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12/24/2008
12/22/2008
Crisis? You ain't seen crisis yet ...
CIT Group Inc., the commercial lender that ran short of cash this year, won federal approval to convert to a bank holding company, a step toward getting an investment of as much as $2.5 billion from the U.S. government. The stock rose 7.7 in extended trading.
The Federal Reserve Board’s approval allows CIT to retain some non-banking subsidiaries, the Fed said in a statement today. The New York-based lender sold shares and bought back debt in order to raise enough cash to meet the government’s financial targets.
CIT joins financial firms including American Express Co. and Discover Financial Services in the rush to collect retail deposits and get access to the U.S. Treasury’s rescue fund. The government has earmarked $700 billion to prop up companies hobbled by the worst financial crisis since the Great Depression. CIT has said it may seek $2.5 billion by selling preferred shares to the Treasury’s Capital Purchase Program.
“Today’s announcement is an inflection point in CIT’s 100- year history,” Chief Executive Officer Jeffrey Peek said in a separate statement. “Bank holding company status is expected to provide us increased access to funding and a new platform from which we will serve our middle-market and small-business clients.”
Other firms seeking bailout money include auto and home lender GMAC LLC and Genworth Financial Inc. and Hartford Financial Services Inc. The two insurers announced plans to acquire lenders to qualify for federal funds. Stink
There's something terribly wrong here. Credit entities created from whole cloth to avoid the strictures of legal banking practices and good common sense are now scrambling to become 'banks' under the guidelines of this current 'bailout' frenzy. Nevermind the fiscal or fiduciary considerations, disregard the regulations that have been on the books since your parents were babies - consider the implications.
If these lending institutions are granted the same status as banks - then they have all the protections granted under the FDIC. The federal government will guarantee their 'investments' to the tune of a quarter of a million dollars per account holder. Think Lamborghini in the place of a simple savings account. Buy THIS car and nothing can go wrong because it is guaranteed by the United States government.
Same with houses - or small businesses. Think about it. Nothing has been said about reining in the process, au contraire, they want to expand the ability of people to borrow money from as many outlets as possible. Not unlike the situation with Fanny Mae and Freddie Mac. Which brought the economic world to its knees.
Here's what I think. I think the very notion, the whole concept of credit as an instrument of purchase has been so twisted by any number of sources, that we stand at the precipice of collapse. Not that I think we should return to currency under written by gold - but hang on a minute. Whatever happened to good old-fashioned thrift and accountibility?
It is BECAUSE people, and government, have not saved that we are where we are now. Toyota just announced its worst quarter in history - 70 years. But they have 18 billion in cash and zero future debt. They can weather what our own industries cannot. They saved their money for a rainy day. We blow our wad if a kid gets the hiccups. And then it doesn't help.
Let the market decide. Those left standing will be the stronger for it and those savaged by it will still have the largesse of the government as backup. I can see no reason why the taxpayer should keep throwing money at those who got us in this position in the first place. In fact, doing that will only make the inevitable that much more painful.
The Presidenator?
Governor Arnold Schwarzenegger hasn't said if he would pursue another job in politics after his term
ends in two years. But there's one position he might be interested in,
if he were eligible for it: president.
"Yeah, absolutely," Schwarzenegger said in an interview Sunday
when asked by "60 Minutes" correspondent Scott Pelley if he would like
to be president.
At the moment, becoming president would be impossible.
Schwarzenegger, who was born in Austria and became a U.S. citizen in
1983, is not a "natural born citizen" of the U.S., as required by the
Constitution. He might be back ...
McCain was born outside the United States and Obama's father was not a citizen of the United States, is it too far a stretch for the Terminator? Granted, we'd like to have a person in the Whitehouse who was Disraeli, Jefferson and Einstein combined - but that ain't gonna happen - look what we actually get. I'm open to this.
12/21/2008
When will 'hope' and 'change' meet 'reality'?
_________________________
Constructora Sambil, the company building the mall, did not immediately
respond to requests for comment. It operates Sambil malls in cities
across Venezuela, including another vast shopping center in Caracas.
Chavez objected to the new mall scheduled to open in Caracas' downtown
La Candelaria district next year, saying the area is already so crowded
that "not a soul fits." The hulking concrete and brick structure takes
up an entire city block and according to the Sambil Web site was to include 273 shops.
The Venezuelan leader said it would be out of line with his
government's socialist vision to allow such a mall to take up precious
urban real estate—and that unbridled consumerism isn't his idea of
progress either. "How are we going to create socialism turning
over vital public spaces to Sambil?" said Chavez, who has nationalized
Venezuela's largest phone company, electric utilities and oil fields. The president also has urged Venezuelans to shed their materialism and their taste for designer clothes, sport utility vehicles, Scotch whisky and plastic surgery.
Yet consumerism has flourished in recent years, with the economy awash
with cash and windfall oil earnings rolling in. Malls are often packed,
and new shopping centers have been sprouting up quickly. The president did not say how much the government might pay the mall's owners in compensation. Link
CARACAS, Venezuela - President Hugo
Chavez ordered construction halted on a major shopping mall in Caracas
on Sunday, saying the government will expropriate the unfinished
building.
B. Fidel & Raul Castro
C. Mahmoud Ahmadinejad
D. Evo Morales
E. Robert Mugabe
F. Daniel Ortega
G. Bashar al-Assad
H. Muammar al-Gaddafi
I. All of the above within the first year
12/20/2008
Big Brother - tool of the Left
BEIJING- China has blocked access to the New York Times Web site, the newspaper said Saturday, days after the central government defended its right to censor online content it deems illegal. Computer users who logged on in Beijing, Shanghai and Guangzhou received a message that the site was not available when they tried to connect on Friday morning, the paper said. Some users were cut of as early as Thursday evening, it said. The Web site remained inaccessible from Beijing Saturday.
It was not clear if the move was meant to block specific content on the newspaper's Web site or if it was a return to stricter censorship of the Internet in general. Beijing loosened some media and Internet controls during the 2008 Summer Olympics - gestures that were meant to show the international community that the games had brought greater freedom to the Chinese people. A spokesman for the Foreign Ministry said they do not deal with Web sites. The Ministry of Industry and Information Technology, which regulates the Internet, could not be reached for comment. Ah so...
Has anyone heard a peep out of the Left? Anyone? And yet, Harry Reid is said to be plotting a re-visitation of past Republican transgressions - especially the 'invasion of privacy' issues brought on by the Bush administration with the Patriot Act. I hear those on the Left howl often about their 'lost privacy' but they can never cite a single example and how it affects them personally. Moreover, Google and the incoming Obama administration are working to digitize everyone's medical records and hold them on Google servers. Democrats are pushing hard to get the so called 'card check' law passed, which would eliminate secret ballots in Union labor voting.
As the worm turns in ...
Did you happen to catch that 'statement' made by Blagojevich yesterday? Setting aside his legal justifications, political machinations and personal considerations, there's something terribly wrong and not just in Illinois - it's happening everywhere. I'm not so naive to think American politics hasn't always had its share of bad apples, but it seems to me the worms are winning and democracy is being spoiled. I have several ideas why that is and what to do about it, but I'd rather hear yours.
