More economic GOOD NEWS: GM could post a profit for 2010

[Oldandtired]

your 'coincidence' cant draw cause to effect. increased government spending is a remedy applied to many economic downturns (if not all). that would be a constant. in fact, our work to prod and enable lending again, even at tremendous stimulus cost, is an attempt to avoid what happened in japan.

the obvious coincidence that i am left with is the severity of the recession. have you taken into consideration that this is the largest recession since the 30s?

What defines it as the "largest" recession? I have never heard that term used to describe a recession.

I have heard "longest"....I have heard "deepest" which was used to describe the impact on employment....but the largest?

Unemplyment never went above 10%.....so what makes it the largest?

'deepest', then. unemployment has nothing to do with recession, per sa... could maybe qualify depression.

'long' and 'deep' refer to how long the GDP remained below the point it was determined to have shrunk(frequency), and how much it shrank(amplitude), respectively.

was it semantics that clouded your recognizing how virtually all recessions' length, even depth was abridged with government spending?

No sir/maam. Was not clouded....... I simply allowed you to make my point.

Yes, this is the longest recession since the 30's...I agree.

Coincidentally, the last time we threw tons of cash to stimulate was the longest on record.

And of course, the lost decade of Japan lasted longer than others.

And I agree, unemployment by no means defines a recession...tell Truthmatters that for me...she argued till she was blue in the face that they are interchangeable.

Anyway, stimuli do nothing but ease the pain of the people, but in no way help an economy recover..and to the contrary, as history shows us, it actually stunts the recovery...slows it down....as we are now seeing once again.

Thank you for making my point. Sorry I trapped you into it.

 

[antagon]

What defines it as the "largest" recession? I have never heard that term used to describe a recession.

I have heard "longest"....I have heard "deepest" which was used to describe the impact on employment....but the largest?

Unemplyment never went above 10%.....so what makes it the largest?

'deepest', then. unemployment has nothing to do with recession, per sa... could maybe qualify depression.

'long' and 'deep' refer to how long the GDP remained below the point it was determined to have shrunk(frequency), and how much it shrank(amplitude), respectively.

was it semantics that clouded your recognizing how virtually all recessions' length, even depth was abridged with government spending?

No sir/maam. Was not clouded....... I simply allowed you to make my point.

Yes, this is the longest recession since the 30's...I agree.

Coincidentally, the last time we threw tons of cash to stimulate was the longest on record.

And of course, the lost decade of Japan lasted longer than others.

And I agree, unemployment by no means defines a recession...tell Truthmatters that for me...she argued till she was blue in the face that they are interchangeable.

Anyway, stimuli do nothing but ease the pain of the people, but in no way help an economy recover..and to the contrary, as history shows us, it actually stunts the recovery...slows it down....as we are now seeing once again.

Thank you for making my point. Sorry I trapped you into it.

no offense taken at your lil trap. and sir, thanks... not only the longest, but the deepest since the GD, too.

the last time 'tons of cash' was thrown at the economy as government stimulus was just a few years ago. remember the stimulus checks idea? i could not think of a recession in the last 100years where that was not the government's reaction... because it is relatively effective.

bush's timing is questionable. it seems his policy aimed to broaden the peak of the business cycle with direct stimulus.

what recession are you saying is an exception to this trend of stimulatory reaction? have you considered that the hesitation to increase the money supply early in the great depression is one of the fundamental causes of its depth and length?

you habitually mention japan, but by the standard of other, faster recovering economies, the japanese government did not spend enough. couldnt the collapse of their banking sector and the wide-spread, stubborn deflation indicate as much?

the basis of your argument is not factual...

trap: perhaps you could show economic recovery without increased government spending as you claimed to be the case between roosevelt and obama.

 

[Oldandtired]

'deepest', then. unemployment has nothing to do with recession, per sa... could maybe qualify depression.

'long' and 'deep' refer to how long the GDP remained below the point it was determined to have shrunk(frequency), and how much it shrank(amplitude), respectively.

was it semantics that clouded your recognizing how virtually all recessions' length, even depth was abridged with government spending?

No sir/maam. Was not clouded....... I simply allowed you to make my point.

Yes, this is the longest recession since the 30's...I agree.

Coincidentally, the last time we threw tons of cash to stimulate was the longest on record.

And of course, the lost decade of Japan lasted longer than others.

And I agree, unemployment by no means defines a recession...tell Truthmatters that for me...she argued till she was blue in the face that they are interchangeable.

Anyway, stimuli do nothing but ease the pain of the people, but in no way help an economy recover..and to the contrary, as history shows us, it actually stunts the recovery...slows it down....as we are now seeing once again.

Thank you for making my point. Sorry I trapped you into it.

no offense taken at your lil trap. and sir, thanks... not only the longest, but the deepest since the GD, too.

the last time 'tons of cash' was thrown at the economy as government stimulus was just a few years ago. remember the stimulus checks idea? i could not think of a recession in the last 100years where that was not the government's reaction... because it is relatively effective.

bush's timing is questionable. it seems his policy aimed to broaden the peak of the business cycle with direct stimulus.

what recession are you saying is an exception to this trend of stimulatory reaction? have you considered that the hesitation to increase the money supply early in the great depression is one of the fundamental causes of its depth and length?

you habitually mention japan, but by the standard of other, faster recovering economies, the japanese government did not spend enough. couldnt the collapse of their banking sector and the wide-spread, stubborn deflation indicate as much?

the basis of your argument is not factual...

trap: perhaps you could show economic recovery without increased government spending as you claimed to be the case between roosevelt and obama.

I would be the first to say that the bush checks werew nothing but a pain reliever and likely do nothing to increase demand for goods and services. Need and want increases demand, not cash.

However, you may be missing the point I am making as I read the rest of your post...and one that I read with great interest and I commend you for your approach and knowledge.

My point is more about recessions, what causes them (as I see it) and how they recover.

Market saturation plays a major role. Technology adds to it. We, as a country are a people of "I have to have it"....iPod comes out....all buy it. A comparable product comes out a year later, all those without an iPod buy the knock off.....and then the demand for the product wanes.

Technology comes in waves. A new idea is invented, and before you know it, there are thousands of new products using the new technoilogy and everyone buys those products...such as flat screens...tvs, computers...and we all overextend ourselves and buy.....and then we are fat with product, heavy with debt, and our needs and wants wane.

Yes, a very basic example...but it can be applied to all industries.

So Bush can give you 500 to spend....but if you are heavy in debt and have all you neeed and most of what you want, that 500 does nothing.

We can build a road and yes, a man now has a job for a month...but he knows he is on the fence and may be unemployed once the road is completed, so he will spend as little as he can.

Cash infusion is nothing but a pain releiver....but it will not increase the deamnd and the want for g and s's.

What will help a recession recover? New technology, 6 months to a year of no demand...and then, of course, the need to buy again.

And THAT is when you take 500 a person and spread it around. Not at the beginning of a recession....and certainly not by borrowing a trillion bucks and spending a large chunk of it after a national campaign that was all about how bad the economy is....and how it is the worst since the 30's....

I mean, sure business is slow, but I have money.....but I am not spending like i normally would and havent since I heard it was the worst recession since the great depression.

 

[Soggy in NOLA]

Great... I hope GM makes it. Problem is, they haven't addressed their real problems like the fact that they are paying more in benefits to EX employees than current employees.

GM's woes have not gone away and I don't think the taxpayer should be subsidizing the unions via GM. Time to tell the unions the harsh truth which is... "WE CAN'T CONTINUE TO DO THIS"

God knows the rank and file American is going to get this at some time when they try to collect SSI. Into which MUCH MORE has been paid than into union pensions by union employees.

 

[Soggy in NOLA]

The politicians and government employees should be told to shove it as well with regard to their pensions... after all, they have been entrusted with all this and have run it into the ground.

Screw 'em.

 

[rightwinger]

Great... I hope GM makes it. Problem is, they haven't addressed their real problems like the fact that they are paying more in benefits to EX employees than current employees.

GM's woes have not gone away and I don't think the taxpayer should be subsidizing the unions via GM. Time to tell the unions the harsh truth which is... "WE CAN'T CONTINUE TO DO THIS"

God knows the rank and file American is going to get this at some time when they try to collect SSI. Into which MUCH MORE has been paid than into union pensions by union employees.

GM has been streamlined and is operating more efficiently. Over the decades they became bloated and unresponsive to the car buying market. Hopefully this is a step in the right direction

 

[boedicca]

but, boedicca, profitability is not a given when emerging from bankruptcy. debt is not the only thing encumbering cyclical profit.

Of course not - but the BK process is a way of getting rid of debts that are weighing down the operations. Given the huge government interest in GM, it's highly likely that they had a great deal of latitude and support to dump a bunch.

Cronyism at it's fine....errrrr...worst.

 

[boedicca]

GM has been streamlined and is operating more efficiently. Over the decades they became bloated and unresponsive to the car buying market. Hopefully this is a step in the right direction

Just curious...what do you think the cause was of all that Bloat?

 

[txlonghorn]

And they said Obama would run them into the ground..


GM could post 2010 profit, CFO says - USATODAY.com


DETROIT — If the economy cooperates and auto sales recover a bit, General Motors has a reasonable chance of turning a full-year profit in 2010, its new chief financial officer said Wednesday.
Former Microsoft CFO Chris Liddell, at his first meeting with reporters in Detroit, said the automaker is making money in Brazil and China, in the middle in North America and struggling in Europe.

"Relative to where we were a couple of years ago, that's enormous progress," he said in a conference room at GM's downtown Detroit headquarters.

A full-year profit for GM, which left bankruptcy protection in July, would be the company's first since 2004 when it made $2.7 billion. It has posted more than $88 billion in losses since then.

IF...it's the biggest 2 letter word in the english lanquage

 

[txlonghorn]

I wonder if they will reopen all their plants and and rehire all their people too? Wait, there wouldn't be a profit then would there? Hmmm...that's too bad. Just think of all the jobs Obama could claim he created.

 

[rightwinger]

GM has been streamlined and is operating more efficiently. Over the decades they became bloated and unresponsive to the car buying market. Hopefully this is a step in the right direction

Just curious...what do you think the cause was of all that Bloat?

Corporate arrogance. The thought that they knew what the buyer wanted more than he did. The production of identical cars tagged as Chevy, Pontiac, Oldsmobile and Buick. Too many dealers selling the same product that nobody wanted

 

[rightwinger]

I wonder if they will reopen all their plants and and rehire all their people too? Wait, there wouldn't be a profit then would there? Hmmm...that's too bad. Just think of all the jobs Obama could claim he created.

How many jobs would have been lost if Chrysler and GM were allowed to fold like Conservatives wanted.

How many Republicans voted against saving GM?

 

[txlonghorn]

I wonder if they will reopen all their plants and and rehire all their people too? Wait, there wouldn't be a profit then would there? Hmmm...that's too bad. Just think of all the jobs Obama could claim he created.

How many jobs would have been lost if Chrysler and GM were allowed to fold like Conservatives wanted.

How many Republicans voted against saving GM?

you mean the government taking control of gm?

 

[antagon]

bush's timing is questionable. it seems his policy aimed to broaden the peak of the business cycle with direct stimulus.

What will help a recession recover? New technology, 6 months to a year of no demand...and then, of course, the need to buy again.

And THAT is when you take 500 a person and spread it around. Not at the beginning of a recession....and certainly not by borrowing a trillion bucks and spending a large chunk of it after a national campaign that was all about how bad the economy is....and how it is the worst since the 30's....

I mean, sure business is slow, but I have money.....but I am not spending like i normally would and havent since I heard it was the worst recession since the great depression.

... now that was not a trap. it was a gaping hole with a brightly colored cookoo sign beside it. what im getting at is that i really question the 'stimulate the tail-end' method you advocate, and which bush put to practice in office.

i fully anticipate econ dudes labeling me keynesian for my take on this, but credit where credit is due..

when the crisis struck, $17,000,000,000,000 vanished in a few months. that is net worth of individuals and businesses in the US. typical of japan and the greatD. real deflation.

it is true, recovery takes time, like it or not, because of the factors you'd mentioned. theres more to it, however... our policy now is to ambitiously replace the much of the vanished cash... doing so will devalue the dollar which could help to combat deflation with inflationary forces (like printing cash). a cheaper buck will help to mitigate damage to our export market, maybe invite some ballers with other enfeabled currencies to plunge at investing in deflated, undervalued US businesses. funneling the cash through the deposit window (&@low interest) would hopefully boost lending, and snatching up the banks' (and GMs!) assets will endow the dollar with some temporary backing, while clearing them of some positions which hurt their lending/borrowing capacity.... etc, etc.

mix this formula with political nepotism in a megacorp welfare environment, toss in a few other unintended consequences and some foot dragging, and youve got obama's gameplan. a 'conservative' government would do similar, but would reduce taxes against the deficit, rather than spend against it... but much the same aim (and a different argument).

bottom line is, when the economy is good, it isnt a bad idea to knock off some debt with the prosperity, using that time to strengthen the currency and streamline the govt. the nation will need it at the next inevitable recession, where it often helps to do the opposite. no need to send out your stim checks when the upturn is underway. investors and consumers will build their own bubble at that point.

if a sport, bbq or chess analogy cant be made, its probably not valid.

im a charcoal man. when i light my grill, i soak the kingsfords with fluid and let em sit 2 minutes. then i can peaceably take a match to them to initiate an even burn. now, putting stimulus after the economy's starting to roar would make me out to be that other guy with no eyebrows who squirts lighter fluid into a live fire... the bubble could (and did) bust as soon as the squirting stopped (and rates went up)

in the early thirties, 3-4 years were spent trying to light the bitch with no lighter fluid at all! <---- thats my take on what dragged that deal out, foremost. you live and learn.

 

[jeffrockit]

And they said Obama would run them into the ground..


GM could post 2010 profit, CFO says - USATODAY.com


DETROIT — If the economy cooperates and auto sales recover a bit, General Motors has a reasonable chance of turning a full-year profit in 2010, its new chief financial officer said Wednesday.
Former Microsoft CFO Chris Liddell, at his first meeting with reporters in Detroit, said the automaker is making money in Brazil and China, in the middle in North America and struggling in Europe.

"Relative to where we were a couple of years ago, that's enormous progress," he said in a conference room at GM's downtown Detroit headquarters.

A full-year profit for GM, which left bankruptcy protection in July, would be the company's first since 2004 when it made $2.7 billion. It has posted more than $88 billion in losses since then.

I won't hold my breath waiting to get the tax dollars back that were poured into the company because they were "too big too fail"!

 

[oreo]

Wow. Isn't that cute. GM stands a reasonable chance of turning a profit. If only every business could hold themselves to that standard.

When you were bordering on bankruptcy a year ago...

That is ECONOMIC GOOD NEWS

I remember of all the doomsayers predicting GM would bring us down with them and we were throwing money away on a lost cause. Good move in saving GM

GM would have gone bankrupt if not for the taxpayers of this country. This administration & congress would not let them go bankrupt--"in their too big to fail" policy to uphold the auto union in this country.

What I find more than interesting is we have a high tech person running an auto industry--who is making comments that "they may make a profit this year?" Funny but the tech crash of 2000 comes into my mind--

 

[saveliberty]

GM DID go bankrupt, dispite the bailout. The business accumen of the government could not see that the labor costs were killing GM. The bankruptcy helped to fix that.

 

[Neubarth]

GM DID go bankrupt, dispite the bailout. The business accumen of the government could not see that the labor costs were killing GM. The bankruptcy helped to fix that.

And even after the BK, they are still not making any money, but hinting that they just might some time in the future. All we can do is hope.

 

[william the wie]

The question increasingly in all manufacturing is will profits result in new hires or more automation to limit labor costs? At last check the US was still the world's largest manufacturing economy with its three biggest competitors being China, Germany and Japan all of whom have a shrinking labor force. If Japan and Germany keep automating with China attempting to (their peak industrial labor force may have already hit with peak agricultural and total labor force expected to hit later this year) then jobs and labor costs will keep going down too. For the US to compete manufacturing labor costs will have to be cut through automation. So what difference does a GM profit make longterm? Afterall Ford, Mercedes, Audi and Honda will run them out of business if they don't cut costs too.

 

[antagon]

The question increasingly in all manufacturing is will profits result in new hires or more automation to limit labor costs? At last check the US was still the world's largest manufacturing economy with its three biggest competitors being China, Germany and Japan all of whom have a shrinking labor force. If Japan and Germany keep automating with China attempting to (their peak industrial labor force may have already hit with peak agricultural and total labor force expected to hit later this year) then jobs and labor costs will keep going down too. For the US to compete manufacturing labor costs will have to be cut through automation. So what difference does a GM profit make longterm? Afterall Ford, Mercedes, Audi and Honda will run them out of business if they don't cut costs too.

the impact that big industry has on employment is, indeed, increasingly marginal. if GM can turn a profit, it is a big deal in michigan, and specifically for autoworkers. the incestual relationship that GM has with the UAW predisposes that they'll have to invest in labor, rather than capital, because they cannot reconcile an opportunity to save on labor through efficiency. they already know how many hours they will spend making cars in 2012.

the contracts which the UAW wrestles makers into is the fundamental reason why they find profitability so elusive, and it is the formula which will make modernization scarce as well.