As spokesmen from Cerberus decline comment on their failed investment in GMAC, the recent bailout has them looking to the back door to slip out.
Two years ago it was unknown to Cerberus Capital Management that their purchase of 51-percent stake in GMAC would stand on the brink of bankruptcy. But, with the Fed's forcing conditions upon Cerberus, this offers an easy out for the privately owned company.
As there were talks of a possible merger between General Motors and Chrysler, which Cerberus owns majority stake, now the option appears to be off the table.
One condition placed before Cerberus by the Fed's was that they would reduce their 51 percent stake in GMAC to 33 percent of total equity and 14.9 percent of the voting shares. Also, co-investors of Cerberus would take control of their own holdings with GMAC instead of through Cerberus' fund.
Reuters states:
“It's a good thing for GMAC – it literally throws GMAC a lifeline,” said David Kukla, chief investment strategist on Mainstay Capital Management LLC. “So in that regard it's good for Cerberus and good for GM. They are stakeholders. GMAC desperately needed capital.”
According to someone with direct knowledge who is not authorized to talk publicly, says that the timetable and more details on the transfer will be provided early next year.
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There is a growing amount of international pressure toward Israel to adopt a cease-fire to “temporarily pause” the attacks on Hamas.
French Foreign Minister Bernard Kouchner proposed a cease-fire to Israeli officials that would last 48 hours to “get essential supplies into the territory, where 1.5 million Palestinians are running short of food, fuel and other goods.”
As Israel currently amasses ground troops along the Gaza border, Israeli Foreign Ministry spokesman Yigal Palmor said that “If a real proposal with credibility and guarantees is submitted to us, we will give it a very serious examination.” However, earlier in the day, the Interior Minister Meir Sheetrit told Israel Radio, as reported by The Washington Post:
There is no room for a cease-fire . . . The Israeli army must not stop the operation before breaking the will of the Palestinians, of Hamas, to continue to fire an Israel.
This coming as rockets pounded down 25 miles into Israeli city Beersheba, reaching the furthest strike to date.
The Washington Post also states:
“We have got to get a commitment from Hamas that hey would respect any cease-fire and make it lasting and durable,” [White House spokesman Gordon] Johndroe said. “Until Israel can get that assurance from Hamas, then you will not have a cease-fire that is worth the paper it is written on.” The scene in Gaza was the focus of intense diplomatic efforts Tuesday. Marie Okabe, the U.N. Deputy spokeswoman, told the Associated Press in New York that the Quartet group seeking to negotiate Middle East peace – the United States, the European Union, Russia and the United Nations – appealed to Israel and Hamas for an “immediate cease-fire.”
All this coming after the fourth day of relentless attacks, some 384 killed and more than 800 wounded.
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Billions of Federal injections came to General Motors today as they received one “bailout” after another, thanks mostly in part to GMAC.
Last Wednesday, GMAC had all but staked their claim of TARP funding by changing over to a bank holding company. With a deadline quickly approaching, and sweat beading from the brow of GM exec's, today the Treasury has allotted GM's financing arm $5 billion. However, the Treasury did not stop there. Another $1 billion would be lent to GM in order to help in the reorganization as a bank holding company.
Bloomberg reports:
The fresh capital from the Treasury's $700 billion Troubled Asset Relief Program will enable GMAC to expand lending to car buyers, which in turn may help save GM.
The
NYTimes states:
The Treasury will buy $5 billion worth of preferred equity shares in GMAC, which used to be the financing subsidiary of General Motors and is now owned jointly by GM and Cerberus Capital Management, the private equity firm that owns Chrysler.
Both GM and Chrysler had been, and still are, working very hard in order for this to be finalized. Both companies had spokespeople saying they were in final stages of completing all the paperwork.
Currently,
Reuters reports Ford Motor Co has said its liquidity was adequate for now and that it did not need a loan at this point. This comes at a time when both Chrysler and GM are dipping ever so deeply into their cash reserves.
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As statements come from countries' top officials, President Bush urges Hamas to cease attacks but offers to Israel to avoid civilian casualties.
The recent attacks from Hamas have sparked numerous casualties as 200 people are reported to be killed and some 750 injured. Of these reports, included are women and children.
Fox News reporting on behalf of the AP states:
Some of the Israeli missiles struck in densely populated areas as children were leaving school, and women rushed into the streets frantically looking for their children.
With these types of casualties, it has sparked a resounding worldwide response.
The
BBC reports the following quotes:
Spokesman for Ban Ki-Moon, UN Secretary General
“[He] appeals for an immediate halt to all violence [and reiterates] previous calls for humanitarian supplies to be allowed into Gaza to aid the distressed civilian population.”
Gordon Johndroe, White House Spokesman
“Hamas' continued rocket attacks into Israel must cease if the violence is to stop. Hamas must end its terrorist activities if it wishes to play a role in the future of the Palestinian people.
The United States urges Israel to avoid civilian casualties as it targets Hamas in Gaza.”
Spokesman for Javier Solana, EU Foreign Policy Chief
“We are very concerned at the events in Gaza. We call for an immediate ceasefire and urge everybody to exert maximum restraint.”
Russian Foreign Ministry statement
“Moscow considers it necessary to stop large-scale military action against Gaza [and] at the same time, we call on the Hamas leadership to stop shelling Israeli territory.”
As
The Times reports how Hamas is committed to the destruction of Israel, Israel “sought to Isolate Hamas by squeezing Gaza economically.”
This coming as
Bloomberg reports:
Hamas leaders said the cease-fire failed because Israel refused to remove restrictions on the flow of food, medical supplies and other goods through Gaza border crossings.
Israel has offered its own agenda saying,
“it will not speak to [Hamas] unless it recognizes the Jewish state, ceases all attacks and abides by past agreements signed by Israel and the Palestinian Authority.”
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Recently, the Feds "loaned" GM the funding neccesary to survive the economic downturn, and yesterday approved GMAC's request to become a bank holding company.
Using thier emergency powers, the Feds took a bold step in salvaging GMAC in allowing them to change to a bank holding company. Cerberus Capital Management LP, a majority owner of GMAC and Chrysler, along with GM are "required to reduce their stakes in GMAC."
The Wall Street Journal reports that:
As a federally-regualated bank holding company, GMAC potentially gets access to Treasury rescue funds. It also gets access to the Fed's discount window - which lends to financial institutions agains collateral in emergency situations. And GMAC potentially will have the ability to issue debt guaranteed by the Federal Deposit Insurance Corp.
Also,
Bloomberg reports:
The change may make it easier for GMAC to apply for a government capital injection through the Treasury's $700 billion financial bailout fund. The New York Times estimated GMAC may get as much as $6 billion, citing a formula used by the Treasury.
While this doesn't guarantee that the Treasury will grant any TARP funds toward GMAC, it would certainly make it easier to inject funds at the already failing auto industry giant General Motors. Noting that GM and Chrysler recieved cash infusions from not only the U.S. Treasury, Canada intervened with a cash investment alsok; North America seems willing to go to any steps to not let the auto industry to fail.
This is supported when
Bloomberg states: "GMAC joins more that 190 regional banks, commercial lenders, insurers and credit-card issuers seeking funds from the Treasury's bailout plan for financial firms."
The
WSJ reports that:
The next step for GMAC is a Friday deadline for bondholders to restructure $38 billion in debt. An earlier deadline for investors had already been extended several times, with GMAC even sweetening the terms of its debt exchange. The final deadline for the debt exchange is Friday.
Bloomberg reports that Julian Mann, a mortgage- and asset-backed bond manager at First Pacific Advisors LLC in Los Angeles, offers that "These guys should be in Chapter 11." And also, "We've now ogtten into the business of discouraging prudence and encouraging risky behavior and irresponsibility."
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It is no secret as to how Iranian President Mahmoud Ahmadinejad feels toward the West - and with a broadcast to be shown in Britain, he spreads a Christmas message that is sure to raise an outrage by some.
In what is being described as a “controversial counterpoint to Queen Elizabeth II's traditional annual message,” Ahmadinejad will deliver a seasonal greeting on Britain's Channel 4.
The Associated Press reports that:
In his recorded message, Ahmadinejad offers seasonal greetings to Christians and says he believes that if Jesus were alive, he would “stand with the people in opposition to bullying, ill-tempered and expansionist powers,” an apparent reference to the United States and its allies.
According to Ahmadinejad in a
pre-released transcript of the broadcast, is quoted as saying:
“If Christ were on earth today, undoubtedly He would hoist the banner of justice and love for humanity to oppose warmongers, occupiers, terrorists and bullies the world over.”
Ron Prosor, Israeli ambassador to London, offers that
“(Channel 4) should give an unchallenged platform to the president of a regime which denies the Holocaust, advocates the destruction of the sovereign state of Israel, funds and encourages terrorism, executes children and hangs gay people is a disgrace.”
He also goes on record saying:
"Outrage doesn't begin to explain it."
This certainly offers a differing view against Ahmadinejad, and one that paints him as a “warmonger, occupier, terrorist and bully.”
President Ahmadinejad's message is being broadcast to
“offer (the) viewers an insight into an alternative world view,” according to Dorothy Byrne, who is the head of news and current affairs at Britain's Channel 4.
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With the U.S. Treasury tapping into the $700 billion Troubled Asset Relief Program (TARP) to the sum of $350+ billion, the number was finally called for American Express.
While many businesses are struggling to stay operable, the nation's fourth-largest credit card company, American Express was sure to feel the pinch of the economic downturn eventually. However, help is on their side with the issuance of TARP funds to the sum of $3.39 billion.
This remarkable feat was not an easy one. With Reuters reporting:
American Express had to go through a debt-for-equity swap in order to raise $1.5 billion to become a bank holding company -- said that in exchange for the TARP funds they would sell preferred stock and warrants to the U.S. Treasury.
At this time, along with all the other recipients of TARP bailout funds, they are opting not to explain how they would use the money – however,
Bloomberg reports that:
The Treasury's Troubled Asset Relief Program will buy preferred shares that pay annual dividends of 5 percent for the first five years and 9 percent in following years, American Express said. The company will also sell warrants that entitle the Treasury to buy common stock of up to 15 percent of the preferred purchase.
This lays out a program for the Treasury to get a gain on their investment in bailing out American Express, but it did little to help the shareholders at the time of the announcement.
With shares falling
46 cents to $17.96 by 4:15 p.m. and an infusion of cash from the Treasury, some if not many were left scratching their heads.
Photo courtesy of Bloomberg News.
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Financial problems are very abundant today with the likes of lending institutions and the automotive industry ‑ but now church organizations?
With mega churches on the rise, and smaller churches adopting a "build it and they will come" attitude to attract a larger congregation, the financial stress has now lent itself to churches. And that stress does not stop at that level, it reaches new highs when specialty lending institutions are forced to take their own drastic measures.
The WallStreetJournal reports:
Church Mortgage & Loan Corp. of Maitland, Fla., another church lender, foreclosed on 10 church properties in the past couple of years. Unable to sell any of them, the company didn't have the funds to pay more than 400 bondholders the estimated $18 million it owes, says company lawyer Elizabeth Green. Church Mortgage filed for Chapter 11 bankruptcy protection in March.
Also reporting:
Strongtower Financial of Fresno, Calif., says two of its 300 evangelical church borrowers are in default, compared with only one in the previous 15 years.
With a haunting trend of organizations tapping the government for help, some may look at churches to become the next in line for a "bailout" to fill their offering plates. While it may seem important to fill the offering plates, for some churches it has become more of an image problem than one that is centered on the gospel.
However, most religious persons will still seek refuge with their respectful source of scripture and relate to Matthew 6:12 saying "forgive us our debts, as we forgive our debtors."
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On Friday, Dec. 19 of 2008, President Bush took stage and offered an address to the people; announcing that he would use his power to bailout the failing automakers, namely General Motors and Chrysler.
With opening remarks stating. . .
For years, America's automakers have faced serious challenges –- burdensome costs, a shrinking share of the market, and declining profits. *
. . .many were stricken with hope that someone finally got it, and also that no financial help would be offered. However, things quickly turned sour when he said:
If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price that failed companies must pay –- and I would not favor intervening to prevent the automakers from going out of business.
But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed. Some argue the wisest path is to allow the auto companies to reorganize through Chapter 11 provisions of our bankruptcy laws -– and provide federal loans to keep them operating while they try to restructure under the supervision of a bankruptcy court. But given the current state of the auto industry and the economy, Chapter 11 is unlikely to work for American automakers at this time. *
Disorderly bankruptcy? Since when was bankruptcy either orderly or disorderly? Any way you look at it, someone is bound to point fingers rather than accepting defeat. Without exception, Pres. Bush pointed his finger saying:
Additionally, the financial crisis brought the auto companies to the brink of bankruptcy much faster than they could have anticipated –- and they have not made the legal and financial preparations necessary to carry out an orderly bankruptcy proceeding that could lead to a successful restructuring. *
Offering a helping hand of sorts to the abysmal U.S. "2" when they haven't protected themselves, is but one thing: INSANITY.
So, what did the President have to offer?
A more responsible option is to give the auto companies an incentive to restructure outside of bankruptcy -– and a brief window in which to do it. And that is why my administration worked with Congress on a bill to provide automakers with loans to stave off bankruptcy while they develop plans for viability.
These loans will provide help in two ways. First, they will give automakers three months to put in place plans to restructure into viable companies -– which we believe they are capable of doing. Second, if restructuring cannot be accomplished outside of bankruptcy, the loans will provide time for companies to make the legal and financial preparations necessary for an orderly Chapter 11 process that offers a better prospect of long-term success –- and gives consumers confidence that they can continue to buy American cars. *
Seemingly somewhat contradictory to a statement made earlier in his address, stating:
American consumers understand why: If you hear that a car company is suddenly going into bankruptcy, you worry that parts and servicing will not be available, and you question the value of your warranty. And with consumers hesitant to buy new cars from struggling automakers, it would be more difficult for auto companies to recover. *
American consumers understand that this industry has failed, due simply to a failed business plan and the high demands that the Union has placed on them. Americans also understand that if they were to perform an "orderly bankruptcy," it would allow these companies to restructure and reorganize; keeping a level of "confidence" among consumers.
So, the next thing to examine would be: "Where is the $13-$17+ billion coming from? What are the terms of this 'loan'? and When does it have to be paid back?"
[It] will be drawn from the financial rescue package Congress approved earlier this fall. The terms of the loans will require auto companies to demonstrate how they would become viable. They must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry –- management, labor unions, creditors, bondholders, dealers, and suppliers.
In particular, automakers must meet conditions that experts agree are necessary for long-term viability –- including putting their retirement plans on a sustainable footing, persuading bondholders to convert their debt into capital the companies need to address immediate financial shortfalls, and making their compensation competitive with foreign automakers who have major operations in the United States. If a company fails to come up with a viable plan by March 31st, it will be required to repay its federal loans.
The automakers and unions must understand what is at stake, and make hard decisions necessary to reform, These conditions send a clear message to everyone involved in the future of American automakers: The time to make the hard decisions to become viable is now -– or the only option will be bankruptcy. *
While this puts an enormous amount of stress on the plate of the Big "2", it still leaves a glimpse of hope by the tax-paying Americans who are footing this automaker bailout rescue. It also leaves many people wondering what is next, and if they themselves will get a "bailout." Some are still left wondering the difference between an "orderly" vs. "disorderly" bankruptcy. Then again, everyone is forced to play the "wait, watch, and see" game.
* -
RealClearPolitics
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Kansas City's first black mayor, elected in 1991, Rev. Emanuel Cleaver II posted an article with the Washington Post. His opine was to curb further "walls" of race, and to help with the idea to "build bridges."
In all he's efforts to help aid in the curbing of race relations, using terms with the like of "brothers and sisters of hue," and "people of color." Certainly, in todays society one would "understand" that with the election of a "black" President, we as a nation could curb the idea of lingering race issues. However, the Rev. Emanuel Cleaver continually brings this issue to the forefront in this article.
As posted on WashingtonPost:
"I know something about what Obama faces. In 1991, I was elected Kansas City's first black mayor. I and more than 400 other African American mayors who served during the most diverse period in the political history of America's large cities experienced a similar, and understandable, unreasonableness from brothers and sisters who saw in our election an opportunity at last to get a slice of the American pie. Obama will fall short of fulfilling the considerable hopes and dreams of the minorities who supported him, just as we could not fulfill those of ours.
To be sure, he will do all he can. Just as the black mayors of the '90s appointed able blacks to positions that were previously beyond their reach, championed capital projects in often-ignored and ailing parts of their cities, and included minorities in municipal economic opportunities, President Obama will certainly be attentive to the unique needs of the nation's neglected. Clearly, the goal of the Obama administration will be to destroy, not supervise, any government impulse to favor one group of Americans over others.
But brothers and sisters of hue, we must be candid: Race relations in America are far from sublime. Despite Obama's election, there are still Americans who, like the ole Missouri mule, are awful backward about going forward. It would be absurd not to expect high-profile acts of racism to continue to occur, just as always. Obama's administration won't have the power to prevent them; no administration could. Yes, such situations will now be addressed by an Obama-appointed attorney general, but they also must continue to be dealt with by civil rights organizations and, frankly, by each of us. The duty of the many cannot become the responsibility of the one, even if the one is a black president.
Obama surely knows that he owes enormous gratitude to the huge numbers of black Americans who toiled in his campaign and came out to the polls to help to elect him. I think every African American supporter of Obama can safely assume that Obama will do everything within his power to create a level playing field for all Americans by ensuring that they have a government that is just and fair."
He then goes on to say:
Most of us thought that we would never see a black president in our lifetimes. Our coming together this past November was a beginning; staying together through the tough times ahead will be progress; and working together to build bridges, not walls, will be the sign that we are creating a change all can depend on.
Well, Mr. Cleaver is correct in thinking that most thought we, namely America, would not see a black President. However, one can't help but question who he sees should "stay together to build." What is it that needs to be built? An understanding? For the most part, most if not all Americans are looking forward enough not to dwell on the past and curb the highly heated race talk.
Certainly, it is true, we must "build bridges, not walls."
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Cross posted at: Conservative Badlands and Rebuild the Party
In a work titled "Prejudice and Abstract Political Theory in Edmund Burke's Reflections on the French Revolution", Nick Russo observes:
'He explains that English philosophers, or, "men of speculation, instead of exploding general prejudices, employ their sagacity to discover the latent wisdom which prevails in them," essentially serving as a confirming and stabilizing force on political thought. This model for healthy political thought can be understood through an evolutionary scenario. Biological systems, such as ecosystems and individuals, remain the same, in a state of equilibrium, until something goes wrong, causing the system to evolve or adapt to ensure its survival. Similarly, Burke finds nothing wrong with the status quo political system if it is providing a better environment than its lack could provide.'
It seems that, for some reason, many people have a prejudicial idea on what conservative is. In our own "state of equilibrium," everything, as we see it, seems calm and unprovoked. Now that our "something [has] gone wrong," many are left learning to swim, in an infested pool, without ever having a true understanding, not only of where we have been, but where we are headed.
So, that brings us to know, as your own understanding, what is Conservative?
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