Well, as expected the Fed have used that hoary old chestnut "too big to fail" to justify a massive bailout package for GM & Chrysler.
There seems to be much dancing in the streets going on over this, but I have a couple of burning questions to put to my learned forum friends...
FACT- US car lots are RIGHT NOW jam-packed to overflowing with millions of un-sellable autos of every size and description. There is NO ROOM for one more auto for sale - let alone the millions the "revived" GM & Chysler factories will need to pump out to keep workers "occupied".
So, given this fact, how is throwing $Billions at those two dodos going to achieve anything meaningful at all, other than feather the nests of the execs by propping their bonus schemes and giving a bit of Xmas cheer to the "protected" (for now) auto workers?
Perhaps the money will be spent buying up millions of those existing un-sellable autos for scrap (I'm serious!), thus freeing up salesrooms and autolots so they can pile up the shiny new ones to be pumped out and delivered post-haste under the "bailout" plan? But, (and this is a big BUT) where are all the millions of new, enthused auto buyers going to suddenly jump from?
Of course, this plan now also raises the bar further for world "protectionism" to grow rapidly, as other automakers in other countries close the borders to foreign imports. Russia is already on to this. Then what - China? India? Korea? Japan? Australia? All this angst to save a couple of dodos? Sorry, I don't get what all the euphoria is about.