3 ms·

Ok...I will look past the politicking tone of the response and address the content. Regardless of how GM turns out, the fact remains that the actions taken by

Ok...I will look past the politicking tone of the response and address the content. Regardless of how GM turns out, the fact remains that the actions taken by the administration so far have been very beneficial to the car maker and have set it on the right course for correction. Not only has GM been able to successfully wind down or spin off ailing brands, renegotiate/get out of ridiculous labor contracts, cut down the size of the dealer network, consolidate their supply chain, but they have done so at unprecedented speed - http://www.foxnews.com/story/0,2933,531022,00.html?FORM=ZZNR3 http://www.foxnews.com/story/0,2933,531022,00.html?FORM=ZZNR... So much so that it's CFO said it might post a profit this year - http://www.nytimes.com/2010/03/18/business/18auto.html http://www.nytimes.com/2010/03/18/business/18auto.html - Yes, I know there is probably a lot of financial shenanigans going on here...but 24 months ago, this would never have been the case (even with financial shenanigans). I would say that this is the best thing that ever happened to GM. If mgmt can revive the brand and focus on good products, in 5 - 10 years we might not even remember that GM went through this period. Not to mention the hundreds of millions (if not billions) in highly subsidized loans and VC money the administration has given to 'electric/hybrid' companies in the auto industry - from Tesla to Fisker (http://online.wsj.com/article/SB125383160812639013.html http://online.wsj.com/article/SB125383160812639013.html) to many others in between, I would be willing to bet that the auto industry in 10 years is going to be radically different than the last 10 years, and I would probably bet that America leads the way in innovation again (after ceding it to Japan and Asia for the last 10 years). Ok...the health care argument, yes the bill wasn't perfect...but guess what..at least he did something. The reality is the current system couldn't stay, and something had to be done. We will see what the final implementation looks like, but I am pretty sure it won't have any death panels. I am not advocating oil & gas price controls, but the fact remains that America (and the West in general) is highly dependent on oil from relatively volatile areas of the world. Yes, people have cried wolf many times and it hasn't always borne out in 'rations', but as a result of the market doing it's thing, we have seen massive price run ups in those commodities (to almost unprecedented levels) right before major economic downturns. From the 70s, to 2000, to last year. One thing that was consistent with all recessions in those times are sky-high energy prices - http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States http://en.wikipedia.org/wiki/List_of_recessions_in_the_Unite... The most recent recession was coupled with financial mayhem, so that eclipsed the high energy prices...but it doesn't take away from the fact that the US economy is highly dependent on foreign oil. As far as I know, regulators and the government (both this one and previous ones) never tolerate/promote insider trading or the backdating of stock options. There are some economists that argue that both shouldn't matter in an 'efficient market', because it would only make the market more efficient by pricing in more information more quickly. I am not sure I agree with that, due to misaligned incentives of executives and shareholders, but that's another argument for another thread. Re: the gov't suppressing IPOs...there are so many things wrong with this statement I don't even know where to start. For starters, a startup shouldn't be a 'vehicle' to an IPO. So the mere fact that you think the gov't 'didn't help us any' because they made the road to IPOs a bit more bumpy, I would suggest that perhaps you need to rethink why you are doing a startup in the first place. Even in 'rosier boom boom' times, driving towards an IPO without solid fundamentals is like gambling. If you have solid fundamentals (i.e. strong revenues, gross & net margins + high ROE + high growth potential) then SARBOX won't have too much of a negative impact on your IPO. Don't believe me? Look at Google. SARBOX implemented in 2002 (http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act), Google IPOd in 2004 (http://www.google-ipo.com/ http://www.google-ipo.com/). If you aren't familiar with the success of Google's IPO, you should probably review it. If anything, SARBOX made the industry healthier, because it weeded out the crappy startups that were relying on hype and fluff (i.e. quite frankly fraud). Ailes is his sidekick @ News Corp and tends to have more extreme views than Murdoch does. e.g. he strongly supports Glenn Beck. Regardless of your political affiliation, I think that explains itself.

hga 17y ago
WRT Government Motors, well, of course it's beneficial in the short term at least to those two companies, but Obama is the President of the US, he's supposed to take a wider view of things. Massive global overcapacity does not suggest that propping up the worse losers is an ideal solution and the thuggish cram-downs of senior debt holders in favor of the unions sends a terrible signal. But the bottom line is how this is going to play out the in long term. It's way too early to declare success, let's see if Government Motors really recovers or instead will need more cash bailouts. If Obama's actions were a bad bet he's only delayed and worsened the pain. On health care "at least he did something" just doesn't cut it as an argument, not with the dog's breakfast the Congress passed. And death panels are inherent in government takeovers of health care. Somebody, some mechanism is going to determine who gets treatments and who doesn't. The U.K. has it's NICE plus the various units of the NHS make their own resource allocations. My bottom line is that we're rich enough that the obsession with decreasing our health care outlays ("bending the cost curve") to European levels is not an imperative. We pay a lot more and we get a lot more (like clean hospital wards). And then there's all the knock on effects, like the inevitable suppression of new drugs and therapies. But at least here there's some justice in the world, for a whole bunch of ObamaCare supporters will some day needlessly die because the program they support will abort something that would have saved them. Anyway, again we'll see; assuming it isn't repealed wholesale in 2013 or defunded before then by a Republican Congress we'll find out if it makes things better soon enough. As for oil and gas, when left along (i.e. not in the '70s) the market does it's thing by signaling the relative current scarcity of oil, which prompts all the players concerned to automatically adjust. And I'm much less concerned about the recent gyrations, for you can't expect to add 2.5 billion or so people to free market (PRC and India) without short and medium term discontinuities. Also don't forget about how many of those price shocks were prompted by devaluations of the US dollar, in which oil is denominated. Nixon's closing of the gold window in 1971 was after all what started the mess. I.e. it's an issue, even a problem, but not a crisis. And I think we'll just have to agree to disagree on "startups as a vehicle for IPOs". If you think the VC game is legitimate, if you think there are ventures that can't organically grow from an angel start (e.g. serious hardware ones), then IPO exits are necessary for healthy VC investing. Just think of all the companies we probably wouldn't have with out VCs: Apple, Sun, any number of chip and hard disk vendors. Some worthwhile things require a lot of upfront money. Pointing out the one post SARBOX blockbuster high tech successful IPO isn't germane; I'm more concerned that there will be no future Googles because the money to build such capital expensive ventures is gone due to the termination with extreme prejudice of the potential of a high payoff at the end of private financing. VCs aren't charities. WRT to Ailes, if you can point out how Murdoch is warping the Journal's editorial board then maybe he's relevant, alhtough I gather he has bigger fish to fry, like the massive growth of Fox News. I just don't see Murdoch doing that, in practice (I read the editorial page every day) or in theory, since his objective is to have the Journal muscle in on the NYT, which is much more of a front page thing.

hga 17y ago

WRT Government Motors, well, of course it's beneficial in the short term at least to those two companies, but Obama is the President of the US, he's supposed to take a wider view of things. Massive global overcapacity does not suggest that propping up the worse losers is an ideal solution and the thuggish cram-downs of senior debt holders in favor of the unions sends a terrible signal. But the bottom line is how this is going to play out the in long term. It's way too early to declare success, let's see if Government Motors really recovers or instead will need more cash bailouts. If Obama's actions were a bad bet he's only delayed and worsened the pain. On health care "at least he did something" just doesn't cut it as an argument, not with the dog's breakfast the Congress passed. And death panels are inherent in government takeovers of health care. Somebody, some mechanism is going to determine who gets treatments and who doesn't. The U.K. has it's NICE plus the various units of the NHS make their own resource allocations. My bottom line is that we're rich enough that the obsession with decreasing our health care outlays ("bending the cost curve") to European levels is not an imperative. We pay a lot more and we get a lot more (like clean hospital wards). And then there's all the knock on effects, like the inevitable suppression of new drugs and therapies. But at least here there's some justice in the world, for a whole bunch of ObamaCare supporters will some day needlessly die because the program they support will abort something that would have saved them. Anyway, again we'll see; assuming it isn't repealed wholesale in 2013 or defunded before then by a Republican Congress we'll find out if it makes things better soon enough. As for oil and gas, when left along (i.e. not in the '70s) the market does it's thing by signaling the relative current scarcity of oil, which prompts all the players concerned to automatically adjust. And I'm much less concerned about the recent gyrations, for you can't expect to add 2.5 billion or so people to free market (PRC and India) without short and medium term discontinuities. Also don't forget about how many of those price shocks were prompted by devaluations of the US dollar, in which oil is denominated. Nixon's closing of the gold window in 1971 was after all what started the mess. I.e. it's an issue, even a problem, but not a crisis. And I think we'll just have to agree to disagree on "startups as a vehicle for IPOs". If you think the VC game is legitimate, if you think there are ventures that can't organically grow from an angel start (e.g. serious hardware ones), then IPO exits are necessary for healthy VC investing. Just think of all the companies we probably wouldn't have with out VCs: Apple, Sun, any number of chip and hard disk vendors. Some worthwhile things require a lot of upfront money. Pointing out the one post SARBOX blockbuster high tech successful IPO isn't germane; I'm more concerned that there will be no future Googles because the money to build such capital expensive ventures is gone due to the termination with extreme prejudice of the potential of a high payoff at the end of private financing. VCs aren't charities. WRT to Ailes, if you can point out how Murdoch is warping the Journal's editorial board then maybe he's relevant, alhtough I gather he has bigger fish to fry, like the massive growth of Fox News. I just don't see Murdoch doing that, in practice (I read the editorial page every day) or in theory, since his objective is to have the Journal muscle in on the NYT, which is much more of a front page thing.