Thanks masaccio

digg

It sounds as though the buying and selling of these swaps is continuing?

Nailed it. I’ll have to link to an article I just read about CDSs. Thank you for posting on this. The crux of the auto bailout is national security.

Amazing Republicans are lining up to say, “No!” to the auto industry bailout.

1. Republicans want to create the largest welfare state in the history of our nation.

2. Republicans want to create the largest threat to our national security in ages.

Now, if THAT isn’t the path back to “core values” of smaller government and less government spending and strong national security.

We don’t have the foggiest idea of trading in this market. There is no published data.

Thanks.

So we are in debt to another specific nation big time…

Our biggest industry (they are not called the Big Three for no reason) is tanking and could greatly affect other sectors, especially our defense sector and over 65bn in CDS’s has GM as the reference credit.

The billionaire and investor Warren Buffet has called this type of investment “financial weapons of mass destruction.”

Warren Buffet has that correct on so many levels.

Update: I wonder if any holders of protection are lobbying against a bailout?

I don’t wonder about it at all.

Jane was had a post about a financial analyst at Pantera, a hedge fund. He was all for forcing the automakers into bankruptcy and selling them to the Japanese or whoever. I wonder if Pantera is holding any of those bets.

Maybe the Chinese want GM to fail, so they can buy it cheap?
Emptywheel has been pushing the idea lately that China is shopping for auto companies to buy, and GM is probably their best match.

Bob in HI

Sovereign wealth funds might be involved for all we know. And what, btw, is the difference between what they do investment-wise and what the U.S. Treasury is now trying to do. Private entities could be at least partly owned by more than one government.

I’m guessin’ Saudis and the Car-lyle Group

Good post – it all does make you wonder, doesn’t it? Wonder whether any of them are foreign interests too?

Hmmm…. If I were a devious political type, I might go searching for somebody who’s betting on GM to fail and then tie them to somebody like Sen. Shelby. Sure would look bad to have a close associate or big donor who was betting against GM while you were making sure it failed….

Good thing I’m just a harmless, overworked computer geek….

BTW the DOW closed at 7,997.28, below 8,000. It’s good that Obama is adhering to his principled stand that we have only President at a time, well except when he pushed the Paulson bailout through the Congress, because with the economy continuing to collapse what we need is for Obama to remain hands off.

So many reason to be concerned about foreign investors right now in addition to CDS’s.

And then there is further schooling by Jonathan M. Felman regarding matrix organizations and R & D cores and what the long term loss would be to the country and the irresponsible thinking in regards to giving both to foreign manufacturers.

Another group might be hostile governments, who might like to see the US lose industries that can produce weapons and war-fighting machines.

Yeah, that would be really horrible.

Why does a private hidden segment have any input into open markets functioning ?

Obama got away with murder in the campaign. Because McCain was soooo incompetent on the economy, the whole subject was pretty much off the table. Think back on everything you heard & saw. Except for some sanitized Qs & As during the debates, and a few serious-faced platitudes, you’d never know from either campaign that the country was in economic crisis. And almost nothing since the election except the lead that W turned down Obama on car co. bailouts.

“leak” not “lead”

did i hear somewhere that total debt was 300b? if true that is why it might not amount to much except they don’t have enough cash.

well,i think bc it is not secret anymore. AND it is real debt.

Great question. Jane? Call back?

Who has the pay off those CDSs? Very likely the US taxpayer, through our support of AIG, who is a BIG player in that market.(AIG, Fanny, and Freddy are all being used as a backdoor bailout!) Just think – if the automakers go bankrupt, the hedge funds get their CDSs paid off by the US taxpayer, AND get to buy the assets cheap! Also, the labor unions are killed and all the pension obligations are passed along to Mr. & Mrs taxpayer.

My debt figure comes from the most recent financials; I give the link. Look at the balance sheet, page 2. The figures are the “long-term debt” at $36bn, and the “debt” under “Financing and Insurance Operations Liabilities” of $1.89bn, some of which may be long-term debt.

We don’t know that either.

without lookin at it. does it include uaw pensions and health?

GM shorters…juat one more piece of a Republican ‘econo-terrorist’ puzzle.

What if Hank’s been spending TARP money in China?

Thanks for your work on this

2007 liability was 191b. i’ll bet it is higher now. hmmm?

You bet your ass the people holding the debt are lobbying against a bailout. This is an example of why CDS regulation needs to happen ASAP.

Since no one knows who is getting the payout, no one knows who has alterior motives. In fact it is possible that car companies themselves have bet against themselves. Anything is possible.

“It’s easy to think of people who might want GM to fail. One group might be those who want to buy the pieces cheap. That might include other car companies, or private equity funds. Another group might be hostile governments, who might like to see the US lose industries that can produce weapons and war-fighting machines.”

where did i read the chinese are lookin to buy the big three? daily kos of huffpost today?

i’ll have more in a diary tomorrow, but for now just want to make sure folks know that the house agriculture committee is going to have a hearing on the role of credit derivatives in the U.S. economy – tomorrow at 10am.

what happens if the chinese buy the auto cos? minimum wage jobs for scabs?

they won’t be able to run somtin here. let them buy it.

Ok, so why not just make payment of all Credit Swaps ILLEGAL! Problem Solved! All anyone has really lost is their premiums, and we can then put them on a list and if there is any money left after this mess is cleaned up, then they can have ‘dibs’ on getting some pennies on the dollar of the premiums paid back.

Its a win win!

See masaccio’s previous posts on the CDS topic for some analyses of that idea.

Pension liability and health care obligations under the union contract are separate entries on the balance sheet. It looks like a total of $45.2bn

Just think – if the automakers go bankrupt, the hedge funds get their CDSs paid off by the US taxpayer, AND get to buy the assets cheap! Also, the labor unions are killed and all the pension obligations are passed along to Mr. & Mrs taxpayer.

So, Dems need to attempt to save the auto workers while using as little money as possible to do it. It’s a tightrope. Also, I can’t see Paulson using any added authorization under TARP, but it’s likely he would be the person to dole out ANY assistance monies. Bush would probably kill any program Dems authorize. Detroit is screwed for being Democratic.

where did i read the chinese are lookin to buy the big three? daily kos of huffpost today?

Here’s a curious triple-cross idea: what if some Americans who have influence from the WH to Detroit help the Chinese by destroying the car companies, helping China buy the pieces on the cheap and get huge ‘brokerage fees’? How could such a person (or people) ever be caught & prosecuted?

Pension & health care @ $45.2B?

How much to give all U.S. auto workers a big payoff when their companies go belly-up? I suspect it’s too big to consider, but wouldn’t it be nice if we could?

What happens to the needs of the American public if the big 2.5 go out of business? How many cars are they selling every year? Who could replace that product flow?