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Suddenly, Welcome to The World of 'Moral Hazard'
Excerpt....
"Now, with big banks dropping like flies and Wall Street vaporizing amid a mortgage meltdown, every corner bar and hair salon is filled with experts on the perils of moral hazard. Everyone gets it: Cut risk down to next to nothing and some people do crazy things.
Borrowers across America took a dive for low- or no-down-payment mortgages buoyed by the Federal Reserve's low-risk interest rates. Wall Street sliced the mortgages thinner than prosciutto ham, "spreading risk," and sold pieces all over the world, where, like magic, they seemed to fatten balance sheets. The deal was so win-win that Bear Stearns, Lehman, Merrill and the rest of the world's mega-banks engorged on their own product. It was as if foie gras geese forced corn and fat down their own throats. The risk of exploding seemed to be nil.
For behind it all sat Fannie Mae and Freddie Mac, running mortgage liquidity into the nation's neighborhoods like an open fire hydrant. Several years ago, when the Journal's editorial board met with Fannie Mae's top executives and pressed the issue of financial risks, we were told by way of ending the conversation that Fannie was merely fulfilling the "mandate of Congress" to spread home ownership across the land. Congress, of course, is a temple to moral hazard."
Congress got us here; back door dealings and stupid ideas have been presented to get us out of here....
When the solutions come from the same folks who created the problems, beware! Excerpt.... ... more -
Tight credit, financial chaos slam auto sales
DETROIT (AP) -- Tight credit, economic worries and high gasoline prices combined to crush the sales of U.S. and foreign automakers alike last month, with Ford, Toyota, Chrysler and Nissan all posting drops of more than 30 percent.
Ford Motor Co.'s 34 percent decline marked its worst sales month this year, and the results across the industry are a strong indication that the financial turmoil that has swelled since mid-September is pushing the auto industry deeper into its trough.
General Motors Corp., buoyed by its offer of employee pricing on most of its vehicles, saw U.S. sales drop a less severe 16 percent, boosting the automaker's market share to its best level all year.
Dealers from many manufacturers said their customers are having an increasingly hard time qualifying for loans to buy autos, as banks have restricted lending because of widespread mortgage defaults that led to disruptions in the financial markets and the collapse of several banks. Plus, several automakers' finance arms have limited or discontinued leasing.
Jim Farley, Ford's group vice president for marketing, said economic conditions have raised uncertainty among buyers.
"Even if you have good credit, there's a reluctance to pull the trigger on a big ticket item," he said.
Nissan Motor Co., which posted significant sales increases in July and August, saw its sales plunge 37 percent on double-digit drops in demand for nearly every one of its models.
Chrysler LLC said its sales tumbled 33 percent, and Toyota Motor Corp.'s sales fell 32 percent. Honda Motor Co., one of the few automakers that had posted sales growth through August, reported a 24 percent drop.
George Pipas, Ford's top sales analyst, said nearly all automakers saw "extremely weak" sales in the waning days of the month as the Wall Street crisis grew and Congress debated the government's $700 billion bailout of the financial industry.
"It was tantamount, really, to a natural disaster," he said.
GM's market share grew to more than 28 percent in September because it experienced smaller sales drops than its competitors, said Mark LaNeve, the automaker's vice president of North American sales.
The share did not come with the expense of incentives, which he said averaged only $100 per vehicle more than in August and were flat from July to August despite the monthlong employee pricing offer, LaNeve said.
Incentive spending was reduced, he said, because GM did almost no leasing during the month.
But even though it may have gained market share, LaNeve said the numbers were still down year-over-year.
"A few years ago I'd have jumped out the window with these numbers, and we're on the 39th floor here," he said in a conference call from GM's downtown Detroit headquarters.
If overall U.S. industry sales drop in September, it will be the 11th straight monthly decline when compared with the year-ago period. That would be the longest string of down months since 14 straight negative months ended in December 1991, according to Autodata Corp. The industrywide figures were unavailable until later Wednesday. DETROIT (AP) -- Tight credit, economic worries and high gasoline prices combined to crush the sales of U.S. and foreign automakers ali... more -
Bush approves $25 billion loan package for auto makers
WASHINGTON (Reuters) - President George W. Bush on Tuesday signed into law a mammoth spending bill to keep the government running until early March 2009 that includes a $25 billion loan package for troubled automakers.
The action came after the Senate over the weekend gave final congressional approval to the more than $630 billion spending bill that was needed to finance defense, education, farm, health, foreign aid and other government programs after the current fiscal year expired on September 30.
The spending legislation allows a ban on offshore drilling to expire on September 30. Democrats had hoped to extend the ban, but did not have the votes to overcome strong opposition from Republicans.
Bush, in a statement announcing that he had signed the legislation, said the measures to lift the ban on offshore drilling "will allow us to reduce our dependence on foreign oil."
The bill sets aside $7.5 billion in taxpayer funds needed to guarantee $25 billion in low-interest loans to help General Motors Corp, Ford Motor Co and Chrysler LLC produce more fuel-efficient cars and trucks.
U.S. automakers have said the taxpayer-backed loan package
would give them access to capital at a time when credit markets are shut and they are being driven to invest in new technologies to meet tough new federal fuel economy standards. WASHINGTON (Reuters) - President George W. Bush on Tuesday signed into law a mammoth spending bill to keep the government running unti... more -
You Want BioDiesel? Take a look at this!!
Oil to Fuel one step continuous process
Oil to Fuel in seconds
All known feedstocks
Ageless Catalyst
Process Benefits
1) Current waste products can be turned into fuel.
2) No use of strong acids or bases in the process.
3) Fast reaction times (seconds).
4) Cheap feedstocks such as waste grease and animal tallow as well as a variety of plant oils can be converted to biodiesel.
5) The metal oxide based catalyst is a contained in a fixed bed reactor thereby eliminating the current need to continuously add catalyst to the reaction mixture thereby reducing the amount of waste produced.
6) Unwanted side reactions with free fatty acids producing soaps are eliminated, thereby reducing the amount of waste that must be disposed of properly.
7) Insensitive to free fatty acid and water content of the feedstocks.
8) Flexible feedstock; animal or plant sources of lipids can be used.
9) The catalyst does not "poison" over time.
pretty cool, eh? Oil to Fuel one step continuous process Oil to Fuel in seconds All known feedstocks Ageless Catalyst ... more -
Senate passes $600 billion spending bill
The Senate overwhelmingly passed a spending bill Saturday that allows a 26-year ban on offshore oil drilling to expire, subsidizes federal loans for automakers and offers aid to Gulf Coast hurricane disaster victims.
The House already passed the $600 billion stop gap funding bill on Wednesday. The bill, which passed the Senate on a 78-12 vote, will continue government spending at the current level through March 6, 2009.
President Bush is expected to sign the measure.
The end to the ban on oil drilling off the Atlantic and Pacific coasts is a major victory for Republicans. Speeches at the Republican National Convention last month were often interrupted with chants of "Drill, baby, drill."
The ban will be lifted October 1.
Republicans on Capitol Hill have seized on drilling as a major election year issue, citing multiple public opinion polls that show a majority of Americans support more offshore drilling. House Speaker Nancy Pelosi, D-California, had incurred Republican wrath for originally blocking any vote on drilling before allowing a vote on limited drilling earlier this month.
The spending bill includes $25 billion in loan guarantees for U.S. automakers, $23-24 billion in disaster aid for flood and hurricane recovery efforts, $2 billion for Pell grants for student loans and $5.2 billion for low-income energy assistance.
Democrats decided to get a vote on this funding measure out of the way but plan to move an economic stimulus package separately. The stimulus package is still being crafted but would likely include an extension of unemployment benefits, food stamps, aid to states for Medicare and Medicaid and billions for infrastructure programs designed to add more jobs to a slowing economy. The Senate overwhelmingly passed a spending bill Saturday that allows a 26-year ban on offshore oil drilling to expire, subsidizes fed... more -
Senate Lifts Offshore Drilling Ban In Huge Spending Bill
Senators have passed a spending bill that aids Gulf Coast disaster victims and subsidizes federal loans for automakers. President Bush is expected to sign the measure despite some reservations.
The $634 billion bill provides money to keep the government running until the next president takes office.
The 78-12 vote Saturday also lifts a quarter-century ban on oil drilling off the Atlantic and Pacific coasts. That's a big victory for Republicans.
The Democrats have once again caved into Bush's demands.
Republicans say ending the drilling ban should lower gasoline prices. Democrats say it won't mean additional oil production for years.
Then why did lift the ban?
The lifting of the offshore oil drilling moratorium does not mean drilling is imminent. But it could set the stage for the government to offer leases in some Atlantic federal waters as early as 2011.
The low-interest loans for automakers are intended to help the companies develop technologies and retool factories to meet new standards for cleaner and more fuel-efficient cars.
After hard lobbying, automakers won up to $25 billion in low-interest loans to help them develop technologies and retool factories to meet new standards for cleaner and more fuel-efficient cars.
The legislation also contains 2,322 pet projects totaling $6.6 billion, according to Taxpayers for Common Sense, a watchdog group. That included 2,025 in the defense portion alone that cost a total of $4.9 billion. Senators have passed a spending bill that aids Gulf Coast disaster victims and subsidizes federal loans for automakers. President Bush... more -
How to slip $25 Billion past the Main Stream Media...
A $25 Billion Lifeline for GM, Ford, and Chrysler
September 24, 2008 05:45 PM ET | Rick Newman
In Washington these days, an 11-figure expenditure barely attracts notice.
With Congress preoccupied with the massive, $700 billion bailout plan for the financial industry, General Motors, Ford, and Chrysler have finally secured Part One of their own federal rescue plan. A bill set to be passed by Congress and signed by President Bush as early as this weekend -- separate from the controversial Wall Street bailout plan -- includes $25 billion in loans for the beleaguered Detroit automakers and several of their suppliers. "It seemed like a lot when we first started pushing this," says Democratic Sen. Debbie Stabenow of Michigan, one of the bill's sponsors. "Suddenly, it seems so small."
But please don't call it a "bailout" -- Detroit is too proud for that. Exact details will come later, but the loans would probably amount to at least $5 billion for each of the Detroit 3, plus smaller amounts for suppliers. That would allow them to borrow money at interest rates as low as 4 percent -- a steep discount compared with the double-digit rates they're paying now. Over several years, the automakers could save hundreds of millions in financing costs. Plus, they'll have five years before they have to start repaying the loans.
yeah, right... "Suddenly it seems so small." A $25 Billion Lifeline for GM, Ford, and Chrysler September 24, 2008 05:45 PM ET | Rick Newman ... more -
VW Jetta TDI Diesel vs. Toyota Prius Reviews - Volkswagen Fuel Economy Beats Prius
Well if you read the fine print, the Prius is better in town then the VW on MPG. On the highway the VW beats the Prius but just by a small margin.
The writer prefers the VW for driving pleasure or as the Germans call it "farfegnugen". Well if you read the fine print, the Prius is better in town then the VW on MPG. On the highway the VW beats the Prius but just by a s... more -
61mpg VW Golf BlueMotion concept headed to Paris
"Vw's math is excellent, as the Golf BlueMotion outdoes the Toyota Prius and any other production hybrid by about 10mpg, for equal or less cost and no worries about batteries or complicated regenerative systems"
The BlueMotion diesels are supposed to have very low emissions.Maybe these VW's will be for sale in the US soon. "Vw's math is excellent, as the Golf BlueMotion outdoes the Toyota Prius and any other production hybrid by about 10mpg, for... more -
GM unveils Volt on company's 100th anniversary
"The Volt is due in showrooms by November of 2010." GM's Lutz said in an interview that the car won't be ready sooner because of the complexity in building an entirely new powertrain
"GM said the Volt will cost about 80 cents to fully charge at a rate of 10 cents per kilowatt-hour, which is about the national average. After that, the batteries will be recharged by a small gasoline engine that allows the car to travel hundreds more miles. GM said the engine will be able to run on E85 ethanol, a blend of 85 percent ethanol and 15 percent gasoline."
The Volt sounds pretty good .....I want one now! "The Volt is due in showrooms by November of 2010." GM's Lutz said in an interview that the car won't be ready soo... more -
Ford readies economy cars for U.S.
Well this is a no duh sortta article. Though factual, it comes as no surprise that American Automakers are in survival mode.
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Volkswagen's First US Assembly Plant Will Be In Chattanooga, Tennessee
VW to build plant in Chattanooga
By: Mike Pare
Volkswagen AG will build its first United States assembly plant in Chattanooga, officials said today.
Europe’s biggest automaker said it will put a nearly $1 billion investment in Chattanooga’s Enterprise South Industrial Park.
The plant is expected to create 2,000 jobs. It is expected to open in 2011.
“The U.S. market is an important part of our volume strategy, and we are now very resolutely accessing that market,” said Martin Winterkorn, chief executive of Volkswagen.
Tennessee Gov. Phil Bredesen said he is “enormously pleased” by the announcement.
Mr. Bredesen and other officials including Volkswagen of America’s chief executive, were slated to be at Hunter Museum of American Art at 11:30 a.m. for an announcement.
“I believe Volkswagen chose Tennessee because of our shared values, our commitment to innovation and our strong respect for the environment,” he said.
Matt Kisber, commissioner of the Tennessee Department of Economic and Community Development, said he could not be more pleased in the partnership between the state, VW and Chattanooga and Hamilton County government.
Hamilton County Mayor Claude Ramsey said he has worked with four different city mayors and other officials with a vision of transforming the Volunteer Army Ammunition Plant site.
Chattanooga Mayor Ron Littlefield said VW and Chattanooga have a lot in common.
“Both are serious about environmental sustainability and 21st century manufacturing,” he said.
U.S. Sen. Bob Corker, R-Tenn., said the community has maintained its focus
Officials at the Wolfsburg-based company said the surging euro has pushed plans for a production facility forward. The 15-nation currency has hit record highs recently against the U.S. dollar, making goods exported from Germany more expensive in the United States.
Volkswagen recently moved its North American headquarters from suburban Detroit to Herndon, Va., outside Washington, to bring it closer to its East Coast customer base.
Tennessee Gov. Phil Bredesen, who landed in Chattanooga early today, said he is “enormously pleased” with the facility coming to Southeast Tennessee.
Erich Merkle, vice president of forecasting auto industry forecaster IRN Inc., said suppliers will build facilities to support the assembly plant.
Chattanooga beat out bids by Alabama and Michigan for the plant.
The announcement came Tuesday from Lower Saxony Minister President Christian Wulff, who sits on the supervisory board of Europe's largest automaker. VW to build plant in Chattanooga By: Mike Pare ... more -
General Motors blames its lagging hybrid tech on public.
Head of GM Rick Wagoner, speaking at an industry conference in Dallas commented, "We have to build cars and trucks that people want to buy," in response to why GM's hybrid lineup is lagging behind.
Autoblog continues, "..your company also has to have at least a modicum of foresight in order to be successful in the tough American market these days. For instance, Toyota is just now reaping the benefits of its hybrid electric vehicles, despite the fact that the automaker has been building them since 1997. Did Toyota know something that GM didn't? Not really". Head of GM Rick Wagoner, speaking at an industry conference in Dallas commented, "We have to build cars and trucks that people wa... more -
GM may become bankrupt
General Motors Corp will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the US auto market continues to slump, Merrill Lynch said. General Motors Corp will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible... more
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Ford to cut up to 12 percent of Salaried Jobs
DETROIT (Reuters) - Ford Motor Co (F.N) plans to cut its U.S. salaried work force by up to 12 percent after its turnaround plan stalled because of the downturn in the U.S. economy, the Detroit News reported on Wednesday.
Ford warned last week it would not achieve its long-standing goal of returning to profitability in 2009 because of the U.S. economic downturn and a permanent shift in demand toward cars and crossovers and away from large trucks and SUVs.
The automaker also told employees in a memo last week that it expected to make cuts in hourly and salaried employees by August 1 and would detail those steps in July.
The cuts would be involuntary and were still being worked out by Ford, the newspaper reported.
A Ford representative could not be reached immediately for comment.
(Reporting by David Bailey; Editing by Steve Orlofsky)
http://news.yahoo.com/s/nm/20080528/bs_nm/ford_cuts_dc_...
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Photo by Flicker user Ford Motor Company
Licensed under Creative Commons Attribution-Noncommercial 2.0 Generic
http://creativecommons.org/licenses/by-nc/2.0/ DETROIT (Reuters) - Ford Motor Co (F.N) plans to cut its U.S. salaried work force by up to 12 percent after its turnaround plan stalle... more -
Who is Stopping the Water Powered Car?
20 Billion dollars are being spent to stop water powered cars or hydrogen/oxygen powered cars, using 100% water as fuel is real. By spiltting water by electrolysis and creating hydrogen/oxygen gas, you can replace gasoline. We have been taught this is impossible! Engineers, scientists and professors may in fact tell tell you you're crazy to believe such non sense. They will also set out to prove you wrong. They base their laws of physics form 1825 thinking. Faraday's laws. Did you know that the first ICE engine ran on hydrogen from water? BMW has them! Hyunda will be making them. Japan indorses them. Many patents, inventions have been bought and there project is shelved, yes it is true. Some of the stubborn inventors who don't sell out disappear. Yes that's right. It happens in the US, Aus, NZ, UK and India. We are in a crunch to find alternative fuels. The pressure is on. War for oil is not the way to go. 20 Billion dollars are being spent to stop water powered cars or hydrogen/oxygen powered cars, using 100% water as fuel is real. By sp... more
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Schumacher fourth in debut motorbike race
He was just having fun
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The fomer head of the FIA Jean-Marie Balestre dies
Back in the day Balestre really busted some chops in F1.
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To the Indy Racing League, size matters
Its about time.
Obviously Mr Johnson the author of the linked article has never been involved in a professional racing series, his saying this rule is "absurd" shows how little he knows.
In every racing series I was involved in, the weight of the driver and car was a standard rule ... BTW... F1 weighs driver and car,.as well as Toyota Atlantic a series in which Danica Patrick raced in a couple years back.
It is an advantage to be lighter and that is just psychics, and at the highest levels, races are won and lost by fractions of a second.
I do believe Danica Patrick is a good racing driver and she is great for the sport. She's no Michael Schumacher, but who is, besides she is a lot better to look at. Its about time. ... more
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