From the "How to Get Severence Pay" File
Iowa College President in Beer Scandal - Gets $400k Severence

Iowa Central Community College didn't have much of a reputation as a party school, or for anything else for that matter. I guess college president Robert Paxton aimed to change that on the day he had this photo taken over the 4th of July that appeared in the Des Moines Register. (Paxton is the pastey white guy in the back holding the nose of a Britney-wanna-be while she chugs a minikeg of Coors Light) Apparently the Board of Trustees wasn't too cool with the image this conveyed, so they started action to force Mr. Paxton out of his job. Those bullies intimidated Mr. Paxton into leaving with only $400,000 in severance money. That's teaching him a lesson.

When last seen, Mr. Paxton was forlornly boarding a plane for Hawaii with Spuds McKensie and the Swedish Bikini Team

From the "Mo Money" File
Detroit 3 Seeking $50 Billion in Federal Loan Guarantees



Sometime after Labor Day, officials from Chrysler, Ford and GM are likely to head to Washington and make their case for $50 billion (more or less, probably more) in federal loan guarantees. The gist of the pitch is that the loan guarantees are necessary to retool for higher MPG goals necessary to fulfill the country's energy policy and to meet CAFE standards. Last year's energy bill included provision for guaranteed loans of up to $25 billion, but Congress never funded that portion of the bill. (I bet the oil companies' tax breaks went through though.)

While capitalist theory would suggest that bailouts are a bad thing. The government, (including the Bush administration)has not been dogmatic in opposing bailouts and subsidies to other industries. The ongoing banking industry bailout is costing much more than what the automakers are seeking. There is no question that if (let's say) General Motors went bankrupt and shut down, the economic fallout would devastate many communities just as thoroughly as Hurricane Katrina devasted New Orleans.

George W. Bush is expected to be inclined not to support the auto industry loan guarantees. The overall tone of his administration right now is to do nothing about anything to keep from doing anything stupid. (Well, that's not exactly true, they did take steps to gut the Endangered Species Act.)

When it comes to equity, you'd think that General Motors would have some chips to call in with the Bush family. When George Herbert Walker Bush was a naval aviator, his plane was hit by enemy fire. The sturdiness of his TBM Avenger let him keep control long enough to bail out. The TBM Avenger was built by General Motors' Eastern Aircraft division. In fact all of the (then) Big-3 provided many of the plants that made up the Arsenal of Democracy that supported the United States and allies during the 20th century. A further erosion in our industrial base couldn't be good for national defense. On 9/11/2001, a few goons hijacked a few airplanes and ran them into a few buildings. It was a tragedy to be sure, with more than 5,000 Americans killed; but the United States and even countries a fraction of our size have shrugged off worse disasters and continued with their economies intact and continued to set their own national agendas. Nine eleven sent GWB first into a stupor and then into a panic. All of a sudden, addressing this handful of terrorists became the prime and overriding domestic and foreign policy issue. His lack of composure and lack of confidence threatened to send the econom into a spiral. General Motors, to its credit, came up with a timely "Keep America Rolling" advertising campain and incentive plan that provided a tangible boost not only to the cash flow of the economy, but also to the national spirit. George Bush, you don't just owe GM one, you owe them two.

It would be nice if GM, Ford and Chrysler had run their businesses well enough to not need government assistance, but they didn't, and they do need assistance. There's no question that these companies have provided and provide strength to the economy disproportionate to the market value of the enterprises; and for that reason alone, it makes sense to carefully invest public money into maintaining our industrial base. If I've learned anything from being a parent, there are times you have shake your head, curse under your breath and write out the check anyway. This is one of those times.

Youtube Video of the Day
Yogi Bush

Self-explanatory

From the "What's this junk in my in-box?" file:
Journalists shot in Georgia - Spam, Virus and Reality

If you're reading this, I presume you have received an e-mail, perhaps countless copies of an email, with the title "Journalists shot in Georgia". This email is a clever rouse to get you to install a virus on your computer. The attached file is a .zip archive, which can't be scanned by anti-virus software. They get you to load it and unlock it with a password and who knows what kind of evil genius will take control of your computer. Assuming you don't open the attachment, the solution is to delete the e-mails and never open the attachment. If you open the attachment, you better run the whole panoply of anti-virus applications immediately. The virus obviously takes over your computer, how much it compromises your personal information is unknown. Here's a link to a (possibly self-serving) website with more information from clearmymail.com.

To answer the anticipated question: yes, journalists were shot in Georgia. The video is on youtube, embedded right here.

Microsoft Pays Seinfeld $10 Million to Shill for Vista

Microsoft announced that it is going to pay Jerry Seinfeld $10 Million to appear in television commercials touting the Vista Operating system. Seinfeld has historically been a prominant Mac user. In fact, if you look at the old episodes of the Seinfeld show, you can guess when each was made by the model of Macintosh in the background in Jerry's apartment.

What's the slogan going to be? Vista, it doesn't suck as much as The Bee Movie.

Where we're Going:
Rats for Supper

Maneka Gandhi, writing for the Bihar (India) Times, wrote this very interesting piece commenting on a project by the government of Bihar that encourages the eating of rat meat. Check out this masterful use of descriptive language in the first paragraph:

(Bihar Times) For years now , I have been advising people not to eat meat. Apart from all the other things wrong with it, very few people know which animal has been killed for its meat, its state of health when it was killed ( 45% of all animals killed in slaughterhouses and 70% of all chickens have gangrene when they are killed as their bones have been broken while being transported , the tissues have started decaying and have become smelly, bacterial infections have set in, the flies have laid their eggs in the pooling blood, blood has turned poisonous for several days, the acidic levels have risen and there is a gas build up, the body has already started rotting much before the animal has been killed. ) and the way in which it was killed ( in an investigation report of the main slaughterhouse in India , Idgah in Delhi, placed before the Supreme Court it was shown how the animals were cut with rusty blades, urinated and defecated on and left in pools of other animal But this article is not about the filth in meat that no amount of boiling can take out ( can you boil gangrene of human faeces out ? ) It is about the type of animal meat that you are eating.

This leads us to another marginally relevant Monty Python sketch. So they don't get mad at me for linking the vudeo, go buy something from them at Pythononline, their official site.

From the "Hey Rick" file:
Charlie Rose Interviews Rick Wagoner

Yesterday, Charlie Rose on PBS had a full hour interview with Rick Wagoner. He repeated the mantra that the oil price shock couldn't have been predicted. I find that kind of laughable. GM with other automakers were busy picking the low-hanging fruit int the rapidly growing Chinese auto market. What else did they think was going to happen with the price of gas with demand increasing, and supply staying the same?




The embedded frame below is an interview between Wagoner & Rose almost exactly a year ago.

McCain Gaining on Obama

A Pew Research Center Poll shows Barack Obama with a slim, perhaps statistically insignificant, lead over John McCain. The race has drawn sharply closer over the course of the summer.

Micheal Moore has penned a book Mike's Election Guide, and in a section, "How to Blow it", Moore gives tongue in cheek instructions on how Obama can (and might actually) loose the election by following in the path of previous Democratic Candidates.

An Excerpt:

These have been the mantras of the Democratic Party. Beginning with their stunning inability to defeat the most detested politician in American history, Richard Nixon, and continuing through their stunning inability to defeat the most detested politician in the world, George II, the Democrats are the masters of blowing it. And they don't just simply "blow it" - they blow it especially when the electorate seems desperate to give it to them.

. . . .

For years now, nearly every poll has shown that the American people are right in sync with the platform of the Democratic Party. They are pro-environment, pro-women's rights, pro-choice, they don't like war, they want the minimum wage raised, and they want a single-payer universal healthcare system. The American public agrees with the Republican Party on only one major issue: they support the death penalty.

So you would think, with more than 200 million eligible voters, the Dems would be cleaning up, election after election. Obviously not. The Democrats appear to be professional losers. They are so pathetic in their ability to win elections, they even lose when they win! Al Gore won the 2000 election, but for some strange reason he didn't become the president of the United States.

If you are unable as a party to get the landlord to turn over the keys to a house that is yours, what the hell good are you?

Well, in 2006, the Dems had a come-to-Jesus meeting with themselves and, under the leadership of Rahm Emanuel, won so many House seats, they just waltzed in and took the place over. What a great day that was, seeing Nancy Pelosi bang the gavel down to open Congress. And what was her first act? To declare that any discussion of the impeachment of George W Bush was verboten and no one was ever to bring it up again. And that was that. It sent a clear message to Bush that he could just keep doing what he'd been doing for the first six years. The result? That's exactly what he did, with Congress authorizing every war funding bill he sent to them. How did the American people respond? Congress's approval rating sank lower than Bush's. How disgusting do you have to be to sink lower in the public's eyes than a man who can't even successfully choke himself on a pretzel?

So when you hear Democrats and liberals and Obama supporters say they are worried McCain has a good chance of winning, they ain't a-kidding. Who would know better than the very people who have handed the Republicans one election after another on a silver platter? Yes, be afraid, be very afraid.


This calls for a link to a video clip with Crackers, the Crime Fighting Chicken, from Michael Moore's, The Awful Truth, a television program from the early 1990's.

Deeper Ties between Chrysler and Nissan?


The Wall Street Journal reported today that Chrysler and Nissan are seriously talking about having Nissan build a midsized replacement for the Sebring and Avenger. The Sebring and Avenger together only have a little bit more than 1/10th of the sales of the industry leading Camry and Accord. Although the Nissan Altima gets good reviews and sells decently, Nissan probably has enough production capacity to build quite a few more.

Chrysler previously announced a balls-to-the-wall rushed project called Project Delta to replace the Sebring and Avenger, models that fell into the marketplace like a lead balloon. According to the WSJ, Delta is not so much an engineering project as a marketing project, to see what the public wants in a midsized car. Even if the company partners with Nissan, Delta won't dawn until 2011. That's a long time for a company to go without a credible mid-sized car. Realistically, Chrysler doesn't have the billions it takes to engineer a new car from scratch.

Return of the Googleteer
Return of Bayhwatch

I took the day off work today, but not the day off blogging. The news is full of reports that Barack Obama is on the verge of picking Indiana Senator Evan Bayh as his vice-presidential nominee. Count me as one Hoosier who doesn't want Bayh to be Obama's running-mate. The best thing that can be said about Senator Bayh is that he usually tows the Democratic party line. He isn't much of a leader, in fact his positions often sway with the political wind. When he doesn't tow the party line, it's usually in cases where he votes the line of high money donors. For example, Bayh took quite a bit of money from financial services industry, and he voted for the disastrous Bankruptcy reform (deform) legislation in 2005. You can count on him to be an obstacle to comprehensive health care financing reform.

I called on the assistance of my friendly neighborhood superhero, the Googleteer. He flew in the window and performed this search

Evan-Bayh lightweight

as of today it returned 4050 hits.

Obama would do much better picking Joe Biden, Jim Webb, Bill Richardson or Hillary Clinton as his VP.

Meet the Montauk Monster

Look at what washed ashore on Long Island. Personally, I haven't seen anything that curious-looking come out of Long Island since Billy Joel.

When the corpse was found, bystanders asked "What could make it wash up on shore like that?" A local Teamster had the answer: "He couldn't keep his mouth shut."

GM's CFO Says Cash Position is Better than Expected

In the wake of GM's $15.5 billion 2nd quarter loss, Chief Financial Officer Ray Young told the press that the company's cash situation was a little better than expected. According to Mr. Young, GM had a net cash loss of about $3.6 billion in the period, and the company currently sits on cash reserves of $21 billion with $5 billion in credit. I postulated in my last post that GM's cash burn could be 2-3 times the $1 billion per month that had been commonly reported. At $3.6 billion for the quarter, cash burn is still 20% higher than a billion a month. The other losses must have been absorbed in other balance sheet items such as declines in other current and long-term assets or increases in long-term liabilities.

source: Reuters

Breaking News: GM's Latest Bad News Friday
GM's Quarterly Loss = $15.5 Billion

For some time now, General Motors has been saving its bad news press releases for Friday, preferably the Friday before a holiday. Since GM couldn't stretch the announcement of 2nd quarter financial results until Labor Day, it announced the bad news today. Led by "one time charges" of $9.1 billion, GM announced a net loss of $15.5 billion. Excluding the one time charges, GM's net loss was $6.3 billion or $11.21 per share. As I write this, Yahoo finance is reporting GM's share price as $10.42. I think when a company's quarterly loss is greater than the total value of all its stock, its a significant event.

Of the one time charges, $3.3 billion went to employee buyouts, and $1.1 billion went to lease write-downs. In that later category, the devil may be in the details. If the write-downs were only for leases that expire soon, then the "one time charges" could be a regular event.

Prior to this earnings report, it was widely reported that GM was burning cash at the rate of about a billion dollars per month. With regular operations accounting for $6.3 billion loss and other true cash outlays, including billions in buyouts, accounting for much more, the billion-a-month may be off by a factor of three or more.

In terms of sales, GM's sales were down 20% in North America, but were up 10% outside of North America. In fact, 65% of GM's total sales were outside North America.

To put this quarter's loss in perspective, you might recall that last month, General Motors announced a two-year plan to boost its liquidity by $15 billion. IF that plan is successful, it will bring GM back to where it was, oh, I don't know, 3 MONTHS AGO. The liquidity plan does not change the market forces that have pushed GM into its current corner.

Primary source: thetruthaboutcars.com