General Motors Death Looms

I don't get upset anymore about ridiculous things that go on in the world. Instead I cheer.

The latest tomfoolery is the ongoing saga of General Motors courtesy of the New York Times. http://www.nytimes.com/2009/05/27/business/27auto.html?_r=1&ref=business.

There are two points in the article worth stressing. The first is the governments ownership stake in GM. Everyone knows governments should own car companies (there is no rational debate here). In this endeavor great strides have been accomplished as the government is set to take a larger stake in GM post bankruptcy with an ownership interest around 70%. Way to go everyone.

I personally can't wait for my new car. I'm imagining a green car that gets 200 miles to the gallon, costs $400,000 to make but only costs me $20,000 to buy due to credits, subsidies, rebates, tax relief, and other government programs. Of course the government will take a loss on the car but c'mon people it will be so green. Have a heart. I'll take 10 please.

The second point worth mentioning is the Debtor in Possession Financing the government is going to be contributing to GM. The number is estimated at 50 billion dollars..... Please. Chump Change. I don't get phased for anything less than a trillion these days.

On that note 10 year treasury yields have risen to their highest in quite some time at 3.5%. Apparently some people think the US government is spending more than it receives and are selling long-term treasuries. Blasphemy. I purpose hunting such traitors down and locking them in jail (without a trial of course).

Remember if these rates keep climbing the recovery is doomed. The stock market is a sideshow. The only thing that matters is the bond market.

The Best Ideas of the Economic Crisis

The following is a list of the best ideas of this financial crisis.

1) It's pretty clear to everyone with half a brain that Medicare/Medical, Social Security, the Pension Benefit Guaranty Corporation, and a whole host of other government programs are woefully underfunded. The best solution? Simple. Leverage them up. With a higher debt load these programs can increase their return and solve all of our problems.

2) I heard an awfully funny rumor that Moody's and S&P were in danger of being downgraded and placed on negative watch.

3) The Dow Jones is very shortly going to need a replacement for General Motors. Some of the talk of replacements include Apple and Google. My suggestion? The United States Government. It's certainly large enough and it owns financial companies, car companies, insurance companies, and more.

4) The problem in the housing market is too much supply. All these foreclosed houses just keep adding inventory to the housing market. The solution is simple. Destroy the supply. Literally. Just take a bulldozer to the houses. Everyone is a winner. Yay.