Topic: Bailout approved: Automakers to get $17.4B

[DeepBlueGXP]

WASHINGTON – Citing danger to the national economy, President Bush approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers.

Allowing the massive auto industry to collapse in the middle of what is already a severe recession was not a "responsible course of action."

"It would worsen a weak job market and exacerbate the financial crisis," he said. "It could send our suffering economy into a deeper and longer recession. And it would leave the next president to confront the demise of a major American industry in his first days of office."

Stock prices.....

For more info click here
http://news.yahoo.com/s/ap/20081219/ap_on_go_pr_wh/meltdown_autos

Fox News
http://www.foxnews.com/politics/2008/12/19/report-white-house-auto-industry-low-loans/

[DeepBlueGXP]

The agreement attached

[DeepBlueGXP]

Cheney: White House Offered Auto Loans Because Congress 'Failed' to Act

http://www.foxnews.com/politics/2008/12/19/cheney-white-house-offered-auto-loans-congress-failed-act/

[GoingSolo]

Hi. Could someone explain a few things. The root of the problem is people unable or unwilling to buy. Giving the bailout money to the manufacturers will not fast track people to buy. For about the same amount of money the Govt. could give everyone who buys a new GM, Ford or Chrysler a $3000 tax credit valid till the end of 2009. I ask my mufflershop customers if they are interested in buying a new car right now, even with the bailout happening. I get a resounding "No."  I then ask if they would be interested if the Govt. were to give them a $3000 credit towards the purchase. Most say they would at least be interested. Many say they would buy. The root problem is that people need to buy. The bailout doesn't address that. My question is "why does the bailout money have to go the the automakers and not the people who buy?"

[baconbits]

"AP study finds $1.6 billion went to bailout bank executives"

Maybe the bank execs can afford a few new cars though they buy Maybachs and Bentleys
.. I'm with you there is no way with the amount of cars sitting on lots across North America that the big three should even manufacture another car till March ..Incentives work but only if the person buying has a disposable income.. Checking Trulia (a multiple listing real estate program) there are currently 28000 foreclosures in Las Vegas..that just Vegas .. figure into that all the other cities across the US ..there are alot of people now with no or bad credit.. are the banks on the edge of solvency going to lend you 30 grand to buy a car. after you stung them with a 330 grand mortgage.. Probably not.. Ford GM and Chrysler are going to have to make unbelievable offers to qualified buyers in the next few months and they are going to have to finance the purchases at prime or sub prime which isn't how the banks got into this mess in the first place..
Bacon

[Sly Bob]

Hi. Could someone explain a few things. The root of the problem is people unable or unwilling to buy. Giving the bailout money to the manufacturers will not fast track people to buy. For about the same amount of money the Govt. could give everyone who buys a new GM, Ford or Chrysler a $3000 tax credit valid till the end of 2009. I ask my mufflershop customers if they are interested in buying a new car right now, even with the bailout happening. I get a resounding "No."  I then ask if they would be interested if the Govt. were to give them a $3000 credit towards the purchase. Most say they would at least be interested. Many say they would buy. The root problem is that people need to buy. The bailout doesn't address that. My question is "why does the bailout money have to go the the automakers and not the people who buy?"

The simple, Readers Digest reason, is that the government doesn't have the money to give $3000 to everyone that buys a car. They could maybe do what they are doing to the automakers and loan them the money. Unlike the general public though, the banks won't lend money to the automakers.

We can't forget that the money is a loan that has to be paid back as was the Chrysler loan was in the 70s. The governments also have taken partial ownership of the automakers. There is a big difference between a loan and what the media likes to call a "Bail Out".

[GoingSolo]

Thanks. That makes sense. I wasn't thinking of the bailout money being a loan. I thought that once it was given it would be gone. Hopefully that doesn't end up being the case. One way or another there needs to be a way to stimulate buying...