“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Tuesday, March 31, 2009

Obamobile Motors

Your new carbon footprint. Have you driven a Ford lately?

How do you spell Lenders' Liability?

The US public allows an ex-community organizer, and ex-driver of a Chrysler 300 to seize General Motors, trample stockholders rights, bond holders rights, contract rights and they hardly bleat a bah-effing-bah. 

Personally I think the chosen one steps into the biggest case of lender's liability in history. What is lender's liability you ask?

A loan agreement is like any other contract. If the agreement was fraudulently induced or there was an absence of mutual consent, the agreement cannot be enforced. If the loan contract was breached, the lender can be sued if it was the breaching party.

In Siegner v. Interstate Production Credit Association of Spokane, PCA convinced the plaintiffs, two couples who operated a cattle ranch, to do business with it by making a series of promises about funding. The PCA loan officer assured the plaintiffs that PCA understood the cattle industry and knew it was cyclical and that plaintiffs could take 10 to 20 years to pay off a capital loan. PCA also induced the plaintiffs to purchase a second cattle ranch.

When the time came to sign the loan papers, the plaintiffs noticed that the documents contained new provisions to which they had not agreed and that the document structured the real estate loan for only one year. The PCA loan officer assured them that these provisions were mere formalities and they had nothing to worry about. Based on the officer's assurances, the plaintiffs signed the documents.

When PCA failed to honor its oral promises and made unreasonable demands regarding the real estate loan, the plaintiffs sued. PCA defended itself based on the parol evidence rule. The plaintiffs prevailed at trial and PCA appealed. The appellate court applied the parol evidence rule and found that the oral agreements were not inconsistent with the written agreement and were the type of agreements that might have been made separately. The court found that it would have been highly unlikely for the plaintiffs to have agreed to repay the loan in a year as reflected in the loan documents; if so, the plaintiffs would have purchased the ranch knowing with virtual certainty that they would lose it, as well as other assets, at the end of one year. A one-year loan would also mean that PCA had made the loan knowing it would be required to foreclose on it in one year. As a result, there was nothing inconsistent with loan documents prepared on a yearly basis, with a separate oral agreement to renew over a long period.
Library Find Law.  



  1. heh, a taste from "The Last Superstition"--(the ways of the Hitch)

    'This, together with his emphasis on God's absolute power and inscrutable will, underlie Ockham's turn to faith as the only possible source of moral knowledge. They also underlie his denial that we can demonstrate the existence of causal connections between things. For if things have no shared essences, and God could have made anything follow upon anything else, then we simply cannot know with certainty that causes of type A will always be followed by effects of type B. In praising Ockham's viewes on causation (as he does) Christopher Hitchens effectively commends him for combining a demonstrably false metaphysical theory (conceptualism) with a theological premise (about God's will and power) that Hitchen's himself rejects. Truly inscrutable are the ways of the Hitch; he is a riddle, inside an enigma, wrapped in a cocktail napkin."

    This book is chuck filled with such delightful good humoured well based attacks on Hitchens, Dawkins, Dennent etal.


  2. It occurs to me that the God of Ockham the Razor is a little like that of the Mohammedans--inscrutable, powerful, unreasoning, and due blind faith.

  3. The Production Credit Association was my first lender in the farm business. My loan officer was a failed farmer, a nice guy, for the most part, with zero knowledge of banking, and not much more of farming. He finally got fed up with the Lutheran Church we were both members of, caused a big stink, a schism, and he a few others went off to form a sect of their own. He put his land in the Conservation Reserve Program, and has divided it up now, selling it off slowly.

    One time my father drove by his place, not knowing it was his place, and there was my lender standing there by the side of the road, so he stopped to say hello.
    The crops looked so shitty, dad asked him:

    "Whose mess is that?"

    "That's mine."

    Egg on dad's face. :)

  4. That is the way the PCA did busines, as I recall. One year loan. Then if we came up a little short, as sometimes happened, we'd jiggle it around a bit, make a new plan, and continue.

  5. "Mish says GM will make it and come out stronger."
    Mish is full of Shit.
    But I repeat myself.

  6. I wonder how Toyota, Nissan, BMW et al will feel about Uncle Sam guaranteeing the warranties on GM and Chrysler vehicles...
    I read that the Saturn brand is one that would be discontinued. That's a shame as Saturn seemed to have been a bright spot in recent GM history.
    Why would Chrysler want to merge with Fiat? Is Fiat subsidized by the Italian government?
    I read/heard that GM will go into bankruptcy eventually anyway, so why would they let the Feds take them over first? Why not seek Bankruptcy protection now?

  7. (Anybody NOT like to be in Fiat’s position with Chrysler with a 30 day sword of Damocles hanging over Chrysler's head?)

  8. If Ford can weather it out, they'll be sitting pretty, the sole survivor that didn't sell their soul.

  9. I'm afraid, bob, that the heritage that you and yours leave the future is not landm but trillions in debt.

    That "everyone" agrees that is a good thing, more than likely, means it is not. Over 62% of "everyone" thought Obama would be a good President, just 2 weeks ago. They must be right.

    It is funny, that when given the opportunity you always prefer more government control, but think that paying for it is unAmerican.

    mat wants to raise tax rates, but not the tax base, thinking that the bottom line of revenue generated is all that matters.

    Manage those lands "better", just like the Federals will manage the US auto industry "better" than private management. That is just nuts.

    "Everyone" thought that taxing the legal income of the AIG folks at punitive rates was a "good thing" as well.

  10. The Tax base is headin for the exits.

  11. Here's the link Sinless provided, in case anybody else missed it first time around like I did.

    Welcome to America, the World's Scariest Emerging Market

  12. Doug: If Ford can weather it out, they'll be sitting pretty, the sole survivor that didn't sell their soul.

    Making them a prime target for an ad hoc special tax from Obama (albeit not 90% of earnings).

  13. Never one to let a Crisis Go to Waste.

  14. Rush said spies reported Algore's lights stayed on!

    ...meanwhile, GM's sold their jets, and Obama prepares to take two 747's, 250 SS, Military Planes for the limos, free rides for the cronies, etc.

    Makes the expenses of the Royals look like small change.

  15. "The G20 summit in London next week is, he says, the last chance to avert disaster. “The odds would favour that it fails because there are such differences of opinion. It’s difficult enough to get it right in your own country let alone with 20 governments coming together, but if it’s a failure I think then the global financial and trading system falls apart.”

    If the G20 is nothing but a talking shop then he thinks we are heading for meltdown. “That could push the world into depression. It’s really a make-or-break occasion. That’s why it’s so important.” The chances of a depression are, he says, “quite high” – even if that is averted, the recession will last a long time.

    “Look, we are not going back to where we came from.
    In that sense it’s going to last for ever.”
    Can't argue w/that, even tho Soros said it!

  16. Even mat, who pines for local control want the Federals to maintain control of the lands across the American West,

    Just shows, once more, the hypocrisy of his ideological position

  17. Not "from Obama", but from the Congress, Ms T.

    Just saw where 70% of the folk believe the finance crisis is GW Bush's fault. That's "everyone", so it must be an accurate perception.

  18. Per the Constitution of the United States, bob.

    The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

    So show US, bob, where the Constitution delegates the power of the land to the Federals, as that land should have been held either by the States or the people.

    You decry the misapplication of the Constitution all the time, here is another example of your ideological hypocrisy, as well as mat's.

  19. This comment has been removed by the author.

  20. Here you go, bob. You supported this fella from PA's position, when you thought it was an anti-Obama partisan ploy, but when applied to the very foundation of "States Rights" your panites get twisted.

  21. And, accoding to what I read at wiki, Fiat is not a subsidy of the Italian Government, but a fully private multi-national corporate conglomerate

  22. With the Federals holding 50.2% of the land in Idaho, how could it possibly have any rights?

    Here is and even better graphic representation of the abuse of Federal power. It makes the GM case seem minor, by comparison, because it is.

    That is why there is little hue and cry about GM, duece, Federal power expansion is the norm, and supported by "conservatives" like bob.

    Federal control, it's for the "common good" and, of course, the children.

  23. This is "Worrying." The LIBOR jumped, overnight. From .29 to .51. Don't know why.

    Must have something to do with the G20.

    Oil and Gasoline dropping like a rock from early advances. Hmm.

  24. $150/bbl oil will seem like a bargain in a few years. The days of oil are over. If you're not prepared and organized for that change, you will have an extremely unpleasant reality to face.

    There also needs to be a change in the way we do money. I've posted this yesterday. Everybody should read this, including you, Doug.

    The Paradigm Shift: Monetary Nebula

  25. Sorry Mat, I had my radical stage many years ago, and observed the very Fascists that now run congress in action.
    "Being prepared" would include drilling and building refineries as well as transitioning to alt-fuels.
    Instead, Obama just added more no drilling land to 'Rat's Map.
    ...not that he or Nancy plan to curtail THEIR Petro Powered excursions.
    Just us little folks.

  26. A ‘Truly Breathtaking’ Departure

    Sen. Bob Corker (R., Tenn.), probably the most knowledgeable man in Congress about the car bailout, and someone who argued months ago in favor of a pre-planned government-sponsored bankruptcy for GM and Chrysler, calls the Wagoner firing “a major power-grab by the White House on the heels of another power-grab from Secretary Geithner, who asked last week for the freedom to decide on his own which companies are ‘systemically’ important to our country and worthy of taxpayer investment, and which are not.” Corker calls this “a marked departure from the past,” “truly breathtaking,” and something that “should send a chill through all Americans who believe in free enterprise.”

    Mr. Corker has hit the nail on the head. And I think his idea of “a truly breathtaking” government departure from American free enterprise — whether it’s the banks or the bankrupt Detroit carmakers — is exactly what caused stocks to plunge 250 points on Monday.

    Incidentally, most of the big bankers who met with President Obama in the White House last Friday want to pay back their TARP money, not take more of it. But the Treasury is conducting stress tests that could stop the TARP pay-downs and force the banks to take more taxpayer funds in return for even more federal control.

    The big bankers say they are profitable. And with an upward-sloping Treasury yield curve and some market-to-market accounting reform coming from the Financial Accounting Standards Board (FASB), the outlook for banks should be getting better, not worse. So why is the Treasury jamming more TARP money down bankers’ throats, especially after announcing a new plan to use private capital to clean up bank balance sheets and solve the toxic-asset problem?

    It kinda sounds like the Treasury doesn’t want to let go of its new uber-regulator status

  27. That oil price is anticipating the quick turn around you're predicting, Rufus!

  28. Spain’s ‘Universal Jurisdiction’ Power Play by Andrew C. McCarthy

    As the U.S. government’s myriad intrusions radically transform our economy, few seem to notice the dangerous progress of the international Left’s assault on American sovereignty. Without firing a shot, transnational progressives are further along than the Soviet Union could ever have reasonably hoped to be, notwithstanding Lenin’s prescient understanding that we would willingly participate in our own demise. In the Left’s sights is the very concept of the American people’s right of self-defense.

    The New York Times reports that a Spanish court is considering filing human-rights charges, and issuing arrest warrants, against former attorney general Alberto Gonzales and five other Bush administration officials.
    So who is the heroic “human-rights” activist behind the effort to criminalize the provision of legal advice to America’s commander-in-chief? The complaint was filed by one Gonzalo Boye, whom the New York Times charitably describes as a “Madrid lawyer.” Unmentioned is how Boye came to be a Madrid lawyer. He obtained his law degree in a Spanish prison. According to reports in the Spanish press (read here), Boye, a Chilean, was a member of the terrorist Revolutionary Left Movement (MIR) when, in collusion with the ETA, Spain’s Marxist-Leninist Basque terrorist outfit, he participated in the abduction of a Spanish businessman, Emiliano Revilla.

    PAGEFor 249 days in 1988, from Revilla’s seizure at gunpoint until his family paid the multi-million-dollar ransom, the social-justice activists of MIR and ETA stashed their hostage in a cell that, as Revilla has recounted, measured 2 meters long, 1 meter wide, and 1.8 meters high. Apparently, he was not given Miranda warnings, access to counsel, or a date certain for his release.
    Boye was ultimately prosecuted and sentenced to ten years in prison, during which time he obtained his law degree from something called the National University of Distance Education.

    Like many another radical, Boye discovered he could get a lot further with a sheepskin. Besides defending ETA operatives in court, he has become a minor celebrity among the international Left’s lawfare trailblazers. He was one of the “human rights lawyers” instrumental in Spain’s universal-jurisdiction effort to prosecute his nemesis, Augusto Pinochet, for crimes committed in Chile — bringing his complaint to investigative judge and would-be post-sovereign emperor Baltasar Garz√≥n, who succeeded for a time in having the former strongman detained in England.

    #ad#More recently, Boye has worked with Palestinian “human rights activists” to bring suit — in Spain, of course — against Israel’s former defense minister, and six others in his chain of command, for 2002 military operations against terrorists in Gaza — which, in the Madrid lawyer’s considered opinion, were “disproportionate.” And Haaretz reports that Boye was back in Gaza earlier this year, consulting with Hamas in anticipation of bringing war-crimes charges against Israel for its defensive operations in a war necessitated by the thousands of missiles Hamas fired at Israeli civilians.

  29. mat wrote:

    "There also needs to be a change in the way we do money. I've posted this yesterday. Everybody should read this, including you, Doug."

    Well, I took the bait and actually read that piece you so urged us all to read and it actually reflects the level of your reasoning quite well and it isn't flattering. You would be better off memorizing another dental text book.

  30. You know I'm always glad for your support and endorsement, Ashley. The ground needs your head pounding it 5x a day, so don't forget your duties to allah!

  31. We'll hit bottom sooner at this Rate, Rufus!
    Record Drop in January Index of Home Prices

    Record Drop in January Index of Home Prices
    A widely watched 20-city index tumbled 19 percent from January 2008, the largest decline since the index started in 2000.

  32. c'mon mattie, look at what the guy is arguing. He tells us that because John, who borrows a hundred bucks at 10% interest, can't pay back the 100 bucks plus interest, the whole financial system is fatally flawed. Well, I got news for you and him - it isn't a zero sum game.

  33. I'm not nearly as concerned about Jan. home prices as I am "Today's" Chicago PMI. That one made me "gulp."

  34. I'm probably a bit "early" with my prognostications, but, hell, I'd rather be "early" than late. :)

  35. These are not very difficult concepts to follow:

    "Money is not paper and money is not a metal, money is productivity securitized and stored. What is productivity you ask? Productivity is the use of energy to create goods and perform services."

    "The combination of fractional reserve banking and interest-bearing debt is fatal because they create a demand for currency that does NOT exist."

    In other words, fractional reserve banking and interest-bearing debt is fatal, because it creates demand for ever increasing supply of new energy. It is a system that demands exponentially increased input of new energy reaching to infinity, when in fact we live in a finite world.

    Economist Dr. Michael Hudson essentially makes the same point.

  36. It's true; fossil fuels are "finite," but the technology to utilize them (and other non-finite forms such as solar, wind, wave, geothermal, etc) is NOT.

    Robot, controlled by Brain Waves.

  37. ..the technology to utilize them (and other non-finite forms such as solar, wind, wave, geothermal, etc) is NOT.

    I disagree. You can argue that the limits are pushed a little further out into the future, but the limits are there.

  38. Wagoner encircled, exits GM with $29m handshake

    Chairman and chief executive Rick Wagoner will depart General Motors with some $US20 million ($29 million) in retirement benefits and other compensation, a company spokeswoman said on Monday.

    "It's not a severance package,'' said GM spokeswoman Renee Rashid-Mereem after Wagoner agreed to step down under pressure from the White House as it hardens conditions for new aid to the troubled auto giant.

    "It's pension benefits and other deferred compensation that he's accrued as of December 31 during his 32 years at General Motors.''

    Rashid-Mereem said Wagoner was also eligible for other post-retirement benefits.

    "That hasn't been sorted out yet,'' she said.

    Wagoner, 56, joined GM in 1977 after studying at Duke University and getting an MBA from Harvard University.

    He rose through the ranks in posts including executive vice president and president of GM North America, and GM president and chief operating officer, before becoming CEO in 2000.


    This nonsense and thievery just never ends.

  39. Is China avoiding using US dollars? - Credit Writedowns

    China and Argentina have made a tentative agreement to swap $10bn (£7bn) worth of their currencies.

    The move, which allows both countries to bypass the US dollar, makes it easier for Argentine businesses to buy Chinese imports directly in yuan.

    It also gives Argentina hard cash at a time when its finances have been hurt by the global financial crisis.

    The deal comes after China suggested that the world should create a new reserve currency to replace the dollar.

    The swap is being seen as a sign of China's ambitions in South America.

    China primarily imports agricultural products from Argentina, while the South American nation buys Chinese electronic goods.

    In the past, China has signed similar deals with South Korea, Malaysia, Belarus and Indonesia.

  40. Idaho, my dear old Idaho, she's the Queen of all the West...fa,da,de,

    With the Federals holding 50.2% of the land in Idaho

    That's what I like about this place. 50.2% of all this wonderland that I can roam in, no 'keep out' signs. Try it sometimes, you'll like it.

    Today is an earn a living day....later

  41. This comment has been removed by the author.

  42. Foreign Policy Passport blog:

    Mon, 03/30/2009 - 12:24pm

    That's how we'd title this post if FP were printed on Fleet Street -- according to an article by the Washington Independent's Dave Weigel on the relative lack of journalistic restraint (or relative excess of narrative enthusiasm) of British reporters in D.C.

    Weigel says stories that don't pass muster for U.S. papers, which have stricter rules on anonymous sources and rumor, end up in U.K. papers. Drudge and the cable news channels then still pick them up. (And, let's face it, occasionally, this blog as well.)



    No industry did more, for instance, to keep hope and fear of a war with Iran alive - among the excitable at either end of the spectrum - than the UK press. (Which is rather funny.)

    Taken as a whole, it is the National Enquirer of US foreign and defense policy. The colorful, Elvis-sighting cousin to major US dailies - which themselves are only any good as long as you know how to read them. (And I am sure the former has been and continues to be 'opportunized' by interested parties. But that's another matter.)

    I don't expect this to be generally recognized anytime soon, however. Let the red-lettered hyperlinks continue!

  43. PIMCO - Investment Outlook

  44. Using my son's computer while my laptop is in the shop.

    And Patrick, bless his heart, would not want his views confused with his mother's.

  45. Patrick, please tell us more about Elvis sightings.

  46. Although his opinions and analysis *have* appeared here on occasion, without attribution. When it comes to certain subjects, he has a ready and insightful grasp.

  47. Nakedcapitalism:

    Monday, March 30, 2009
    Guest post: Obama's auto plan: good strategy, poor tactics

    Submitted by Edward Harrison of the site Credit Writedowns

    I like the fact that President Obama has drawn a line in the sand and signaled that no more funds will be given to U.S. automakers without their presenting a viable long-term plan for restructuring. Ultimately, the automakers cannot survive merely as a result of government largesse, but through the discipline of a competitive auto market.

    In my view, the American automakers are viable companies which can produce cars that sell well. It is their poor operating cost structure and disastrous balance sheets which make them bankrupt organizations. This should mean they are prefect candidates for restructuring.

    Nevertheless, other aspects of Obama's treatment of the automakers are troubling. The dichotomy between how the big three automakers are being treated and how the big banks are being treated plus the sacking of a CEO at a critical juncture leave a lot of questions.

    First, as to what Obama has done.

    * The Obama Administration used the threat of withholding bailout funds from General Motors to induce that firm's CEO Rick Wagoner to resign and its board to seek replacement members.

    * GM has received 60 days to come up with a viable restructuring plan or they will face Chapter 11 bankruptcy. Chrysler gets 30 days to forge a deal with Fiat or they too face the same fate. The Obama Administration has indicated that it will help the companies with liquidity during this time, but will not give them any 'bailout' funds.

    * Any bankruptcy will be heavily 'directed' by the Obama Administration to mitigate any fallout in terms of jobs, suppliers, regional economies or the broader American economy.

    * Meanwhile, the Administration has indicated that it would guarantee any vehicle warranties offered by either firm on existing and newly purchased vehicles if either firm were to go into bankruptcy.

    * The Administration has also made green car production, federal car purchases, an tax breaks for buyers a large part of helping increase demand for domestic vehicles. Very smart. The green emphasis is something the Germans have also done.

    In short, the Administration is credibly threatening to withhold support for GM and Chrysler unless those organizations can create a restructuring plan that Obama's people consider viable, the penalty for failure being bankruptcy.

    This approach has several benefits. Here are a few:

    * Taxpayers will not need to commit more money without the certainty that this money will be used effectively.

    * The carrot and stick approach forces the unions, management and bondholders to the table because their best alternative to a negotiated agreement (BATNA) is clearly inferior in each case. Bankruptcy would mean significant losses for each constituency. That is the stick side of things. Simultaneously, if they do reach agreement, their concessions will be met with additional capital from the government. This is the carrot.

    * Even if the parties cannot agree, the Administration can make sure that bankruptcy will not mean Armageddon for workers and local communities by taking a direct role in the proceedings. Moreover, by withholding funds until bankruptcy, the government will be senior to all other creditors including bondholders.

    All in all, this seems like a difficult choice, but the right one.

    But, is this not what should be happening with the big banks? Why the differential treatment here? Here's my take. I see two reasons.

    First, the Obama Administration suffers from cognitive regulatory capture. Former denizens of Wall Street are so ensconced in the Administration that they cannot but see events from a 'Wall Street perspective.' In effect, they operate like a horse with blinders. Their view takes as axiomatic the importance and needed continued existence of the big banks that they dismiss alternative workout solutions out of hand.

    Second, the Obama Administration is well aware of rising populist sentiment. They understand that bailing out the big three automakers would weaken them politically as this would be seen as another outrageous subsidy to big business. However, Obama errs politically because the juxtaposition between his treatment of the big three and his treatment of the banks is obvious to everyone. the big three are seen as representing ordinary blue collar Americans. While the big banks are seen as Gordon Gekko-like rapers and pillagers of the robber baron class. This alone increases populist outrage at the administration. Effectively, Obama's unwillingness to deal with the banks in the same fashion earlier has put him in a lose-lose situation.

    Then there is the dismissal of the GM CEO and re-composition of its board of directors. While the need for someone to take 'responsibility' for failure has been obvious, the timing is questionable. GM is about to go through the most crucial phase of its existence. To subject the organization to the type of turmoil that a change in leadership entails at such a juncture is a catastrophic misstep.

    Finally, the uncertainty surrounding the Big Three has led to a major selloff globally. In my view, this eliminates all of the positive momentum we saw earlier this month and after the Geithner bank plan was announced. Tactically, this announcement, then, has been another major misstep.

    My conclusion, therefore, is that the Obama Administration has developed a fairly good plan here. It looks to force necessary concessions from all interested parties without bankruptcy. It is also still viable in bankruptcy. However, tactically, I see the plan as having misfired for the reasons enumerated above. And, this is unfortunate because this auto plan may end up weakening the Administration rather than pushing it forward.
    More on this topic (What's this?)
    Obama Rejects Automakers’ Reorganization Plans; Elevates Potential for Bankruptcy (Money Morning, 3/31/09)
    Obama Wants To Split GM Into "Good" and "Bad" Company (Zero Hedge, 3/30/09)
    Automakers get their money, but should they? (Canadian Business Blog, 3/30/09)
    Read more on Auto Makers, Obama's Presidential Policy at Wikinvest

    Topics: Auto industry

    Posted by Edward Harrison at 9:08 PM

  48. Nakedcapitalism

    Patrick, if you want Doug to read this commie drivel, you better submit it under my alias.

  49. Bobal: With the Federals holding 50.2% of the land in Idaho

    And the Federals shifting wealth from taxpayers to farmers NOT to grow taters on much of the rest of the land. But we're worried about the creeping socialism of GM being nationalized.

  50. Wretchard, I have observed, has the difficult job of rallying the troops while keeping them somehow within the bounds of sanity and respectability.

    This is made all the more difficult, or comically pretentious, given his own whackjob-baiting: AIG bonuses = Reichstag fire.

    "Look, folks," implores Wretchard, "let's keep the dialogue within bounds."

    What does that mean to him, exactly?

  51. In my view, the American automakers are viable companies which can produce cars that sell well.

    In my view that's incorrect. All the established familiar car companies will see significant drop in overall sales and significant writedowns for retooling. In other words, they will survive. GM and Chrysler, being the weakest of the bunch, is just the beginning. The turn of stronger established car companies is not that far off the horizon.

  52. This comment has been removed by the author.

  53. AIG bonuses = Reichstag fire.

    Interesting that he does not mention the $615 billion in bonuses just delivered to the military to redesign your toilet.

  54. Mat: Interesting that he mention the $615 billion in bonuses just delivered to the military to redesign your toilet.

    You laugh now, but when the nuclear Electromagnetic Pulse (EMP) makes your town's sewer system run backwards it won't seem so funny.

  55. And it will get uglier:

  56. .
    President Obama didn't stop at just demanding the head of GM's boss on a platter. He also oversaw Monday the shotgun wedding of Chrysler with the Italian auto-maker, Fiat.

    According to a report he commissioned on the U.S. auto industry, Chrysler will only remain viable if it has an international partner. This fits the long-term strategy of Fiat's chief executive, Sergio Marchionne, who believes that just five or six major vehicle makers worldwide will survive this recession.

    Fiat seems an unattractive match. Over the last couple of months, the Italian company's debt was reduced to junk bond status by two of the world's largest rating agencies, and its domestic sales were down 30 per cent in February.

    Fiat reduced to junk is a great match Chrysler.

  57. ..a great match ^for Chrysler..

  58. I have orgasms bigger than that car.

  59. Mat's Utopia is brought to life in Rio in Wretch's latest video.

  60. I confess - Firefly isn't my favorite show - I forgot about "Southpark (too busy to watch lately).

  61. GM makes 20 lines that are profitable.

    11 of these will be eliminated.
    They all are either Trucks or Suv's.

    Mat won't be satisfied until every farmer tils the soil with a Prius, with a transition to the Volt to be required within five years.

  62. Wow, that is very impressive.

    Seems to me that we're going to soon be underwriting Fiat.


    Also seems to me that at the rate we're printing and spending money, a US guarantee of US Automakers' warranties will be worth about as much as my guarantee of US Automakers' warranties.

    Sometimes I think the crap is so deep that our rulers and masters are betting everything on these last rolls of the dice. Otherwise, why would they spend so foolishly?

    I've said before that we have a problem. A systemic one. Our economy is based on growth and we need spending to keep things humming along. All the air has gone out of the economic bubble and the Fed is desperately trying to reinflate but the market is deflating overheated real estate prices.

    Now, no one wants to spend and the banks do not want to lend.

    We're stuck and the situation has a very strong potential to get significantly worse as state and local governments begin to really feel the effect of a burst bubble. Real Estate property taxes have not yet begun to reflect the market. Taxing authorities, like homeowners cling to outdated notions of market value. When reality sets in, the spiral could steepen significantly.

    Also, it's not much reported but revenues on gasoline taxes have plummeted. Florida has seen a $9 billion decrease in the 2 years.

  63. Wow, that is very impressive.
    Was in reply to the 4:24 comment.

  64. I thought the show usefully reduced abstract concepts such as securitization into concrete situations involving human agents.

    For example, Stan tried to return his father's loan-financed margarita machine and had to visit bankers who had securitized the debt and no longer much cared whether his father would pay or not, nor could they return the machine even if they wanted to.

    Moral hazard and incompetence become easier to recognize when we can use our hard-wired empathy circuits, so this seems like a place where art can be especially useful.
    The formula would be:
    Instantiate abstractions into specific concrete examples, thereby improving our intuitions of the concepts.

    Rob Zahra

  65. There IS no "4:24" comment, Whit!

  66. Picky, picky, it was the 4:25 comment.

  67. Both the barkeeps are impressed with Devil's Richter scale.

  68. Whit was so rattled, he lost a minute.

  69. Otherwise, why would they spend so foolishly?

    Because they're captured morons. They waste trillion on companies that have no worth or utility and should have disappeared long ago. They do not believe in free and fair competition, and have been manipulating the market for years and decades now. Really what they are is a bunch of commies/fascists. They have zero credibility.

  70. Hope no one missed my comment about Obama further insuring our poverty by increasing our no drill zones by an area twice the size of Montana.

  71. You describe your Green Comrades Well, Comrade Mat!

  72. Higher gas prices are just what Obama's Doctor ordered. Higher fuel prices kill two mockingbirds with one stone. 1. Decrease Amerika's carbon output. 2. Facilitate a market for alternatives to the evil internal combustion engine.

  73. Comrade Mat!

    Say it again, Doug. Say it again and I'm out of here.

  74. Lost In An Energy Wilderness,
    Energy Policy:
    The House approves a Senate-passed omnibus bill that puts 2 million more acres of energy-rich land off-limits.
    We need a government that leads us out of the energy wilderness and not into it.

  75. This comment has been removed by the author.

  76. Here's the direct link in case Media Matters sabotages that one.

    Lost In An Energy Wilderness

  77. "The man who speaks to you of sacrifice is speaking of slaves and masters and intends to be the master"

    - Ayn Rand

  78. Earlier this year, Interior Secretary Ken Salazar canceled 77 Utah oil and gas leases that had gone through seven years of studies, negotiations and land-use planning.

    They were rejected because temporary drilling operations might be "visible" from several national parks more than a mile away.

    We are not making this up.

    Some of these parcels are in or near the Green River Formation, an oil-rich region in Colorado, Utah and Wyoming that's been called the "Persia of the West."

    Prosperity is a thing of the Past. (except for the annointed)

  79. Very good interview with Roubini here:

    Roubini says a prepackaged bankruptcy is most likely for GM.

  80. Mediated by those intent on it's destruction as a viable economic entity.

  81. Soros: The Recession Will Last Forever
    If the G20 is nothing but a talking shop then he thinks we are heading for meltdown. "That could push the world into depression. It's really a make-or-break occasion. That's why it's so important." The chances of a depression are, he says, "quite high" – even if that is averted, the recession will last a long time. "Look, we are not going back to where we came from. In that sense it's going to last for ever."

    On a somewhat more amusing note, we liked his explanation for how he knew when the market was about to turn:

    He tells us that he has psycho-somatic illnesses – backaches and pains – that tip him off to changes in the market. "It's as if you're a jungle animal, and you see another animal facing you. You have to make a decision: fight or flight? Your hair stands up and you growl and you decide, 'Am I going to attack because I'm stronger or am I going to run away because otherwise he's going to eat me?' You are very tense. And that's the tension that gives you the backache."

  82. Why do I get the feeling Doug is nursing a toothache. ;)

  83. Mish said GM would make it, Mat, after bankruptcy.

  84. Mish said GM would make it, Mat, after bankruptcy.

    I think in this case Mish is wrong. I think pure EVs is where the market will be. The new players don't need an established brand to establish market share, and they will subcontract to China anyway. I just don't see how GM will survive. They have a terrible brand, and are over-tooled to make legacy products.