No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for January 21st, 2009

For those of you who still have the Still Spinnin’ blog on your rolls…

by @ 19:57. Filed under The Blog.

…this activation of the Emergency Blogging System is for you. Huckleberry Dumbell reports that the URL for Dan Deibert’s old place has been taken over by a pR0n site.

This concludes this message from the Emergency Blogging System.

For We and Me?

by @ 14:53. Filed under Miscellaneous.

On his first full day in office, President Obama issued several executive and operating orders.   Most notable to me were the Presidential Memorandum on Transparency and Open Government, and the Presidential Memorandum on the Freedom of Information Act:

News outlets and other groups and individuals submit FOIA requests when they are seeking information they believe should legally be made public. Mr. Obama said he wants agencies to make public such information whenever possible instead of looking for reasons to withhold it.

President Obama also noted that his executive orders applied not only to agencies but to himself as well.

I applaud President Obama’s desire to create an openness and transparency in Washington.   If his administration is truly focused on serving “the people,” this will be essential.   My only question is, does this transparency start today or would it apply in general?   For example, if there was still a question about Obama’s birth certificate that could be easily resolved by releasing a legitimate copy of it via an FOIA request, would he do it?   I mean, what could be more transparent than a birth certificate?

Emergency Roll Bloat – I heard he missed us edition

by @ 7:40. Filed under The Blog.

That’s right; the best blogger to come from East Central Wisconsin found his pencil and something to write on. Please give a warm welcome back to Kevin Binversie and Lakeshore Laments.

Since I won’t have time to do a Scramble this morning, I may as well burn the theme song of the day.

[youtube]http://www.youtube.com/watch?v=b_lio51Z1qc[/youtube]

Worst. Inauguration. Evah.

by @ 7:14. Filed under Business, Economy.

Or so say the equities markets; I stayed away from anything broadcasting news of the corona…er, inaugura…er, coronation. How bad did the markets take it? Let’s review some selected lowlights from Bloomberg’s story:

– The Dow Jones Industrial Average plunged 4%, the worst percentage drop on Inauguration Day in the history of the average.
– The S&P 500, off to its worst start of a year ever (11% over 12 trading days), plunged 5.3%.
– The S&P 500 Financials Index is at a near-14-year low, closing at its lowest level since March 1995, with all 81 companies lower at the close.
– One professor who saw the meltdown coming says that the US banking system is “effectively insolvent”, with capital of $1.4 trillion and possible losses of $3.6 trillion.

I wonder what will happen when (I no longer believe “if” applies) the Treasuries markets are no longer able to absorb all the debt being printed up and proposed to be printed up.

Fiat Hearts Chrysler

by @ 5:25. Filed under Economy, Politics - National.

News out today that Fiat has obtained a 35% interest in Chrysler.   They have an option to increase their stake to 55% although those terms weren’t disclosed.

Anyone buying a 35% in a rapidly failing company in a flailing industry is news.   Obtaining a 35% interest in a company while providing no cash remarkable.   Why would Chrysler give up 35% of what admittedly is a company that has nearly zero worth, for an agreement that brought no cash?

According to the published reports, the marriage makes sense for both companies.   Fiat has wanted to reenter the US market.   Via Chrysler, they have access to a dealer network and a lot of unused production capacity.   Chrysler is supposed to get access to Fiats design work which is supposed to be particularly good in mid and compact cars.   While the arguments for the combination make some sense, I saw a nearly throw away comment in the article that caught my eye:

“However,” he warned, “the deal does not provide Chrysler with any new liquidity commitments from Fiat, which could reflect a desire by Fiat to protect its investment under future downside scenarios for Chrysler.”

This is another lesson in the unintended consequences of government activity.

I have no doubt that both parties see benefits in their arrangement.       However, it’s clear from the statement in the article that the only real reason this relationship exists is because the government has provided $4 billion with the promise of much more to come.     That last bit is why Chrysler is willing to give away 35% of itself for little more than nothing.

Chrysler must present a plan to the Auto Czar by May 1st.   This plan needs to show how they will satisfy the shrill calls for greater fuel efficiency and make a profit.    How credible the plan is will weigh on the Czar’s decision not only to advance more funds, but  whether the already advanced $4 billion should be yanked backed.     Chrysler has ranked near the bottom of fleet fuel efficiency and have no magic beans to quickly grow something saleable in the efficiency market.   Additionally, Chrysler is sitting on a ton of excess capacity.   Capacity/overhead costs, that  will be a substantial drain on their ability to show profitability in any reasonable time.   Fiat provides answer to both of those questions.  

It’s pretty clear that Fiat has no interest in supporting Chrysler if they get no additional government funding.   If the government cuts Chrysler off, Fiat will just rip up their otherwise worthless contracts and look for another alternative, maybe even pick up some of the bankrupted assets on the cheap.

While you’ll hear lots of reports in the papers and even during follow up hearings, as the automakers beg for more money, about how much Fiat ♥ Chrysler, don’t be fooled.   There wouldn’t and won’t be any marriage if the government is holding a shotgun paid for by taxpayers money!

Update 1/21 – Dad29 pointed out that reports out this morning are saying that Fiat only   ♥ Chrysler if Chrysler brings an additiona $3 billion dowery.   Being right so often is a burden I gladly bear for NRE’s readers :)

These People Know How to Party!

by @ 5:12. Filed under Economy, Politics - National.

As reported by the Agency who shall not be named and others, Hamas supporters spent the day celebrating the fact that even though they suffered numerous casualties and destruction, they weren’t wiped off the face of the earth.

I’m wondering if we should be taking notes.

The Hill.com is reporting today that a “stimulus bill” of $1 trillion is not even enough for some Democrats:

"Some of us are saying we need a stimulus of 1.2 or 1.3 or 1.4 trillion to prevent a depression, rather than just slow our descent into a depression," said Rep. Jerrold Nadler (D-N.Y.).

Hamas is partying after losing and suffering economic damage of a paltry $2 billion.   Think of how big our party will be after Congress flushes $4 trillion ($2 trillion Treasury won’t tell what they spent it on, $700 Billion TARP and the stimulus plan), and have nothing more to show for it than “We aren’t dead yet!”  

Now that I think of it, wouldn’t we all have a lot more fun and probably stimulate the economy just as much,  if instead of waiting until the $4 trillion is spent, we take it and put it all towards a party now?

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