Glynn’s Appearance on Fox news underscores predictions of industries with their hand out
It’s a run on the Federal Government by many industries and giant companies. Big companies are running to the government for help – AGAIN! Auto, Finance, Airline and there are many more mouths to feed. The cascade of the housing and financial meltdown is rippling through every sector of the economy and it’s a worldwide cotangent. Even China is being hurt and had to implement a stimulus package. When do the handouts stop!
The most recent proposal to bailout the auto industry and here comes AMEX adds to the long and growing line of companies seeking government handouts. Although proposed investments are being considered in businesses and loans carrying high interest with warrants it is still just a drop in the bucket. $700 billion is not enough and I suspect it is going to at least $1.5 trillion over the next year. And what we don’t see is the off US balance sheet money being used to help industries suffering front the effects of long term cancer.
The government is wrapping feeble businesses and industries with band aids so much that they look like a mummy. Mummies are already dead when wrapped and this is true for many companies and even industries that continue to line up with their dead hands out. The Ferry Man skeleton we are all familiar with wants a coin in its bony hand to get across the lake. In this case the lake is like the Great Lakes and the shore is so far away many of the companies will drown because of terrible management, unions and the inability of American consumers to consume. These are the fact and wait until retail is hammered this Christmas and forced to come to the government with a hand out. I say chop it off. The government is trying to be Rumpelstiltskin but the spinning of hey into gold isn’t going to happen.
We all want solutions and the cancer this nation faces is the deficit and the banks not lending and cutting off credit without methadone. And when this is all over, which will be a long time, consumer will emerge with horrible credit – 30, 60 and 90 day late or worse bankruptcy. Everyone is hobbled and millions won’t be able to access decent loans and credit cards, auto loans etc in the future. Why doesn’t someone give relief there and allow consumers trying to pay their bills to have their records wiped clean if they have had any negative reporting over the last year. If someone doesn’t recognize this as a major consumption problem then we are blind and this will trickle right down to small businesses, retail, airlines and every industry that requires US consumers to consume. This alone will exasperate the long term crisis.
Why don’t these giant companies immediately begin selling off profitable assets and businesses and even taking them public to unlock shareholder value. GM finance, GE finance and AMEX insurance for example. All huge value producers and obvious vehicles to raise capital though spin offs and IPOs. Also, why aren’t we tackling the deficit – I offered up the 10% solution that I believe is a revolutionary opportunity for everyone. I don’t propose we shut down the auto industry but I do want a bridge loan provided and then a debundling of assets as I would require in other industries. All these business have acquired so many companies throughout the 80’s and 90’s that they are now way upside down and just too big. We should assemble a group of turn around and Leverage Buy Out groups immediately to replace management and get these companies profitable as a condition of any loan or hand outs. These people are experts in unlocking value and have 100’s of billions to participate as a partner in the plans.
There are so many capitalist plans that can be implemented and if we don’t pursue them or force them to happen this will continue to be a cancer we cannot recover from. Worse it has spread to a vast group of consumers that just are out of the consumption game and this will perpetuate the pain everyone is undergoing. With or without our input these bailouts will happen. And the line up just will not end until government puts its foot on the necks of the failing industries and get out of the commercial lending arena.
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