The Finance-Related Quote of the Day I Never Wanted to Read

Morning am owner of some blogs and would like to make the partnership link (add your blog to my blog roll and you add to your my)with you, almost all are pagerank 3, all are in the technorati:

Computer: http://netcomputernews.blogspot.com/
Receipts: http://dailyreceipts.blogspot.com/
Curiosity: http://www.newcuriosity.blogspot.com/
Sports: http://1001sportsworld.blogspot.com/
Humor: http://humorandjoy.blogspot.com/
Innovations: http://innovationsttechnological.blogspot.com/ (pagerank 4)

if you want to add one or with all my blogs and get in touch to add your blog as fast as possible, an Abrasive, congratulations on your successful blog and more each day

Note: If you have a blog that is not taking time to update and want to give me I accept it and continue posting!

I AM FROM BRAZIL
I AM FIREMAN
RIO DE JANEIRO

LUCIANO

I can't really evaluate the validity of this, but I can spit back a stock answer. Supposedly, the reason that we're bailing out the banks but not Detroit is that, if the banks fail, they'll bring otherwise healthy business down with them. Whereas, if Detroit fails, it's largely the automakers' own damned fault. Although then, you end up with a whole state being punished, so I don't see how it's that much better.

Actually, if the automakers fail, they'll bring a whole lot of other reasonably healthy businesses down with them, too, including dealers, parts suppliers, etc.

And tell me why we can't lend Detroit $25 billion?

As Atrios has pointed out, that runs the risk of bringing the WTO on us like a ton of bricks.

But I guess the old saying applies. If you have a $10k loan that you can't repay, you have a problem. If you have a $10B loan that you can't repay, the lender has a problem.

Again I have to ask the question: Why should GM get a bailout instead of a promise of bridge financing during bankruptcy? I can understand why we don't want to liquidate GM. It's a useful company, employs a large chunk of our industrial base, and has its fingers in many pots in our national economy. That doesn't mean that it should be treated like an insurer or a lender whose failure could cause the collapse of the banking system. Let them go bankrupt and step in to guarantee the financing that won't be provided by the tight credit markets. That's what chapter 11 is for.

As for numbers like $7.8T, they're largely meaningless without context. Being "prepared" to spend that much money is not the same as actually spending it. If it was, insurance companies would be insane because they have ridiculous piles of potential liabilities that will almost certainly not materialize. I would like to see the government take a more aggressive and--dare I say?--socialist approach to failing banks as the rescues so far have been too generous, but let's not blow things out of proportion.

With apologies to Senator Everett Dirksen;

A trillion dollars here, a trillion dolalrs there. Pretty soon, it adds up to real money.

Different problems need different solutions. Your auto industry was in deep trouble for years before the financial crisis. The crisis did not change anything; it's just been hastening what was already hapening anyway. You might look at the example of British Leyland before you get all set on the idea that bailing out your Shrinking Three is a good idea.

GM (ect) is failing because they build lousy cars that no-one wants to buy. They should be allowed to fail. If that would cause too many ripples, then the problem underlying the problem is that they have been allowed to get to big. Trusts "too big to fail" are a danger to the nation, and anti-trust legislation exists precisely for the purpose of stopping them from forming. The legislation should have been applied way before it all reached this stage.

... and banks don't make things.

As most of the news, movies, tv, and other entertainment has been telling us for decades, people who make stuff are scum. It's 'executives', 'investors', and 'entrepreneurs' who deserve all the accolades.

I think I see a solution:

1. Government buys $7.4x 1012 worth of American-made cars.

2. Government gives cars to the banks, preferably by dropping them from high-flying airplanes.

There was an in-depth analysis of how to use the $25 billion to actually save the big 3 at TNR yesterday instead of just using it to delay their inevitable bankruptcy. I wasn't sure they could be saved until reading that.