Cash For Trash On Your Dime Sucker

Let the fleecing begin

By Jennifer Liberto, CNNMoney.com senior writer

WASHINGTON (CNNMoney.com) — The House on Tuesday waded deeper into the rescue of the troubled auto industry when it passed a $4 billion plan to subsidize new cars sales for consumers who scrap old ones.

By a vote of 298-119, the House approved the “cash for clunkers” program.

The measure would give consumers vouchers worth as much as $4,500 to turn in gas guzzlers and buy new cars that are more fuel efficient.

The legislation now goes to the Senate. President Obama has said he supports such a measure.

The House bill would go into effect within 30 days of enactment but it is not retroactive for new purchases made earlier this year.

The move by the House would deepen the federal government’s involvement in the auto industry, only a week after federal officials announced spending another $30 billion in addition to the $19.4 billion already given to GM to cover its losses and operations.

“The bipartisan cars act will shore up millions of jobs and stimulate local economies. It will improve our environment and reduce our dependence on foreign oil,” said bill sponsor Rep. Betty Sutton, D-Ohio, during floor debate. “The cars act demonstrates that we can free ourselves from the false argument of either you are for the environment or you are for jobs. You can do both, you must do both.”

While the original cash-for-clunkers proposal had its roots in an environmental initiative, this bill aims to jump-start sales of new cars and trucks, including some that don’t quite meet the average fuel efficiency standards.

Clunkers eligible for the program must get 18 miles per gallon, or less, in combined city and highway driving. The subsidy ends up benefiting more owners of light trucks, SUVs and mini-vans more than it would owners of regular old passenger cars, auto experts say.

A $3,500 subsidy can be used toward purchasing cars and vans that are more fuel efficient than the older clunkers by four miles per gallon. A $4,500 subsidy can be used toward purchasing cars and vans that are more fuel efficient than older cars by 10 miles per gallon.

However, cars that have not been insured for the past year or those that are older than 25 years are not eligible to be traded in for vouchers.

The House measure aims to spend $4 billion in new dollars toward the measure, and was expected to get added through a war supplemental funding bill. That could prove to be a sticking point, since some Republicans in the Senate said they rather such a measure use already allocated dollars.

“We’re going to have to pay the piper at some time,” said Rep. Jeff Flake, R-Ariz. “This is a clunker of a bill.”

The program lasts either one year or until the funding runs out.

So now the focus turns to the Senate, where two versions of a subsidy bill have been introduced. Neither has yet to be voted on or fully debated.

The Senate proposal that is most similar to the House bill is sponsored by Sen. Debbie Stabenow, D-Mich., along with Sen. Sam Brownback, R-Kansas. That bill takes its funding from existing stimulus dollars and is retroactive for new purchases made since March 31.

Environmental lobbying groups are pushing for an environmentally tougher bill geared more toward cutting carbon emissions. That measure, sponsored by Sen. Dianne Feinstein, D-Calif., aims to replace more gas guzzlers with more environmentally sensitive and fuel efficient cars.

Never mind dilution

Joe Weisenthal|Jun. 9, 2009, 3:21 PM

Another thing to be pissed off at Ken Lewis about if you’re a Bank of America (BAC) shareholder: You’re paying for Angelo Mozilo’s legal defense, as fe faces civil fraud charges from the SEC.

Granted, The Tanned One had that agreement in place with Countrywide prior to the sale, and Bank of America inherited that when it bought the company. And it’s also true that in Q1 Countrywide was a big contributor to Bank of America’s earnings. So maybe you should be grateful! A few extra lawyer bills are a small price to pay.

Although if the refi boom melts in the face of higher interest rates… Well then that Countrywide arm will then be re-exposed as the garbage you always figured it was.

Pandit should go just for selling C a bag of goods defunct mortgage company just as he was hired to C !

John Carney|Jun. 9, 2009, 4:31 PM

The New York Fed cannot effectively regulate Citi because it has been captured by the mega-bank, according to a top economic official inside the Obama administration. The close relationship between Citi executives and officials at the New York Fed is stymieing efforts to reform the bank and change its management, according to the official.

The official asked not to be identified.

Citi executives have told Charlie Gasparino that they are in a “regulatory purgatory,” unsure about what the government’s plans for them have been. Recently, the Wall Street Journal reported that Sheila Bair’s FDIC had been considering plans to oust senior management at the bank. Gasparino reported that Citi officials believe Bair herself leaked that story to the Journal in order to start the ball rolling.

Earlier, we mentioned reports that Tim Geithner was reportedly advocating keeping Citi chief executive Vikram Pandit in place. Neither Bair nor Geithner, however, are the primary regulator for Citi. That job falls to New York Fed.

Minor traction for green shooters

By Simone Meier

June 9 (Bloomberg) — German industrial output unexpectedly declined in April led by investment goods, suggesting Europe’s largest economy may struggle to gather strength.

Production dropped 1.9 percent from March when it rose 0.3 percent, the Economy Ministry in Berlin said today. Economists predicted an increase of 0.3 percent, the median of 30 forecasts in a Bloomberg survey showed. From a year earlier, output declined 22 percent when adjusted for work days.

Germany’s economy may be slow to recover from a record contraction in the first quarter as companies trim jobs and the global slump curbs foreign sales. German exports fell more than economists expected in April and European Central Bank Governing Council member Erkki Liikanen said today that there is “no quick recovery is in sight” for the world economy.

“Today’s numbers are a clear warning against any overhasty optimism,” said Carsten Brzeski, an economist at ING Groep NV in Brussels. “At best, the German economy seems to have entered a period of sideways motion.”

Output of investment goods such as machines slumped 6.4 percent in April from the previous month, today’s report showed. Production of intermediate goods fell 1 percent and manufacturing output slipped 2.9 percent from March.

Output of consumer goods rose 0.5 percent in April from the previous month. Energy production increased 5.8 percent and construction output rose 0.5 percent.

Export Slump

A drop in exports and investment were the main reasons behind the economy’s 3.8 percent decline in the first quarter, which was an unprecedented fourth successive quarterly contraction. While Chancellor Angela Merkel’s government has pledged 85 billion euros ($118 billion) to fight the crisis, it still expects the economy to shrink 6 percent this year.

Some recent data has suggested the economic slump is easing. German manufacturing contracted at a slower pace in May and business confidence increased.

There’s an “increased chance of a foreseeable bottoming out of industrial output given a stabilization in demand for industrial goods and the change in trend of sentiment indicators,” the ministry said today. The construction industry is also showing “positive output impulses,” it said.

Daimler AG, the world’s second-largest maker of luxury cars based in Stuttgart, Germany, sees an “improved mood” among high-end auto buyers that may help bolster sales, Chief Executive Officer Dieter Zetsche said in an interview on June 5.

Job Cuts

Still, companies may be forced to step up job cuts. The country’s leading economic institutes forecast that the average number of unemployed will rise to 4.7 million next year from a current 3.46 million. ThyssenKrupp AG, Germany’s largest steelmaker, said on May 8 it will seek to eliminate as many as 2,000 jobs at its main unit by the end of September 2010.

The ECB on June 4 kept its key rate at a record low of 1 percent, with President Jean-Claude Trichet saying the 16-member euro-region economy may only return to growth in 2010.Liikanen said today that while “we may have passed the phase of sharpest declines in output, no rapid recovery in the world economy is in view.”

“The German economy will only reach a sustainable growth path in the first half of 2010,” said Stefan Bielmeier, Chief German economist at Deutsche Bank AG in Frankfurt. “But the downward dynamic in gross domestic product should decline in the next quarters.”

A 22 year low

By Jason Clenfield

June 10 (Bloomberg) — Orders for Japanese machinery fell to a 22-year low in April as dwindling profits forced companies to cut costs amid the worst postwar recession.

Bookings, an indicator of capital investment in the next three to six months, fell 5.4 percent to 688.8 billion yen ($7.1 billion), the lowest since April 1987, the Cabinet Office said today in Tokyo. Economists predicted a 0.6 percent drop.

The collapse in global demand has forced manufacturers to cut production by more than a third from last year’s peak. Plummeting profits have forced companies to pare investment in plant and equipment, spending that accounted for about 15 percent of the world’s second-largest economy last year.

“Companies aren’t willing to increase investment because the recovery in demand is slow,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “The economy will probably return to growth this quarter, but it may be temporary because capital investment and consumer spending are slow to recover.”

The yen traded at 97.29 per dollar at 10:34 a.m. in Tokyo from 97.46 before the report was published. Shares of machinery makers were mixed, with Fanuc Ltd. and Advantest Corp. declining, while Tokyo Electron Ltd. advanced.

Prices Slide

A separate report today showed that producer prices, or the costs companies pay for energy and raw materials, tumbled 5.4 percent from a year earlier, the biggest slide since 1987, according to the Bank of Japan.

Data released in the past month suggest gross domestic product may grow this quarter, after plummeting at a record 15.2 percent pace in the first three months of the year. Japan’s manufacturers have gotten a lift from revived demand in China, where the government is spending $586 billion on roads, hospitals and low-cost housing. Exports and production have increased for two months running on a month-on-month basis.

Still, even after showing signs of stabilizing, exports and production have fallen by more than a third from last year’s levels. Only about half the nation’s factory capacity is being used, putting pressure on managers to cut costs and delay investments.

A survey published this week by the Nikkei newspaper showed that Japanese companies plan to cut capital spending by an unprecedented 15.9 percent this business year. The previous record was an 11.8 percent decline that came in 1993 when the bursting of Japan’s asset bubble left companies saddled with plant and equipment they no longer needed.

Output Decline

Jet-engine maker IHI Corp. said last week order delays from airlines have forced the company to slash production of parts for Airbus SAS and Boeing Co. The Tokyo-based company, which forecasts output will fall this year by 20 percent from 2007 levels, says it will delay investments in production capacity for as long as four years.

“Capacity utilization is so low and profits have fallen so sharply that I just don’t see a strong recovery,” said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo. “What you can say is there are signs that orders are bottoming. The numbers aren’t plummeting like they were at the beginning of the year.”

Toyota Motor Corp. estimates it will sell only 7.3 million vehicles this year, less than the 10 million it has the capacity to build. The company, expecting its second year of losses, will cut capital spending this year by 36 percent, according to the Nikkei.

Cost cuts by Toyota and other companies including television-maker Sharp Corp., which is closing older factories that produce screens for mobile phones, may limit the scope of Japan’s rebound, according to former Economic and Fiscal Policy Minister Hiroko Ota.

“More layoff and investment cuts could mean the economy falls back into negative growth,” Ota said last week.

“nonsensical green shoots”

The rising long-term USTreasury Bond yield has captured attention. The breakout chart for the 10-year Treasury was pointed out here when it rose over 3.1%, hardly a high level. In the first week of May, a target of 3.5% was cited, one easily surpassed. It zoomed to 3.75%, enough to create some waves in the stock market distracted and preoccupied by nonsensical Green Shoots talk on the psychological side and by falsified bank balance sheets on the accounting side. Bigtime stress has come to the USTreasury complex, a story difficult to mask and conceal, since it is at the epicenter of the credit markets.

Only on Wall Street can we hear lunacy of less bad economic statistics (framed in sophisticated second derivative arguments) amidst an absolute cavalcade of miserable news on the jobs front, home foreclosure front, and home price front. So the unemployed workers, dispossessed homeowners, and insolvent households will lead the nation on a recovery, while credit approval is much more strictly applied even to the creditworthy among us? Doubtful! Only on Wall Street can we hear of the banks undergoing a healing process when huge credit asset writedowns are replaced instead by convenient ‘Credit Value Adjustments’ as booked profits on their books.

So a stream of upcoming additional asset losses will lead an investment boom by basic accounting fraud, calling them gains with SEC blessing? Doubtful! The stock market rally is being called a ‘Sugar High’ by the venerable Wall Street Journal, very accurately. Sadly, foreigners are watching, and they are selling the USDollar down. They observe the mountain of USTreasurys hitting the market like Chain Letters bound in Treasury Auctions. They observe outright monetized purchases of the Treasury Investment Protection Securities (TIPS) designed as an inflation signal. With fading confidence, they are selling the USDollar down the river. One might realistically perceive the stock rally as based upon a flood of monetary inflation, given an assist by blatant recovery propaganda, powered further by good old fashioned accounting fraud.

Behind the bushes, a powerful billboard message can be seen by the trained eye, accompanied by loud signals audible to the trained ear. The US Federal Reserve will be forced to continue the gargantuan monetization scheme. The first round was announced in mid-March, for $300 billion in USTreasurys and $750 billion in USAgency Mortgage Bonds. Most did not give a second thought, that it was a one-time event. WRONG! The monetization news dealt a powerful blow to global confidence in the US financial system generally and the USDollar specifically. The $1 trillion monetization will be repeated, and even become a quarterly event, much like a constant sub-surface flow of water to remove a foundation built upon sand.

The trip to China by USDept Treasury Secy Geithner should be viewed as a key reassurance to these important creditors, later to be viewed as a betrayal. The Chinese audience responded with loud laughter when Geithner assured them that their $2 trillion in savings was safe and secure. This was a national humiliation event, as Geithner has been muzzled. If only the USCongress had such broad wisdom and deep courage to laugh when Goldman Sachs henchmen ‘(Made Men’) from the syndicate gave regular speeches laden with deception and rationalizations for their continued fraud. Then again, the Chinese audience is not on the receiving end of graft and bribery, nor the object of revolving doors.
PLIGHT OF PRIMARY DEALER PARTNERS

The group of 20 to 22 bond dealers with contracts to sell USGovt debt securities are under siege, suffering a grand new plight. This is perhaps the best kept secret in the entire credit market right now. The USFed primary bond dealers are being squeezed. They actually have some power to respond. They are at risk, and face a possible rapid extinction. Despite the rising long-term USTBond yield, money going into USTBond purchases in general is growing like a powerful torrent. Demand for USTBonds is growing fast, very fast. Bond supply is rising faster than demand though!! The role of primary bond dealers is to hold inventory as intermediaries, a prospect that makes those dealers LOSERS right away.

Auction sizes one or two years ago used to be $5 billion, $10 billion, even $15 billion on a given month. Just last week the official auction was for $110 billion, a 10-fold increase. The pushback comes from these primary bond dealers, who collectively possess the power to tell the issuer (USDept Treasury) and the agent (USFed) that buyers just do not exist in sufficient volume to absorb such huge regular supply. Fear has entered the hearts and minds of the dealers. They will soon tell their bosses at Treasury and the USFed that more monetization must come in order to lighten the supply load, or else face a renewed crisis, at least horrendous negative publicity. The credit market trucks are breaking down from the weight. The $300 billion monetization sounded like a big amount, but it is not. That amounts to two or three months in supply, if the $1800 billion in USGovt deficits is to be financed. The $1 trillion monetization MUST BE REPEATED, and even become a quarterly event. Refusal by the Treasury and USFed to monetize could result in failed auctions, crushing losses by the primary dealers, and their possible disappearance. Remember what happened to private equity firms stuck with their own stock and bond inventory? They went bust. That is precisely the risk to these bond dealers.
FORCED MONETIZATION COMMITMENT

The trend is clear for those with open eyes. The official bond auctions will continue relentlessly, probably well over $100 billion per month, for perhaps twenty months at least. Worse, the USGovt federal deficits will be much bigger than estimated. Here is a sobering fact. The USGovt tax revenues are down 35% year over year. For the first time in US history, the tax collection month of April 2009 was a net negative month. Expect the USTBond supply pressures to build, not reduce. My conclusion is clear. PURE MONETIZATION WILL SOON BE A REGULAR QUARTERLY PROMISE. IF NOT, THEN A USTBOND DEFAULT THREAT LOOMS NEAR ON THE HORIZON, OR A POWERFUL SUDDEN STOCK MARKET COLLAPSE WILL ENSUE. A monetization commitment forestalls a USTBond default at a later date.

Meanwhile, the economic impact of this unremedied crisis will slowly be recognized. Watch the job losses, which continue in huge numbers. Watch the home foreclosures, which continue in accelerating numbers. Watch the national home prices, which continue in steady declines. Recall that the USEconomic recovery that began in 2001-2002 was built upon a housing bubble as a foundation. The burst of that bubble is absolutely not a completed process. The national insolvency will take its toll on USTreasurys as a certain reflection. The debt downgrade (imminent, scheduled, expected, who cares its label?) of the UKGilts two weeks ago should have awakened the world to the perception of the USGovt debt as Third World debt paper. The government finances of the United Kingdom are no better and no worse than those of the United States. The global reserve status of the USDollar and USTreasury, the greater size of the USEconomy, these only guarantee that the impact of the US fiasco have broader shock waves. The fiasco is tied to the USGovt committed debt being transformed into debt securities, the USTreasury Bonds. It is a gigantic hairball. It is like a rattle snake swallowing a goat.
SPOTTING THE USTREASURY BLACK HOLE

The USTreasury Bond supply (skyrocketing) is growing much faster than the rising demand. The untold story is that demand is rising in stride to take the rising bond supply, FOR NOW. A rising USTBond long bond yield does not mean necessarily that money exits. Price is determined as demand meeting supply. The rising bond supply will be continuing, not just for a month or two, but for a year or two or three, maybe four. Projected USGovt federal deficits are due to occur for as far as the eye can see. Bond analysts knew that big problems would result. They have begun. Huge USGovt debt commitments ensure a skyrocket of continued USTBond supply. It is sucking in funds all over the financial markets, like a Black Hole.

The stock market is at growing risk for its available funds. The primary dealers have the ability to put pressure on fund managers of a wide variety. Those managers will be urged to purchase more bonds, to alter their allocation ratios, and to respond to government pressures. Some will be lured to earn future favors. The Dow Jones Industrial stock index and the S&P500 stock index have begun to stall, after quite a run powered by short covering, relaxation of accounting rules, and widespread talk of early sightings of recovery evidence. The gargantuan outsized USTreasury Bond auctions must find funds to feed the beast, and the stock market is a nearby target. The great Black Hole of USTBond issuance and sale has the potential to draw the entire stock market into its vortex. The conclusion is simple, and the USFed must respond. The $1 trillion monetization MUST BE REPEATED, and even become a quarterly event. Refusal by the Treasury and USFed to monetize could result in painful stock market declines, the effects from which the public observes and understands well. Their pain usually results in hue & cry, and if not addressed, panic.
AWAKENING TO CRIPPLED USDOLLAR

The USTreasury Bond cannot be monetized without enormous damaging fallout to the global reserve currency in the USDollar. It has begun to arrive, both to the USTreasury Bond and USDollar. For many months, my analysis has stated that even with intervention, either the USTBond falls or USDollar falls, guaranteed one, since official pressure to aid one would render harm to the other. In the last couple weeks, we have seen both fall in value, as colossal mismanagement might be the global perception that prevails, as debt quality is heavily scrutinized. The entire world is awakening to the development of a dying USDollar. Watch the euro head back to 150 with ease, then to 160 later this summer.

Even the garbage British pound sterling is running, whose possible impetus is not what one might think. The commodity currencies are rising. See the Canadian Dollar, whose base creation at 77-78 cents has preceded a rise over 92 cents. See the Australian Dollar, whose base creation at 61-62 cents has preceded a rise over 81 cents. To be sure, the recovery in the crude oil price has helped power the rise, but more factors are involved. The Deflation Knuckleheads should look to the crude oil price, and the commodity currencies for guidance, even contradiction of their theories. The primary stabilizing factor against deflation is the falling USDollar, which delivers rising energy prices (now with natural gas), rising food prices, apart from domestic banking challenges on the lending side.

The USDollar has fallen in a very noticeable manner, enough to capture the attention of the world, enough to force a meeting in Beijing by USGovt finance syndicate bosses. The chart looks absolutely miserable, surely ominous, and very dangerous. The daily chart has meaning, but the weekly chart has more meaning. Three important cyclicals are shown. The relative strength is down hard, not yet at the important trigger 30 level. The stochastix is down hard, not yet near a crossover for rebound. The MACD is down hard, not yet showing signs of a level reading. Watch for a powerful upcoming negative signal, like in with the next two weeks, for a bearish crossover event. The 20-week moving average (in blue) is close to crossing below the 50-week moving average (in red). When it does cross below, expect a powerful move in the DX index to 76 then to 72, for a bottom retest. The DX dollar index has fallen below the critical 81 level, where past weekly opens and closes were registered in December. That means a retest of summer 2008 lows is guaranteed. Some speed bumps on the downhill are due in the 77-79 interval.

Finally, bear in mind the enormous fallout from USGovt and USFed actions, based in desperation. The $1 trillion monetization MUST BE REPEATED, and even become a quarterly event. The effect on the USDollar will be profound, extremely deep, and potentially devastating. Confidence in the USDollar is already shaken badly by events of the last 18 months. Promised monetizations will only continue to shatter that confidence. As the USDollar plumbs the critical support lows, and pushes to lower lows later this year, the GOLD & SILVER PRICES WILL MAKE NEW HIGHS AND CAPTURE GLOBAL ATTENTION. Both gold & silver price levels are resisting even little selloffs. Be sure to avoid the Exchange Traded Funds, namely GLD for gold and SLV for silver. It is highly doubtful that they hold gold or silver bullion in claimed quantities. They are highly likely to be leasing their bullion to the cartel in order to suppress prices. See their prospectuses for names of gold cartel firms, whose names are frequently listed among the biggest owners of staggering outsized short positions on the COMEX in gold and silver futures contracts. Those are illicit Naked Shorts!

USFED BALANCE SHEET OF LOUSY QUALITY

Focus has been steady on the USFed balance sheet. Not only is it huge, but it is loaded with toxic assets. They cannot easily sell off their assets in order to drain the excess liquidity from the credit markets, enough to prevent a spillover into the USEconomy. Such a big drain would permanently cripple the housing market, which would kill the banks. Doing so would cause a USTreasury bear market of monstrous proportions, which would kill the USDollar. Therefore, price inflation is coming for a simple reason that the USFed cannot drain the excess liquidity, and cannot prevent a certain eventual spillover. When price inflation arrives without welcome, or even with welcome, the impact on the gold & silver prices will be very big and very positive. The impact on USTreasurys is uncertain. Holding the line on USTreasurys will assure a powerful negative blow to the USDollar.

John Hussman makes two great points on this very important matter. He claims that price levels can remain under control only if the money velocity is held down permanently. To maintain low money velocity, the banks must keep their bank reserves over the current 95% level, something difficult to do as they gradually approve new loans. He claims that price levels can remain under control only if the value of goods & services is perceived as less than the value of USGovt liabilities packaged in debt securities. To maintain the USTreasury bubble will be difficult, especially when supply is overwhelming, especially when price inflation is seen as a growing future risk, and especially when foreigners are diversifying out of US$-based securities. Hussman makes the strong point that bank losses will continue, as new categories like commercial mortgages and formerly pristine prime mortgages add to big losses, a parallel point to mine. He concludes that the USEconomy will experience a 100% price inflation in the next decade, in order to bring back into line the debt ratio to the US Gross Domestic Product. That angle of reasoning makes perfect sense for a price inflation long range target. A double in consumer prices and the GDP price component would result in a gold price of $3000 per ounce, and a silver price of nearly $100 per ounce.
THE GM STORM CLOUD (MINI BLACK HOLE)

Volumes could be written about General Motors, dubbed recently Govt Motors. The illegal trampling of their bondholders is well covered. Their executives just requested $15 billion for walking around money during the bankruptcy hearing that began on Monday. Actually it is for continued operating costs. So AIG is the basket case ‘Ward of the State’ in the financial sector. So Fannie Mae is the basket case ‘Ward of the State’ in the mortgage & housing sector. Now General Motors is the basket case ‘Ward of the State’ in the industrial sector. Here is a wrinkle that few have considered. The issue arose in the 2005 near death experience suffered by GM. To confuse matters, the GM corporate bond resolution might cause a firestorm. My guess is that 5x the volume of CDSwaps are in circulation to insure against default of their outstanding corporate bonds true volume. The orderly resolution of CDSwaps might cause a powerful unwanted rally in GM bonds, even though dead. An embarrassing situation perhaps is coming. The resolution of Lehman Brothers corporate bonds was highly disruptive. GM has much greater debt volume, $172.81 billion to be exact. Since 2005, the Powerz have attempted to let GM bonds expire and roll over into more controllable securities. It could become wild.

GM is to emerge from the restructure process much smaller company, geared to selling much less profitable smaller cars. The United Auto Worker members are still attached to the USGovt umbilical line, with cost. The new & improved Govt Motors will be peddling a $40k electric hybrid called the Volt, while Toyota continues its production of the $20k electric hybrid Prius. Can anyone detect a price and experience differential in the financial transmission? Anyone who has any knowledge of competition head to head against government-run businesses should see the prospect of unexpected future losses of great magnitude at Govt Motors. Competing against high level bureaucrats who crowd executive offices is an easy prospect. Not to be dismissed, the USGovt is certain to order huge fleet purchases. By the way, evidence mounts that the main trait in common with the Chrysler dealers shut down last month were their campaign donations to the Republican National Committee by the victimized dealers. The business of politics is very consistent. Watch for a similar theme in GM dealer shutdowns. Just a footnote. The sale of the Hummer division is in the news. Each vehicle sold to the USMilitary was subsidized by a $25k payment directly to General Motors, to keep America strong.

The nation would be better served by giving every GM worker a $120k cash grant designed to assist widespread business startups, like bankruptcy counseling, import-export firms, internet software ventures, math-science tutoring, landscape services, security for abandoned empty homes, tent city planning, second sourcing for ammunition, research on the US Constitution versus fascism and communism, even lemonade stands. If 10% of new business ventures grew into viable businesses, that movement would easily eclipse the Govt Motors rebirth initiative. The costs this year and next year to General Motors will be staggering, whose estimates are way too low. The nation is obsessed with supporting failed businesses, starting with Wall Street banks, and now with industry in the heartland.