Friday, November 21, 2008

They Came In Private Jets And Left Empty Handed and Market Decimation

First Let Me Be The First To Wish Our Elected Officials In Washington A Very Happy Holidays As They Will Be Some Of The Only Ones That Will Still Be Able To Afford One!!!

More Ridiculous Washington Rhetoric: They Came In Private Jets

I am racking my brain to remember which congressman first asked the question Wednesday about the travel method the heads of the Big Three used to get to Washington for the hearings on an infusion of government money.

What I do remember after that is the drooling that I sensed around the beltway as well as the media, because they now had their new tag line, the new "it's not about Wall Street but about Main Street" to use incessantly for the TV cameras, blogs and the press. Why The Private Jets.

What are some of the quotes from the hearings:

  • It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo - Gary Ackerman of New York
  • There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands... Gary Ackerman
  • "Couldn't you have downgraded to first class or something, or jet-pooled or something to get here?" Gary Ackerman
  • “I don’t know how I go back to my constituents and say, ‘The auto industry has changed,’ if they own private jets which are not only expensive to own but expensive to operate and expensive to fly here rather than to have flown commercial.” - Brad Sherman of California
  • "I'm not an opponent of private flights by any means, but the fact that you flew in on your own private jet at tens of thousands itself dollars of cost just for you to make your way to Washington is a bit arrogant before you ask the taxpayers for money." - Patrick T. McHenry of North Carolina

Note: GM CEO Rick Wagoner and Ford CEO Alan Mulally are required by their companies to fly by private aircraft for security reasons, according to company documents filed with the U.S. Securities and Exchange Commission.

I will tell you the real irony here

Couple of things. The first is the continued sanctimony of the politicians who preside over one of worst economy's we have seen in decades, chastising the auto execs for their use of private jets. How many of these politicians travel in commercial jets, and how many, with dollars in the economy at a premium are prudent with the "peoples money" in day to day operations, campaign spending etc.. I would like to see congress questioned about their waste and contribution to the problems that are now costing over $1 Trillion with a T.

Anyway, the second point is that there is no doubt that in a public relations analysis, the auto executives should have seen that flying in a corporate jet while asking for help (I said help and not some of the other phrases being tossed around for what they are doing). They also should have had some of the answers to some of the questions that were asked that one might have assumed were going to be asked. We also don't know if this relatively small amount of money will actually help in more that the very short term, or if a pre-packaged Chapter 11 might not be the more prudent way to go.

What I do know is that to sit at the podium and condemn an entire industry due to the PR failures of the leaders of that industry is asinine. To evoke the phrase of: how am I going to explain a bailout to my constituents back home, is yet another case of politicians not thinking of the greater good of the country, not making whatever tough decisions they NEED to make, but merely watching the polls back home and maintaining a partisan stance so that in 2 or 6 years depending on where they serve they will be in position to win their seat back.

If they have to postpone their Thanksgiving recess, or something really drastic such as curtailing campaigning, so be it. For once, try and actually do the job that we sent you to Washington to do.

The Markets

10:10 AM Thursday: Stocks continue to slide with the financials getting taken to the woodshed. Citigroup is about to go to a 4 handle, Goldman is 49 and change, Bank America is plowing toward 10 and General Electric is stunningly in the 12's. I sit, I watch and I can't believe.

The two year Treasury is through a 1% yield, the 3-month is .01% and the ten year 3.15%. I think the term "flight to quality" doesn't even begin to describe it.

5:00 PM Thursday: Yet another horrible close with the S&P down 54 and the NASDQ down 70. All kinds of technical levels were breached to the downside, which brings in the real potential of another leg down Friday and Monday. The VIX closed at 81, and the financials, led by the banks and insurance company's portend something frightening. You need a magnifying glass to see Treasury yields.

Any vote on a auto industry cash infusion is also on the back burner.

It's Time To Go Back To The 70's and 80's and Hit The Two Martini Lunch Again

1 comment :

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