Mr. Paulson only has roughly 30 days left in office and somehow he is convinced that he needs to take down the second tranche of TARP funds…

From the WSJ (emphasis mine):
In the very short-term, the allocated but not yet disbursed TARP balances, in conjunction with the powers of the Federal Reserve and the FDIC, give me confidence that we have the necessary resources to address a significant financial market event. It is clear, however, that Congress will need to release the remainder of the TARP to support financial market stability. I will discuss that process with the congressional leadership and the President-elect’s transition team in the near future.

How exactly is this clear?  What have the funds done to really help anything?  The banks have been recapitalized on the liability side (deposits); however they are just dropping that back into the fed and earning interest on it.  Credit is still jacked, consumers are still underwater, mortgages are a mess, home values are continuing to decline, we’ve entered the land of ZIRP and the fed is printing money.  For Pete’s sake, why does the Treasury need more capital?

Well, it looks like GM and Chrysler will get a $17.4 Billion Dollar cash infusion from the Executive Branch of our government.  They will get $13.4 Billion of it today, and another $4 Billion in February. The automakers have to prove viability via a number of possible methods, I’m sure they’ll be able to pull that off and we will be on the hook for more cash.

The good news is that this is a “positive” news clipping for the market.  Futures were up, and the market opened up stronger today.  I’m hoping that this news clipping provides the juice to get us up to 950 on the S&P. 

Okay, if anyone out there knows how I can personally become a bank I’d like the information.  It appears that the White House will likely announce the auto bailout tomorrow ( Bloomberg).  Here is the catch, they will likely not bailout the auto makers, they will bail out the credit arms.  Given that each of these companies own a lender, who is basically a bank, they can get TARP funds.

I had this discussion with a few folks at the office a week ago.  My take was that if the Congress said ‘No‘, then the treasury would back door this through GMAC and Chrysler Financial.  God forbid we allow the Congress to make a financial decision – that is there constitutional charge if I’m not mistaken.  GM isn’t bankrupt yet, and I’m sure they could keep hobbling around for a while without this backdoor cash injection from bailout Hank.

Let me tell you, these guys are all asking for billions, the bank of Barr’s would only need a few million and we’d be able to mop things up and create an extremely viable long term business model.  We are happy to lend money to credit worthy folks and would be happy to provide housing for those less fortunate.  For that matter, the Bank of Barr would be happy to take that TARP money and use it to keep folks in there homes.  I guess, with all of that stuff, I’ll up my request…. Maybe 1 billion would be nice… however, I’m sure I could talk Megan into only taking 750 million.

Hank, were can I fill out the application. I just aced my Accounting class at Kellogg so I’m sure I can keep reasonable books, heck I even know what mark-to-market is!

Yes indeed… Just as we gave a tax rebate for producers of “wooden arrows for children” when we bailed out the banks, it appears that our wonderful leadership in Washington feels the need to insert pork into the draft auto bailout bill round one.

I stumbled across this one tonight while reading my normal rss feed.  Forrest Maltzman over the themonkeycage.org noted it tonight, here is the link: http://www.themonkeycage.org/2008/12/a_holiday_package_for_the_uaw_1.html

Lately I wonder how we can even begin to call our “leadership” leaders.  This sort of garbage makes me sick.  I don’t have any problem giving Judges a raise, in fact, I fully support it.  Just past a “give the Judges a raise” bill.  Don’t load this into some other bill and try to hide it.  Our whole legislative process lately makes me want to puke.

I’m sure it has been this way for a long, long time.  I just haven’t read through a bill in a long, long time.  With these huge bailouts and issues, I’ve been reading lots of legislation.  All of it makes me ill.

The chief executives of GM and Chrysler said they could run out of
funds without the government’s support. GM CEO Rick Wagoner said the
package is needed to “save the U.S. economy from a catastrophic
collapse.” – http://online.wsj.com/article/SB122703811621838291.html

That is what happens when your business model is broken.  The Management of GM and Chrysler are coming to grips with the BROKEN businesses they run.  Saddled with UAW contracts and long term obligations that are simply ridiculous and a product line that no one wants, what else do these guys expect?

We bailed out Chrysler once before, what did that get us?  Another bailout request about 30ish years later.  If the business is broken, let the management fix it.

The reality is that if GM, Ford or Chrysler go down it will be very painful for the US.  However, a better business will pickup the pieces, hire the workers and get to moving on a new automotive front.  Toyota isn’t bankrupt, neither are Honda, VW and a myriad of others.  If GM Chrysler and Ford can’t make it on there own today, why should we believe they can do it tomorrow?

Just my two cents.