on its laurels and fails to adapt to change.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.

 

[ninjahood]

Originally Posted by Dirtylicious

lol....1 car out of how many?

oooohh.

*sigh*

da other car thats built on da zeta platform..

http://www.motortrend.com/oftheyear/car/112_0801_2008_cadillac_cts/overview.html



chevy malibu

[h2]Chevrolet Malibu - What the Auto Press Says[/h2]
The 2009 Chevrolet Malibu ranks 2 out of 23 Affordable MidsizeCars. This ranking is based on our analysis of 68 published reviews and test drives of the Chevrolet Malibu, and our analysis of reliability and safetydata.

Since its 2008 redesign, the Chevrolet Malibu has been the surprise of the automotive world. The car has won praise for itsstylish good looks, spacious, well-designed and sharp passenger cabin, solid safety scores and driving dynamics that impress many who think they know GMproducts. The 2009 Chevy Malibu is competing with perennial class-leaders like the Honda Accord and Toyota Camry -- and in many cases, it's beating them out.

The automotive press has grown accustomed to family sedans that offer some of the charms of sports sedans, some of the amenities of luxury cars, and some ofthe economic advantages of yesterday's midsize cars. But auto writers seem pleasantly surprised to find one wearing Chevy's bowtie badge. The 2008 Malibu took home a trunkful of awards from the press -- one of Car and Driver's 10Best, North American Car of the Year at the North American International Auto Show in January 2008, Kiplinger magazine's "Best in Class," AutomobileMagazine's 2008 Automobile All-Stars -- the list goes on and on.

The Malibu now threatens the traditional favorites in this class. It's a viable alternative to the popular Honda Accord and Toyota Camry, and should be on your test drive list before you put money down oneither of those. If you're looking for something more exciting, however, many find the all-new 2009 Mazda6 a more enthusiastic ride, particularly in corners, and a better-lookingcar.

Another argument in the Malibu's favor, at least until April 30, is GM's new Total Confidence Plan. Under certain circumstances, GM will now makeup to nine payments on behalf of a Malibu owner who loses their income. The plan also offers some protection against lost equity. Once half the paymentstoward the car have been made, buyers can trade the Malibu in on any new GM vehicle, and if the owner owes up to $5,000 more than the car is worth, GM willforgive the difference. Vehicles from Ford and Hyundai carry similar plans, but Honda and Toyota have yet to match the offer.

Because of the success of the 2008 model, Motor Trend reports, Chevrolet "purposely kept the 2009 model year changes to a minimum. The most noteworthy include an expanded offeringof the fuel-wise 2.4L/6-speed automatic powertrain combo, four new exterior colors, and the addition of Bluetooth with the new OnStar 8.0 system."Chevrolet has also taken steps to improve the Malibu's fuel economy for 2009, reacting to a market in which most consumers are concerned about high gasprices.

If fuel economy is an important consideration to you, keep in mind that s 2009 Chevrolet Malibu Hybrid is also available and is reviewed separately.

The 2009 Malibu is available in four trim levels, with a choice of two engines and three transmissions. To Chevrolet's credit, even the mostwell-appointed LTZ trim level is available with the most fuel-efficient powertrain -- a 2.4-liter four-cylinder engine and a six-speed transmission. Many ofthe Malibu's rivals couple their highest trims only with their thirstiest engines.

Be sure to check for current Chevy deals that may be available on anew Malibu.

 

[mdresident]

Originally Posted by Fede DPT

[h1]General Motors Files for Bankruptcy Protection in New York[/h1] [h2]GM's reorganization plan will rely on up to $30 billion of additional financial assistance from the Treasury Department.[/h2]
FOXNews.com

Monday, June 01, 2009

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General Motors CEO Fritz Henderson addresses the company's viability plan in Detroit on April 27. (AP Photo)

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General Motors filed for Chapter 11 bankruptcy protection Monday as part of a plan under which the government will pump another $30 billion into the company with the aim of re-creating the troubled automaker.

GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.

Under the plan, GM would eventually have 50 percent fewer liabilities and far fewer product lines. The $30 billion government infusion is on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

Senior administration officials, who declined to speak for attribution, said the U.S. government will be a "passive" investor but will oversee operations at the new GM because "the taxpayer will want us to."

Not one of President Obama's senior economic advisers could or would venture a guess as to when taxpayers would see a return on the massive, White House-engineered investment.

"We're not here to predict," a senior official said when asked about any timeline for taxpayer payback.

Advisers were more certain about GM's future access to the taxpayer till -- it's over.

"One never says never, but this is it in terms of support for GM," a senior official said.

GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge this week from its government-sponsored bankruptcy as Chrysler Group LLC.

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

The downsized GM brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks.

The reduction in product lines means the closure of 11 factories and the idling of three other facilities.

Trading of GM shares was halted early Monday after they plunged Friday as low as 74 cents. GM will be kicked out of the Dow Jones Industrial Average because rules of the index prohibit it from including companies that have filed for bankruptcy.

Obama is scheduled to speak about GM's future at midday from Washington, and GM CEO Fritz Henderson is to follow him with a news conference in New York.

The outlines of the restructured GM are as follows:

-- -- Cut GM's production break-even point from 16 million annual unit sales to 10 million.

-- UAW concessions include allowing GM to shed its $20 billion obligation to its pensions and health care fund, otherwise known as the VEBA. The White House said the UAW concessions were more substantial than those sought by the Bush administration when it was considering throwing the company a taxpayer lifeline.

-- Bondholders representing at least 54 percent of the company's unsecured bonds have agreed to trade their portion of GM's $27.1 billion in unsecured debt for a pro-rated share of 10 percent of the equity in the so-called new GM. In addition, the bondholders will receive warrants for an additional 15 percent of the company. The bankruptcy process, which the White House said should take between 60 and 90 days, will enforce this distribution as well as adjudicate proceeds for bondholders who do not participate in the White House deal.

-- The reorganized GM will buy most of the old GM assets needed to carry out its business plan. The purchase will happen in the Chapter 11 process. In exchange, the U.S. government will relinquish a majority of its loans to GM.

-- The new GM will create an independent trust (VEBA) that will finance health care benefits for GM's retirees. The VEBA will be funded by a note of $2.5 billion payable in three installments that end in 2017. There will be an additional $6.5 billion purchase that will create 9 percent perpetual preferred stock. The VEBA will also receive 17.5 percent of the equity of New GM and warrants to purchase an additional 2.5 percent of the company. The VEBA will be able to chose one independent director for the new board. It will have no right to vote its shares or other exercise other governance rights.

-- The GM-qualified pensions for current hourly and salaried employees will be transferred to the new GM.

-- Treasury will provide $30.1 billion of debtor-in-possession financing to support GM through an accelerated Chapter 11 process. Officials anticipate no additional funding for GM. "There is no plan of any kind for future support beyond this point," an official said.

The government will receive $8.8 billion in debt and preferred stock and 60 percent of the company's equity. Treasury will appoint all new board of directors members not appointed by the VEBA and the Canadian government.

-- Governments in Canada and Ontario will lend $9.5 billion to GM and the new GM. The Canadian and Ontario governments will receive approximately $1.7 billion in debt and preferred stock, and approximately 12 percent of the equity of the new GM. The Canadian government will select one director to the new GM board.

-- The new GM will, as part of the government-supervised restructuring, build a new small car in an idled UAW factory. The goal is to increase the share of U.S. production for U.S. sale from 66 percent currently to 70 percent.

These are the White House "principles" for managing the ownership stake:

-- The government will sell equity stakes as "soon as practicable." The goal is a profitable company without government involvement.

-- The government will reserve the right to set up-front conditions to protect taxpayers, promote financial stability and encourage growth.

-- The government will manage its ownership stake in a hands-off, commercial manner. It will not interfere with day-to-day company operations. No government employees will serve on the boards or be employed by these companies.

-- The government will only vote on core governance issues, including the selection of a company's board of directors and major corporate events or transactions.

Under the White House policy on new GM warranties, GM will honor consumer warranties. Last week, the Treasury Department provided $361 million in financing to the Warranty Support Program as a backstop so GM can pay warranties on vehicles sold during the restructuring.

Also, employees will continue to receive ordinary salary, wages and benefits. The pension plan and VEBA will be transferred to the new GM. GM will seek authority at its "first day" bankruptcy hearing to continue to pay suppliers. In addition, the U.S. Treasury's Supplier Support Program will continue to operate, and GM suppliers benefiting from the program will continue to receive that support.

GM will also seek authority at its "first day" bankruptcy hearing to honor dealer warranties and maintain sales incentives for dealers the new GM intends to retain. Terminated dealerships will be given an 18-month wind-down window to close their operations.

FOX News' Major Garrett and The Associated Press contributed to this report.

-- The government will manage its ownership stake in a hands-off, commercial manner. It will not interfere with day-to-day company operations. No government employees will serve on the boards or be employed by these companies.

Of course it wont, Obama doesnt want this whole thing to look Dictatorial. That's why he APPOINTED a "Car Czar".

-- The government will only vote on core governance issues, including the selection of a company's board of directors and major corporate events or transactions.

This had to be the most disgusting thing in the article. The Unions are in bed wit the Administration, the Administration is going to hand-pick the entire board.

Also, employees will continue to receive ordinary salary, wages and benefits. The pension plan and VEBA will be transferred to the new GM. GM will seek authority at its "first day" bankruptcy hearing to continue to pay suppliers. In addition, the U.S. Treasury's Supplier Support Program will continue to operate, and GM suppliers benefiting from the program will continue to receive that support.


This is skewed. Reason being since the UAW has a majority hold on the company, if you weren't in a Union you are assed out.



So the "tax-payer" is a majority stock holder are we all gonna get company cars? Obama stated he doesnt want to be in the "car industry", if so what is his Exit Strategy? Maybe there isnt one...Maybe because he wants to dictate the cars YOU drive with GPS chips in the car to track your gas and gas mileage.






I really don't understand what you're so shocked about? i mean, the govt is bailing them out with 30bill, why wouldn't they have control over thecompany?? Does this not make sense to you?

 

[chicagos finest 23]

Obama talking about it

 

[kicks4kaskets]

Originally Posted by Emmanuel Goldstein

obama FTL! ... i cant wait till the majority of people start to realize this FACT ... its a damn shame ... smh

Obama forced them to put out horrible cars year after year?

 

[essential1]

so what's the conservative take on how we should have handled GM, is it let them fail like we should have the banks? Loser strategy if so.

 

[dirtylicious]

a spattering of a few quality cars does not mean domestics are on par with imports.

Wondering which car brands are the all-around best? According to the Automaker Report Cards published in Consumer Reports', Annual Auto Issue, 4 of the top 5 brands are Japanese, with no US car makers making the list - even though there was a 4-way tie for 5th place. Ouch. [h2]Consumer Reports' Top 5 All-Around Car Brands[/h2]

• Honda
• Subaru
• Toyota
• Mazda
• (tie) Mercedes-Benz, Nissan, Volkswagen, and BMW

While it may be somewhat disheartening not to see at least one US car-maker on the list, CR says that the lack of American brands doesn't mean that there aren't any quality American cars. For example, new models like the Ford Flex, F-150, Chevrolet Malibu, and Cadillac CTS have done well in CR's tests and rank near the top of their classes in its ratings.
Overall, though, the worst overall car manufacturer is Chrysler. "The company's poor performing products and sinking reliability results have kept all Chrysler, Dodge, and Jeep badged vehicles off CR's Recommended list."

http://consumerist.com/51...-5-all+arounQ-car-brands
like i said... Consumer guides consistently rank imports brands higher in quality and reliability


http://cache.gawker.com/assets/images/consumerist/2009/02/howmanufacturerscompareand****.jpg

 

[meshies]

GM has a few WORLD CLASS vehicles, but the plethora of BS vehicles holds them back.

 

[rexanglorum]

This article is interesting and pretty much sums up the fact that Barack Obama's Chicago Machine style of politics has serious blow back from themarket.

NEWYORK (Reuters) - Scoresof companies are being punished in the bond market as the Obama administration's policies on General Motors and Chrysler LLC create new risks forcreditors, a veteran bond strategist says.

As GM teeters toward a bankruptcy filing and Chrysler attempts to restructure in bankruptcy court, the Obama administration is offering most of therecovery value of those companies to "a favored political class, in this case the United Auto Workers, leaving creditors with very slender debtrecoveries," Christopher Garman, founder of Garman Research in Orinda, California, said in a report released late on Friday.

To gauge whether those cases have made debtholders wary of other companies with so-called favored political classes, Garman compared spreads, or bonds'extra yields over U.S. Treasury yields, for companies with collective bargaining agreements with the high-yield bond market as a whole. While the two performedin line with each other since 2003, they diverged sharply in February, with spreads on companies with organized labor gapping nearly 11 percentage pointshigher than the market as a whole, according to Garman's research. The gap in spreads has persisted and was about 9 percentage points as of mid-May, Garmansaid. The gap appeared shortly after strategists reported signs that bondholder negotiations with GM were unraveling.

Apart from automakers, sectors heavily influenced by collective bargaining agreements include supermarkets, construction, wired telecommunications,delivery and healthcare, Garman found. Gaming, select media and publishing companies and paper and textile companies also made his list. For years in the past,"bondholders were more than happy to hold on to the debt of these companies," Garman said in an interview. "That's come to a pretty sharpend over the past six months."

Garman's findings echo warnings from other bondholders that unionized companies will have trouble attracting cash in the bond market if thebankruptcies of GM and Chrysler give creditors substantially smaller payouts than they traditionally received.





In plain English, Barack Obama's decision to change the rules in the middle of the game will cost manycompanies. Normally, those who buy bonds in a company get a very low interest rate and it is because bonds were, until very recently, regarded as the safesttype of investment one could make into a given company. The reason was because if the company goes bankrupt, bond holders have the top priority, legally, torecover at least part of the value of their bonds.

Now that Obama has told the bond holders of the bankrupt company Chrysler, that they will basically get nothing (the bond holders got hosed so the UAW, theunion that works for Chrysler, would get everything), the bond market has reacted. Bond interest rates on any company that has a largely unionized workforce,will be going up shortly and the reason is because bond holders know that as on gas the president can shred contracts and change the law on a whim, bonds arenow a much riskier investment compared to before bankruptcy court became this tainted by presidential lawlessness.

The real world, flesh and blood consequences of this will be that companies will not be able to expand very much because borrowing money will cost more becauseof higher interest rates. This means less jobs, lower pay, less products being created, a slower growing economy, less productivity and therefor moreinflation. This is not economic theory this is economic reality.




Right now it hard to tell Bush apart from Obama, from a policy stand point and it terms of how both men regard the rule of law. I have more faith in PresidentObama changing course though because he is an intellectual and he seems very willing to be self critical in private and change the course of his policies tobetter ones and till manage to fulfill the politician's duty of placating the various groups that back him. For isntance, perhaps in time a union wnatssomething he can give them some money fro mthe public treasury and then allow bond holders to get the lion's share of the cash fro ma liquidation, it isstill a very imperfect solution but it would let Obama please the unions without scaring off all of the private capital that is still being lent to firmsacross the economy.


BTW, can we all just agree that bailouts were apparently never needed, or at least not to the degree the ruling class said it was needed. Perhaps "doingnothing" would not have been a great option either but it probably would have been less terrible. Also, no other options were presented aside frombailouts on the banks' and automaker's terms or "doing nothing" and supposedly allowing the universe to implode, perhaps doing a few things,perhaps shielding or partially shielding the collateral parties and letting the firms themselves fail would have been the best solution.

Unfortunately, so many people do not think and they let the leaders of the political party, that they prefer, do the "thinking" for them and worseyet allow various smug, TV and radio entertainers be the voter's final word on any issue.

 

[AL Andretti]

Damn GM, time to rebuild...

 

[fede dpt]

Originally Posted by mdresident

I really don't understand what you're so shocked about? i mean, the govt is bailing them out with 30bill, why wouldn't they have control over the company?? Does this not make sense to you?

Who said I am "shocked"? You dont find it one bit disturbing that the Gov't is massively increasing its size?

Obama forced them to put out horrible cars year after year?


He didnt, Gov't over the past 30 years did and he told them 2 weeks ago what kind of cars they will be making.

The American business model in general is flawed. Outsourcing jobs has exponential perks in short term, but Obama should put a stop to the tax breaks that companies receive in this process.



Do you even know why they outsource jobs? Did you know that the U.S. has the highest Corporate Tax on the planet?

 

[fightingfrog62]

end of an era

 

[emmanuel goldstein]

couldnt have said it better myself ...

 

[jordanpp30]

Hopefully I can find an '06 GTO for the LOW LOW....

 

[dublbagn]

it just comes down to how people perceive each brand.....BMW's, Mercedes, Jag, Austin Martin are all brands that are looked at as prestigious...but letsalso look at this, the day of BMW actually being The Ultimate Driving Machine is over, Mercedes have tons of problems and horrible resale values, but peoplewant them because of the perceived benefits of owning them...

I dont think Nissan, Infinity, Toyota or Lexus make particularly great (besides the obvious choices,z platform, etc....) but they kill in the servicegame....but they are pricey as hell....
Honda and Acura do a great production job...but american cars of today can last just as long...the differences in the 80's battle between carburetor andfuel injection is over....everyone has a version of Hondas earth shattering Vtech......it comes down to a very few things...

Imports try and change their styles every 3 to 4 years and keep their platforms...
detroit was keeping minimally altered body styles for 5-6 years and it caught up with them.....in addition to fighting an uphill production battle (moreexpensive labor and legacy costs) ....the economy was just the straw that broke the camels back.

Lets not act like American brands dont make decent cars...Cadillac is, was and will always be a desirable brand, Lincoln has fallen off but still makes decentfull sized cars, Ford kills it on trucks and the Mustang is seen everywhere...the new lineup of Challenger, Camero, Charger are all great looking cars...andanyone that lives in a place that gets more than 50 inches of snow knows that trucks and SUV's are needed to get around...

Prestige is all in perception and the imports won that fight along time ago..... thats what the domestics need to change...and for christ sake stay out of themidsized SUV market...

 

[dirtylicious]

^sorry but reliability of domestic cars is STILL an issue.

not perception...but reality

 

[andycrazn]

well their public announcement was good but i think all of it is bull. i mean how are they going to say they want to make all their models profitable and whatnot when they cant even do that now.

 

[ninjahood]

Originally Posted by Dirtylicious

^sorry but reliability of domestic cars is STILL an issue.

not perception...but reality

can't be worse then benz

 

[dublbagn]

Originally Posted by Dirtylicious

^sorry but reliability of domestic cars is STILL an issue.

not perception...but reality

I am not convinced of that...I have owned 7 cars in my life so far.... pontiacs, hondas, chevys, nissans, fords, chryslers and most recently an 06E350

I broke a new 03 Accord in 12 months, quality was not as great as I thought it would be...
my mustang was great except for the plastic interior
and my E350 has cost me more than any other car I have ever owned, I have replaced brakes, tires, a few engine issues and I want to dump it but I can only sellit for less than 1/2 of the 52K it originally cost...

I have friends who have fusions, flex's, chargers, 300's and the fact is that each car is a crap shoot.....my boy has a 05 E350 and has yet to have anykind of problem....

 

[chisoxdavid]

There is an American that can compete with any Import. You guys that pull for imports just pick the wrong cars to compare them with. When the G8 GXP wasbrought up you bring up the gas factor, ummm that car is not there to compete with cars that have good mpg. If I bring up a car that is cheap and has good mpgyou guys try to compare it to a car that has high HP. People are just biased. Bring up an Import car and there will be an American car that has similar if notbetter specs.

 

[rexanglorum]

Essential1 wrote:

---

Trucks and a few cars here and there are comparable but the entire fleet is not even close..


Also Obama FTW, where most sources (even Neil Cavuto from Fox News) are saying consumer confidence is way up and believe an end to the recession is in sight.
When one thinks in the terms of economics first and then politics, one will reach a different conclusion aside from Obama caused the recovery. Therecovery has three main components to it. Two of them are market based and the other is coming from the Fed.

The first reason for this tentative, potential recovery is that prices have finally been dropping. Prices can be sticky but luckily they have proven to be lesssticky than wages so Americans who actually have jobs have more purchasing power, a de facto raise, and they are, little by little, consuming a bigger share oftheir income again. Another factor in this nascent recovery is that the market forces, supply and demand have been allowed to work in terms of actual homesbeing built and the simple price of a home. Government did a fine job of regulating and subsidizing the mortgages and MBS market into the ground but theconstruction side of the housing industry is much more market driven (except in the dark blue states and counties where it is almost impossible to build newhomes to keep up with demand) and as prices plunged, supply generally stopped expanding because building new homes would be an unprofitable move. The virtualfreeze on the housing stock's expansion is allowing home prices to stabilize and start to modestly rise in many communities.

That is the evil market at work; meanwhile, the Fed has been printing money like crazy and that has put liquidity into the banking system, which has had asmall effect on real economic growth and investment since much of that free money for commercial banks is getting lent to the government in the form ofTreasury securities, which see their interest rates increasing every day because of the impending reckless spending (and considering, how thriftless hispredecessors are, to have your budget be so reckless they make Bush and Reagan deficits seems minuscule, is a very grand thing as far as perverseaccomplishments go). So the Fed has had some effect on the real economy but not much and it will be paid for many times over with nasty inflation.

Some will say that the stimulus is the elixir that is getting it all done and while his spending will entice some subsets of the population to spend more, itis see, correctly in the eyes of many Americans, as a tax in one form or in other, through inflation or additional taxation to pay for all of these"investments" by Washington. So every tax dollar being spent will stimulate some consumption, but has to come from a current or future tax and thatdepresses consumption.

There is rigorous debate among macro economists over which policy: high taxing and spending or low taxation causes the highest levels of consumption. Infortunately for the pro spending side, real life economics involves qualitative measures as well as quantitative measures and lower taxes increase consumerhappiness because it allows people to spend their own money themselves and get more bang for the buck. Another blow for the pro government spending camp isthat the macro economy has a supply side, which is the measure of how productive an economy is an productive resources that are allocated my market forcesyield more productivity compared to situations where the means of production or coordinated through large scale central planning.


So the two work horses of the recovery are based on item that the government has keep its claws off of the most. The market works, even when our system of freeenterprise is running at half power, with policy makers tossing sand into the engine.

Also macro economy has cyclical nature to it, GDP growth and standards of living have ups and downs. The problem is that with many of Obama's policies, heis promising to lower standards of living in a structural way. My making almost everything either more expensive and/or rationed, he will make recessions evenmore miserable and boom times far less enjoyable than the otherwise would be absent so much heavy handed governance.


BTW, please, if you are going to respond, do not respond with "well Bush started it." If that is what you are thinking, I wil laddress that now. Ihave no empathy for Bush and I have no personal antipathy for Barack Obama. I have problem with heavy handed governance and its brutal inefficiency, propensityto be corrupted and its proclivity for extinguishing property rights and rule of law and with it the initiative and creativity and risk taking that has madethe Us into a place with one of the highest standards of living known to man.

 

[ninjahood]

GM is screwed....

they're operating cost is alot higher then import car makers due to da unions....and honestly, no one is gonna cop smaller cars..you're gonna have toartificially raise da gas prices up by taxing gas for that to happen....