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If GM Is Like Citi, Where Is Citi's Sacrifice?

By Big Tent Democrat, Section Economy
Posted on Tue Mar 31, 2009 at 09:46:17 AM EST
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Jim Manzi writes:

Chrysler may have to play Lehman to GM's Citigroup.

The idea is Chrysler will be allowed to fail like Lehman and GM will be rescued like Citi. Here's my question -- where is the tough talk to Citi?

It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized [financial] industry.

When will President Obama say that?

Speaking for me only

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    If GM Is Like Citi, Where Is Citi's Sacrifice? | 16 comments (16 topical)

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    When will President Obama say that? (5.00 / 3) (#1)
    by Anne on Tue Mar 31, 2009 at 10:01:23 AM EST
    Can I pick "never" as the over/under on that one?

    What I would love to know is whether he has even asked his own advisors why they are not being as tough on Citi as they are on Detroit, because I think it is inevitable that he will be asked that question, and at this stage, I'm anticipating an awkward WORM Squirm that even a TelePrompter won't be able to help him with.

    And then all hell really will break loose.

    He could answer that very easily Anne (2.00 / 1) (#7)
    by dallas on Tue Mar 31, 2009 at 12:35:08 PM EST
    He is asking GM union members and creditors to make concessions. Citi has no union members to make concessions. And they do not even come close to having the amount of creditors as GM does. Unless of course you want to count Citi's biggest creditor and that is the depositors. I don't think we want them to make concessions.

    So given those facts how could Obama possibly ask Citi for the same things as he is GM when Citi does not have the same to ask of?

    Parent

    Citi's creditors (5.00 / 2) (#10)
    by Big Tent Democrat on Tue Mar 31, 2009 at 01:30:17 PM EST
    who are not depositors are the issue. Depositors are insured up to 250K by the FDIC.

    You are again full of it.

    Parent

    Clarification (2.00 / 1) (#13)
    by dallas on Tue Mar 31, 2009 at 02:37:35 PM EST
    What I'm full of is information that is not talked about much by other posters.

    What I said was

    Citi has no union members to make concessions. And they do not even come close to having the amount of creditors as GM does.

    Both of those are true. So my point again is how can Obama ask for something that does not exist. Union Members, non-existent. Enough creditors to make a difference in negotiations, not there compared to raw material heavy, vendor supplier heavy, machinery heavy, GM. Those are just facts bud. I mean look at the two businesses. One is heavy in all the raw materials/vendor/suppliers  mentioned above and the other buys office supplies.

    Now if you are just looking for some symbolic negotiation that won't add up to any dollars to speak of then OK. But what would really be the point? I don't think Obama is going to do something like that. Do you?

    FDIC? Not even part of the conversation in negotiations. I was just pointing out that if someone wanted to talk about creditors then the depositors were the largest ones. Subtract them from the balance statement and creditors get real thin in terms of dollars.

    Sorry if you disagree bud but I've taken a look at the financials and facts is facts.

    Parent

    The only clarification (5.00 / 1) (#20)
    by joanneleon on Tue Mar 31, 2009 at 11:28:56 PM EST
    you've provided is that you don't know what the heck you're talking about.

    Really?  A bank's only creditors are office supplies vendors?  They only buy office supplies??  Good Gawd.

    Parent

    But GM is basically a blue-collar shop (5.00 / 1) (#3)
    by imhotep on Tue Mar 31, 2009 at 10:56:41 AM EST
    and those industries don't count as much as the white-collar shops according to cw and the prevailing right-wing ethos in DC.
    And unfortunately (5.00 / 1) (#14)
    by cal1942 on Tue Mar 31, 2009 at 02:46:03 PM EST
    too many "progressives" as well.

    Parent
    Last night (5.00 / 4) (#4)
    by TeresaInSnow2 on Tue Mar 31, 2009 at 11:03:46 AM EST
    ..on CBS News, someone interviewed a Detroit Auto Worker.  

    I was delighted to see that Mr. Blue Collar auto worker essentially (symbolically) asked the same question: "Why Not Citi?".

    I think the Wall Street Masters are hoping that we mere citizens are too entrenched in "the economy" and "our troubles" to ask that question.  Sorry, not so.

    Lehman's price was brought down (5.00 / 1) (#18)
    by Samuel on Tue Mar 31, 2009 at 04:50:47 PM EST
    price was brought down by hedge funds purposefully.  Goldman owed them 8bil so they put a hit out to wash the debt and profit off short-sales.  

    Chrysler makes cars that people don't buy.  

    re: When will President Obama say that? (2.00 / 1) (#19)
    by elrapido on Tue Mar 31, 2009 at 05:28:10 PM EST
    Assuming that GM is like Citi is your mistake here.


    This is too confusing for (none / 0) (#2)
    by oculus on Tue Mar 31, 2009 at 10:35:33 AM EST
    Us in the trenches. But pssst musn't do anything to suggest weakness in our financial institurions.

    The administration would be shooting (none / 0) (#6)
    by coast on Tue Mar 31, 2009 at 12:12:52 PM EST
    itself in the foot if it took the same hard line against the banks that it is against the auto makers.  All the bailout money to the banks supposedly were given to strengthen the balance sheets of the bank.  As I understand it, this was done for several reasons but most of all to avoid a run on the banks by depositors who believed they may fail.  If Obama took the same stance against the banks that he has against the auto industry, there could be a run on the banks.  Therefore it would totally defeat what has been done.  I believe that Geitner's request for expanded powers is a move to eventually nationalize a few of the banks.  However, he has not done this yet because, as I understand it and could be wrong, the government can currently only take over the banking operations of those banks that fail.  If granted these expanded powers, I think the Treasury could take all the operations under the bank holding company.  Given the size of some of these banks, it makes sense to want to control the whole thing rather than just a piece.  Is it fair, no.  But does it make some sense, yes.  Do I think it right, no.

    So much better to hand them a trillion dollars (5.00 / 2) (#9)
    by Big Tent Democrat on Tue Mar 31, 2009 at 01:28:37 PM EST
    no logic on your comment imo.

    Parent
    I believe the subject of the thread was (none / 0) (#11)
    by coast on Tue Mar 31, 2009 at 01:43:30 PM EST
    what makes the bank different from the auto industry, not whether handing the banks a trillion was wise or logical.  I've have been against the bailout from the start.

    Parent
    Does it make some sense? (none / 0) (#16)
    by Big Tent Democrat on Tue Mar 31, 2009 at 02:50:30 PM EST
    You answer "yes." I answer "no." The illogic is expanded when you say you oppose it.

    Parent
    Dalllas is banned from my threads (none / 0) (#17)
    by Big Tent Democrat on Tue Mar 31, 2009 at 03:37:02 PM EST
    Do not reply to his comments as they will be deleted.

    If GM Is Like Citi, Where Is Citi's Sacrifice? | 16 comments (16 topical)

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