Daily Archives: August 19, 2010
I think I need a special category for this. The “unexpected surprise of the week”. Of course, it would mostly be filled with posts about unemployment numbers – although there’d also be plenty about “disappointment” concerning other economic numbers as well.
Apparently the “Recovery Summer” sunshine show is showing it’s tattered edges fairly obviously.
New U.S. claims for unemployment benefits unexpectedly climbed to a nine-month high last week, yet another setback to the frail economic recovery.
Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000 in the week ended August 14, the highest since mid-November, the Labor Department said on Thursday.
And last week’s loss was revised upwards another 4,000 lost jobs.
The economy grew at a 2.4 percent annualized rate in the second quarter, much slower than the 3.7 percent pace in the first three months of the year.
Which, politically, means:
The economy’s poor health has handed President Barack Obama a tough challenge and put at risk the Democratic Party’s majorities in the U.S. House of Representatives and Senate in November’s mid-term elections.
Obama’s approval ratings have tumbled to the mid- to lower 40 percent range and Congress’ ratings are hovering at about 20 percent.
Hey, when you’re the loudmouths who stand on the side and blame the other guy for the problem and claim you are the only ones who can “fix” it – elect me – then you by God better fix it when it is handed to you (even if you haven’t a clue of how to do it).
Irony can be a bitch, can’t she?
And, as you might imagine, it’s all politically driven:
G.M. said that it would offer both common stock and preferred stock in the offering, which could begin as early as October, when the Obama administration will be seeking to portray its aid to the auto industry as a success before midterm elections in November.
How neat and nice. Claiming a profit from the "turnaround", something which has been debunked since, GM hopes to free itself from being called "Government Motors", which, it says is hurting sales. Additionally GM is still hemorrhaging money with a negative cash flow in the millions per month.
Given all of that though, I loved this:
The Treasury is expected to sell enough stock in the initial offering to bring its overall ownership position in G.M. below 50 percent — freeing the automaker of the stigma of being called “Government Motors,” which executives have said is hurting its reputation in the marketplace. G.M.’s 734-page filing said taxpayers would “continue to own a substantial interest in us following this offering.”
Got that? Treasury is going to sell enough stock to bring its overall ownership position in GM below 50% – however:
The Treasury, in a statement on Wednesday, said it would “retain the right, at all times, to decide whether and at what level to participate in the offering.”
The statement said the offering would not include the government’s preferred G.M. shares, worth $2.1 billion.
Read that however you wish to read it, but that says BS to the first part of the claim where I come from. The way I read it is Treasury has assumed “the right” to interfere (by buying more stock, not just selling it) at any time it deems it necessary to do so.
So – given the way the last group of investors was treated when GM went into bankruptcy and the fact that government “retains the right” to interfere – why in the world would I want to invest my money in Government Motors?
Have to hand it to the National Republican Senatorial Committee on this vid. It pretty well takes the left’s argument about the right and properly turns it on its head: