Ford wants you to buy more of their crappy cars.

The Ford motor company today released its new buisness plan for congress to review and hopefully incorporated within their decision when they grant this bailout.
FORD MOTOR COMPANY BUSINESS PLAN [CSPAN] PDF

overview & Key Points page 1-7 out of 33

What ford wants you to know:
-the Auto industry supports five million jobs in all 50 states and spends $12 billion
annually on research and development in the U.S. pg. 2

-"While we have much more work ahead of us, Ford did not wait until the current crisis to begin our restructuring efforts, but has already begun a fundamental restructuring in the way we do business. Our early efforts showed promise before the credit and economic crises hit earlier this year." pg. 2

-"The auto sector is one of the first to suffer from bad economic conditions –
indeed, spending on new vehicles historically represents about 4% of GDP and
therefore is closely tied to economic conditions." pg. 4

Translation, we were the first to suffer in this recession, because consumers stop consuming unnecessary crap. Like a new car every 2 years, why is it necessary to have the exact same car come out with relatively few improvements every year? The 07 Ford f-150 looks just like the the 06 f-150. How about alternating production lines every year to avoid over saturation

-The recession and financial crisis has resulted in automotive industry sales volumes at the lowest annualized level in 25 years. pg. 5

- We ask congress for additional incentives incentives for consumers to trade in

older vehicles and move to more fuel-efficient vehicles.
We need the consumer to buy more crap, and we will make it look like we are doing something environmentally friendly. If a person has a old Monte carlo that still gets 20 miles per gallon but have no note to pay or full coverage insurance. It is not in the persons best interest to buy a 21,000 dollar car at 350 per month(That is 5 years of payments with no interest calculated.) in financing fees and insurance for a new car will at least run 150 a month for full coverage insurance and drives 3000 miles a quarter. Then that cost a boat load more to drive and be environmentally friendly. 3000 divided by 20 equals 150 gallons of gas per quarter for the monte carlo equaling 420 dollars spent every quarter on gas which is 1680 per year. Mean while the "Fuel efficient" car gets the recommended mileage which is 35 miles per gallon. Using the same formula as for the Monte carlo would equal out to 240 a month in gas. That is 960 dollars spent on gas per year, now add in the 350 dollar a month car note and that is 4200. add in the additional 1800 dollars in insurance per year and that is a grand total of 6350 a year to go green. Hating the environment would save you $4670 dollars. Now this number doesn't include maintenance for oil tires and all other things that are necessary for maintenance of a car. But no way does the maintenance of the Monte Carlo wost 15,000 every 5 years. I vote no on this part, you want a loan from the people so that you can try to trick them in taking out a loan from you for the next 5 year?

- Ford plans to consolidate their 4 divisions(North America, South America, Asian Pacific, European) Deemed no longer neccessary do to the advances in communication. pg. 7
LAYOFFS

-blah blah blah blah blah lies blah blah lies blah 7-33
Im tired of reading it. Hope that is a good overview..

Sounds like a good start, I am sure they are way ahead of GM or Chrysler. Due to the fact Ford identified the market shift earlier than the others.

2008 Ford Recalls

May 14, 2008 Ford recalls over 650,000 pickups for brake hose
April 28 2008 Ford Recalls F-250, F-350 Trucks for Fire Hazard
Feb 27, 2008 Ford Recalls 470,000 Mustangs to Update Air Bags
Apparently Ford thought it would be fiscally conservative and install the wrong airbags
Feb 11, 2008 Ford Recalls 57,000 More Trucks, SUVS for Fire Hazard
Feb 11, 2008 Ford recalling vehicles over door handles and fuel hoses
Jan 21, 2008 Parts shortages delay repairs of fire-prone Fords
Dec 6, 2007 Ford recalls 1.2 million trucks for engine flaw
Aug 3, 2007 Ford recalls 3.6 million vehicles
in less than two years ford has recalled over 5.9 million vehicles in 2 years. If they made a good product they can sure save money from repairs and lawsuits. Or take their time building a car they can find these problems before you let these deathtraps on the road.
If every repair takes 200 dollars not including lawsuits that is 1.19 BILLION in loses over your own product.

Take the number of vehicles in the field, A.
Multiply it by the probable rate of failure, B.
Multiply the result by
the average out-of-court settlement, C.
A x B x C
equals X.
If X is less than the cost of a recall, we don't do one.

Edward Norton "Fight Club'
Its clear that that is the formula, hurray unregulated capitalism.

Links and videos

Google Buys Digital Historical Newspaper Archives [Searchenginewatch.com]
Commenter from lifehacker.com

Just in case you need confirmation for what your bank account already knows. A recession has been declared [Washington Post]by the old rich white guys, who cant fix the economy.

Bush 2008


Dave Ramsey


Dave Ramsey might have common sense when it comes to saving money. Come on just because your not broke doesn't mean your a financial economist. Or ignore common sense things like, inflation, unemployment (Including those who have stopped looking). Perspective, how about come out of your ivory tower and see that people have been hurting for years. How did those mortgage backed securities work? Why are you not screaming "We are not in a recession" now. Ramsey is part of the religious right, that votes on what his church says. A recession is a statistical measure of growth or lack their of. The only problem is if you tools to measure an economy are not reliable and valid. The stock market is NOT THE ECONOMY. People are. O and good call on the housing market. Talk that shit now.

UAW is good at making demands

Now the UAW speaks up, they were not concerned with this during the last contract talks.
UAW to Congress: The autoworkers union calls on the government to give aid to GM Get a deal done Ford and Chrysler before Congress adjourns. (CNN.com)
Since they are fighting for this bailout, I know its a bad idea. If any congressional leader elects to give the money to the auto companies based on this plea, then they are spineless just like I thought.

"Congress must not adjourn with the Bush administration in place without an
agreement,"
UAW President Ron Gettelfinger.

That sounds like a demand instead of a request, from a person who didn't see this coming. Now they suddenly know how to fix the car industry! 2 years ago they didn't see this crash coming. Yes it is a crash, it is time to stop calling it an economic downturn. Its time for economist and people in the financial sector to stop acting like they know whats going on. Every week it is some new anomaly in the system they are trying to explain for the reason why the bailout isn't working. Can't they admit this is a completely new situation that can't be fixed by using the economic models that got us into this mess. The people old enough to remember the depression, are not the same people that pulled us out of the depression. Just because they have a government title, does not mean they know anything when it comes to the financial sector. In fact it probably means the opposite.


Business in the areas of the big 3 factories agree with a bailout (CNN.com)

Congress wont help because of a lot of things

Dean Baker is the Co-director, Center for Economic Policy Research as well as a contributter to The Arena @ Politico.com.
Dean Baker had this to say about the situation the Big 3 & the UAW have put themselves in.

"The Big Three have a problem in that there is a fundamental conflict between the interests of the top executives and the interests of the workers and the most affected communities. The latter should be perfectly happy to accept a bailout that has as one of it main conditions that the top industry executives get put out to pasture and that whoever remains on top also gets big pay cuts. Reduce...

Obviously the executives themselves are not interested in such a package and would rather try to milk the companies of every last penny before they go under.

Congress will also be ambivalent about a bailout package that imposes real restrictions on executive pay because it will yet again highlight the fact that they handed over hundreds of billions of taxpayer dollars to Wall Street bankers without any real restrictions. In short, you have a situation where is it difficult to justify to the public a bailout that hands millions more to auto executives with a track record of dismal failure. On the other hand, a justifiable bailout would call attention to the completely outrageous terms of the Wall Street bailout.

Will Congress be willing to embarrass itself to save economies of Michigan, Ohio, and Indiana? Probably not."

Everyone has egg on their face :(

Can anyone really justify trickle down economics?

The term of deflation is rarely used when describing the freemarket economy in the United States, but add it to your vocabulary for Thanksgiving and Christmas dinners. While I will continue to encourage students not to use Wikipedia as a direct source for speech's and papers I will use the explanation presentented by the nice people of the Wikimedia Foundation.

Deflation is the opposite of inflation. Therefore, under the usual contemporary definition of inflation, 'deflation' means a decrease in the general price level(Barro & Grilli, 1994, p.142)

In economic theory, deflation is a general reduction in the level of prices, or of the prices of an entire kind of asset or commodity. Deflation should not be confused with temporarily falling prices; instead, it is a sustained fall in general prices. In the IS/LM model (that is, the Income and Saving equilibrium/ Liquidity Preference and Money Supply equilibrium model), deflation is caused by a shift in the supply and demand curve for goods and interest, particularly a fall in the aggregate level of demand. That is, there is a fall in how much the whole economy is willing to buy, and the going price for goods. Because the price of goods is falling, consumers have an incentive to delay purchases and consumption until prices fall further, which in turn reduces overall economic activity - contributing to the deflationary spiral.

The New York Times today featured an article by JACK HEALY concerning the fear of defelation taking place due to the 1 percent fall in the Consumer price Index this month.

A key measure of how much Americans pay for groceries, clothing, entertainment and other goods and services, fell 1 percent in October, according to the Labor Department, the biggest drop in the 61-year history of the consumer price index. Much of the decline could be traced to a sharp drop of 14 percent in the price of gasoline, but the cost of a broad range of goods including clothes, milk and vegetables also fell sharply.....
The talk about falling prices is all the more remarkable because just a few months ago many economists were concerned about inflation and the prospect of stagflation, in
which inflation and unemployment rise simultaneously.
“It’s funny that just a few months ago everyone was wringing their hands over inflation,” said NarimanBehravesh, chief economist at Global Insight. “It’s gone. It’s over.”(Healy, NYT 2008)

The fact that their are economic analyzt surprised at about the pending deflation to economy ask why. my reason for asking is if the Free market Capitalism economic model is partialiy dependend on the concept of Supply side ecomonics(Supply & Demand). If you have an item and there is high demand for it the price will go up (inflation). It has been the general consesus for many years the USA has become consumer nation, that lives way above its means due to the accessibility to credit that excisted before this current financial downturn. If the country has increased the unemployment rate in the last year by 2 percentage points, the price of gas and other goods increased to the point that families had to make a choice between food and gas. Of couse demand for all the extra crap that is marketed to the masses will decrease. With that decrease of demand its only natural that the sellers have to lower their prices to remain viable in a different market plaace. How is it so inconcivible that deflation is occuring, an should occur to some extent to return the market to a true equilibrium?
I am just dissapointed at the education of the American people is so far lacking that the general public is not equiped with the lingo and knowledge to understand something that effects them so much. I guess that was the goal of the powers that be. And no, there is nothing funny about confused economic analyst who are just playing catchup because their economic predictive models were proven to be invalid.

Some links today and Tech is # 8

The U.S. debt calculated into the GDP :( [Seeking Alpha]

Who would have thought, that the airport screening process would increase theft[NJ.com]

Jim Cramer is sad his show doesnt have a purpose for a while [New York Times]

Texas Tech is #8 in the BCS [ESPN]

The Guy that layed the Golden turd; Phil Gramm

Phil Gramm the man who said"We are experiencing a mental recession" had no trouble accepting $54 billion of dollars to bailout the "investment" bank UBS. The reason I said he had no trouble accepting it is because he is just not a board member or lobbyist for UBS, he is the Vice Chairman of UBS.

"The Swiss government injected six billion francs into banking giant UBS onThursday, and the central bank lent it 54 billion dollars to transfer its non-liquid assets into a separate fund....Eugen Haltiner, president of Federal Banking Commission, told journalists that the step was necessary because "trust in UBS has seriously suffered" owing to the subprime crisis and general financial turmoil. In an indication of how much of a pounding the bank's once-solid reputation has taken, customers withdrew nearly 84 billion Swiss francs worth of assets from UBS during the third quarter, it said in a statement...UBS's wealth management and business banking division saw clients withdraw a net 49.3 billion Swiss francs, "with a significant part of the outflow taking place in the last few weeks of the quarter," it said...[ZURICH (AFP)]"

Way to go Phillip! Another piece of proof that every time you touch something it is guaranteed to lose money. You just identify what is happening as capitalism, as long as Phil Gramm makes money the economy can't fail.

Phil Gramm produced porn during the Nixon administration & lost money.[The Nation]
The Porn industry is a 10 billion dollar industry according to Steve Croft and 60 minutes. How does he fail in an industry that is that profitable, how can Gramm even be referenced as a reliable economic advisor.

Strong fundementals from a nation of whiners?

John McCain NAILS IT !! Fundamentals of Economy STRONG !!


Phil Grahm - McCain's former economic adviser July 9, 2008

"You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.

"We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years.

McCain Responds to Phil Gramm "Mental Recession" Comments July 10, 2008


McCain: "Fundamentals of Economy Are Strong" September 15, 2008 JUST DAYS BEFORE THE BAILOUT PROPOSAL


Why would McCain like to president....DId he just lie in a church, no shame, no shame.


Why isnt Obama using this stuff, its not like its made up. They are the words of the Republican Nominee for President of the United States.

Jason Coronel knew, how come Paulson or Bernake didn't

How could none of the economic genius who are selected or elected to help define the countries economic vision not see this coming. Jason Coronel could, and that was in 2002. This has happened before and almost the exact same way 20 years ago in Sweden. This is not just similar to what has occurred in our economy but the exact same in many instances. The The following is an excerpt of a thesis written by Jason Coronel about the collapse of the Swedish economy in the 1990's. page 10-11

"....The resulting deregulation in the domestic capital market would by the early 1990s result in disaster and plunge Sweden into one of the worst economic periods of its history.

From the mid ‘70s forward, Sweden embarked on a deregulation process that phased out most of its financial regulatory rules that had been in place since the decade after World War II. The reason for financial deregulation was due to the government’s continuously increasing budget deficits that required financing and the need to attract foreign private investment (Arter 1999; Bieler 2000). In 1985, the deregulation binge resulted in the removal of lending ceilings by banks (Bieler 2000). The resulting credit-led expansion boom caused by deregulation dramatically increased private sector borrowing and caused a speculative spree within the housing sector (Canova 1994; Moene and Wallerstein 1995). Real estate speculation led to inflated values for assets and property and increased domestic consumption. When the speculative boom ended in the early ‘90s, the massive decline in the value of property and assets triggered a sharp decline in private domestic consumption (Moene and Wallerstein 1995; Ramaswamy 1994). The resulting decline in aggregate demand in combination with a global economic contraction plunged Sweden into one of its worst economic downturns in history (Moene and Wallerstein 1995; Pontusson 1992). Unemployment from 1990 to 1993 was around 8 percent as Sweden suffered one of its worst economic periods since the Great Depression (Miles 1997). On top of the severe economic recession was a banking crisis in which the government was forced to save the banking industry from insolvency. The resulting demand for greater welfare provisions, in accordance with the government’s bailout of the banking sector created massive government deficits equaling to about 17 percent of GDP by 1994 (Miles 1997). The end result of domestic capital deregulation during this period was a catastrophe in two ways: capital deregulation was one of the main reasons for the calamitous early ‘90s recession and investment capital was wasted on unproductive property speculation and consumption (Hubers and Stephens 1998)."

The rest of his paper can be found at the [link].
Coronel, J. (2002). Foundations, decline and future prospects of the swedish
welfare model: from the 1950s to the 1990s and beyond. DePaul University.
10-11

Find Yourself A home, the housing market is in the toliet

freshome.com
Today is an active day, their is just so much for me to catch up on and study for. Why study when you can be in the Lab reading the news.
For years everyone has said houses in Florida, New York, Las Vegas and other states were overpriced & artificilly inflated. During this same time period everyone new there was a housing bubble. What do all bubbles eventually due...BUST. How are all these analyst suprised, did they just assume prices were going to continue to go up until all houses where unafordable for the middle and low income groups? As everyone knows know, the housing bubble has exploded. Screwing those who are trying to move, assessing equity, taking equity out against their house, and Investmant banks.

“Home prices continue to fall, decelerate and reach record lows across the nation,” said David Blitzer, index committee chairman at S&P. “No markets seem to be completely immune from the housing crisis.”

Blitzer said all 20 cities S&P tracks have seen falling prices for five consecutive months when compared to the prior month. What’s more, the declines are growing in severity, with 13 of the 20 cities reporting their biggest single monthly decline in January.

Pava Leyrer, president of Heritage National Mortgage in Detroit, said the tightening of loan standards has compounded the problems of too much inventory, foreclosures and worries over the economy.MSNBC

On the upside, houses are more affordable, you just cant get a loan right now. Dont let that stop you, go to a new developement. Look for the street that has the most empty houses. Choose a house that is located halfway down the block, and move in. I am sure you can get at least 2 free months of rent. When they kick you out or the authorities come, just use the last name of the builder and say you are their half brother/Sister. By the time they come back to kick you out, you will be able to find another empty house in another development. Good luck