Saturday, 4 April 2009

When a German Idea fails as an American Idea

Significant car sales in Germany? Forty percent increase over a year ago? No dealerships in trouble? Slight downturn for the manufacture guys....but things appear to be smoothing out to some degree? Why? And how come the same thing can't happen in the US?

The deal was simple....announced shortly after Xmas. In Germany, if you owned a car that was nine years old....and had ownership for twelve months or more....you could take the car to the junkyard and crush it....getting a $3k check for a new German-made car. It had to be crushed, and hit had to be German-made on the purchase. It was a simple program that everyone from both parties signed off on.

The only issue with the German program? The guys playing this game....bought cheaper cars. They didn't buy $35k type BMWs or $50k Audi's. They bought typically cheaper cars at $15k to $20k.

So why won't this program work in the US?

First, you'd have to agree to all US-made cars....to include Honda and Toyota. This is where Ford, GM and Chrysler get upset. These guys aren't part of the "Holy Three", so the three idiots can't possibly agree to this deal. So they wanted cash forever....which in January....it was possible. Today.....GM is basically finished, and its questionable if the Fiat-Chrysler relationship will ever work.

Would the US government have worked up a $3k deal? Its possible, but then with so much corruption in the US....its doubtful that we could trust in such a program to carry itself through. The guys crushing the cars? They would have sold the car off to some dude in Mexico or Nigeria....getting it out of the US quickly.

So another good idea flushed down the toilet.

Just a Trillion

As the big boys all came to meet in G20 this week....they were all happy, smiley and dopey. At the end, they said that they just had to save the world....and this involved a trillion dollars. Course, its a nice round number, which makes me think immediately.....that this is imaginary in nature. Why not say $1.21 trillion? Why not say $1.05 trillion? So the twenty said this...smiling all the way for the cameras.

Stand back for a moment....sit there and think about these twenty countries. Yes, you do have Germany, Japan and the UK. Yes, there is Australia and China. Yes, there is France and Mexico. The other 120-odd countries in the world? They were smiling because if this all works....they get the money.

The question is....does this work?

At no point, did Obama come back to the US press and say what our magic number is. My guess is that we are supposed to cough up around $100 billion. I went to five different press pieces on this discussion....and none of them laid out the US coverage on this. I thought this was strange, but then maybe this is a topic that they really don't want to discuss in detail because no one knows anything beyond the White House staff.

So will we give away $100 billion? Frankly, I don't think the Senate is going to agree with this deal. They are going to ask questions and wonder about how this all works. The deal cooked up by Gordon Brown and the Obama team....doesn't really have any iron-clad answers. Its basically free money. They may say that there are rules involved, but they can dump the rules in a heartbeat....as we've seen hundreds of times over deals like this.

The chances of Germany signing up for their likely contribution (I'm guessing 75 billion)....well...they are going to ask alot of questions about this donation. I don't think any of the major political parties are going to be agreeable on this deal.

So the promise of $1 trillion at this summit? Bogus? Yes....simply yes. None of this money will ever come to the 100 other nations. It was fine talk and pumped up the stock market for a week. In six months.....ask about the $1 trillion and see how far it went.

Remember this.....Chrysler and GM alone....wanted $25 billion to survive for four to five months. This one trillion.....really isn't that much when you consider the big picture. It'll flush real quick....if the twenty nations are stupid enough to dump it on the market. Corruption? Yep....there are folks in Kenya already thinking of how they can grab their $15 billion and walk away with half in corruption fees. There will be thousands upon thousands of bridges built.....to nowhere....with this trillion.

Just a Moment in Alaska

It was an odd week in Alaska. Ted "the Stud" Stevens....ex-senator and almost the corrupted & convicted senator....suddenly came to the luckiest moment of his life. The judge started tossing out charges, and the government prosecutor is screwed. Apparently, lots of corrupt factors on the government side as they prosecuted corrupt Ted.

Don't get me wrong....I am happy for Ted. The guy is over eighty, and probably wouldn't have enjoyed prison that much....with nothing much gained. But behind the dropping of charges and convictions....Ted was pretty damn corrupt, and had been for the past twenty years....maybe even his entire life.

So there's an odd feeling in Alaska. Ted got convicted days prior to the election in November....and then lost. The democrat dude.....Mark Begich.....is happy for Ted....but thats just about all. He has no intention of discussing the idea of stepping down or running another election.

The feeling in Alaska? Well...the Republicans are kinda chatting about taking Begich down (in a nice way), and doing the election again. Curiously, the sole represenative for the state....a Republican....has said that he is against Begich stepping down. Then we have the second senator for the state....who is Republican....Lisa Murkowski....who basically said this is not an option.

What fears are being played out? Governor Pralin is currently on a major plus-side for support within the state. There is an expectation that she is going to run for senator again Murkowski in the next election. We can be kinda honest here....Lisa Murkowski isn't exactly a legend, or four-star senator, or keenly popular in the state. Everyone knows her name....by her dad's legend....and little else.

Recall? Well....summer is coming, and there is this chance that some folks will begin to meet and discuss this matter. They might be able to round 20,000 Alaskans who are keen to have a recall....but I doubt that this is enough or that the majority in the state want to change history.

The real damage done? Well....if you ever come to Alaska again as a federal prosecutor, and dump charges on anyone.....don't expect a jury to cooperate with your vision. This taught a long hard lesson for most state residents....distrust of federal law officals is absolute now. You have to basically move the entire case out of the state, and I don't think that residents there will agree with this idea any longer.

Finally, for Lisa Murkowski....start preparing for a hard run for your senate seat. All Pralin has to do...is say that you stood by a Democrat when Ted was unconvicted....and she's got twenty percent of the state vote automatically....without even adding the rest of the major topics.