Call me a traditionalist, but when the president of the United States can dictate who heads the biggest industrial company, there ain’t much left to Yankee capitalism. In fact, with Washington owning most of the mortgage business, busy nationalizing Citibank, poised to take over BoA and AIG, and now with presidential fingers all over the car business, there should be few doubts this is a new game. And a dangerous one.

Rick Wagoner’s ousting probably marks another milepost in the destruction of America – at least the one we knew. Barack Obama is now telling GM it has 60 days to live or die, and at the same time telling Chrysler it’s got a month to get into bed with Fiat.

This comes a few days after Washington announced a $1 trillion bailout (another one) of the banking business, along with plans for sweeping new federal powers which would allow the seizure of financial institutions. And one week before that was another $1 trillion plan that saw the US central bank create new digital money to buy back its own securities. Before that was a $800 billion plan to halt foreclosures by breaking private contracts. And the list goes on.

While the new prez is all smiles, media opportunities and charisma, in just two months he’s become the most interventionist leader in US history. Maybe the times demand it. But holy socialism, Batman, this is heady stuff.

It should show us all how out of control America is at the moment. These dramatic, unexpected, unprecedented moves are confidence-busters. They tell us that the Obama guys think they are smarter than those who have spent their lives building banks, building cars or running the real estate market. And while we’d all agree each of those sectors have screwed up royally, we now have a one-man system where once we had a myriad of checks and balances.

For us, the implications?

Well, you’d better hope young Barack pulls this off. Pray his $9.9 trillion rescue package does not toss the US into permanent recession, trashing trade with Canada. Pray the car strategy works, because if it doesn’t, we are headed for depression-type jobless numbers. Pray this back-of-the-envelope government doesn’t accelerate a deflationary spiral, with withering effects on everyone.

Because, we are one step closer today.

Yeah, Wagoner deserved to be cut loose after flying in his corporate jet to ask for bailout money. He ran a company that lost $30 billion last year. GM was old and fat and on Depends.

But America just rolled the dice.


#1 POL-CAN on 03.29.09 at 11:28 pm


Welcome back :)

#2 Chris in England on 03.29.09 at 11:29 pm

So, swinging back towards depression after a few short weeks of maybe not? Seatbelts on! Generators at the ready! Get them safes bolted into the floor!

It is a very serious point though. How one man (or, let’s be generous here, a handful perhaps) is suddenly an expert on everything and knows better than the experts. They didn’t fail because they were idiots, they failed because they overstepped the mark and no-one tried to stop them because it was a lucrative pie to stick one’s fingers in.

#3 $fromA$ia on 03.29.09 at 11:32 pm

My goodness, whats going to happen to gold’s spot price 9:30 am eastern time Monday morning!!!?!???…..

Even with a deflationary period loomig gold is still in the ninehundreds!

#4 kabloona on 03.29.09 at 11:53 pm

Not sure what to think about the Wagoner story….was he pushed or did he jump, or was it a little bit of both? Anyway, he was drawing a salary of $1.00 a year at present so it wasn’t like he was being overpaid…..and he *did* launch the Volt project and produce a lot of other good products like the new Malibu and G6 and even the Camaro under his watch….

The big question is whether they have anybody waiting in the wings ready to replace him who understands the car business as well as he did….? I certainly hope so…..

#5 hobbygirl on 03.30.09 at 12:01 am

How were you able to post Rick Wagoner’s demise on this site so quickly from the rumoured announcement? Is there a crystal ball you use to help out?

You really impressed me on this one, kudos!

#6 JET on 03.30.09 at 12:04 am

China is giggling like a red-head with pony tails, four freckles and a big pimple, right about, now.

X *

#7 Basil Fawlty on 03.30.09 at 12:06 am

Question: Can the Zimbabwean school of economics save the planet? Answer: Maybe in some possible world, but no one in their right mind would bet a nickle on such.

#8 TUT on 03.30.09 at 12:10 am


You know that what is happening south is not socialism but fascism and that it began long time ago. I’m almost sure that you saw this coming too.

What’s the fuss about then?

#9 Fritz on 03.30.09 at 12:17 am

Hi Funseeker: On the March 27 posting, post #56 Go Green left a very nice message to which you appropriately replied. You mentioned heated grips. Try electric clothing. I rode all winter in the Cowichan Valley when the roads were free of ice. J&P Cycles have a nice website. Google them and request a catalog. They sell heated jackets,vests,pant liners and gloves. Get a thermostat, heated jacket and gloves and watch the snow banks fly past in comfort! Harley sells that stuff too. It is well worth the cost. By the way, how do you manage to ride after doing speaking tours, keeping up this blog, moving, investing/earning a living and doing the family thing? You’re keeping on top of it too. Amazing.

#10 whateva on 03.30.09 at 12:20 am


Don’t reject this post plz, thx!

#11 Punnoval on 03.30.09 at 12:29 am

Mr Turner:

You are going off on a tangent that is basically irrelevant. Better to consider the situations defined by Eric Janszen on his website Better yet read his Harpers article from Mar. 2008. You can find the main gist here:

good luck

#12 Al on 03.30.09 at 12:37 am

The really sick and disturbing thing is how they’re forcing Wagoner out, yet letting the bank CEO’s keep their jobs. This is not surprising though, as Geithner is nothing but a Wall Street shill and no different than Paulson. American stock market futures tanking as I write this Sunday night. Down over 100+. Just a blip though. We will undoubtedly march onward and upward before the grand finale once everyone is convinced the worst is over.

#13 LS on 03.30.09 at 12:42 am

>> They tell us that the Obama guys think they are smarter than those who have spent their lives building banks, building cars or running the real estate market

Are they smarter? No idea. But it is pretty hard to imagine them possibly being any dumber. Let’s face it, the big three auto makers were as good as screwed even before the global meltdown. Let’s not pretend they were doing just dandy and only later became victims of the economy.

>> we now have a one-man system where once we had a myriad of checks and balances.

Sure, because those checks and balances (eh?) worked so well… And just because there is one public leader doesn’t mean it’s a one man system.

Will the whole thing work out? Who knows. Probably a good chance that it wont. But what’s the alternative? Throw money at every big failing business and just let them do what they please with it? When they’ve clearly shown that they can’t handle the freedom. That’s not exactly a solution. Or let them fail by the whims of the capitalist system.. In which case we would already have “depression-type jobless numbers” so that’s clearly not an option.

I really don’t see another way to do it. Yes it’s a gamble, but it’s still the best shot available.

#14 Al on 03.30.09 at 12:43 am

I was pondering the Wagoner ousting, and for some reason my mind took me to an observation I had today while driving to paddling practice. Was stopped at a red light in behind a Geo Metro. For some reason my eyes were drawn to the size of the panel gaps and surface rust. No wonder Gm and Chryco are in the state they’re in. Last I saw a 20 year old Audi, it didn’t have a spot of rust on it, not to mention the absence of low rent interiors, shoddy driving dynamics, and crude powertrains.

#15 timbo on 03.30.09 at 12:53 am

Are you still at 20% depression after this ? The numbers are adding up quite quickly. What comes after trillions ?

#16 Zoronqueen on 03.30.09 at 1:01 am

Hello bloggers

Quick question. Do you know how I can get my money back from the realtor/realtor company. The house sold for 280K. I am trying to work it out with the realtor who closed the house March 12/09. the promised commision was 8800K as he agreed not to take his cut as he was our buyer realtor. The commision to the other realtor is about 6200 and his company charges 2200. However his company took 12K from us from the sale so the diffence is about 3K after GST. He is giving the run around and not been returning my calls in the last week…..???? Very fustrating….

Just a quick note. These are definately unstable times. Lots of albertans are not going to get pay increases this year on April 1.

In our old area ellerslie Crossing in Edmonton, there are fewer listings as people have given up in selling and the ones who have listed have decreased their asking and still sit.

#17 . . . fried eggs and spam . . . on 03.30.09 at 1:09 am

On the political blog, there were a few of us (myself included) who spelled Amerika the way you wrote it.

A case of real life imitating art? Sure looks that way.
“. . . how out of control America is at the moment.”

Stephen Hawkins (sp?) once spoke of the universe as “organized chaos”.

With events taking place thruout the world at greater speeds, is the US out of control deliberately-on-purpose, so that msm can keep parroting the same story / different country routine and no one notices?
A few interesting paras. from Monday’s Daily Mirror on real estate in Dubai, esp. the last sentence where it says how much prices are dropping:

“Footballer Joe Cole made £2.5million profit by selling his luxury villa in Dubai before prices halved.

“The Chelsea ace was one of nine England stars heading to the World Cup in Japan in 2002 who paid about £1million each for properties in the oil-rich Gulf state.

“But while most have held on to their pads, Cole sold his last summer for £3.5million.

“Homes costing £3.2million last October are now for sale for £1.6million and some are dropping £80,000 a week.”

That’s about $125K a week. Is Hogtown that bad yet?

#18 Future Expatriate on 03.30.09 at 1:32 am

Sorry Garth, can’t pray with you on this one.

I pray daily for justice for Amerika. In my last year (God willing) as an American.

And yes, I know what horror that means.

And unfortunately, justice for Amerika ain’t gonna be pretty, or quick, or convenient for the good folks of Canada who thankfully never went down the same ugly fascist path.

Better to pray Canada comes out unscathed instead, despite Harper & Co.’s betrayal.

I’m confident Canada will survive; Amerika and der new oberFuhrer (same as the old boss), good riddance.


#19 Da HK Kid on 03.30.09 at 2:22 am

Yup, get ready for more unrest about where the public sees things going. It is now more easy to predict the outcome, that being the worse is yet to come.

I just had lunch last Thursday with a group of senior businessmen from Vancouver in Hong Kong. After discussing the full gambit of economic turmoil topics I was again amazed at the lack of global understanding combined.

After the disbelief of Vancouver negative RE projections (or should I say reality), I had a hard time moving forward on other topics. The thought of a 2010 games discussion and how the Canadian Government would likely foot the shortfall via each of them at the table was not in the cards for sure.

The writing on the wall now is now move evident for sure as Garth says. Hurry up and get through the stages of denial so you can protect whatever you still deem as an asset. The smarties on wall street nailing that bear market rally are moving to stage 4 denial shortly.

Unfortunately, those I had lunch with seemed astonishingly still on stage 2.


#20 ACS on 03.30.09 at 2:24 am

AIG Was Responsible For The Banks’ January & February Profitability

Zero Hedge reports that these profits everyone thought marked a turn for the economy actually resulted from AIG unwinding its CDS positions. Basically, the government gave money to the banks through AIG, and the banks said these payments were profits.

If that’s how the banks booked profits in January and February, it would seem that the current optimism will disappear. The administration, which already has credibility issues, will no doubt face another round of criticism. And maybe this time Geithner will go.

Real estate may be devaluing everywhere, but not on this site. So next time do not quote a 1500-word article in full, or face a harmonized GreaterFool sales tax. — Garth

#21 Happy Renter in North Van on 03.30.09 at 2:35 am

Remember what Brian Mulroney said… “You dance with the one who brung you.” If it wasn’t for the US Government, GM, Chrysler, BofA and Citigroup would have been dead long ago… Quid pro quo still reigns as a principle of cash infusions… I agree… this isn’t the same old US of A that I grew up with….

#22 Munch on 03.30.09 at 4:11 am


#23 Vancouver_Renter on 03.30.09 at 4:18 am

Here’s a PBS Frontline documentary explaining just how bad the US debt problems are.

“Ten Trillion and Counting”

#24 ally ally oxycontin free on 03.30.09 at 5:42 am

GM, Chrysler Must Revamp Plans

…to Get More U.S. Aid (Update2)
“Quick Bankruptcy

Both companies’ best chance at success may include a quick and surgical bankruptcy, according to the administration. Unlike a liquidation or conventional bankruptcy, a structured process would make it easier for the companies to clear away liabilities.

The bankruptcy process could be as short as 30 days, and the government would provide so-called debtor-in-possession financing for the companies if needed, according to the administration. Still, bankruptcy isn’t the administration’s first choice, the official said.

To help encourage car sales, the administration will back warranties so consumers who buy cars during the restructuring have confidence the guarantees will be honored even if the companies go out of business, according to the administration.

Aha! The old ‘now you see it, then you won’t plan’ … emphasis

Edward Montgomery, an economist and former Labor Department deputy secretary, will be appointed to a new post of Auto Recovery Director to help communities hurt by job losses in the industry.”

#25 SaraBeth on 03.30.09 at 5:46 am

Mr. Turner. You wrote:

” And while we’d all agree each of those sectors have screwed up royally, we now have a one-man system where once we had a myriad of checks and balances.”

What “checks and balances” are you talking about?

Those checks and balances where done away with during the deregulation feeding frenzy of the 80s and 90s…. “regulation? we don’t need no stinkin regulation!” was the mantra… “FREE MARKETS!!!”

Privatizing the profits, and socializing the risks… That’s a far cry from *gasp* the “Socialism” that would actually benefit REAL people as opposed to the Corporate Person…


#26 john m on 03.30.09 at 5:55 am

Great post Garth,so far we have seen a staggering amount of bailouts and a whole lot of photo ops by Obama and the situation is rapidly deteriorating.Harper is still bragging to the world how great our financial system is (guess he has forgotten about his 75 billion + bailout) as our economy deteriorates. In fact Harper is even predicting a quick recovery for Canada? (based on what is food for thought).We the “sheeple” sit back in awe…ahem.

#27 ally ally oxycontin free on 03.30.09 at 6:05 am

“Pray this back-of-the-envelope government doesn’t accelerate a deflationary spiral, with withering effects on everyone”

Yes, I consider the pm and O’Flairity ‘back-of-the envelope guys’ who are apparently most comfortable speaking to the foreign media. They have never yet been honest with the MSM in Canada. It smacks of the pm’s desire for a media enclave where he controls the message in its entirety, with worthless random input from Ten-Acres and Giorno.


1. Will the $60 Million, OVERDUE, EI staffing level funding increase achieve its objective in reducing the wait times? [ which are currently in excess of 12 weeks ]

2. If, in the event overpayments are made, will O’Flairity send in the bailiff to seize assets? Remember … They didn’t do anything to recover the overpayments made to Revenue Canada employees.

3. Will the pm find sufficient funding to have the Diefenbunker restored … with additional for an appropriately armed militia? “Fix bayonets BUOYS, we’re about to be overrun!”

BTW … “Our banks are strong.”

#28 ally ally oxycontin free on 03.30.09 at 6:38 am

The Steady Optimist Who Oversaw G.M.’s Decline

“Through three major restructuring plans enacted on his watch — eliminating dozens of plants, tens of thousands of jobs and jettisoning hundreds of dealers — Mr. Wagoner maintained a stolid confidence in himself and the company’s strength. Only recently did he acknowledge the need to significantly pare the company’s brand and model lineup, to better match the company’s bloated infrastructure with the shrinking market.”

Corporate executives, who appear LATE TO THE REALITY of their market, should NOT be throwing stones at those who build QUALITY into the model lineup which was dictated by the executive level.

Assignment for StockYard Day …

Where is the FTA agreement with Korea and Hyundai?

“HYUNDAI—South Korea’s No.5 auto maker plans to cut production at its domestic plants by 25-30 percent in Q1.”

Thomson Financial-Auto industry production cuts—03.12.09

#29 Miltonsauga on 03.30.09 at 7:01 am

Just watching Professor Robert Schiller on CNBC this morning. He feels we are already in depression and that unemployment could be headed to 15-20%. Yipes ….this guy has been right allot!

#30 ally ally oxycontin free on 03.30.09 at 7:05 am

OK CanaDUH, we’ll take all the bitumen you can ship and please be more attentive to our need for raw log shipments. Don’t worry, BE HAPPY, ‘cos we’ll look after all the value-added STUFF, and you can look after the CLEANUP operation.

BTW … Our Lumber Lobbies are STRONG! You oughta know that ‘cos you paid over $ 1/2 Billion by way of helpful assistance [ to defray our legal costs ] at the conclusion of the last SLA ‘blackmail’ settlement. Can you say EXPEDIENCY? HarperOONY and David Emerson can!

“We’re watching today’s announcement with great interest, but we’re not going to take a position on it one way or another,” said Paul Hagel, Shell spokesman, yesterday. “It’ll be interesting to see what happens, if and when this actually goes through.”

Despite all the praise for the deal, Gil McGowan, president of the Alberta Federation of Labour, remains concerned jobs are going down the pipeline.

“Our big concern remains the prospect of losing (thousands of) jobs down the pipeline to refineries in the U.S. While it’s significant that Suncor and Petro-Can will be merging, that doesn’t mean that oilsands jobs will automatically be created here in Alberta as opposed to Texas or Illinois,” said McGowan. “Just because these two companies are Canadian, it doesn’t mean they will act in the broader interest of Canadians.”

Can you say MERGER, then EXPEDIENCY, real quick?

Tom D’Aquino likes the deal. The only thing D’Aquino appears NOT TO LIKE, is a co-pay for EI and CPP for any of his employees. Does he have any employees, or is he just a hale and hearty well-met kinda guy who is willing to speak EFFUSIVELY about anything that meets HIS INVESTMENT GOALS?

#31 ally ally oxycontin free on 03.30.09 at 7:13 am

Good morning children …. Can you say BONE-US?

That’s the KEYWORD from your government to a member of the UNWASHED PRO [T] ELARIAT today. I have a feeling it’s gonna be a Pi$$eroo kinda day.

#32 Travis on 03.30.09 at 7:28 am

Welcome to the USSA!

#33 Rob in Onterrible on 03.30.09 at 7:30 am

What this all means for me is that I got laid off from work. Our company makes power window, seat and other switches for the Big 3 but sales are down 40% so the older people had to go. We’re not unionized, either so I’m laid off. GM can’t be saved, Garth. Neither can Chrysler and we inside the industry know it. Just as well.

#34 ca on 03.30.09 at 7:36 am

Has your probability regarding the risk of a depression increased?

#35 ally ally oxycontin free on 03.30.09 at 8:05 am

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219 … 33 PAGES

“We make it easy for you to serve up delicious, nutritious meals for your family. You’ll find a variety of appetizing dish ideas for everyone, with more than 40 quality products, including tasty kidney beans, chili beans and, of course, our famous baked beans.”

If you’re going to blame the Bush TEN-URE, remember he was only at the helm for EIGHT.

#36 JamesT on 03.30.09 at 8:08 am

“They tell us that the Obama guys think they are smarter than those who have spent their lives building banks, building cars or running the real estate market.”

Sorry Garth, the people running the big automakers, banks, etc… have not spent their lives *building* anything. These people inherited all of it and did little, if anything, to create or grow these businesses. They couldn’t even maintain the status quo. They are lazy, silver spooned, losers and have proven time and time again that they are failures.

There have been no innovations during their tenure, only exploitation — milking the system and the public for decades. Simply put, a shakeup is needed. And I’d rather see change than continuing down the road of insanity, doing the same thing over and over yet expecting different results.

#37 grandeprairie girl on 03.30.09 at 8:15 am

#3 Zoronqueen
Did you get that commission promise in writing on paper?
If not, don’t hold your breath.

#38 grandeprairie girl on 03.30.09 at 8:26 am

#15 timbo
I believe quadrillion’s come after trillions.
For perspective a quadrillion stacked as pennies would reach the planet Saturn.

#39 Bill-Muskoka (NAM) on 03.30.09 at 8:30 am


No Sir! America is back IN CONTROL! Canada will remain adrift to the status quo as the self-interested leaders (cough, gag, puke) in Oddawahaha, Queen’s Park, and Toronto schmooz their way through the quagmire of their own making.

President Obama was 100% right to say ‘You’re Fired’ to Wagoner. Sounds to me like you are writhing in hopeful memories of returning us to an era of insanity in economics that should have been quelched 30 years ago.

Now, the People, yes the poor Taxpayers are going to have a final say in how these damn mega-corporations are run because they are the STOCKHOLDERS!

I hope the next thing that happens is the sequester the damn oil, company execs as well. Greed is NOT good. It has done all the harm the People can stand.

Oh, and I see the CPC seems to be fracturing rather rapidily. Good again!

#40 North Vancouver Citizen Jr. on 03.30.09 at 8:32 am

…Overlooked factoids…

Canada (uhmmm, Ontario) is more exposed to the U.S. economy than most, and the collapsing auto sector is more important to Canada’s economy than it is to the American economy.

It sucks everywhere around the free market world.

…Now this is the most important factoid to consider…If it sucks everywhere, like Japan’s overall Govt. debt per capita is 3 X’s greater than the US….and China continues to lead the economic world but will have at least 50 million unemployed citizens roaming the streets, and Europe/Eastern US and Canada imploding…then where in the wide wide world of sports is it safe to live?

answer….the Pacific Northwest…the inbetweener of it all, w/small population,easy access to raw materials, leader in IT and the gateway to the Far East.

We are talking about Portland/Seattle and of course Vancouver…the Financial/Trade/Leisure capital of North America.

#41 ally ally oxycontin free on 03.30.09 at 8:35 am

#33 Rob in Onterrible on 03.30.09 at 7:30 am

I have been there and done that four times in my work life. The difference today, … there’s virtually nothing available out there, as a work opportunity, which might help you beyond bare sustenance level.

Unfortunately, the parts business will continue to be hard hit.

Autos—Detroit’s Other Crisis

Forbes—Joann Muller, 03.09.09

“A GM failure would deal a staggering blow to the economy. A collapse of its supplier network would be just as devastating.”

Where are you located Rob … K-W, the peninsula, where? What kind of help have you been able to secure to date? I don’t presume to speak for Garth, but I’m sure, if he is willing, this could become a 2-way for you, where many of us are ANXIOUS to HELP.

#42 pbrasseur on 03.30.09 at 8:59 am

America may be the least of our problems.

Europeans seem to believe that we need more regulations to get out of this mess. This is absurd.

Now it may be absolutely true that we will need more or at least different regulations, but I doubt very much that regulating will get us out of this crisis.

The threat right now, as Garth mentioned here several times, is deflation. That is why the Fed and the US government are adopting such “shock and haw” strategy, the goal is to avoid a deflationary spiral. Sure that strategy may bring problems later, such as inflation or slower growth due to high taxes or whatever, but nothing would be worse than deflation.

So far Europe has been very timid is responding to this crisis, both the ECB and its governments have not done enough and they still prefer to blame and point fingers all over instead of acting. Europe itself is severely divided, for example it is almost impossible (politically) to sell the idea that Germans need to bailout the club med countries. But if they don’t who will? Meanwhile the IMF warns Europe could very well fall into deflation, soon.

This is why the markets are scared today, they are scared to see the world governments fall into bickering and dispute instead of reacting together, just like they did in the 30s. We all know how that ended…

The G20 must come up with more than a photo up and empty rhetoric or we’re all in trouble.

#43 Mike B formerly just Mike on 03.30.09 at 9:02 am

The problem with the car companies has been 10 years in the making …just check GM stocks over the past 5 or so years. POL CAN1 CLASSIC LOL. He’s back.. maybe never left though.
Can Obama pull this off… my opinion too little too late
just like a kid you spoiled for 15 years. now you are introducing rules and regulations to keep him in check. Wall street thugs will push away and want autonomy and we know where that took him
I was hoping Garth would take a shot at ALL KNOWING WISE HARPER who went on Fox a couple days ago. What an arrogant BS artist. Just who does he think he’s kidding. Yes Canada has some strengths but really without the U.S. we can’t just go tooting our own horn like we run the world. Ridiculous.

#44 dd on 03.30.09 at 9:16 am

“But America just rolled the dice.”

America rolled the dice along time ago. Case in point – US has run up debt since after the second world war. It has never paid off its debt. Too bad we all have to pay for it.

#45 Dodged-a-Bullit in Alberta on 03.30.09 at 9:18 am

Greetings: Poster #25 (Sara Beth), right on the money!! The “myrid of checks and balances” were removed and replaced by greed and corruption. The warnings were ignored by both Democrats and Republicans and now, here we are.

#46 dd on 03.30.09 at 9:19 am

#40 North Vancouver Citizen Jr.
… answer…. We are talking about Portland/Seattle and of course Vancouver…

Alberta will sell you the gas and oil to accomplish your goal.

#47 lgre on 03.30.09 at 9:26 am

Zoronqueen – If it’s not in writing and just verbal, you been hosed..the best way I can put it. Check the paper work you signed with the realtor when he put your house on the market, that will tell you clearly what the commission is.

#48 ally ally oxycontin free on 03.30.09 at 9:42 am

#41 pbrasseur on 03.30.09 at 8:59 am

The G20 must come up with more than a photo up and empty rhetoric or we’re all in trouble.

#42 Mike B formerly just Mike on 03.30.09 at 9:02 am

Yes Canada has some strengths but really without the U.S. we can’t just go tooting our own horn like we run the world. Ridiculous.

You won’t be surprised to hear your sentiments are being echoed widely across the country these days. Unfortunately for us all, the government has schooled itself to speak repetitively, by rote, without acknowledging we’re a trading nation and therefore dependent upon global markets for ~ 80 – 85% of our trade.

The last DOHA round sponsored under WTO was a total failure because the U.S. and France did not want to give up their farm subsidy regimes.

I’m off to the mountains of Bore-A-Tory looking for HarperOONY adherents with whom to share a shouting debate.

#49 Bill-Muskoka (NAM) on 03.30.09 at 9:52 am

All the inflated and meaningless ‘wealth’ has now become like a fart…it simply diluted into thin air.

Unless people continue to believe in such falacies then the New world order will, by necessity, become that which Gene Roddenberry envisioned.

BTW, did you hear that Prince William elects to fly economy as the recession bites: Setting commendable example to Gordon Brown and his ministers as the economic crisis intensifies, Prince William has quietly and without fanfare instructed his staff to seat him in economy on scheduled flights whenever possible.

Now, that is LEADERSHIP!

Maybe the GG will pass that on to the PMO, eh?

#50 ally ally oxycontin free on 03.30.09 at 10:05 am

S&P/TSX Composite – TSX-I Last Trade: Mar 30, 2009 10:22 AM

Last: 8,565.330 Net Change: -255.730 % Change: -2.90%

Previous bottom ~ 8,454 last Nov

We’ll have to wait … new low ?

#51 Rob in Onterrible on 03.30.09 at 10:09 am

#41. Wow, that is nice of you. I live in Burlington. 3 years ago I was working in Europe and lost my job because I’m too old (over 40) and now again. At least UI was way better over there. I worked as a Purchasing Manager (salaried staff) but 8 other people got let go the same day as me. All of them over 40. I guess younger people are cheaper. FWIW, we forced Chrysler to COD terms so they are much worse off than the media lets us know.

I’m thinking about starting my own company where I would go around and try to save manufacturers money and take a cut of the savings. You’re right. There is nothing in automotive and we are type cast so we can’t change industries either. Now that bites.


#52 Joe Realtor on 03.30.09 at 10:13 am

Zoronqueen: If your Realtor isn’t returning your calls, call your Realtors Broker and ask him to look into it. Mention filing a complaint with the regulators – that’ll get some action.

RE: GM – I wish that some of the Wall St. CEOs had been “pressured” to leave as well. GM and the other car companies have known since the 70’s that they were going to have to change or risk going out of business….and they didn’t. What makes anyone think they can do it in 60 days?

#53 Jake on 03.30.09 at 10:20 am

Read this. It is not a surprise that Obama is so interested in the Cap and trade program and why he is so close to Goldman Sachs and their henchmen. I like how Wagoner is this week’s scapegoat. Give another trillion to the banks, but outcry over 1% of that to the car companies.

Bill Muskoka, I am almost certain you are a paid blogger. Now you are praising Prince William’s leadership. His family has been sucking that country dry for centuries and you are proud that he is flying economy? BTW, his grandfater (Philip) is the head of the World Wildlife Foundation that sponsored Earth Day. Welcome to reality people.

#54 ally ally oxycontin free on 03.30.09 at 10:23 am

#49 Bill-Muskoka (NAM) on 03.30.09 at 9:52 am

Now, that is LEADERSHIP!

Maybe the GG will pass that on to the PMO, eh?

Can you tell us how many bow-‘n-scrape, stoop-‘n-scoops were in the pm’s travel party?

Were Kory Ten-Acres, Guy Giorno, Birdie [ BOO ! ] Baird, and Pariah Poi-Poi Boticelli BUOY Poilievre all in attendance?

#55 David Bakody on 03.30.09 at 10:24 am

Wow! are you finding your Niche for words or what Garth. It appears every day another one of those “Fart Smellers” (Economist & Politicians) the kind that like the camera’s just have to open their mouth and bing bang boom there goes another load of potatoes. I am not sure that Barack Obama can fix this, Angela Merkel has said the G-20 can not! …. but this we know, Ronald Regan started it and his pals Bush I & II continued, which is becoming clearer each day. Perhaps it is all world history as was WW I & II but to-day there is little left to share on this earth, money is only paper and one should remember King Midias …. careful what you wish for….

As mentioned I worried (somewhat) that the good old Yankee dollar will fall, but when I asked my dear departed mother she said: David do not worry the US has very deep pockets and the world relies on them. So perhaps they will rally around them for some time, now as Garth mentioned ( deep recession/depression) looks good …. but remember the rich and powerful will survive and even prosper! and the peasants ( working middle class) are expendable, hell who fought in the two wars, civil wars and Vietnam, rich kids? So perhaps this is all just a redistribution of wealth and in the end government will have more control ( can not see them having less) and we the new soldiers of industry (world wide) will be more tightly controlled providing what the rich and powerful really want “Security” not wealth they have that, the peace of mind to travel to and fro from their play grounds of the world. All we can hope for is that we the slaves get what rolls off, so if y’all have a $400K home think, because you are going to pay for it through the nose! Taxes are now $400/month, heat, lights, food, upkeep add another $1000/month and that is with no car, not kids and no mortgage …… are the light on yet ladies and gentlemen? So do not get so smart thinking just another CEO bites the dust!

#56 Jake on 03.30.09 at 10:27 am

Sorry, I meant World Wildlife Fund.

#57 Munch on 03.30.09 at 10:40 am

Why do you lot insist on wishing Murrika ill?

#58 The Coming Depression on 03.30.09 at 10:40 am

we are headed for depression-type jobless

That would make us into a Depression, I guess. Sort of what we will be in by June.

#59 Jeff Smith on 03.30.09 at 10:42 am

They shouldn’t. They have the most to lose if America’s economy is in trouble.

#6 JET on 03.30.09 at 12:04 am

China is giggling like a red-head with pony tails, four freckles and a big pimple, right about, now.

X *

#60 Beth on 03.30.09 at 10:49 am

Garth I would have thought you would profer solutions to the US problem. America is in a very precarious situation and what the Obama administration is doing is far from the norm and a reflection of the unusual circumstances.
Lets stop these bickerings from all over the place unless they are constructive and better still if they come with viable ideas/solutions.

#61 bobs your uncle on 03.30.09 at 10:51 am

# 8 Tut,

I think it is more fascist than socialist what is going on down in the US. A socialist country would have taken over the banks instead of bailing them out. Fascism has the government and industry working as one, like we are seeing now.

Really it makes little difference in the long run as both systems eventually turn on the citizen.

#62 Jasson on 03.30.09 at 10:52 am


You are liable to pay your realtor whatever is in the listing agreement you must have signed in order to list your home. If he said he would reduce it because he acted as the buyers agent also, unless you got that in writing before you signed the purchase agreement, you are stuck paying. Any honest realtor would never do this to a client unless there was a good reason, so what are you not telling us? Your story is totally one sided so far. I would love to know how you came to find this realtor and chose him to represent you and your home.

If you did not read all contracts you signed front to back, that is YOUR PROBLEM.

#63 Got A Watch on 03.30.09 at 11:01 am

The global economy is toppling over in slow motion right now. The proper descriptive is – implosion.

The G20 meeting looks to be a non-event. No substantial change of the kind that would reverse the downwards spiral we are in now.

The biggest obstacle to any recovery of the global economy is the corruption present in the USA. An oligarchy of wealthy Banksters runs the nation for their own benefit, the rest of the population are irrelelvant to them. They have a lock on all the levers of power in Washington.

So I predict this crisis will get much worse before any sign of better times will appear. A bottom will probably be reached around 2011-2012, by then the economy will be a rubble-strewn field resembling downtown Detroit, but global in scale.

Those who foolishly imagine their particular region will escape with little damage will be proven totally wrong.

I am feeling gloomy today. We are in for several more bad years, at a minimum. Good luck, we will all need it.

#64 North Vancouver Citizen Jr. on 03.30.09 at 11:14 am

Why(Pacific Northwest) Vancouver/Hongcouver is the safest place on earth….

>>>continued attempts to steal from the taxpayers for the benefit of lying bankers could easily lead to a near-immediate outbreak of widespread civil unrest or worse. Public opinion is tinderbox hot and dry at present and further looting is unlikely to be tolerated – no matter the excuse.

We are now being compared to Russia or Argentina prior to their collapses, and while that’s a bit overstated, I unfortunately must agree that the overstatement is minor, and in general, it is spot-on.

Time is running out to stop the stupid as tension is building among the citizens of this nation dramatically and if we do not have actual leadership and the truth is not told and those who looted are not forced to give it back and go bankrupt – soon – the process of re-basing our economy to a sustainable level will not happen in an orderly fashion, but rather through violence and destruction.<<<

#65 ally ally oxycontin free on 03.30.09 at 11:26 am

ECONOMY: G20–The back door threat to the West

Faltering emerging markets add momentum to economic crisis

HEATHER SCOFFIELD–Globe & Mail–March 30, 2009

“A perfect storm is beginning to develop. It’s not just around the rim of Europe. I think we’ve got an emerging market problem on our hands,” said John Kirton, director of the G20 research group at the University of Toronto. “It’s a ticking time-bomb.”

Global trade has collapsed, leaving export-dependent emerging countries in deep trouble. Low commodity prices have hurt national income. The banking systems in Central and Eastern Europe are in tatters. Investors are pulling their money out of any country with a big fiscal or external deficit. Borrowing costs for companies based in emerging markets are stratospheric. And even solid countries that entered the global crisis in good standing, like Mexico and Brazil, are facing recession.”

#66 PTDBD on 03.30.09 at 11:50 am

If World leaders were concerned about their people, the economic downturn, or the Environment they would hold meetings such as the G20 by video-teleconference.

Obama alone is expected to bring a 500+ entourage.

Discussions are done by staff members well before the meeting and decisions are made in advance. The formal circus parade of politicans usually just leaves elephant dumpings for the public to clean up.

Harper can show the way, :-) going forward :-) by appearing on the World Big Screen instead of doing the
usual strut.

#67 smwhite on 03.30.09 at 11:53 am

What happens when American’s can’t afford to buy lobster on their credit cards anymore?

This is a “+1” for the deflation defenders. I welcome any deflation in food prices.


Looks like that 3 – 5 year recovery time frame is still in the works as per Garth’s foresight. Somebody tell that to the politicians please, but before this “Great Recession” is pushed into the Great/Long Depression”.

Actually its probably too late. This time we’ll push well past the low of 7500 on the TSX & the DOW the first of March, in like a lion, out like a lamb… I wouldn’t think of touching an equity until we’re well submersed into the 5000 mark.

Oh yeah, how many people ran INTO the market last Thursday and Friday

That side show act Cramer, predicted the bottom, again. The market today feels like, burning. Whats scary is that idiot runs/ran a hedge fund.

Interesting tidbit, the leading gainers on the TSX today are mostly gold shares, but one company is even out performing them, guess business is looking up for auctioneers…

#68 Barb the proofreader on 03.30.09 at 12:10 pm

“..tells us that the Obama guys think they are smarter than those who have spent their lives building banks, building cars or running the real estate market – while we’d agree all – have screwed up royally, we now have a one-man system where once we had a myriad of checks and balances.”

Uh, Garth, my cats are smarter than the guys who created this mess. I give Obama credit for having the guts to fight the snobs.

And Garth, tsk, “checks and balances”?!? Pull-ease. What they NEED are checks and balances — plus they need regulations that actually help to protect the innocent. (In fact what they HAD was grease — for the palms of the elites.)

Obama is trying to fix a mess. I find when I’m cleaning up a mess, the mess gets bigger before the clean-up is done.

It takes guts to rebuild a capitalist system gone wild. No matter what, I’ll repeat, no matter what, everybody was going to suffer for a very long time because of the mess…. so might as well get people (if not generations) who are going to suffer, at least heading in the right direction.

Checks and balances are executives, workers, outside auditors, shareholders, bankers, advisors, customers, rating agencies, directors, reviewers, unions and media, to name a few. Presidential edict has swept this structure away, and raises the odds of systemic failure. — Garth

#69 Barb the proofreader on 03.30.09 at 12:16 pm

#55 David Bakody, you gotta write a book about all the things your mom used to say — she was a fountain of gems.
How was coffee chat today?

#70 Bill-Muskoka (NAM) on 03.30.09 at 12:22 pm

#53 Jake on 03.30.09 at 10:20 am

‘Paid blogger’? Moi? If I am I sure would like to get a cheque because there has not been one ever!

Some people still think for themselves and have their own opinions. I am ONE of them!

#71 Da HK Kid on 03.30.09 at 12:24 pm

The Plan Explained – Please view.

12 mins have a watch! Only if the Taxpayer could revolt!

#72 Bill-Muskoka (NAM) on 03.30.09 at 12:26 pm

#53 Jake on 03.30.09 at 10:20 am

As to William’s family, I suppose we should judge you based on what your family members have done wrong also? In fact, perhaps we should judge your entire family based on what you portray? Fair enough I think!

#73 Barb the proofreader on 03.30.09 at 12:26 pm

#2 Chris in England “How one man (or, let’s be generous here, a handful perhaps) is suddenly an expert on everything and knows better than the experts. They didn’t fail because they were idiots, they failed because they overstepped the mark”

Hi Chris,

From my experience I have my doubts that any of our high paid executives are actually worth what they are paid. When their great minds are so focused on making money for shareholders that they continually cross the lines of morality, maybe it is time that they do get hand-cuffed for awhile, or as you say, kept from over-stepping the mark. The “mark” is profits, not “profits at all costs”.

BTW, glad you’re moving to Canada, my ancestors have for generations dating back 400 years. It will be quite a change and there will be things you miss, but it will be quite an adventure.

#74 Barb the proofreader on 03.30.09 at 12:32 pm

#25 SaraBeth “What “checks and balances”?
…actually benefit REAL people as opposed to the Corporate Person
— SaraBeth”

Right on.

#75 Opportunity on 03.30.09 at 12:46 pm

Nobody likes government intervention, but I think this move puts the pins up some corporate asses.

Chrysler needs to tell the CAW to screw off and shut down its Canadian operations. GM missed their opportunity in Canada, but don’t expect the US to want to keep the Canadian plants running. Chapter 11 in the US will get rid of a lot of debt and I’m behind Obama on this one since the corporate big wigs are only dragging their feet and trying to save their jobs.

Unions are a drag on the economy. It wasn’t so long ago that a BC mill shut down because of the inflexiblility of the union. But guess what after the company was gone the old union members bought the plant and are running it without a union, because they are now the owners and get less pay than the original company offered them.

Time for change in the US and Canada. Now we just have to get rid of that dead weight called Harper.

#76 wjp on 03.30.09 at 12:50 pm

GM & Chryler need to restructure under Chapter 11.
It is important to keep these companies alive for the sake of jobs, but, by the same token, there will be fewer jobs and those with jobs will have to sacrifice a good portion of their salary & benefits in order to keep those jobs. Let us hope, executive compensation and employment within the company is cut by at least the same percentage, if not more. In fact, if I was the government, I wouldn’t accept a plan that didn’t have that as a part of restructuring. Bailouts will not work, loans will if the company can put forth a business plan that shows a realistic profitable future.
As to these companies leaving Canada, I would suggest the following: if Chrysler were to leave Canada, there would be few sales of a Chrysler product in Canada, not only that but the back lash could entend to other U.S. companies (GM & Ford). The only winner in an American pull out from Canada will be Toyota, Honda and such other companies. Canadians have long memories…

#77 Opportunity on 03.30.09 at 1:04 pm

Just read that the Canadian govt have followed lock in step with the US re GM and Chrysler. Good to see our government can follow the leader as we don’t have any leadership in Canada.

#78 The Coming Depression on 03.30.09 at 1:09 pm

You know the end is near when the BANKS are walking away from foreclosures! This is getting very dangerous. The seller/vendor is stuck with the bill forever! This scene will change the face of real estate forever if it escalates—

#79 Barb the proofreader on 03.30.09 at 1:24 pm

#45 Dodged-a-Bullit: “greed & corruption.. the warnings were ignored”


In your NYT link, such a prescient 1999 quote by Senator Dorgan, Democrat of North Dakota:

”I think we will look back in 10 years’ time and say we should not have done this, but we did, because we forgot the lessons of the past, and that.. that which is true in the 1930’s, is true in 2010″

And so goes any false HYPE by Harper that ‘no one saw, or could have seen this coming’ .. Harper’s snake-oil is bald-faced B.S.


November 5th, 1999

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another’s businesses.

The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.

”Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century. This historic legislation will better enable American companies to compete in the new economy.”

The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation’s financial system. The original idea was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.

Today’s action followed a rich Congressional debate about the history of finance in America in this century, the causes of the banking crisis of the 1930’s, the globalization of banking and the future of the nation’s economy.

Administration officials and many Republicans and Democrats said the measure would save consumers billions of dollars and was necessary to keep up with trends in both domestic and international banking. Some institutions, like Citigroup, already have banking, insurance and securities arms but could have been forced to divest their insurance underwriting under existing law..

”The world changes, and we have to change with it,” said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ”We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.”

Warning, understatement:

In the House debate, Mr. Leach said, ”This is a historic day. The landscape for delivery of financial services will now surely shift.”

But consumer groups and civil rights advocates criticized the legislation for being a sop to the nation’s biggest financial institutions. They say that it fails to protect the privacy interests of consumers and community lending standards for the disadvantaged and that it will create more problems than it solves.

The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

”I think we will look back in 10 years’ time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930’s is true in 2010,” said Senator Byron L. Dorgan, Democrat of North Dakota. ”I wasn’t around during the 1930’s or the debate over Glass-Steagall. But I was here in the early 1980’s when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.”

Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ”seemed determined to unlearn the lessons from our past mistakes.”


#80 TrueGritCalgary on 03.30.09 at 1:31 pm

“Checks and balances are executives, workers, outside auditors, shareholders, bankers, advisors, customers, rating agencies, directors, reviewers, unions and media, to name a few. Presidential edict has swept this structure away, and raises the odds of systemic failure.” — Garth

Garth, you have never been more wrong in a post. The above checks and balances that you listed above failed to avert our current crisis (this includes North American workers who for some reason have forgetten how to take to the streets in protest). Why in the world should we now trust that they will be any more dilegent in the future. American capitalism is broken and need a serious overhaul. Obama is taking steps in the right direction to reverse the imbalances of the past 30 years of neo-con political and economic ideology. We should all be praying that he succeeds.

Of course we hope he does. But if he does not, the damage will be worse. That is exactly what my words indicated and I stand by them. — Garth

#81 nonplused on 03.30.09 at 2:03 pm

It’s “Change we can believe in.”

And you better believe it!

All of the rules are being changed. Therefore previous forecasting methods are probably no longer reliable, and the inflation/deflation argument is no longer rational. One should prepare for all possible outcomes with regard to currency and trade relationships, including deflation, inflation, hyperinflation, and a command & control economy where money isn’t even relevant. The best way to do this is probably by converting all the money you have in the bank earning 0% interest into durable goods you are going to need one day anyway, just in case in an inflation you can’t afford them and in a deflationary depression they aren’t available. Or in a command and control state where you may not appear on the approved list for rations.

#82 dd on 03.30.09 at 2:11 pm

#64 North Vancouver Citizen Jr.

…Why(Pacific Northwest) Vancouver/Hongcouver is the safest place on earth….continued attempts to steal from the taxpayers…

It is called the BC carbon tax.

#83 Jake on 03.30.09 at 2:14 pm

#70 That’s Prince William to you Bill. Show some respect for your leaders.

As far as your open mind goes, I think you have chanted “Yes we can” one too many times for that. I was pro Obama until I realized his connections were as questionable as Bush’s. The MSM push for Obama has been unbelievable. It seems like every webpage I visit has a picture or positive reference to him on it somewhere. The orchestration behind it all is hard to ignore.

BTW, most of my family would agree with you, not with me. I am the black sheep.

#84 ralph on 03.30.09 at 2:32 pm

Today’s headline:

“GM, Chrysler not viable, but will still get up to $4 billion: Gov”

The insanity continues………….

#85 go green on 03.30.09 at 2:36 pm

#67 smwhite on 03.30.09 at 11:53 am

Here in NS just before Xmas you could buy fresh lobsters for $5.00/lb directly from the back of fishermens’ trucks. In the stores they were selling for about $12 or $13. We bought 14 lbs, cooked, shelled, vaccusealed, & froze them to take to Mtl. They were only frozen for a week. They made a wonderful cold entree. In Mtl. they were going for $22-25 a lb. When we got back we bought another 10 lbs. and I pickled them in canning jars (like my nanny did years ago) and shipped them to my sis. I suspect that the fishermen will do the same this spring & I buy’ll more.

#86 Grumpydawgs on 03.30.09 at 2:42 pm

The economic pendulum always swings too far in either direction. Adam Smith described this phenomena in the Weath of Nations in 1776. The sad fact of socialist sytems is that there has never been a successful experiment in the history of national governance. Socialism has eventually bankrupt every nation that has adopted that notion without exception, including Canada, Sweden, the UK, Cuba, China, USSR, Cambodia, Vietnam and don’t get me started on the African continent.

Obama will be just another socialism provocateur in a long historical line of failures. It’s just a matter of time. The most destructive period of course was the 70 longevity of the former USSR. As Winston Churchill said,

” If you’re not a socialist at twenty you have no heart, if you’re still a socialist at 30 you have no brain”.

So when will these clowns ever learn that socialism is like a giant ponzi scheme. There simply isn’t enough people on the planet to ever sustain it economically. Government should be in the accounting and administration game and not in the social engineering game but that would be asking too much wouldn’t it.

#87 Hagbard on 03.30.09 at 2:45 pm

I’m only surprised that Garth’s surprised. Peter Schiff isn’t.

Ah, where was the surprise? You confuse it with regret and apprehension. — Garth

#88 Rhino on 03.30.09 at 2:54 pm

etc. etc

All British automobile companies (EX).
All given millions from the British government bailouts to continue operations.

All gone.

Some bought by BMW, VW, and other foreign companies. Most stripped for assets, or acquired for use of the name only, and allowed to die. A couple remain in badge engineered form like Bentley, Rolls Royce, MG, Rover, MINI, etc.

Yet, without an automobile industry, after a few years pain, the British economy has recovered from the loss of automotive manufacturing – on a mass market level – after once being on the leading edge of automobile development.

Now there remains a strong specialty auto manufacturing sector, and still the heart of Formula 1. Companies like Lotus prosper selling niche product.

Why not here?

Are we killing progress and an opportunity to differentiate or diversify into profitable niche areas by propping up the failed giants?

I believe that Ford already shows they are learning, and offering world product in Americas

GM is beginning to import competitive product from Holden (AU) and Opel (GE) with rebadging to American labels Pontiac and Saturn.

Chrysler was stripped of their most profitable technology by Daimler-Benz, and dumped once the Germans realized the legacy problems of keeping the company afloat. At least Chrysler got a couple of worthwhile platforms from Mercedes’ past products which is why the 300, Charger, and Challenger are decent cars – they are C-class under the fancy fenders. No innovation there.

Chapter 11 may be the best option.

#89 jess on 03.30.09 at 2:56 pm

no one wants to take possession of the property no booooooooody including banksters?

#90 Barb the proofreader on 03.30.09 at 3:16 pm

“…to name a few. Presidential edict has swept this structure away, and raises the odds of systemic failure.
— Garth”

I don’t disagree with your worry and concern Garth. It all shivers my timbers too. Did he have a choice, though.

This all takes guts.
You gotta admit, whether he’s wrong or right, this is new territory. It’s sorta like Butch Cassidy & the Sundance Kid. Let’s all hold hands and run off the cliff screaming together. Maybe it’ll work.

(But let’s not go for being holed-up in Bolivia — that doesn’t work.)

#91 Barb the proofreader on 03.30.09 at 3:26 pm

Just in — my Living With Ed membership email news flash from Ed Begley Jr. who writes:
“Hey Guys, I’ll be on CNN’s Larry King Live tonight talking about the US Auto Industry. I hope you tune it.”

#92 North Vancouver Citizen Jr. on 03.30.09 at 3:36 pm

Stay away from Eastern US and Canada

another Govt Pension may blow up…

>>>The Pension Benefit Guaranty Corporation may be little-known to most Americans, but it serves as a lifeline for the 1.3 million people who receive retirement checks from it, and the 44 million others whose plans are backed by the agency.

The agency was set up in 1974 out of concern that workers who had pensions at financially troubled or bankrupt companies would lose their retirement funds. The agency operates by assessing premiums on the private pension plans that they insure. It insures up to $54,000 annually for individuals who retire at 65.<<<

…..Pacific Northwest is the only safe place in the whole world.

You heard it here first…..

#93 OttawaMike on 03.30.09 at 4:15 pm

Here’s a good read comparing the incestuous relationship between Amerika’s bankers & govt to that of Oligarchs(Oligarths?) in developing nations:
That article bolsters my view that nationalization and breakup of the rotten banks is the only answer.

Now that Amerika is more socialist than France can they change the name Freedom Fries back to French Fries?

#94 OttawaMike on 03.30.09 at 4:16 pm

Oops,Here’s the linky to page 1:

#95 smwhite on 03.30.09 at 4:23 pm

#68 Barb the proofreader

I give Obama credit for having the guts to fight the snobs.

So that’s why Obama’s “Dream Team” is made of of guys like Volcker and Summers right?

Obama is full of so much shit his eyes are brown.

#96 Too Old Bob$ on 03.30.09 at 4:23 pm

“Yeah, Wagoner deserved to be cut loose after flying in his corporate jet to ask for bailout money.”

Yep! way to set an example. This kind of attitude contributes to the over all problem with little people and the rich. These friggin people run companies into debt, then ask for money and the little people to help bail them out. Meanwhile, take home pay and bonuses.

These car companies should have seen it coming years ago when the foreign vehicles entered the market. Sure they still sold their vehicles, but could they not see that the percentile was slowly changing. Geez! I wonder why. Don’t get me wrong now, I have 2 GM products and 1 Honda. Guess which one has cost me less to operate? Guess which one is more reliable?
Yes I know they are slowly improving their product, but it’s a little too late.

I don’t think they are going to get out of this. They need to sell off, restructure bigtime, layoff or even go defunct and restart. Ya! it sounds like suicide, but personally, I think it’s coming anyways. How many vehicles do they need to sell in the next few months to prove themselfs. Who is going to buy them in this economy? Good luck!

#97 Dan in Victoria on 03.30.09 at 4:30 pm

I’ve been waiting to hear how much Wagoners pension was,not bad around 22 million plus some other

#98 ally ally oxycontin free on 03.30.09 at 4:47 pm

Weekly [ or is it ‘weakly’ commodity prices with highlights, [ actually, they mean summary. ]

#99 CM on 03.30.09 at 4:53 pm

Don’t feel too sorry for Rick Wagoner. He’s leaving the CEO post with a $20M retirement package. Some hardship!

If they can honour his retirement, how about doing the same to the poor schlmoes on the line? Ha! Just kidding.
Welcome to Vietnam, Mr. President!
By Ray McGovern

In the Sixties he served as an infantry/intelligence officer and then became a CIA analyst for the next 27 years. He is on the Steering Group of Veteran Intelligence Professionals for Sanity (VIPS).

On Obama’s ratcheting up the war in Afghanistan:

“There is still time to put the brakes on this disastrous policy. One key lesson of Vietnam is that an army trained and supplied by foreign occupiers can almost always be readily outmatched and out-waited in a guerilla war, no matter how many billions of dollars are pumped in.”
Michael Hudson at the G20 summit

A possible reason why the G20 don’t want to bail out the U.S. any more:

“Strange as it may seem – and irrational as it would be in a more logical system of world diplomacy – the “dollar glut” is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire – effective “taxation without representation.” Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.”
Rumours abound that Petraeus is trying to keep ahead of the game (and it is a game to him) so he can have a go at the WH in 2012. If things go on as they are, he won’t have to make a presidential bid.

He’ll just stay in the job he’s got and still run the U.S.
Stevie Harper on his U.S. media blitz has received high praise from Fox News. Stevie has found his spiritual home.

Too bad he doesn’t talk to the Canadian media much.

#100 Rural Rick on 03.30.09 at 5:01 pm

Was out shopping for food today. Two different grocery stores recommended I phone first about the availability of items. Is this the beginning of supply chain problems?

#101 ally ally oxycontin free on 03.30.09 at 5:08 pm

GM’s Wagoner May Receive $20.2 Million in Pensions (Update1)

“By Jeff Green–March 30 (Bloomberg) — General Motors Corp. Chief Executive Officer Rick Wagoner may be eligible for pensions valued at $20.2 million as of the end of 2008, according to a regulatory filing. He isn’t eligible for severance pay.

The pensions under two retirement plans include a $68,900 yearly amount and five annual payments of $4.5 million, according to the Detroit-based company’s annual report filed with the U.S. Securities and Exchange Commission on March 5.

“Mr. Wagoner has worked for GM for nearly 32 years, and would be entitled to certain vested awards, pension and other post-retirement benefits,” company spokeswoman Renee Rashid- Merem said, referring to the annual regulatory filing. “However, specifics on any compensation entitled to or actually paid to Mr. Wagoner are still being reviewed.”

GM doesn’t have an employment agreement with Wagoner, 56, that would provide him with any special additional benefits for his departure, she said.

Wagoner, CEO since June 2000, was asked to leave GM as part of the automaker’s restructuring, which President Barack Obama today said did not go far enough.

GM fell 90 cents, or 25 percent, to $2.72 at 2:42 p.m. in New York Stock Exchange composite trading.”


Parachute for sale …. Never Opened … ONLY USED ONCE !

#102 Bonnie N BC on 03.30.09 at 5:23 pm

I do not subscribe to your analysis that Obama is dead wrong and leading his country and by default ourselves down the slippery slope. However, I think that a one trillion dollar budget is staggering and makes me wonder how the USA will come out on the other side to prosperity.

There seem to be a lot of people playing Monday morning quarterback – so my question is what should President Obama do? Nothing?

The US banking system is so complex and based on stock dividends and not prudent financing. The auto industry is based on CAFÉ standards that rewarded SUV’s over cars due to weak regulations and profiteering.

As a side bar, I talked to someone who just came back from the Caribbean. Apparently, there was a bunch of AIG people running around town in red t-shirts emblazed with the AIG logo. She thought they were crazy at best. Wait until this little junket comes out.

#103 Wealthy Renter on 03.30.09 at 5:36 pm

This deep discussion is brought to you by real estate news :)

The Toronto Sun with a fairly ominous report.


#104 Bill-Muskoka (NAM) on 03.30.09 at 5:39 pm

#83 Jake on 03.30.09 at 2:14 pm

As he and I share the same name I shall call him by it and there you go! Pzzzzzzzzzzzzzzzzzzft!

As to how Obama is having to deal with the situation in the U.S. I would suggest I know a helluva lot more about American politics than you do having lived there the majority of my life. he has followed the Constitution and that is quite confusing to the Bushies remaining.

Those calling him a Socialist simply do not know the meaning of the term and sound like drunken parrots on a binge. Perhaps they will run for the leadership (what a laugh that handle is) for the Ontario CPC?

The Far Right is so desperate now they would follow Hitler if he were to rise. They already follow Rush Limburger and their ideology is dead and waiting to be buried along side their arch Nemesis Communism Soviet Style, aka, Stalanism!

But they keep on squawking like the mindless sociopaths they have always been. The only ones listening are themselves.

Fortunately, it is clear to the people who caused the current mess…The CONSWERVATIVES!

#105 Bill-Muskoka (NAM) on 03.30.09 at 5:46 pm

As need be GM will file for Chapter 11, and perhaps Chrysler, but all that means is they will re-orghanize UNDER the direction of Washington, D.C. this time.

Chrysler is moving a lot of vehicles with their current special deals. In fact, it appears they are doing quite well.

GM simply got too BIG for their own good and now have to get lean again, which I doubt they can even find anyone in manglement that can comprehend the term after all the gluttonous years at the trough!

When Chrysler gets rid of their moron CEO from Home Depot they will ‘surge ahead!’

BTW, Cerebus also owns GMAC Financing!

#106 The Coming Depression on 03.30.09 at 5:46 pm

#92…..Pacific Northwest is the only safe place in the whole world.

You heard it here first…..

Where do you come up with this asinine statement? I have lived here for 4 years and I have NEVER met more dumb people in my life. I meet people talking about the economy blowing up and then they go out and open restaurants! They buy real estate, then talk about a depression coming as they write their deposits. They order 100’s of dollars worth of wine then discuss how they may be losing their job. These dummies talked about the markets tanking 3 months ago, then go out and BUY STOCKS the next day! Now they are all stuck with dogs waiting for it to go back up.

What is so safe being around a bunch of retards? You probably know half of them, they own the restaurants all around town. They talk about booze sales down 40% in their restaurants then go out and lease a BMW.

#107 OhPlease on 03.30.09 at 6:06 pm

Oh, please. Amerika?

It is called the choice of restructuring outside of court or taking Chapter 11 Bankruptcy in a court proceeding.

GM ran itself into the ground, played its PR badly, and didn’t come up with its own workout plan probably because it was too far gone. Wagoner is responsible for much of this.

Chapter 11 is the law. It prescribes courts powers to direct the unwinding and restructuring of companies, wiping the shareholders and giving haircuts to the creditors, while selling off the business in whole or in parts, or handing it to its creditors. In Chapter 11 the courts oversee interim financing to keep operations going until the sale or transfers to new owners is completed. The courts also appoint new management.

GM may enter formal Chapter 11 bankruptcy. The new CEO just said as much. For the moment, GM and the government are making one last try at restructuring outside the courts.

The government is not taking over the operations of the company, not beyond telling the miserably failed top management to bugger off. Obama is not calling shots on how cars should be made. Rather, terms are being set for financing the restructuring of a company that is owned by shareholders and will in the future be held by shareholders (but maybe not the same ones as before).

If you think this is fascism, let alone socialism, let alone anything unprecedented, then, frankly my dear, you have spun yourself out of perspective.

Is the US in a terrible economic mess? Certainly. But ranting that the ouster of Wagoner is fascism or socialism is neither taking the economic mess seriously nor taking politics and history seriously.

#108 Rene on 03.30.09 at 6:18 pm

Aren’t bonus structures set up to encourage good performances? Why is Wagoner being paid out 20 million retirement package for running a formerly blue chip company into the gutter? He should be rewarded with a prison sentence.

#109 Rich in Calgary on 03.30.09 at 6:20 pm

#58 The Coming Depression on 03.30.09 at 10:40 am we are headed for depression-type jobless

“That would make us into a Depression, I guess. Sort of what we will be in by June.”

If we’re not, does that mean you’ll stop posting?

#110 Future Expatriate on 03.30.09 at 6:22 pm

#95- Obama’s brown eyes… Good one! LOL

#111 . . . fried eggs and spam . . . on 03.30.09 at 6:29 pm

#58 The Coming Depression at 10:40 am — “That would make us into a Depression, I guess. Sort of what we will be in by June.”

‘Spose that is one of the reasons why a whole lotta Reserves and National Guard — not sure what their titles are — have been quietly getting ready to subdue any violence that happens, because folks are thoroughly pissed off, not only here but in Europe as well.

As for the banks, and don’t, for one second count any of the Cdn. banks out of this, see

Just down to the right of the article, there is a chart showing the Derivatives (US$1.5 quadrillion) in play. Also shows the CDS’s percentage.

AIG seems to have most of the business in CDS’s, and that is why the US govt. cannot afford to let AIG fail, because if AIG goes, so goes the rest. :-D

We’re all gonzo, dudes!

#112 Bruce on 03.30.09 at 6:35 pm

So, what do we start singing? Happy Days are Here Again or Nearer My God to Thee?

The endless confusion and conflicting media reports have us totally befuddled as to to who is telling the truth and who isn’t. Just how BAD is the situation really, and what is it they aren’t telling us, for obvious reasons? My opinion on Obama is that he’s a man who gives the impression of being everywhere at once, a man who wants to be completely in control of everyone and everything. In other words, he’s a textbook example of a classic megalomaniac.

Mark my words people, you heard it here first: Where Bush failed with Iraq, Obama will fail with the economy. This is a guy who is promising something that is technically and fundamentally impossible. I said within three months of Obama’s inauguration that the honeymoon would be over. The G20 meeting will prove to be another carnival sideshow as any solutions to the unraveling global depression are short-lived and poorly executed.

As far as Timmy(I forgot to pay my taxes)Geithner goes, they ought to fire that dumb SOB ASAP. He’s totally clueless, if not downright incompetent to be holding that position in the first place. Stupid is as stupid does I guess. What a clown show we have going on Washington D.C. People are friggen’ sheep.

#113 TUT on 03.30.09 at 6:47 pm

#99 CM on 03.30.09 at 4:53 pm

” Don’t feel too sorry for Rick Wagoner. He’s leaving the CEO post with a $20M retirement package. ..

.. the “dollar glut” is what finances America’s global military build-up. ..””

USA DOD budget 2009 = Approx. 20 billion/day
Rick Wagoner’s package = Approx. 20 million.

Poor guy, he got only 15 minutes of Imperial Defense!
And it does not count the War On Terror!

#114 bobs your uncle on 03.30.09 at 6:53 pm

# 107 oh please,

When the government pays off bank debt with public money what would you call it? Capitalism?

Where did all the bailout money for AIG go? Mostly overseas. Obama is a puppet of the financial sector.

#115 go green on 03.30.09 at 7:05 pm

A much as I feel great sadness for those in the NA auto industry, the writing has been on the wall for years. IMHO, they have an inferior product in comparison to Asian vehicles. My first vehicle in Canada was a used Toyota Corolla which I bought for $500k and it lasted me for 3 years. I was a new driver so insurance was cheap. I didn’t want to go in debt for a new car that I might crash. It cost me next to nothing in repairs, I could fill up my tank for $3. (I know I’m dating myself :-)). As I’ve said before, I bought one NA car because it had a German engine. Big mistake. Endless problems costing many $k’s. If I’m going to spend thousands of hard earned $$ on a car & want to eventually buy a newer model, I’d like to know it has some resale value. Plus, I don’t want it in the shop for multiple recalls. Just my experience.

#116 go green on 03.30.09 at 7:08 pm

Oops – should have said $500. not $500k in my last post. Gees, I ‘d be afraid to drive a Lamborgini.

#117 kabloona on 03.30.09 at 7:39 pm

#79 Barb the proofreader on 03.30.09 at 1:24 pm

Great post, thanks for the link. Remember that Phil Gramm was one of CNN’s Villains of the Meltdown….just doing what he was paid to do, I guess…. ;-)

Did anybody listen to what Obama said re. GM and Chrysler? He said clearly that he *won’t* bail them out endlessly…..and on PBS his “Car Czar” Goolsbee reiterated the fact that the White House “would not be in the business of running a car company”, unquote. In my mind, that’s going in the opposite direction to what the British did with their post-war auto industry, i.e nationalization….

There was a rational discussion of the US Government position on the US auto industry tonight on PBS Lehrer Report, people should check it out. Just my $0.02….

P.S. Garth, I just read the “2009 real Estate Round Table” article in the Richmond Hill Post. Sounds like the Lambster got pounded…..

#118 JO on 03.30.09 at 7:49 pm

Obama has confirmed he is in bed with the bankers and a hard core Socialist. Yes, any nation who allows a central bank (private agency) to control the issuance of its currency and allow banks to do whatever they want – leading as usual to extreme leverage – goes down the gutter. Central banking, with its blatant intent to manipulate the economy and impoverish the middle class/working class through ongoing devaluation of the currency (inflation) and fractional reserve banking (counterfeiting operation), is a socialist favourite. Obama is now Hoover and will be very lucky to be in power before 2011.

Lets make one thing clear because it makes me sick to hear how much misinformation is out there: A debt based, fractional reserve, fiat money system is a wealth confiscation scheme from start to finish. Any economy built on this system (any system with a central bank and no hard money) is NOT a free market economy. A free market economy is ONLY possible with sound/hard money. What we have seen is power and wealth concentrated by banks and friends who have been free to make their own rules and screw eveyrone else. This is not a free market system.

Combine this monetary system we have now, disastrous as it is, with oversized governments that confiscate well over 50 % of your wealth through taxation, and you have the other part of the wealth confiscation scheme. The larger the government, the less democracy and wealth creation you have. A large, high tax government (usually go together) is MORE DANGEROUS than any monopolistic corporation could ever be.

God help us

#119 Jonathan on 03.30.09 at 8:57 pm

North Vancouver Citizen jr.

“We are talking about Portland/Seattle and of course Vancouver…the Financial/Trade/Leisure capital of North America.”

I get the impression that you simply say that because it gets a rise out of people and not because you or anyone else actually believes it.

#120 Chris L. on 03.30.09 at 8:58 pm

Obama has offered ‘tough love’ to Chrysler by refusing a bailout, yet he continues to display ‘true love’ to bankers. No accountability, no conditions, no new management, no results for tax dollars. Love that….welcome our new neighbours; the USSA!

#121 Jonathan on 03.30.09 at 9:07 pm

What pisses me off is the saying that goes capitalism is broken.

It was government who removed bank regulations in the late 90’s. It was governments in the east that dumped money in to the west. It was governments in the west that kept interest rates too low and fueled a housing bubble. Now government believes it has the answer – lets turn this useless capitalist system into something more communist in nature. Stop picking on the free markets.

Government is there to create the rules of the ball game. Think of them as the fat guys drinking beers in the bleachers. They are in love with the game, can call an out better than an ump, but can’t hit a ball if their life depended on it. So when did these fat guys start thinking that they can hit even better than the sluggers?

Keep out of the free markets!

#122 Judy on 03.30.09 at 9:22 pm

Listened to Clement and Flaherty outline Canada’s U.S. automaker plan.
Clement said the loans were secured. The loans would be repaid or there was collateral in place in case of default.
Then I heard that GM had guaranteed all its assets, including Canadian assets, to the U.S. treasury.
Are Canadian government loans to GM and Chrysler secured or not? Does anyone know?
Is Clement telling the truth or lying?

#123 . . . fried eggs and spam . . . on 03.30.09 at 9:23 pm

So Merrill Lynch gets $3.6 bln. in bonuses and may be investigated; Goldman Sachs paid out between US$10-11 bln. in bonuses; AIG gets ‘sweetheart’ deals from the WH.

Is it any wonder that people’s blood is boiling?

#124 North Vancouver Citizen Jr. on 03.30.09 at 9:26 pm

#106 The Coming Depression

>>I have lived here (Vancouver) for 4 years and I have NEVER met more dumb people in my life.<<

….So stop spending all your time at Tim Hortons, all the customers are expat Ontarian’s….The coffee is spiked you know.

#119 Jonathon

I am sincere Vancouver will soon become the Mecca of the West.

#125 TUT on 03.30.09 at 9:49 pm

Typo correction to post #113

USA DOD budget 2009 = Approx. 2 billion/day (not 20)

Still same result …

#126 TUT on 03.30.09 at 9:51 pm

#123 . . . fried eggs and spam . . . on 03.30.09 at 9:23 pm
” … Is it any wonder that people’s blood is boiling?”

May be its boiling but who cares?. We are blogging not rioting. That’s peace of main for the bosses.

#127 Grumpydawgs on 03.30.09 at 9:54 pm

“Credit Suisse analysts added that they believe the correction in housing prices in Spain –down 9% annual in February vs. 10.8% in January — is just beginning, and prices are still high with some banks now offering 100% financing to an individual to purchase a house if developers cut prices by 20%. “This is, in our view, a big problem. A 20% (or 30%) discount does not mean anything if the properties are overvalued by let’s say 50%,” Credit Suisse analysts said.”

Does this sound familiar to anyone? If not for the constant propaganda war perpetrated by a ruthless and immoral, unethical media on the people here I think a lot more confused buyers would have come to thier senses.

#128 Grumpydawgs on 03.30.09 at 10:00 pm

BTW, as distasteful it is to many of the union persuasion the best thing that could happen is for the auto companies to go bankrupt. They cannot survive the recession while dragging the absurdly high wages and legacy costs along like a ball and chain. So, Obama said the word today, hooray, it’s about time. We’ll save billions which could be better spent on school and hospital upgrades.

#129 Barb the proofreader on 03.30.09 at 10:29 pm

“A large, high tax government is MORE DANGEROUS than any monopolistic corporation could ever be.
God help us

Ha! That’s hilarious.

Here we sit in the midst of the wreckage of corporate greed, top management and lobbyists doing the worse job on earth — yet paid to do the best.. and what do they do? ..They take every opportunity to screw the public.

As far as government, try doing the math. With a growing population, just what do you think would be the case with smaller government? This “smaller government crap” is a political “false cry” that has no reality behind it.

As the population grows, we need MORE police to police them, and more representatives to represent the burgeoning hoards. Smaller government my ass !!! We’d be run over and burned by complete gang corruption if we didn’t have watch dogs, police, regulators and other protectors to protect us from ourselves.

“Smaller government” yappers should sit themselves down and do the math, maybe that would shut them up!

Geez, figure it out!! (re: growing overpopulation population and crime). We’d be in so much chaos and crime if we went to smaller government — we would easily resemble the chaos in third world countries.

#130 Rural Rick on 03.31.09 at 12:11 am

Let’s be clear about one thing. Bad incredibly bad management caused the problems with the car companies not organized labour not the economic crisis. These companies are failing because of bad management period. There is nothing the best union in the world can do to make bad managers into good ones. Don’t try shifting the blame.

#131 nonplused on 03.31.09 at 12:44 am

Barb, I’d like to be polite, so I will be.

The government is a corporation. Only without educated shareholders that can vote out the board. Idiot shareholders.

I will state this unequivocally: If the government is doing it, they are doing it wrong. Period.

Garth was in government. Yes. Only means he did what ever he managed to do wrong while he was there. Hopefully less wrong and forced out at the end of the day.

Look, you can’t raise my children any more than I can raise yours. Government is only good at providing EMS, Police, Fire, and Defense forces. Other than that government has no use.

Yes, they built the roads and the suburbs. But without those, there was trams and people didn’t need cars. Yes, they built the grid. But before that people didn’t need the grid. Government = enslavement.

#132 gold bug on 03.31.09 at 1:58 am

LS (which I take to mean Latent Socialist) writes: “Will the whole thing work out? Who knows. Probably a good chance that it wont. But what’s the alternative? ”

The alternative is called the “free market.” Check it out sometime if you can put down Das Kapital long enough, comrade.

#133 gold bug on 03.31.09 at 2:13 am

Barb the Proofreader writes: “Geez, figure it out!! (re: growing overpopulation population and crime). We’d be in so much chaos and crime if we went to smaller government — we would easily resemble the chaos in third world countries.”

Barb, I’ve concluded you’re the proofreader for your high school newsletter because your economic views are so soporific that you can’t possibly be older than 15.

Barack Obama is just one guy. One man, regardless of his talents, cannot remake an entire economy.

I’ll save the socialist fan-boys on these boards the inevitable paroxysms by refraining from writing what I think of St. Obama’s particular talents.

#134 GTA001 on 03.31.09 at 2:19 am

To Garth:

Thank goodness that you discussed this issue in your Blog, because the dismissal of GM CEO Mr Rick Wagoner is a clear sign that something has gone very very wrong in the Obama Administration in Washington DC.

“He rolled the dice and made a crisis into a catastrophe”

This is the day that people in North America will remember that the President of the United States, Mr Barack Obama crossed a line by taking over the automobile industry and telling them how to run their companies, despite the fact that he is informing Americans that to save the country it will be necessary to add $9trillion in subsequent federal budgets to the national debt by 2012. This is a government which according to the CBO is running a $1.2+ trillion budget deficit for Fiscal Year 2009. He is sanctioning the actions of the Federal Reserve Board in redeeming long term treasuries to the tune of $1.25 trillion which is in short printing money while pocketing the interest since global investors are beginning to avoid US Treasury bills. Is hyperinflation in the cards for the US economy in 2011-12?

First and foremost, he cannot FIRE Mr Rick Wagoner.Mr Wagoner DOES NOT WORK for the US Government. He answers directly to the shareholders of GM and the Board. He resigned to prevent the Board from being embarrassed. The President of the US can only recommend to the GM Board of Directors that he has no confidence in his ability to lead the corporation through its restructuring phase. This is enshrined in corporate law which in turn dictates due process. If the Board of Directors met today at the Renaissance Center in Detroit and there was a unanimous or majority agreement to the President’s Recommendation then the CEO would have to resign from his position. As far as I know the Board is not staffed with appointees from the US Government. That is the second mistake that the President of the US made. He does not believe in the RULE OF LAW and DUE PROCESS.

One source in the MSM news believes that Mr Wagoner was sacrificed by the Obama Administration on the eve of the G20 meeting in London, England. European leaders are demanding more regulation as opposed to a coordinated world wide stimulus package. By getting tough with the auto sector the President is signaling to the European’s that he can be strict with ailing industries that do not have a viable restructuring plan.

According to the Lou Dobbs Show on CNN on Monday, the Auto Sector Advisory Team has no industry experts and few if any drive American cars. The third mistake that the President made is not relying on the expertise of the automotive industry CEO’s to find a way to get other parties to the bargaining table to finalize a restructuring deal that is acceptable to Capitol Hill.

I also think that he is using a double standard in dealing with the automobile companies as opposed to the financial industries. AIG received $182 billion, CITI Corp $50 billion with $300 billion in guarantees to offset bad credit card, student and vehicle leasing loans in addition to the toxic mortgage assets. Other banks such as Bank of America and JP Morgan Chase Manhattan got loans to offset toxic mortgages, derivatives and credit default swaps. Why did he not ask for the CEO’s of these banks (who have a direct hand in the global credit crisis) to step down and subsequently take over the Board of Directors and impose restrictions on what they can do with the bailout funds.

What makes me angry is that he is forcing a industrial engineering company GM that received $17 billion in bailout funds into a Chapter 11 bankruptcy. The 266,000 people (123,000 who work in the continental US) produce a real product-cars. If the company is forced into this situation which seems inevitable as of tonight by the Obama Administration as reported by Larry Kudlow’s show on CNBC. It could start a chain reaction of job losses in the industry exceeding 400,000 and that is an optimistic projection. The worst case scenario could result in a loss of 2 million jobs, shutdown or closure of manufacturing plants ,auto suppliers (who also produce parts for Japanese auto makers)leading to personal bankruptcies, home foreclosures and loss of confidence in the economy. The fear is already starting to set in as the Dow Jones dropped 3.27% or 254.16 points to close at 7,522.02 while the TSX dropped 224.84 points,closing at 8,596.22.

What are the problems that the former GM CEO Rick Wagoner faced at the corporation?

The company employs 266,000 employees in 19 countries (123,000 in the US)

Its revenues were $148 billion (2008)
Its operating income -$21 billion(2008)
Its net Income is -$30.86 billion (2008)
Its capital assets $91.047 billion (2008)
its equity -$86 billion(2008)

In 2001 the company sold 4,904,015 cars and as of 2008 it sold 2, 980,688 a drop of -22%.

A major issue (courtesy of is the dispute between GM and its bondholders over the Other Post Employee Benefit (OPEB). In 2001 the stock market crash after the September 11 attacks cause a pension and benefit underfunding crisis. When it lost 10.6 billion 2005 the plan was restructured. What is interesting to note is that the the benefit funds were performing better that expected posting a $17 billion surplus in its $101 billion pension fund in 2007. There is the issue of the cost of retiree’s health benefits, but no figures were given

In the first 6 months of 2008, GM lost -$18.8 billion and saw its stock drop 76%.

From October 2007-2008 sales declined by 45%.

On February 12, 2008 it lost $39 billion and just over a month later on March 24,2008 it had a cash position of $24 billion.

CEO Rick Wagoner(MBA Harvard, 1977) joined GM as a treasurer in 1981 and steadily moved up the ranks of management and became CEO in June 2000 and Chairman on June 1, 2003. Under his management GM shares have dropped from $60 in 2000 to $1.27 in March of this year.

Is well liked by executives and employees

-takes an instrumentalist approach to management
-lack of vision
-not ruthless

Focused too much on SUV and light trucks which were not fuel efficient. He regrets the demise of the EV1 electric car. However, it may have been cancelled due to its faulty nickel metal hydride battery and the unwillingness of the company to invest funds in emerging battery technologies that are in the market now.

Although GM produced 843 hybrids(in 6 different models) in 2008,it expects to produce 40-50,000 in 2009.

During Mr Rick Wagoner tenure GM closed several plants and laid off 25,000 employees. Vehicle production dropped from 6million to 5 million. The company to this date (March 30, 2009) has lost about -$82 billion.

Other Issues:

As the world largest car company GM appears to suffer from a lack of vision and proper strategic planning. It focused on the SUV and light truck market because it mistakenly believed that there was little demand for better fuel efficient cars. It also discounted the environmental movement and the need for hybrid/electric cars to combat climate change. When fuel prices sky rocked in mid 2008, demand for its cars, light trucks and suv collapsed. It simply could not retool fast enough to meet the changing nature of consumer taste for more fuel efficient vehicles while its competitors took advantage of its problems.

The US and Canadian governments wants the auto industry to survive through this crisis. The problem is that the North American auto worker is overpaid and has a overly generous pension plan that is hurting the long term viability of GM, Chrysler and Ford (by the way Ford is only surviving due to a $36 billion loan that was taken out before the crisis!) These companies are moving production to countries with lower wages, benefits and environmental standards to cut costs. How do you explain the announcement of both governments that the auto industry must exact more wage and benefit concessions from the UAW and CAW!
We also need to know what are the issues over the legacy/health cost for GM retirees and options for its solutions!

The quality of GM cars have improved, but not fast enough for consumers. Parts for domestic cars are less expensive and take less time to order than foreign car makers. GM, Chrysler and Ford has to undertake more research in metallurgy and engine technology to build better quality and longer lasting vehicles to outdo its Japanese and European competitors.

Its pretty clear that if GM and Chrysler do not come up with an adequate restructuring plan they will be forced into a Chapter 11 bankruptcy scenario. The auto industry in the US could lose up to100,000 jobs, will run fewer manufacturing plants and sell substantially fewer cars. GM will probably have to shed 50,000 workers, retool a number of selected plants such as the one in Oshawa,Ontario to a flex plant design to build more than one line of vehicles. Reduce the number of dealerships and cut production from 2.9 million cars in the us to at least 1.4 million(a drop of 50%).

What the President of the US is doing is imposing state sponsored socialism/fashism in dealing with the auto sector rather that allowing the capitalist system to manage the downsizing and bankruptcy of a company through the common law system.

CEO Rick Wagoner track record at GM is uneven at best. His downfall at the company was due to bad forecasting of oil prices and vehicle demand, poor long term strategic planning, difficulty in dealing with the UAW and CAW in terms of wages, benefits and pensions and the inability to retool the factories to build better quality, fuel efficient advanced technology vehicles.

#135 Grumpydawgs on 03.31.09 at 2:21 am

#129 Barb, Do you mean ‘as opposed to the huge numbers of people who are being killed by the police today’? The 70% ( direct and indirect) personal tax regime we have today? The political and race restricted hiring policies we have today? Small businesses driven out due to agregious taxes and eminent domain? Farms being bulldozed by crooked city councils for special intrest groups and contractors? The number of people who die waiting for medical procedures in Canada is far greater than many third world countries and an open shame in the first.

If you look around my dear the nightmare scenario you fear is already here, where have you been? Giving the government more power is akin to offering your children to Satan and asking him to be nice.

#136 charliegosurf on 03.31.09 at 3:42 am


Round #

1 What a self centered world this is, socialism vs capitalism or a field full of foolish looser with winners grinning.

2 When you have troll’s just provocating people all over to get an erection of comments for the sacred justification.

3 Where the center of the world has to be, for bragging or self inflating ego’s to the abyss of greed. the best, always about the stressed best, but the badass last is too relax..

4 Who said karma wasnt here to take care of things, maybe god yelled it, but evrybody was too busy, worried about the economik past, present & future. maybe karma is that ligth all around us that shines for luck but is in pity for us now.

5 Whereabout you are, there is someone else somewhere that is more hungry than you are. less healthy but happy to not have to worry because they dont know what ecosystem murderers we are. you know

6 This blog should be renamed, Ultimate Fool – The Troubled Present of Planet Earth, and it is a planet in case you forgot, a little bubble of o2, that is about to burst in a carbon agony.

7 The state of these troubles are so real that you blindly argue in echo for that precious safetyness of a organized world, so few can reap the benefits in the face of the exploited mass. ZION LIVES but for how long

8 The dice is rolled, but that dicey has no numbers. Those CHIFFRE (123456789)as figures dont matter anym0re 0bviously, as s0 the financial capital, or cApitals or governement etc.. eight is the eternity symbol of human addiction to profit.

9 If god really exist, you know exacttly what’s to come for us. if not, you still know that things are meant to be even, and the upward balancing act that greed and envy raped is about to scream in the freefall.

ding, ding ding, did you hear the bell ring amidst your cell, the tv, ipod’s, horn, siren, earplugs,kidscreams…the entire population of this big land screams but wont open their mouth.


theres only one way to go now, down back to the ground, the dusk is all dust and the sunshine will always shine on that american flag up on the valley of [email protected]

ironic it is or whatever you say, you have to go commute, fly,work, shop and pay those bills until the next week-end…


#137 dd on 03.31.09 at 6:01 am

#119 Jonathan on 03.30.09 at 8:57 pm North Vancouver Citizen jr.

“I get the impression that you simply say that because it gets a rise out of people and not because you or anyone else actually believes it.”

Keep repeating anything as much as that … and you will begin to start believing it yourself …

#138 RTbandit on 03.31.09 at 9:43 pm

To Poster #134……the US government can ask Wagoner to step down. This was the right move and has delivered a message to the entire auto industry that they need to stop wasting time and start to make some real concessions. During this entire time they continue to manufacture cars people don’t want, particulary Chrysler…..this alone should indicate they are directionless.

The US government is taking the necessary steps to do the things GM and Chrysler would not do on their on. This should be seen as a positive to the long term health of the auto industry in North America. The US got the world into this mess, and they will lead the world out of it. Never in history has a democratic government reacted so swiftly and dramatically.

There will be tougher times ahead but longer term things will normalize…’s a reality of economics of supply/demand.

#139 GTA001 on 04.01.09 at 12:38 am

Addendum to post #134

A little more info on GM

In 2008 the company produced 9.3 million cars in 19 countries. The 2.9 million cars were produced for the North American Market.

#140 GTA001 on 04.01.09 at 12:42 am

Addendum 2 to post #134

I found out last night that GM owes pensioners approximately $20 billion in health care benefits.

#141 Barb the proofreader on 04.01.09 at 1:38 pm

To all the corporate lobbyists and huggers, one word, Bhopal.

#142 john m on 04.01.09 at 6:22 pm

#108 Rene on 03.30.09 at 6:18 pm

Aren’t bonus structures set up to encourage good performances? Why is Wagoner being paid out 20 million retirement package for running a formerly blue chip company into the gutter? He should be rewarded with a prison sentence.
…………………….pretty much sounds like what Harper has done since he came to power……..and he still has his job and flys around in his private jet :-)

#143 GTA001 on 04.08.09 at 10:55 pm


Latest information from Detroit suggest that GM is negotiating with its bondholders to swap 1/2 of its $62 billion dollar debt for equity and pay down the rest (About $33 billion). It is trying to find a solution to its $20 billion legacy health care cost. The company is moving to a Chapter 11 bankruptcy scenario in which the new firm will consist of the best performing divisions while the GM holding company will hold the poor performing divisions and debt. I assume that the holding company will broken up, sold off and its assets liquidated to the highest bidder.