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Monday, February 23, 2009


government soliciting DIP financing for automakers

the journal.

Outside advisers to the U.S. Treasury have started lining up the largest bankruptcy loan ever, talking with banks and other lenders about at least $40 billion in financing for General Motors Corp. and Chrysler LLC, in case the two auto makers need it, said several people familiar with the matter.

While acknowledging the grimness of the task, administration officials involved in the auto talks said they are trying to find a way to restructure the two companies without resorting to bankruptcy proceedings. They stressed the latest efforts were "due diligence" on the part of the government advisers, and that bankruptcy financing may not be necessary.

Still, people involved in talks with senior Obama administration officials said that the administration believes that the option of Chapter 11 filings by the two auto makers needs to be seriously considered.

this locks in that the carmakers, unlike the banks, will be hustled into bankruptcy. given the general incompetence on display in both washington and detroit these days, i am hardly sanguine about the prospect. the hope is for reorganization, but the chance of liquidation is not small. either way, massive tranches of jobs will be cut, denting already-strange government notions of demand management. and i'm half certain no one in congress or the administration has considered the potential fallout to synthetic CDOs.

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i'm sure glad 'change' came to america!

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ooops, anon was me gm.

i wonder where all the lefties who criticized everything bush did for 8 years will be on this one, when the new administration proves to be just as clueless and incompetent as the last one.

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i voted for the man, ccd, as you know -- there was no real choice, given the alternative -- but the early performance of the obama administration has been incredibly bad.

summers and geithner look ever more like a terrible mistake at the key pivot. your resume doesn't matter if you're just a cipher for the busted money center banks. both should be hustled out of office on a rail before they're allowed to devastate the american economy by refusing to actually proactively fix the problems rather than sit around and concoct ways to be sure their patrons can be bailed out by the taxpayer. the depression will be bad enough without delaying the financial system fixes you actually can do something to effect.

unfortunately, the one thing summers does well is politics -- it will take a change of heart from obama himself. let's hope rahm emanuel can knock summers off.

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"unfortunately, the one thing summers does well is politics..": someone should get him on tape talking about women in science again.

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