[Spridgets] I like Peter Egan but....

David Riker davriker at nwi.net
Tue Mar 10 09:09:06 MST 2009


I just don't see AIG paying back their loan EVER that they seem to be 
getting without question....

The great depression was caused by LEVERAGE.  Our current situation is also 
being caused by LEVERAGE.  It doesn't matter that it is a house, a business 
venture, an insurance policy, a comodity, or a derivitave.  If you borrow 
money to buy something you can't afford in the hopes that you can handle the 
payments with cash flow and sell it at a profit to somebody else who will 
borrow the money, handle the payments with cash flow, with the hopes of 
selling it to someone else at a profit, you have a ponzi scheme.  Pyramid 
ponzi schemes always fail.  Ours is failing.  The automakers borrowed money 
(stocks and bonds) against their assets (factories, reputation, future 
sales) with the hopes of paying the interest with cash flow (daily sales) 
with the hopes of paying it all off by selling (more stocks, or in the case 
of Chrysler, another owner).  The pyramid is now too big to support itself, 
the cash flow (daily sales) no longer cover the payments (billions each 
quarter) and the whole thing is coming down.  The question is, DO YOU WANT 
TO PAY FOR THE CRASH IN MONTHLY PAYMENTS, OR ALL AT ONCE, BECAUSE YOU AND I 
ARE GOING TO PAY FOR IT... PERIOD.

David Riker

----- Original Message ----- 
From: "Dean Hedin" <dlh2001 at comcast.net>
To: "Spridgets" <spridgets at autox.team.net>
Sent: Monday, March 09, 2009 9:11 PM
Subject: [Spridgets] I like Peter Egan but....


>I just can't agree with his latest column.
> http://www.roadandtrack.com/article.asp?section_id=26&article_id=7716
>
> The way I see it is that the "people who make things" are already hurting 
> due to decreases demand across the
> entire auto industry.
>
> So the arguement that GM going into Chapter 11 will cause a cascade of 
> failure of suppliers just does'nt hold.
> The suppliers are already hurting.  The suppliers have already laid off a 
> bunch of "people who make things".
>
> The government should have told GM & Chrysler to go pound sand back in 
> December.  Instead of dragging this thing out and
> throwing more good money after bad.
>
> It should have then provided conditional low interest loans to Ford (or 
> any other automaker operating a factory in the US that was
> not
> asking for a bailout).  The condition being some sort of reward program 
> for rapid re-hiring of displaced auto workers and suppliers.
>
> It was a miracle that Lee Iacoca was able to repay the 1.3 billion loan 
> for the Chrysler bailout.
>
> I just don't see GM ever paying that bailout money back..not ever.
>
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