Archive for December, 2008

Remember back during the initial debate on the $700 billion bailout? Remember how we were led to believe the economy would collapse if they didn’t pump taxpayer money into mortgage securities? It sure took them long enough didn’t it?

The Federal Reserve said Tuesday that it will begin purchasing up to $500 billion in mortgage-backed securities early next month in an effort to bolster the long-suffering housing market.

The Fed first announced that it would purchase the securities, which consist of pools of mortgages that are bundled together and sold to investors, in late November but did not say when they would begin. The central bank will buy securities guaranteed by the government-controlled home loan giants Fannie Mae, Freddie Mac and Ginnie Mae, a federal agency.

Oh no! Are we going to have bailout Dow Chemical now too?

Kuwait decided on Sunday to scrap a deal to form a $17.4 billion petrochemical joint venture with U.S. company Dow Chemical.

The cancellation of the deal, which had met opposition in Kuwait’s parliament, was acknowledged Sunday by Dow and is a blow to the largest U.S. chemicals company. Dow had planned to use the proceeds to repay a large part of $13 billion in debt it will have to shoulder once its acquisition of rival Rohm & Haas closes, which is expected to be in early 2009.

Hell, we own everything else already, why not a chemical company too?

Wow. I own a stake in investment firms, banks, insurance companies, mortgages, and now GMAC and GM.

Attention government guys: I would prefer to take said ownership in GMAC out of my current loan, thank you very much.

The government said on Monday it was pumping $5 billion into auto and mortgage lender GMAC LLC and lending up to $1 billion to automaker General Motors, (GM.N) ensuring the solvency of a company considered crucial to GM’s survival.

The Treasury Department said it would buy $5 billion in senior preferred equity with an 8 percent dividend from GMAC. It also said it is lending up to $1 billion to GM to help GMAC reorganize itself as a bank holding company.

Do they really think that GMAC failed to obtain ‘bank holding status’? The powers that be at Team RePO would never let that happen.

Even after a crucial deadline came and went, the financing arm of General Motors Corp. remained silent Saturday on whether it cleared a final hurdle to become a bank holding company and gain access to billions in federal bailout money.

Analysts have speculated that if GMAC Financial Services LLC doesn’t obtain financial help it would have to file for bankruptcy protection or shut down, which would be a serious blow to parent GM’s own chances for survival.

I have no doubt they made it, and I have no doubt that my hard earned tax money will be flowing into the GMAC and GM coffers anytime (if they haven’t already).

The headline reads, “Retailers’ holiday sales plummet 4 percent“.

Retailers’ sales fell as much as 4 percent during the holiday season, as the weak economy and bad weather created one of the worst holiday shopping climates in modern times, according to data released on Thursday by SpendingPulse.

The figures, from the retail data service of MasterCard Advisors, show the 2008 holiday shopping season was the weakest in decades, as U.S. consumers cut spending as they confront a yearlong recession, mounting job losses and tighter credit.

Four percent is a plunge? With unemployment nearing 8% and everything else going on with the economy, they think 4% is bad? Think about it…

If a retailer usually makes $1,000,000 during the holiday season, they (on average) only made $960,000 this year. Most of the major retailers who will be bitching about the 4% “plummet” make far more than that. They should be thankful holiday sales only fell four percent and not a lot more, like it did at the Gap or A&F.

I hope you all had a very Merry Christmas, now back to reality. It seems everyone is making predictions these days.

The US economy shrank in the third quarter, official data confirmed Tuesday, as the IMF’s top economist warned of a second Great Depression offering no respite from relentless gloom ahead of Christmas.

The abrupt 0.5-percent contraction of gross domestic product (GDP) in the world’s largest economy was seen as marking the start of a steep downturn for the United States after GPD growth of 2.8 percent in the second quarter.

Merry Christmas & Happy New Year!

One company’s failure is another company’s success.

Top U.S. electronics retailer Best Buy Co has been gaining market share as rival Circuit City closes stores, and smart cost cutting could keep it shining throughout 2009, Barron’s said in its December 22 edition.

The weekly business newspaper said that while Best Buy shares were off by a third since it ran a bullish story on the company earlier this year, the retailer has been making the most of its rival Circuit City’s woes, after that company filed for bankruptcy.

It’s not too difficult to do well, when you are the only store in town.

Wouldn’t you love to work in an industry that pays you a huge salary and bonuses even when you’re running your company and the economy into the toilet? Oh wait, it looks like some of people already do.

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Who cares if 116 banks could have been saved just with the perks many of these CEO’s received. I’m sure many of them just couldn’t live without their company jets, chauffeurs, and country club memberships.