Archive for the ‘Bailout’ Category

Germany’s Parliament on Friday backed a $140 billion bailout plan for Greece, but the vote did little to convince global markets that the European and International Monetary Fund rescue plan would work.








Greece – Travel and Tourism – International Monetary Fund – Maps and Views – European Union

Among the banks that rule Wall Street, Citigroup got a bailout that was bigger than the rest. Now the company is about to pay a king’s ransom for its federal rescue.

ATHENS — Greek workers shut down schools, grounded flights and walked out of hospitals Wednesday to protest austerity measures as their prime minister headed to a crucial European Union summit with bailout speculation at a fever pitch.

WASHINGTON (Reuters) – The Obama administration is prepared to impose fees on financial firms for as long as necessary to ensure that every cent spent on bailing out banks is repaid, U.S. Treasury Secretary Timothy Geithner said on Tuesday.

On the frenzied day in September 2008 when the federal government bailed out insurance giant American International Group, Timothy F. Geithner logged dozens of calls with top Wall Street executives, Washington regulators, political leaders and even investor Warren Buffett.

Federal Reserve Chairman Ben S. Bernanke said Tuesday that he would “welcome a full review” by government investigators into the federal bailout of the troubled insurance giant American International Group.

With all the chatter in the media about Congress spending $500 Billion for this and $500 billion for that, we thought it worthwhile to put all that cash in perspective. I have held a few $20 bills in my hand, so I can imagine what a few hundred dollars would look like, or perhaps even one thousand dollars. But a million dollars? A billion dollars?

This is $10,000 in $100 bills.

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THE EXTORTION OF US TAX PAYERS (a.k.a., the Detroit Bailout)

Let’s do the math and perhaps put it out to a poll. I’ll focus on GM, you can do the same for Ford and Chrysler. GM employs about 252,000 people globally. The company website totals its US work force at 97,624 across some 87 US zip codes.

The pitch made by the Big Three last week puts the GM term loan “request” at least $12 billion they said was needed to bridge a funding gap in their global operations through just 2009. Unless you think that by the end of 2009 mobs of Americans will be buying enough GM cars to make a difference, by this time next year these same three will be asking for more tax payer money. They will site then, as they do now, a vast US unemployment amongst a plethora of other dire consequences should they be “allowed” to fail.

Now here is the math: if we consider only the US based employees of GM, that “term loan” works out to over $122,920 per current employee – including the over two dozen lucky top earners at the company that make well over $1 million per year. If we were to poll those same US employees of GM, asking simply, should GM management be handed $12 Billion IN CASH or instead should each US based employee given a severance package that includes nearly $123,000 IN CASH and then seek employment at the several other US based (but foreign) car manufacturers who for some reason are NOT asking for a bailout. By the way, these other car companies will most assuredly be delighted to increase their own US car production output to make up for the void should the “big three” go under. Now back to the math, what would those tax paying US based employees choose? Would they trust $12 Billion in the hands of a few pigeon headed multi-millionaires that drove their company, an icon of American manufacturing competence and power the world over, into total obsolescence or would they take a chance on themselves with that $122,920?

Now that $122,920 may seem like a paltry amount for some, and certainly that is so for the GM CEO who earns over $10 MILLION IN ADDITION TO his annual salary of $1.5 million (source WSJ) that he is now willing to “sacrifice”, for one year, for the sake of getting this bailout…presumingly because its good for the nation. What a patriot. Take note however, he is offering to giving up just over one tenth of his total compensation and this “sacrifice” does not include his use of the company’s air force (yes, we talking about a car company), fleet of chauffeured cars, personnel/family allowances and that all important multi-million dollar corporate expense account amongst the plethora of other perks.

Do we really need to debate this?

See also:

CNN:  auto plea passes the House