Tuesday, 18 November 2008

The failure of the U.S. Auto Industry and the Ripple Effect


This is a promo to get Congress to bailout the US car makers. It's worth considering what will happen if these three companies collapse.

Recently US secretary Hank Paulson stated that he would not give money to the US car industry after he had just given hundreds of billions of dollars to the banks. And the banks, rather than using the money to alleviate the mortgage situation are looking to buy up other banks. The treasury money has not helped calm the situation.

It's likely that the big banks are letting the crisis play out so that they can acquire assets (ie other banks or institutions) at bargain basement prices.

[Posted at the SpookyWeather blog, November 18th, 2008.]

1 comment:

steven andresen said...

The business here is about extortion.

What do we do when someone tells us, give us your money or we start shooting the children?

If the police themselves are bought by the extortionists, do we just hand over the money. Or, do we try to hold our children close and see if we can trip up the extortionists ourselves? Or maybe, we just figure they will shoot the children no matter how much money we pay out.

I think the President's men telling Congress that we'd have martial law if they didn't sign the bailout was a crime and the Congress decided to pay the extortionists instead of having the children shot. However, I believe they smell blood and are not about to stop. It will be pay for bank bailouts, or we shoot the children. Pay for auto industry bailouts, or we shoot the children. Next it will be, pay for the hospitals and insurance companies bailouts, or we shoot the children. etc, etc, etc.

Or am I too optimistic?