It is easy to speak when you are not the one losing a job or finding that at an advance age – having worked at G.M. all your life – you may not be able to get a decent job. But tough times are here to shape a better future, and letting G.M. survive with a bail out won't be the right answer.
I always had my doubts over Rick Wagoner, I found distress knowing that he always enjoyed a wide support from every employee and car dealer of G.M., meaning that everyone is to blame for the mismanagement. Just after reading an article on the New York Times from David Brooks I came to realize that he is right. Saving the big three will send the wrong message to other companies that are in trouble. After all as David puts it "are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?."
Maybe if Ford, G.M. and Chrysler file for chapter 11 they may never recover. But that may be the right signal to send to the companies, you either have a genius like Steve Jobs on your ranks, or you may find yourself begging for money after years of incompetent management. Obama is trying to save Detroit sinking the very own foundations of the American spirit of development.
Those millions of jobs related to this companies that may be lost will put even greater pressure on the already belated job market. No matter what the outcome is the government must assure people that it will take care of workers left out with no jobs, but it will also need to make sure that stock holders and the high management team are left with nothing.
It will be painful to see one of the big three falls into bankruptcy, it may never emerge from chapter 11, but companies like Google will grow stronger trusting their entrepreneur instincts rather than bad calls that could stalled them for years. A bail out on Detroit will only mean that CEOs like Wagoner could still find a high paid job while millions of really hard working smart guys are left unemployed.
If any of the big three survives this crisis it could emerge stronger, really embracing a new technology to transform those polluting machines that we drive today. It could also mean that no matter how iconic a company may be, it knows that it is on its own to forge a stable and prosperous future because Uncle Sam won't be there to save it.
This will also mean that if the government does protect workers, they will feel comfortable working at any company even when it is facing trouble times, they will feel that the state will back them, after wiping out all the big investors money. This will show Kirk Kerkorian to better know where he puts his millions, and stock holders to see a sweet deal when it appears.
We will see what happens if by this Friday nothing really shows that Democrats will have the votes to save the car companies. G.M. does not have enough cash to make it until Obama assumes the presidency next January. So maybe before 2008 ends being the worst year in recent memory, we will find that the big three may be the small two, or the lonely one.
lunes, 17 de noviembre de 2008
jueves, 13 de noviembre de 2008
One more joke Rick!
I know, Rick can´t say that G.M. will face bankruptcy unless it gets that so needed money from the US government. Mr. Wagoner was self assuring on CNBC ´s interview with Phil LeBeau telling him that G.M. does not think about going bankrupt, the country can´t allow that to happen.
The US should not allow that to happen, that is true. When Lehman Brothers was left to the sharks the spiral of chaos unfolded much faster than anyone had anticipated. On the other hand I always thought that Mr. Wagoner was a lousy CEO. G.M. has been losing ground for several years now, it changed its big monster cars years after Toyota was enjoying a PR success called Prius.
I don´t know much about mechanics, but as a consumer I can feel the engine´s power and gas consumption, even when I do not understand the specifics. With this in mind Asian cars like Hyundai, Toyota or Honda give me the sense that they are more fuel efficient, have more power and are more comfortable. I would rather buy any of them than any of the G.M. brand.
Talks with Chrysler were fine now that we are facing recession. Talking about not getting a deal while your stock it’s at $4.36 is just stupid. If there is a lesson out of another lousy CEO like Jerry Yang is that you have to do what is best regardless of what your feelings are.
Mr. Yang rejected a $44.6 billion takeover by Microsoft back in February, instead he went to Google to cross a deal in advertising. Google backed off that deal facing possible inquiries of monopoly leaving Yahoo with a $12.2 a share as on Friday.
Microsoft´s proposal was for $31 per share, you know a bad move when you see it.
This could make G.M. a possible candidate for chapter 11, burning roughly $2.3 billion a month on Q3 it faces a huge liquidity problem as soon as January. Even with $15.2 billion in “available liquidity” it cannot risk to get to its minimum needs to get cash infusion. That is when Rick needs to run to Capitol Hill to beg for some money.
A bankrupt G.M. won´t be good for anyone being the same case as AIG. This confronts those two face phony Republicans that claim a free market wonder, just to bail out almost every big player in the American economy.
My concern does not lie on G.M.´s future, it goes to the fact that Rick Wagoner is just inept. If you hear him claim that G.M. needs around $11 to $14 billion minimum to operate and it has roughly $15.2 billion on cash liquidity, burning around $2.3 billion a month, then you now if has less than 2 more months until if goes below its minimum level.
Maybe it is time to show the exit door to Mr. Wagoner and teach an important lesson to stock holders, hey! fire the big boss before he brings down the company, do not reward him with millions of dollars on bonuses, do not give them a second chance.
To all those free market lovers, please accept the fact that free market does work but letting it be “free” could destroy the world economy as we know it. Rick Wagoner was defending that bail out of the auto industry saying that the domino effect that G.M. could cause if it goes out of business could prove devastating to the entire economy. If you are a free market pundit you may feel comfortable stating that AIG should be on chapter 11 with Lehman Brothers, Wachovia, IndyMac, Meryl Lynch, G.M., Ford, maybe Chrysler and Freddie and Fannie.
If that is the case then our current economic situation will be catastrophic, yes the world would have learn its lesson and we may waking up someday in the long future with a much stronger system, but for many years we could have suffered tremendous devastation in every corner of our economy.
When Mr. Wagoner says that in difficult times policymakers need to be ahead of the problems instead of reacting to the problems, it sound as if he never was told that the price of oil was jumping and people were looking for fuel efficient vehicles. He is talking about his own mistake for years, he is telling policymakers not to do what he did, making it sound as if he never crossed that path.
Do not react, that is a huge lesson. About 240000 jobs were lost this past month, maybe it is time for Rick Wagoner to be part of that statistic.
The US should not allow that to happen, that is true. When Lehman Brothers was left to the sharks the spiral of chaos unfolded much faster than anyone had anticipated. On the other hand I always thought that Mr. Wagoner was a lousy CEO. G.M. has been losing ground for several years now, it changed its big monster cars years after Toyota was enjoying a PR success called Prius.
I don´t know much about mechanics, but as a consumer I can feel the engine´s power and gas consumption, even when I do not understand the specifics. With this in mind Asian cars like Hyundai, Toyota or Honda give me the sense that they are more fuel efficient, have more power and are more comfortable. I would rather buy any of them than any of the G.M. brand.
Talks with Chrysler were fine now that we are facing recession. Talking about not getting a deal while your stock it’s at $4.36 is just stupid. If there is a lesson out of another lousy CEO like Jerry Yang is that you have to do what is best regardless of what your feelings are.
Mr. Yang rejected a $44.6 billion takeover by Microsoft back in February, instead he went to Google to cross a deal in advertising. Google backed off that deal facing possible inquiries of monopoly leaving Yahoo with a $12.2 a share as on Friday.
Microsoft´s proposal was for $31 per share, you know a bad move when you see it.
This could make G.M. a possible candidate for chapter 11, burning roughly $2.3 billion a month on Q3 it faces a huge liquidity problem as soon as January. Even with $15.2 billion in “available liquidity” it cannot risk to get to its minimum needs to get cash infusion. That is when Rick needs to run to Capitol Hill to beg for some money.
A bankrupt G.M. won´t be good for anyone being the same case as AIG. This confronts those two face phony Republicans that claim a free market wonder, just to bail out almost every big player in the American economy.
My concern does not lie on G.M.´s future, it goes to the fact that Rick Wagoner is just inept. If you hear him claim that G.M. needs around $11 to $14 billion minimum to operate and it has roughly $15.2 billion on cash liquidity, burning around $2.3 billion a month, then you now if has less than 2 more months until if goes below its minimum level.
Maybe it is time to show the exit door to Mr. Wagoner and teach an important lesson to stock holders, hey! fire the big boss before he brings down the company, do not reward him with millions of dollars on bonuses, do not give them a second chance.
To all those free market lovers, please accept the fact that free market does work but letting it be “free” could destroy the world economy as we know it. Rick Wagoner was defending that bail out of the auto industry saying that the domino effect that G.M. could cause if it goes out of business could prove devastating to the entire economy. If you are a free market pundit you may feel comfortable stating that AIG should be on chapter 11 with Lehman Brothers, Wachovia, IndyMac, Meryl Lynch, G.M., Ford, maybe Chrysler and Freddie and Fannie.
If that is the case then our current economic situation will be catastrophic, yes the world would have learn its lesson and we may waking up someday in the long future with a much stronger system, but for many years we could have suffered tremendous devastation in every corner of our economy.
When Mr. Wagoner says that in difficult times policymakers need to be ahead of the problems instead of reacting to the problems, it sound as if he never was told that the price of oil was jumping and people were looking for fuel efficient vehicles. He is talking about his own mistake for years, he is telling policymakers not to do what he did, making it sound as if he never crossed that path.
Do not react, that is a huge lesson. About 240000 jobs were lost this past month, maybe it is time for Rick Wagoner to be part of that statistic.
miércoles, 5 de noviembre de 2008
A New Era in Black and White
Obama is the next US President, now what?
For most of the world – as we saw on the Economist electoral vote – Obama was the right choice to be America's President. Many see an amiable America after his is sworn to the office next year. But things are tough, and so will be his presidency.
The myriad problems that the world faces are only beginning to unfold, the current crisis is reaching to untold levels of complex derivatives that government officials are trying so hard to hide. We are at a benighted stage, the future looks dim and with the price of oil going down there are two new foreign policy aspect to take into account.
First of all Obama must deal with global warming. We saw some light when oil prices were trading above $150 per barrel, now they price is below $70 meaning that people could afford to drive big guzzling cars.
Second the financial crisis is creating a plethora of opportunities for a few really wealthy people to increase even more their income, leaving the vast majority with less money to cover their basic needs.
The world seems to have acknowledged that change is needed, even with nuance upon basic proposals the broad picture is objective to the blindest. But as we all know, whatever is cheap and brings more money, is what we will buy in the end. So with prices falling down and with no signs of recovering in the near future, oil is the king again.
Although this is good for consumers, for oil exporting countries it could prove to be devastating. If low prices are the trend then Obama may have an easier time in dealing with Russia, Venezuela and Iran. Those countries facing low prices and therefore lower income will need to cut back on costly social programs.
On the first front Obama will need to push to customize subsides on alternative energy, that is until companies have enough production to cut costs and be competitive. This or taxing oil – which won't happen any time soon. The great advances on fuel efficient cars could prove inadequate under low prices at the pump. Solar panels, wind farms, research on bio fuels, all compete directly with fossil fuels, and with oil being cheaper there is no space for any other source of clean energy.
We face a world in which pundits have a hard time adjusting to a cultural reality; capitalism won't fade even when banks fall into the government's hands. An ominous challenge is to regulate without strangulating entrepreneurs, without giving too much on subsides, without risking tax payer´s money. We sure miss high oil prices for a green future, we don't when it comes to geopolitics.
This brings us to the second problem, the financial crisis and the leaders that were the apotheosis of failure are still managing the possible solutions to hinder this recession. They failed at preventing this mess, and now they think they can get the world out of it. Shame on them.
Few harbingers were accurate when smelling the whole that was being dig underneath the housing bubble that busted. Among the future tellers that weren´t is Alan Greenspan. He is still surprise that the economy did not act according to what the theory stipulates. Maybe he is mistaking macroeconomic calculus with the theory of gravity.
Obama must deal with the most severe recession since War World II mixed with rough regimes and the threat of Al Qaeda. Printing money won't get the country out of debt, it will increase its dependence on foreign “aid” just when there is no foreign money. China holds over a trillion dollars on US debt, it cannot allow the dollar to fall so it needs to keep on buying government papers. China suffers when the Fed lowers interest rates, at present time it is 1% – lower than inflation. China loses money each time that this happens.
Those tawdry international investors who win when they speculate with the ups and downs of the market, are the ones that hurt poor countries around the world. They bet against the dollar, then against the euro, then against the peso, all of this in micro deals that create a sweeping vacuum machine that suck money out of every continent.The next US President must deal with these voracious investors as he tries to calm the market and the common people that are raving against the Wall Street´s greedy. Saving Wall Street means that Main Street will suffer, but the pain won't be as bad if the government chooses to let Wall Street fall. Punishing speculators will be impossible; the first step will be to push for more regulation and more power to international entities, something that Bush and his doctrine of isolation don't want.
More regulation will only minimize the problems, we will see if the dynamic of the US economy is enough to take it out of this crisis, and later if faith on the market could make honchos invest again.
The market teeters with no clear direction or signs of prompt recovery. The dollar strengths no because its economy is getting stronger, but because the others are doing much worse. Obama must prioritize the resurge of the US with unshakable leadership. Like Sarkosy in Europe the US must lead our continent to a sole and unify policy toward this global mess. Most of our governments will take scathing measures if they react as late as usual, this will only dampen the steady growth that Latin America has enjoyed in the last years.
Obama could not allow the lacunae in our financial world to become a plight chaos of epic proportions as it swallows every dream in which we have forged our society. He must act right now by getting the best and brightest into his ranks. He must not dodge at any difficulty, if he is to become a legend, he must put the country first, even before his party´s principles.
For most of the world – as we saw on the Economist electoral vote – Obama was the right choice to be America's President. Many see an amiable America after his is sworn to the office next year. But things are tough, and so will be his presidency.
The myriad problems that the world faces are only beginning to unfold, the current crisis is reaching to untold levels of complex derivatives that government officials are trying so hard to hide. We are at a benighted stage, the future looks dim and with the price of oil going down there are two new foreign policy aspect to take into account.
First of all Obama must deal with global warming. We saw some light when oil prices were trading above $150 per barrel, now they price is below $70 meaning that people could afford to drive big guzzling cars.
Second the financial crisis is creating a plethora of opportunities for a few really wealthy people to increase even more their income, leaving the vast majority with less money to cover their basic needs.
The world seems to have acknowledged that change is needed, even with nuance upon basic proposals the broad picture is objective to the blindest. But as we all know, whatever is cheap and brings more money, is what we will buy in the end. So with prices falling down and with no signs of recovering in the near future, oil is the king again.
Although this is good for consumers, for oil exporting countries it could prove to be devastating. If low prices are the trend then Obama may have an easier time in dealing with Russia, Venezuela and Iran. Those countries facing low prices and therefore lower income will need to cut back on costly social programs.
On the first front Obama will need to push to customize subsides on alternative energy, that is until companies have enough production to cut costs and be competitive. This or taxing oil – which won't happen any time soon. The great advances on fuel efficient cars could prove inadequate under low prices at the pump. Solar panels, wind farms, research on bio fuels, all compete directly with fossil fuels, and with oil being cheaper there is no space for any other source of clean energy.
We face a world in which pundits have a hard time adjusting to a cultural reality; capitalism won't fade even when banks fall into the government's hands. An ominous challenge is to regulate without strangulating entrepreneurs, without giving too much on subsides, without risking tax payer´s money. We sure miss high oil prices for a green future, we don't when it comes to geopolitics.
This brings us to the second problem, the financial crisis and the leaders that were the apotheosis of failure are still managing the possible solutions to hinder this recession. They failed at preventing this mess, and now they think they can get the world out of it. Shame on them.
Few harbingers were accurate when smelling the whole that was being dig underneath the housing bubble that busted. Among the future tellers that weren´t is Alan Greenspan. He is still surprise that the economy did not act according to what the theory stipulates. Maybe he is mistaking macroeconomic calculus with the theory of gravity.
Obama must deal with the most severe recession since War World II mixed with rough regimes and the threat of Al Qaeda. Printing money won't get the country out of debt, it will increase its dependence on foreign “aid” just when there is no foreign money. China holds over a trillion dollars on US debt, it cannot allow the dollar to fall so it needs to keep on buying government papers. China suffers when the Fed lowers interest rates, at present time it is 1% – lower than inflation. China loses money each time that this happens.
Those tawdry international investors who win when they speculate with the ups and downs of the market, are the ones that hurt poor countries around the world. They bet against the dollar, then against the euro, then against the peso, all of this in micro deals that create a sweeping vacuum machine that suck money out of every continent.The next US President must deal with these voracious investors as he tries to calm the market and the common people that are raving against the Wall Street´s greedy. Saving Wall Street means that Main Street will suffer, but the pain won't be as bad if the government chooses to let Wall Street fall. Punishing speculators will be impossible; the first step will be to push for more regulation and more power to international entities, something that Bush and his doctrine of isolation don't want.
More regulation will only minimize the problems, we will see if the dynamic of the US economy is enough to take it out of this crisis, and later if faith on the market could make honchos invest again.
The market teeters with no clear direction or signs of prompt recovery. The dollar strengths no because its economy is getting stronger, but because the others are doing much worse. Obama must prioritize the resurge of the US with unshakable leadership. Like Sarkosy in Europe the US must lead our continent to a sole and unify policy toward this global mess. Most of our governments will take scathing measures if they react as late as usual, this will only dampen the steady growth that Latin America has enjoyed in the last years.
Obama could not allow the lacunae in our financial world to become a plight chaos of epic proportions as it swallows every dream in which we have forged our society. He must act right now by getting the best and brightest into his ranks. He must not dodge at any difficulty, if he is to become a legend, he must put the country first, even before his party´s principles.
Que Viva América!
draft-
You have to give it to the blue giant of the West. Yes they brought the financial crisis with those greedy bastards at Wall Street stealing billions of dollars, but they also gave us a huge lesson about how the future will look like.
Obama did not win the presidential election by getting 100% votes of black people, he won the election by getting, whites, blacks, Latinos, woman and Asians on his side. As you watched the crowd celebrating on Chicago you can see the diversity of the country.
Only in America could a black man with a Muslim background be elected president. Black people achieved through him the highest job on earth. It does not get any better than that, and it gives you a perspective of how the world will look like in the future.
Russia, Japan, China, India will never imagine to elect a minority leader as president, neither will a middle east country elect someone that is not Muslim, and sure enough Israel won´t have a catholic as Prime Minister.
But the US little by little is embracing its different emigrants into its main power. Now they have a black man as President and a woman as majority leader of the house. Nancy Pelosi is a tough leader who managed to succeed in a man´s only congress.
What is emerging and great about this is that Democrats being more tolerant have taken most of the seats available on the senate. They end up having a strong majority on every power seat in the country. The rest of the world may be thinking, what?
Yes the US made a lot of mistakes, mainly caused by a monochromatic party, but also by contempt to its minorities. Latinos felt abandoned by republicans, blacks no doubt about it since Katrina. A lot of changes are happening fast, the main one, America thinks green
Obama is not a black President he is a human President of the most diverse country in the world. You have to give it to America, they have done it again, they elected the most capable guy because he was most capable. As he will be sworn as the 44th President of the US next year many of the rest of the world will be thinking, is this true?
It is true, and more than that, this is the future, right now, right here. Que Viva América with all its flaws and all its achievements. Many black people were crying with joy when Obama was coming to the stage. The next leader could be a Latino, of maybe an Asian, a woman, or a regular white guy. It does not matter anymore, you truly have the chance of being something in America.
All those US haters may be left with little to cheer for, yes you hate the country but still have family there, or friends, or like a band, of the language, of their technology, sure you have doubts about the war on terror, but felt empty when the twin towers felt on that horrendous day.
It is not a matter of a new day for the US, it is something to embrace and think in the rest of countries. Unless you have the best of all cultures, of all people, you will be left as a third world country.
Every minority in the world is winning everything, from sports to elections. Take into account that we all are similar in the end. When it comes to color we prefer green, and not the kind of good green that could save the world, but the evil green that is making it disappear.
Anyways, I saw a nice picture of a pretty blond girl on top of her dad´s shoulders cheering for Obama just behind a young Latino guy. On another shot there was an Asian lady holding a camera just as a white commentator announced the latest results.
Congratulations to Obama and all that he carried on with this election. May he hold his word and have the courage to fight all the problems that the nation faces. McCain also made a special conceding speech saying that he feels that being an American is more important than any other thing. To all of us that face differences in our own countries this prove to be a life lesson, only if we unite as a nation to be better. We do not back our elected leaders, we wish them the worst, and that only mean, that we all get the worst.
You have to give it to the blue giant of the West. Yes they brought the financial crisis with those greedy bastards at Wall Street stealing billions of dollars, but they also gave us a huge lesson about how the future will look like.
Obama did not win the presidential election by getting 100% votes of black people, he won the election by getting, whites, blacks, Latinos, woman and Asians on his side. As you watched the crowd celebrating on Chicago you can see the diversity of the country.
Only in America could a black man with a Muslim background be elected president. Black people achieved through him the highest job on earth. It does not get any better than that, and it gives you a perspective of how the world will look like in the future.
Russia, Japan, China, India will never imagine to elect a minority leader as president, neither will a middle east country elect someone that is not Muslim, and sure enough Israel won´t have a catholic as Prime Minister.
But the US little by little is embracing its different emigrants into its main power. Now they have a black man as President and a woman as majority leader of the house. Nancy Pelosi is a tough leader who managed to succeed in a man´s only congress.
What is emerging and great about this is that Democrats being more tolerant have taken most of the seats available on the senate. They end up having a strong majority on every power seat in the country. The rest of the world may be thinking, what?
Yes the US made a lot of mistakes, mainly caused by a monochromatic party, but also by contempt to its minorities. Latinos felt abandoned by republicans, blacks no doubt about it since Katrina. A lot of changes are happening fast, the main one, America thinks green
Obama is not a black President he is a human President of the most diverse country in the world. You have to give it to America, they have done it again, they elected the most capable guy because he was most capable. As he will be sworn as the 44th President of the US next year many of the rest of the world will be thinking, is this true?
It is true, and more than that, this is the future, right now, right here. Que Viva América with all its flaws and all its achievements. Many black people were crying with joy when Obama was coming to the stage. The next leader could be a Latino, of maybe an Asian, a woman, or a regular white guy. It does not matter anymore, you truly have the chance of being something in America.
All those US haters may be left with little to cheer for, yes you hate the country but still have family there, or friends, or like a band, of the language, of their technology, sure you have doubts about the war on terror, but felt empty when the twin towers felt on that horrendous day.
It is not a matter of a new day for the US, it is something to embrace and think in the rest of countries. Unless you have the best of all cultures, of all people, you will be left as a third world country.
Every minority in the world is winning everything, from sports to elections. Take into account that we all are similar in the end. When it comes to color we prefer green, and not the kind of good green that could save the world, but the evil green that is making it disappear.
Anyways, I saw a nice picture of a pretty blond girl on top of her dad´s shoulders cheering for Obama just behind a young Latino guy. On another shot there was an Asian lady holding a camera just as a white commentator announced the latest results.
Congratulations to Obama and all that he carried on with this election. May he hold his word and have the courage to fight all the problems that the nation faces. McCain also made a special conceding speech saying that he feels that being an American is more important than any other thing. To all of us that face differences in our own countries this prove to be a life lesson, only if we unite as a nation to be better. We do not back our elected leaders, we wish them the worst, and that only mean, that we all get the worst.
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