Auto Bailout Talks Breakdown

December 12th, 2008 12:13 am | by John Jansen |

Talks to bailout the three big US auto companies appear to have ended in failure. Congressional negotiators were unable to reach an accord.

Stocks have broken down hard. Dow futures are down 316 points and S and P is down 39 points. I am writing at 1107 PM and that quote is 19 minutes old.

Once again using lagged quotes the 2 year note yields 0.67 percent, the 10 year yields 2.51 percent and the 30 year yields 3.01 percent.

The Euro is $1.34 and the yen has a 90 handle.

I love the smell of napalm in the morning.

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  1. 15 Responses to “Auto Bailout Talks Breakdown”

  2. By Tom Lindmark on Dec 12, 2008 | Reply

    You had it right this morning. No politician is going to let this happen. If the market dives on the opening or even the close for that matter, buy auto related equities. The bounce up when they finish the charade will be rewarding.

  3. By John Jansen on Dec 12, 2008 | Reply

    I cant believe they will walk away myself.

    I also never thought that they would let Lehman bleed to death

  4. By Comrade on Dec 12, 2008 | Reply

    holy polony, JPY at 89

  5. By John Jansen on Dec 12, 2008 | Reply

    Just saw that.

    Do you have live Treasury quotes?

  6. By Comrade on Dec 12, 2008 | Reply

    I’m not sure, whether it’s realtime, though my Reuters terminal says it is

    2y@ 0,0697
    10y@ 2,5
    30y@ 3.027

  7. By Comrade on Dec 12, 2008 | Reply

    2y@ 0,685

  8. By Comrade on Dec 12, 2008 | Reply

    0#USBMK=_BMKMaturity_Ask 0#USBMK=_BMKMaturity_Bid Spread
    1M -0.0051 0.0456 -0.0507
    3M 0.0051 0.0152 -0.0101
    6M 0.1979 0.1979 0.0000
    1Y 0.4720 0.4770 -0.0050
    2Y 0.6773 0.6932 -0.0159
    3Y 1.0057 0.0700
    5Y 1.4084 1.4181 -0.0097
    10Y 2.4870 2.4920 -0.0050
    30Y 2.9963 2.9990 -0.0027

  9. By Kaizen on Dec 12, 2008 | Reply

    This somehow seems on topic… and out of reach for the out-of-touch unions, political morons and the coke snorting TARP corporations that are consumed by greed and stipidity:

    This philosophy of small steps toward improvement was introduced to Japan after the war, when General Douglas MacArthur’s occupation forces began to rebuild that devastated country. If you are familiar with Japan’s corporate dominance in the late twentieth century,

    you may be surprised to hear that many of its postwar businesses were run poorly, with slack management practices and low employee morale. General MacArthur saw the need to improve Japanese efficiency and raise business standards. A thriving Japanese economy was in MacArthur’s best interest, because a strong society could provide a bulwark against a possible threat from North Korea and keep his troops in steady supplies. He brought in the U.S. government’s TWI specialists, including those who emphasized the importance of small, daily steps toward change. And, at the same time that MacArthur was holding forth on small steps, the U.S. Air Force developed a class in management and supervision for the Japanese businesses near one of its local bases. The class was called the Management Training Program (MTP), and its tenets were almost identical to those developed by Dr. Deming and his colleagues at the beginning of the war. Thousands of Japanese business managers were enrolled.

    The Japanese were unusually receptive to this idea. Their industrial base destroyed, they lacked the resources for sweeping reorganization. And it wasn’t lost on Japanese business leaders that their country had been defeated by America’s superior equipment and technology—so they listened closely to the Americans’ lessons on manufacturing. Viewing employees as a resource for creativity and improvement and learning to be receptive to subordinates’ ideas was an unfamiliar notion (as it had been for Americans), but the graduates of these

    programs gave it a try. These entrepreneurs and managers and executives went on to work in civilian industries, where they excitedly spread the gospel of small steps.

    In the U.S., Dr. Deming’s series of strategies for enhancing the manufacturing process were largely ignored once the troops were home and production was back to normal. In Japan, however, his concepts were already part of the emerging Japanese business culture. In the late 1950s, the Japanese Union of Scientists and Engineers (JUSE) invited Dr. Deming, the wartime proponent of quality control, to consult further on their country’s economic efficiency and output. As you probably know, Japanese businesses—which rebuilt themselves on the bedrock of small steps—soon rocketed to unheard-of levels of productivity. Small steps were so successful that the Japanese gave them a name of their own: kaizen.

  10. By nrolland on Dec 12, 2008 | Reply

    the 90 limit broke…. down to 88.52 : nice drop

  11. By John Jansen on Dec 12, 2008 | Reply


  12. By BL on Dec 12, 2008 | Reply

    Letting GM fail will wreak havoc not just in Michigan, but Ohio, Indiana, Illinois, and PA. No Republican would ever again represent those states, so there will be action. The southern senators will listen to their constituents and let Bush take the heat.

    A good time to buy high yield corporate bonds?

  13. By Danny on Dec 12, 2008 | Reply

    good morning!
    is the down in the market only because of the Autos?
    I believe the Madoff ‘bash’ will have a lot to do with the sell-off…

    Could you please give us your thoughts on the biggest Hedge Fund Scandall – Ponzi Scheme?


  14. By Sharon on Dec 12, 2008 | Reply

    I think they’ll eventually come back to the table. But, this is their first and best chance to in 50 years to tame the auto unions.

    “I love the smell of napalm in the morning.”

    Yep, “it smells like…victory.”

  15. By aaron4unitruth on Dec 22, 2008 | Reply

    There are many reasons why the bailout of Wall street and the auto industry is wrong but most importantly because the federal government is far more powerful than it was ever meant to be. Now the government can be a stockholder? Sounds too much like socialism.

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