Thursday, November 13, 2008

Barney Frank writes legislation for US bailout

Don't you love this picture of US Rep. Barney Frank? He seems to be a college professor mulling over one of his student's attempts at placating him.

These are truly historic times we are living in and the incessant barrage of news stories about the economy (US and global), stock markets, bankruptcies and bailouts testify accordingly. Something I have been watching closely is the US automaker death spiral. The Big Three are anything but and if they do not receive a gratuitous cash injection, they may all be belly up before Barack Obama can get sworn in and work his magic. At least for GM, bankruptcy is as real as death and taxes at this point. Even though Rick Wagoner swears that this is not an option, we all know without government assistance, it will become reality.

The latest manuverings are being perpetrated by the current US "lame duck" session of Congress as it tries to force the Treasurer's hand in doling out some of the 700 billion dollars that was recently authorized. Congress is expected to convene this coming Monday, November 17th.

From Automotive News:

"The government's stake in U.S. car companies would be determined by the Treasury Department, under a House proposal to rescue the Detroit 3.

Taxpayers also would be paid back first when the automakers recover, Steve Adamske, a spokesman for Rep. Barney Frank, D-Mass., said in an interview today. Frank chairs the House Financial Services Committee.

The terms outlined by Adamske are among the details beginning to emerge as Congress prepares legislation to provide emergency low-interest loans to General Motors, Ford Motor Co. and Chrysler LLC. Frank is scheduled to introduce his bill Monday."

Hmmm. So we are supposed to believe that taxpayers are going to be paid back first AND that this would be a loan? I am highly skeptical, at best.

Do you think this will really be a "loan" or will it be monies thrown at the Big Three in a desperate attempt at staving off bankruptcy, only to be lost later when these companies are beyond salvation?

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