PeakTrader.com Forum Index PeakTrader.com
Economics, Portfolio Optimization, and Technical Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 
Log inFast Charts

TARP/Bailouts

 
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles
View previous topic :: View next topic  
Author Message
administrator
Site Admin


Joined: 28 Dec 2005
Posts: 10748

PostPosted: Sun Jun 14, 2015 6:38 am    Post subject: TARP/Bailouts Reply with quote

PeakTrader:

It seems, consumers paid back taxpayers, e.g. through more and higher fees, which contributed to the slow recovery.

The Bailout Scorecard – Last update: Jun. 2, 2015

https://projects.propublica.org/bailout/

****

Joseph, you may be unaware of a few facts.

Citigroup alone has 239,000 full time employees.

And, Citigroup stock, in the crisis, had a crew cut, falling to 97 cents a share.

The U.S. government lost billions of dollars in the auto industry rescue (people pay one way or another).

GM, for example, was in decline for decades before it went bankrupt.

And, bankers/top management are no more incompetent or criminal than anyone else (although they tend to work harder) Smile

****

Joseph, what about GM paying each union worker much more in compensation than other automakers. Was that management’s fault too?

GM’s market share was in decline, since the 1960s. Over the “long boom,” its market share fell from roughly 43% in 1982 to 22% in 2007.

Government can easily squeeze money out of banks, even while heavily regulated. After-all, they have deep pockets, which lawyers love.

Do you really expect a CEO to micromanage and know everything going on in a huge global bank.

****

Maybe, we should replace people with robots to eliminate crimes.

****

I stated in Feb 2009:

“Instead of loans for the auto industry, the government should buy autos and give them away to government employees (e.g. a fringe benefit). So, automakers can continue to produce, instead of shutting down their plants for a month. Auto producers should take advantage of lower costs for raw materials and energy, and generate a multiplier effect in related industries.”

In Feb 2009, GM laid-off about 20% of its domestic workforce – 50,000 people – and a total of 107,000 layoffs in the recession. GM domestic auto sales fell from about 4 million in 2007 to a little more than 2 million in 2009. GM’s cost-cutting still couldn’t make it solvent.

Taxpayers lost roughly $10 billion to $15 billion (depending on the accounting) bailing-out U.S. automakers. If the government bought $20 billion of cars from GM instead (e.g. 1 million $20,000 cars, although GM was best producing SUVs, pick-ups, and luxury cars), there would’ve been much fewer layoffs and taxpayers would have something to show for the bailout.

In WWII, government bought jeeps, tanks, ships, etc., which put Americans to work, although production went to war rather than to consumers.

****

Or, instead of giving away autos, the government could buy autos and give vouchers to dealerships. So, consumers can buy autos made in the USA at a discount for a limited time.

It could be a one-time event, like WWII (although, there was also WWI).

****

Federal government lost $9.26B on auto rescue
December 30, 2014

“Under government accounting rules, the U.S. Treasury actually lost $16.56 billion on paper on the auto bailout…taxpayers lost more because interest and dividends paid by borrowers — in this case, the automakers and finance companies — aren’t applied toward the principal owed.

A homeowner, for example, who borrows $100,000 doesn’t get credited with interest payments in paying off the mortgage. That largely explains the difference between the government’s larger accounting loss and the $9.26 billion net loss.”

http://www.detroitnews.com/story/business/autos/2014/12/29/federal-government-lost-auto-bailout/21019899/

****

Federal government lost $9.26B on auto rescue
December 30, 2014

“Under government accounting rules, the U.S. Treasury actually lost $16.56 billion on paper on the auto bailout…taxpayers lost more because interest and dividends paid by borrowers — in this case, the automakers and finance companies — aren’t applied toward the principal owed.

A homeowner, for example, who borrows $100,000 doesn’t get credited with interest payments in paying off the mortgage. That largely explains the difference between the government’s larger accounting loss and the $9.26 billion net loss.”

http://www.detroitnews.com/story/business/autos/2014/12/29/federal-government-lost-auto-bailout/21019899/

****

Under government accounting, interest and dividends aren’t counted. So, the government had a bigger loss.

It should be noted, interest and dividends are taxable.

Anyway, interest rates on bailout loans aren’t important. What’s important is stopping a severe downturn, prevent massive bankruptcies, raise stock prices, and start getting people back to work (to create taxpayers instead of unemployment spending).

---
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles All times are GMT - 8 Hours
Page 1 of 1

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by PeakTrader 2.0.8 © 2001, 2002