Galt Stock

Fast profits, limited losses in a changing market!

Dec 12, 2008

The dance continues on Capitol Hill over a bailout for the Detroit 3.  Will they or won’t they use TARP money, did they or didn’t they offer wage concessions, why won’t Cerberus Capital put their own money in Chrysler?  The questions go on; the commentators make up the answers if they do not know.  The stock market opens down 300 on the DOW then takes off for a gain late in the day on light volume.  The retail numbers were not as bad as expected and the FED is expected, with 100% certainty, to cut interest rates next week.

How can the Treasury help the domestic auto makers? I looked at the TARP legislation to find the authority to use funds under the bill. I have reprinted it below:

(1)  AUTHORITY- The Secretary is authorized to establish the Troubled Asset Relief Program (or `TARP') to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with this Act and the policies and procedures developed and published by the Secretary.

I cannot find the language that allows buying “troubled assets” from auto manufacturing companies.  You can read the bill here for your own amusement.

http://thomas.loc.gov/cgi-bin/query/F?c110:10:./temp/~c110TW4xPV:e1425:

You may want to look for any other loopholes in the bill.  Thirty-seven states facing deficits and will probably line up in Washington soon for their turn at the trough.  They are ‘only’ looking at a $137 billion combined shortfall, so it should not be too hard for OH! BAMA! to spread the wealth.  He is already working on an infrastructure plan to pay off the states that supported him.  We all know the biggest needs are in the highly populated Northeast and California.   Amazing how the biggest problems are where the Democrats have been in charge the longest. 

WARNING:  The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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