Shocker: Chrysler Won’t Repay Bailout Money

chrysler

There goes that cash… straight down the money pit.

But, hey, what’s $7 Billion among friends. Especially nowadays:

Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler’s bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company’s key financial advisors in the bankruptcy case.

Now, a pessimist might say that the bailout money has gone down the black hole that these failing companies are and we will never see any of it repaid (even if the companies want to repay it).  Unfortunately I am a pessimist. After all the government would much rather own or control these companies than get money back from them:

An Obama administration official confirmed Tuesday that Chrysler won’t be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

“The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process,” said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company’s reorganization is meant to compensate taxpayers for the lost money.

Like I said… shocking.

Chrysler Expected to Fail Despite Bailout

Well, there’s absolutely no way anybody could have ever seen this coming. There was no way to ever predict anything like this. No posible way to figure out that the massive bailout madness would backfire and leave the tax payers holding the tab. Who would’ve thought that the brilliant thinking behind all of this could have turned out to be idiotic?

But none the less most analysts now expect Chrysler to fail despite the massive amount of cash the government has thrown their way. These hideous numbers, reported by the Associated Press, tell the story of the idiocy that is the automakers bailout:

Even by the standards of battered automakers, Chrysler is in dire shape. Its sales in December were down a stunning 53 percent, far worse than Ford or General Motors, and analysts say it probably won’t survive the year as an independent company — despite $4 billion in government loans and the possibility of more.

Things were so bad last year that a single Toyota model, the Camry/Solara midsize car, outsold the entire fleet of Chrysler LLC’s passenger cars.

It gets worse: Continue reading “Chrysler Expected to Fail Despite Bailout”

Bank of America Gives in to Squatters

In an incredibly stupid move the Bank of America has given in to protesters who were demanding money from them despite the fact they have no legitimate reason to do so.

The absurd decision to surrender to the Republic windows and doors employees comes shortly after the workers decided to occupy their old factory. The workers decried that they would not leave the factory until Bank of America, which has zero obligation to these workers, extended more loans to a company which had already gone bankrupt.

So, what does this idiotic cave in by Bank of America mean for the country? Well, it seems to me that it points to a disturbing future. One in which laid off employees illegally occupy their old places of employment until their demands for money are met.

This is a terrible precident that can only lead to more bad news.

Not So Shocking News: 53% of Rescued Borrowers Default Anyway

Proving that incompetent and irresponsible people will be incompetent and irresponsible no matter how many breaks you give them or how much taxpayer money you throw at them, U.S. Comptroller John Dugan revealed yesterday that 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months.

Seems like pure common sense to me… a financial free pass from the government is no cure all. In fact, its little more than snake oil.

But will this make a bit of difference to those caught up in the Massive Bailout Madness? You can bet it wont.

UPDATE: Malkin’s Duh of the day

AP Cites Workers ‘Occupying’ Factory as a ‘Rallying Point’

In an article heroically chronicling the efforts of 200 union workers “occupying” their old window and door factory the Associated Press made sure to emphasize how the squatters have given the nation’s grim economy a “rallying point.”

Here is how they introduced the story (emphasis added):

The nation’s grim economy now has a rallying point: Employees at a window-and-door factory that went out of business have taken over the building in a siege that has come to symbolize the woes of the ordinary worker.

Yes, that’s right; the AP sees a group of people who are illegally squatting on private property as symbolic of ordinary workers. They even describe the actions of these workers as a “siege” in an apparent sign that the AP thinks people unhappy with the bad economy should rally and lay siege to their work places.

But the AP wasn’t finished glamorizing and militarizing these workers actions:

The Republic Windows and Doors factory closed abruptly last week after Bank of America canceled the company’s financing. Since then, about 200 of the 240 laid-off workers have taken turns occupying the factory, declaring that they will not leave until getting assurances they will receive severance and accrued vacation pay.

Now, not only are the glorious workers laying ‘siege’ to the factory but they are occupying it and declaring their demands for money be met before they leave. As shocking and unlawful as this may seem to others it seems the AP can’t get enough of this behavior.

But the standoff has also come to embody mounting anger over the government’s willingness to bail out deep-pocketed corporations but not average people.

However, even as the AP is cheering on this act which they seem to view as something  glorious and militaristic they cast doubts on the legitimacy of the workers claim that the law says they are owed vacation pay because they were not given 60 days notice before they were laid off:

The law allows businesses to close without giving the required notice under certain circumstances, such as if another company that is the sole source of income suddenly goes out of business, said Mark Johnson, president of Erisa Benefits Consulting in Grapevine, Texas, who said he was not familiar with the Republic case.

Paulson to Lend Money to Anybody Who Wants it

Gosh, doesn’t this sound familiar?

The government stepping in to let just about anybody borrow money regardless of their circumstances.

In fact, I’m relatively sure this is exactly what caused the problem in the first place. Ummm, yea, actually I’m completely positive of that.

Hmm lets think back to the first presidential debate when Obama claimed that deregulation was the cause of our economic ills. Here was my reaction then:

“Deregulation, Obama? Are you kidding? Was it deregulation that created organizations to give people loans that clearly weren’t qualified for them and never would have received them otherwise? Was it deregulation that mandated financial institutes give the same clearly unqualified people loans? Thus creating a massive and seemingly unending housing boom which then lead to a plethora of bad investments, investments which were sold by the government as safe investments. No Obama it wasn’t deregulation, it was idiots like you.”

But, obviously, Bush, Paulson, and the rest of our betterers in DC will never admitt that this is what happened and will, inevitably, stick with the same broken mentality that got us into this mess.

Does anybody see the supreme irony in this move by the government? I mean, yea, there’s the whole quandary of using the same tactics that got is in trouble in order to save us from that trouble. I’m almost convinced that this was the exact conversation that occured when this plan was being mulled over:

(several of Springfield’s best and brightest are stuck in a hole they dug while searching for buried treasure)

Mayor Quimby: Mmm, I guess we’re not gonna find anything.
Otto: Well how we gonna get outta here?
Homer: We’ll dig our way out!
Wiggum: No, no, dig up, stupid!

But I think, perhaps, the deeper irony lays in the fact that we are increasing our government’s debt for the express purpose of increasing consumer debt. In other words the government is spending money it doesn’t have in order to encourage people to spend money they don’t have. Does that sound like a downward spiral to fiscal hell to anybody else?

UPDATE: Michelle Malkin eventually weighed in on this…

Forbes: Bailout Costs 5 Trillion… So Far

Yup… you read that right. 5 TRILLION dollars.

So far…

I recommend taking the time to go through and read every last detail in this article because there are little spending gems hidden throughout. Gems that you, most likely, wouldn’t hear about otherwise.

But the best part of this has to be the results… or, more accurately, the complete lack there of. After all lending between banks, which the government tells us is the most important problem, is still frozen even after interest rates have been cut by more than half. And it would appear the much touted bailout bill from October is nearly out of money to throw at the problem.

But, hey, take heart, the bottom is probably only another couple TRILLION taxpayer dollars away…

P.s. For more on the Massive Bailout Madness check out my earlier post. And for those who never saw this coming, check out Malkin’s latest.

UPDATE: Looks like the Massive Bailout Madness hasn’t helped stop or even slow foreclosures and some Senators are pissed at Paulson