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”

Porn Industry Wants 5 Billion Dollar Bailout

larry flint

In a move that has the potential to be the most egregious story of this entire massive bailout madness the porn industry will ask for a 5 billion dollar bailout.

CNN reports:

Another major American industry is asking for assistance as the global financial crisis continues: Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis said Wednesday they will request that Congress allocate $5 billion for a bailout of the adult entertainment industry.

So, this request has created the potential for the government to not only prop up a dying industry and one of the most dispicable and disgusting industries to ever grace the face of our fair planet. If this passes, and anything seems possible in this climate, it will represent just how far we have fallen and just how hard conservatives will have to fight to gain back any ground.

But wait, is the porn industry dying at all? Does it even need free money to stay profitable? Well, according to the reject making the request for money, no: Continue reading “Porn Industry Wants 5 Billion Dollar Bailout”

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

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

Massive Bailout Madness!!!

In case you missed the first go round we now have the pleasure of a take two which shall be appropriately named:

Massive Bailout Madness!!!

Who are the stars of this sequel you ask? Well I’ll tell you…

First off, like any quality sequel, there is always one returning star. For this production that returning star happens to be AIG. The insurance giant wants billions more on top of the billions they received in Bailout Madness take one.

But, like any sequel worth destroying a country over, this sequel includes a few big name newcomers.

There is American Express who must have figured, “Hey, we suck at running our business too… why not?”

And the last star for this sequel, though you can be sure this certainly isn’t the last sequel (I’m thinking this could be a 5 part series), happens to be the big three automakers. Yes, that’s right, in a not so shocking move Ford, GM, and Chrysler have asked for and received a 25 billion dollar bailout… opps make that two 25 billion dollar bailouts.

Unfortunately the predictability and complete lack of direction combined with an overused and ultimately unsuccessful plot line (you know how it goes, Business meets bad management. Bad management drowns business. Government buys badly managed business. Government provides even worse management, as always. Economy explodes) makes Massive Bailout Madness absolutely unbearable. I am forced to declare it a turkey (and I mean on a Gigli level).

I much prefer the classic and intelligent; Business makes bad choices. Business doesn’t get free money. Business faces consequences of its actions. Business learns lesson and adapts or closes.

But, in an upside for those who prefer the story behind Massive Bailout Madness, I hear it is an extremely popular plot line overseas…

UPDATE: Rumor… Newspapers will be big new star for then third instalment of this worn out series?

It’s the end of the world! Oh wait…

No its not.

Not even close.

Yea the 778 point drop in the Dow is terrible, its even the biggest point drop ever according to CNN.

But that sure as heck doesn’t mean we are headed for another great depression.

Consider this, while the 778 point loss is the biggest point loss in history it is only about a 7% loss. Compare that to the stock market crash of 1987 where there was a 508 point drop which accounted for a massive 22.6% loss and there was no long drawn out depression which followed that incredible crash was there?

But, even beyond the crash of 87, today’s crash is relatively small in comparison with other market troubles of the past. After all, the 7% dropped we encountered today is only the 17th biggest drop of all time. This isn’t something that should keep you up at night, at least not as it stands now. Especially since this will most likely be sorted out in less than a week.

We should all know what is going to happen by now. It’s really quite simple and foreseeable. There will be news that another bailout bill is on the way, in fact there already is news of that, and the markets will regain some, if not a large amount, of their losses back. The bill will eventually pass since it doesn’t truly benefit either party to let these problems linger and that will reassure the markets and they will stabilize. Things won’t be good but they will be bearable again.

UPDATE: Oh look… the world isn’t coming to an end. Oh hey… what’s this? A stabilizing rebound of over 300 points? Who could’ve seen that coming?