By on March 28, 2009

The news that the Presidential Task Force on Autos (PTFOA) has decided to “loan” Chrysler and GM more money arrived well ahead of the March 31 (Tuesday) deadline. No less a personage than the president confirmed that Uncle Sam would turn a deaf ear to the 60 percent plus of America voters who oppose Motown Bailout III (Don’t forget the DOE tour). The announcement removed any possibility that GM bondholders and/or the unions would satisfy the previous loan’s conditions for a major debt for equity swap, or that GM would get its brands sorted out. To counter-spin this wholesale lack of “progress,” Bailout III will claim that new, piano-wire like “strings” are attached. Such as?

All I can find: GM bondholders and/or the unions will have to satisfy those same unsatisfied debt for equity/health care swaps. Or else. Here it is, via The New York Times.

Administration officials have said the bailout of the automakers is at a turning point, and the task force would intensify its oversight of G.M. and Chrysler until talks with the union and bondholders reached a conclusion.

Those officials also said the administration had no intention of nationalizing the auto companies or taking direct control of their managements.

Nor, apparently, calling the loans, putting Chrysler into Chapter 7, putting GM into Chapter 11, or removing current management and providing debtor-in-possession financing. Which is, was and will be the only sensible strategy or credible threat. Well, at least it was a credible threat until the Obama admin let it ride. Which they wouldn’t do again, would they? Meanwhile, here’s the thing . . .

The longer the feds keep throwing multi-billion dollar bags on the automakers’ IV pole, the less viable Chrysler and GM become. The process accelerates their product plan chaos (e.g., on-again, off-again GM products, the yes/no/maybe Chrysler Fiat hook-up); the constant erosion of command and control structure (employee cutback take their toll); and the brain damage caused by hitting their metaphorical heads against the same old walls (e.g., unions, debt, dealers, brands, products, inventory, marketing, technology). It has a cumulative effect.

As the Brits say, there will be tears at bedtime. Chrysler and GM will be worse off after federal life support than they would have been had they’d faced reality and filed. A C7/C11 would have forced the radical changes that the PTFOA seek. The damage to Chrysler and GM’s reputation would have been less severe.

Meanwhile, the new new federal loans aren’t a bridge to nowhere. They’re a road to nowhere paved in gold. Our gold.

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44 Comments on “Bailout Watch 461: More Money, Same Threats...”

  • avatar

    Is there anyone inside these companies that realises that the risk of C7 or 11 is real?

    From what I see, Chrysler is using bailout 1 to discount their product until Fiat signs up and saves them. GM is begging every govt in the world to bailout their local operation until it can be sold (to who is the question not being answered).

    The transplants are keeping very queit in N America, but busy working on alliances (BMW/Daimler), or talking to their own govt (including the Japanese).

    Ford in the meantime is bringing new product in from Europe (Transit Connect and Fiesta) and selling off Volvo.

    All the other companies must be irate that the GM/Chryco are using taxpayer dollars to undercut them in what little market remains. But they’re keeping quiet and getting on with the job of getting through this recession/restructing.

    As for the risk that if GM/Chryco fail they’ll take out the suppiers and there won’t be a car industry – why not help the suppliers so they can survive and service the remaining OEMs?

  • avatar

    Did anyone else see the CNBC article yesterday that GM has made another offer to the UAW and bondholders, basically giving them the company (or 90% of the equity)?

    No one else picked this up so I’m wondering how true it is….

  • avatar

    From what I read, a sticking point is that GM wants to pay the lenders and UAW in stock instead of ‘real’ money. If they wanted to play hardball, they should demand gold.

    Meanwhile, over at the banking trough, while the financial boys whine over threats to their bonuses being in jeopardy, Fifth-Third cranked up some office renovations shortly after getting a Tarp handout.

    But we don’t know what a bankruptcy judge would do. Almost certainly he/she would not pull the plug without some drawn out process, and dismal sales would be even worse in the meantime.

  • avatar

    From what I’ve read, GM could probably pay the bondholders in the form of new, unsold Aveos, Hummers, Saturns, personal wastebaskets, and clocks. Maybe throw in a few autographed copies of Lutz’s book too, but only if they ‘do the deal today’

  • avatar

    mikey610: “Did anyone else see the CNBC article yesterday that GM has made another offer to the UAW and bondholders, basically giving them the company (or 90% of the equity)?”

    I didn’t. But the question is, “What equity?” GM’s liabilities exceed its assets. It’d be like offering someone a house that isn’t worth as much as the mortgage loan against it.

    Your idea of paying off bondholders (or other creditors, for that matter) in Auras and Lucernes is intriguing. Right now, if I held $40,000 in GM bonds I’d swap them in a minute for a car worth $25K. The bondholder would have a tax deduction and some new wheels to drive or sell. GM would have a tax gain but its massive losses would offset that.

    Mr. Auctioneer Lang, how might an auction of 5,000 new Impalas, G6’s, Silverados and Vues fare?

  • avatar

    What you may or may not realize is that the “threat” is pointing at you, me, and every other hard-working, non-criminal U.S. citizen.

    Specifically, the threat is this: If you Don’t “pay up” …we will seize everything you’ve every worked for …and then toss you in prison. We will make your life a legal nightmare and a living hell if you don’t pay.

    You mentioned 60%+ of Americans do not support this theft…yet it’s being perpetrated anyway. The debt is yours (the US citizen) to work off. It is your sweat, your labor, your getting out of bed each day to put in an honest days work which is being used against you.

    You see, GM, Chrysler and every corrupt banking organization are not the problem (in their eyes)….YOU are the problem and you must be dealt with accordingly.

    The piano-wire is not around GM’s throat…it is around YOUR throat.

  • avatar
    Rod Panhard

    With the next $17.4 billion dollar “loan,” GM & Chrysler will continue to be able to pay the autoworkers for cars that are 60 percent less marketable than last year.

    By the way, that $17.4 billion dollars works out to $142,000 per GM & Chrysler worker.

    And that’s just in this round.

    I think I’d feel better if I were to just hand $142,000 to each of the 228 sixth graders at my son’s middle school. I think the result would be more beneficial.

    We’ll never see this money, again.

  • avatar

    Rod, would you know the cumulative “dollars per employee” for all three rounds so far?

    Holy cow, if this last suckle is $142,000 per employee…I’d love to see the total thus far.

    All in the name of “saving jobs”….yes, of course, that’s it.

    I have to say this is about the most sickening thing I’ve witnessed in my lifetime. It’s beyond sickening….it’s the greatest fleecing of the American public in our 200+ years of history.

  • avatar

    The critical mistake here was made by the congressional Republicans such as Shelby and Corker, who turned bondholder concessions into a deal point.

    This may have seemed like sensible tough talk, but it was the opposite. Knowing that Bush had already dumped money into GM and Chrysler that the feds would presumably want to get back, all this did was empower the bondholders. It made things worse, not better.

    Had they been smart about it, Bush, Corker and Frank would have had a joint press conference and made an announcement that included this language: “As part of this package, we will require that the bondholders compromise. If they refuse to compromise in a fair and reasonable manner, we will take other steps that will include cramming them down.”

    Use of the expression “cram down” would have put what has become this bondholder fiasco onto a different playing field. Instead of being empowered, they would be looking at the real possibility of their investment going to zero. That would have created a bit more bondholder motivation and inspired more efforts to play kissy face with the government, instead of flipping them the bird in the way that they are now.

  • avatar

    PS, thought you all might enjoy this:

    Those who voted for “Change”…well, guess what…You Got IT!!

  • avatar

    I saw many instances of class warfare committed against the masses of American citizenry for the last three decades.

    It is only with the recent economic brouhaha that I believe that a decently large percentage of a generally brainwashed, deluded, well-indoctrinated complacent herd of sheep-like Americans have finally realized that the USA is engaged in active class warfare with the masses of commoners (96 percent or so of the total population) on the losing end of the affair.

    The Founders wrote of what needs doing but times have changed.

    Two words MAY contain the only possible cure that MAY save the Union and the common folks within.

    M……. C…

    ask for some “i’s” for the first word and a “p” for the second and avoid the “bankrupt” on the spinners’ dial and you may BE A WINNER!!!!!

  • avatar

    Meanwhile, over at the banking trough, while the financial boys whine over threats to their bonuses being in jeopardy, Fifth-Third cranked up some office renovations shortly after getting a Tarp handout.

    I thought the point of this crap was “stimulus.”

    Scenario 1: Fifth-Third Bank receives bailout money, lends it to someone, that someone hires people to renovate their offices, pays it back, Fifth-Third makes a profit on the loan. Someone gets a nicer office, redecorators are employed, economy is stimulated.

    Scenario 2: Fifth-Third Bank receives bailout money, hires people to renovate their offices, gets nicer offices, redecorators are employed, economy is stimulated.

    How exactly do you feel that the two situations are different? The bank makes off well in both cases, as do the redecorators. I’ll assume for the rest of this that you don’t just have an animus against redecoration. If you want to complain (and I certainly do) complain about the bank getting the money in the first place, not about what they’ve done with it.

    Now, you may say that bankers are supposed to make a profit on loans, but nice offices aren’t part of a banker’s job description. I’d have to disagree. Anyone with experience with banks knows that banks tend to have nice offices and buildings, nicer than other places. Why? Because they want to give the impression that they aren’t about to go under and take your money with them (or make it hard to get). Fractional reserve banking depends on that confidence (see “It’s a Wonderful Life” if you haven’t.) They don’t want to come off like shady used car dealers. Nice offices and buildings are the types of expenses that only make sense if you plan to be in the location for years; if you’re planning to shut down or leave soon, they’re as much of a waste as painting your house in an unusual color or getting a car in an unusual color or unpopular options or trims that will hurt resale value if you plan to get rid of the house or car soon.

    The point of TARP was, along with stimulus, to have the banks not fail, which also depends in large part on people believing that the banks won’t fail. Redecorating is stimulus for the economy. If it also convinces people that “Fifth-Third Bank may bastards, but they must have enough money that they’re not going to go out of business if they can do that, so it’s okay to put my money there,” then TARP has done its job, oddly enough.

    It’s not about fairness; it never was. Banks are going to operate like banks if you give them free money, and banks have nice offices. If you feel upset about it, you should oppose TARP, like me.

  • avatar

    I thought the point of this crap was “stimulus.”

    No, the point of TARP was to give liquidity to banks so the credit markets would free up and they could lend again. Using the money to redecorate an office doesn’t do jack in that department.

  • avatar

    You are sucking on the hind tit of a dead cow:

  • avatar


    You are correct, but will it ever be written in history how big a mistake the government is making trying to save the gangrenous (sp?) bits of GM and Chrysler rather than do what needs to be done before the patient is dead.

    Wouldn’t it be better for us to protect the profitable bits from being dragged down by the other parts?

    Maybe one of you guys out there knows why the treasury doesn’t lend the banks money for longer terms if they want to save mortgages? I mean, if I can only borrow in the short term, then loaning in the long term is that much more risk.

  • avatar
    jerry weber

    What I don’t get here, is GM’s teeth gnashing that if they had all of their dirty laundry hung out for all to see in a bankrupcy, no one would buy the cars. Well, we have all the laundry out in the bailout (which is serving to put light on all parts of GM’s enterprise) and yes GM’s cars continue to plummet at an even accelerated rate.

    So in effect, this is the perfect storm of a bankrupcy filing as far as public perception goes. If any saturn, hummer, or saab store survives this year (after the public being told it’s curtains for them), it is only because the dealer had money from some foreign franchise he operates to pour into the hole. You want to get rid of dealers, this will do it.

    However, the customers are going down the same drain (the old baby with the bathwater syndrome). What can be done? At this late stage, probably nothing. When management is so obtuse as to run a too large leviathan into the ground when all evidence told them years ago to change course, no one will pick up these pieces.

    I now wonder whether cadillac and chevy can be saved. The longer this soap opera goes on, the less sales for any part of GM. Who is going to say, I didn’t buy an olds because they were going to go? Now I can’t buy a saab, hummer, or saturn because they are going to go. So I’ll just buy a chevy or caddy because they will certainly be left standing?

    Even if the brand stands, the resale value will be trashed and thus the investment a poor one for the buyer. Couple that with service and parts availability problems, and you have a perfect storm for any GM product. I know that toyota, honda, nissan, subaru and some German builders survive this, more than that is a crap shoot.

    Since I can’t see three years down the road at my next trade in time, I have to go with the sure thing. Why is this so hard a logic to understand?

  • avatar


    Glenn Beck? Seriously? That man is a few sandwiches and a six-pack short of a picnic…

  • avatar

    Good morning, Ferrariman,

    I never said I listen to him, not did I say I like him…truth is, I don’t know anything about the guy because I honestly don’t listen to him.

    But the message in his clip I found to be quite appropriate. If you dislike the man, that’s perfectly fine…nobody said you had to. But if you can find fault with his analysis, please speak up for the entire world to hear…and clarify where exactly he is mistaken.

    Thanks, I look forward to you correcting him.

  • avatar

    But if you can find fault with his analysis, please speak up for the entire world to hear…and clarify where exactly he is mistaken.

    There are more than enough errors to crash this server. Here are a few of them –

    -The money supply has been growing over time, including before 1965. His chart is just flat wrong. Since the data is readily available from the Federal Reserve, then I can only conclude that the Fox News team is dishonest or stupid.

    -Increasing the money supply is not necessarily a bad thing. If you’ve been paying attention to recent news, then you should know that deflation is just as bad as inflation, as deflation creates depressions.

    If someone is going to bang on about the alleged benefits of the gold standard and a stagnant money supply, then that person should explain exactly why those are supposedly good things. I have yet to find anyone who understands what money really is who supports a gold standard. It’s nonsense from economic ignoramuses and kneejerk populists who should learn something about what they’re talking about before getting onto TV.

  • avatar

    Rastus, it’s just that Beck is not all right in the head. He’s only worth caring about to mock him. At least Rush Limbaugh and Sean Hannity can put together a coherent thought.

    I’d find fault in his analysis, but that would take all day, and I don’t want to go any further OT than we already are.

  • avatar

    Um, last time I watched the clip he was talking about “debt”, there PCH101.

    I don’t recall him saying anything re. money supply.

    So, PCH101, show me some figures which pertain to National Debt, please.

    Is this a battle of ideology? Is this what its about? Liberals vs. Conservatives?

    No…Let’s just stick to “debt”, shall we, please?

    What is it PCH101? What is out National Debt, and if you are so bold, why not divide it by ..let’s be conservative (I know that goes against your grain)…but let’s divide it by 350,000,000.

    Thanks buddy…and thanks for the truth.

  • avatar

    I don’t recall him saying anything re. money supply.

    Then you apparently didn’t watch your own link, nor did you read the title of the video post. (The poster on You Tube apparently did — he referred to it as the “monetary base.” Most of us would call that M1 or M2.)

    And if it had been about the deficit, then it would have also been wrong. Surely, you must know, for example, that the US ran substantial deficits during WWII to finance the war. As a percentage of GDP, those deficits were far higher than anything we’ve had since.

    Is this a battle of ideology?

    It’s a delicious blend of Fox’s ideological taint and penchant for really bad reporting, including blatantly bogus information.

    Get your data from better sources. If you want to get hard data, then use your favorite search engine to get it from the original sources, which in this case would be the Fed. It’s not a state secret, and the results fly in the face of the blatantly inaccurate information provided by the unfair, imbalanced op-ed cable franchise.

  • avatar


    Pch, you know better.

    Glenn Beck is not a journalist. You can’t blame the Fox News team for his rants. Otherwise, all the news teams are bad.

    Wait, maybe you are correct…

  • avatar

    I asked you very kindly if you would just spell it out.

    Please. What is it? What is our cumulative National Debt, and what is it per person (based upon a conservative estimate of 350 million U.S. citizens).

    Thanks for being so straight-forward…people appreciate that in conversation.

  • avatar

    Listen, I’m not even a Glenn Beck listener. I came across the clip and thought it was quite telling.

    By God, if it is wrong, then please …someone please clarify.

    I come to you like a lamb….sweet and innocent. I just want an answer to my silly question.

    This Bailout Nation is becoming quite a burden to the average working citizen.

    It’s only fair that each citizen knows how much “he/she owes”, right? How can you pay off your debt if you don’t even know what it is?

  • avatar

    I asked you very kindly if you would just spell it out.

    I did. Let’s try this again –

    -You asked us to point out inaccuracies.

    -I indicated that his money supply chart was wrong, based upon the actual data available from the Fed.

    Your response — you want to misinterpret the chart, and claim that it is about something else, even though it would be wrong, even if you were correct.

    Go back and watch the link. He’s discussing the money supply.

    Once you’ve done that, go to the Federal Reserve website and look at the M1 and M2 money supply figures. Compare those to the Faux News chart. Notice the big difference.

    Then, use that revelation to acknowledge Fox’s blatant error, and learn to be more cautious next time in citing them as gospel, when they can’t even get the basics right. It’s one thing to be ideological, it’s quite another to be blatantly wrong on the facts.

  • avatar

    Yep, you ask for a straight-forward answer …with a simple figure…and you get the above.

    Thanks PCH, you’re a real straight arrow.

    If the error is so blatant, and someone asks for a simple numerical figure which would set the record straight…and doesn’t get it…all the while being ridiculed from a person espousing honesty and openness…then I can’t say I respect your opinion. You see…the truth is not so convoluted…the truth is the truth.

    No, the truth must be woven behind a web of tangents, diversions, deceit and anything else you can think of to avoid spitting it out.

    Besides, the M3 money supply (which supposedly is comprised of both M1 and M2) is no longer published. It is now a “secret”…so if you know something I don’t, please…again, spit it out.

    Please see “M3”.

  • avatar

    I can’t say I respect your opinion.

    A change in the money supply is not an opinion, it’s a statistical fact. Either you get it right, or you don’t.

    At about 1:01, he says while pointing at the chart, “This is billions of dollars, this is how much money that we print and have in the system at any given time.” Clearly, he is talking about the money supply, not the deficit.

    He then goes on to compare 1929 to 1941, claiming that we “haven’t pumped a lot of money into the system” during the 1930’s. He shows a flat line — no change — between the two periods.

    Now compare this to data from the Fed. Take a look at the right-hand column of pages 24 and 25 of this study:

    Total money in circulation, 1929: $4.74 billion
    Total money in circulation, 1941: $9.61 billion

    Obviously, not only is Beck wrong, but he’s wrong by a huge margin. Contrary to his assertion, not only was the money supply not flat between 1929 and 1941, but it more than doubled during that period.

    There’s obviously a huge spread between 0 and 100+%, but I suppose that we shouldn’t allow facts to get in the way of a good argument.

  • avatar

    There you go, that’s how you respond to these things. That wasn’t so bad, was it? :)

    And to answer “my” question…I guess I have to do it myself:

    Now, consider this: The US Government is bankrupt- anyone or anything which has this amount of debt hanging over it’s head is bankrupt…by definition. The only thing propping it up is their “full faith and credit”…ie, their ability to tax their own citizens…and since most people are so fortunate to “own” their own homes…ie, they “own” a mountain of debt in the form of a mortgage….if per chance this debt were to be called in …we are in (as Pete DeLorenzo would say) a “whole lot of not good”.

    So, if in this quest for a “good society”…why are we rewarding the minority…and instead why are we not concerned with the majority?

    I guess it all depends upon what your definition of a “good society” really is. I guess in some sick and demented way, homelessness would be considered a good thing. Non-representing Representatives are indeed good. The voice of the people not being heard is good.

    I guess I just need to get with it and embrace the ideals of socialism and move to Finland…where I can buy a UAZ and motor till my little heart is content.

  • avatar

    What does a “debt clock” have to do with the money supply?

    You obviously don’t understand that Beck was discussing the money supply. I quoted him verbatim in the previous post, just in case you missed it, yet you continue to misinterpret what he said.

    You also refuse to admit that Beck got the facts wrong. The data is what it is, and he clearly blew it.

    If you want to make this an argument about your failure to understand what he is saying, then you’ll have to find another sparring partner. I can’t really help you if you can’t distinguish between deficits and money supply.

  • avatar

    Can I say something? I’ve been talking all along about debt. Why is that so difficult to comprehend? This is not me against you…this is about the debt burden which resides on each and every tax payer’s shoulders.

    You want me to confess my sin to you? For what reason? For me to acknowledge you as somehow my superior? Will that boost your ego…is that what you are looking for?

    I asked a very simple question: What is the total National Debt? If Glenn Beck is wrong..then what is it?

    Fine…I found that out from other sources.

    Yet somehow I owe you something? Ummm….okay…

    Why do you think I’m against you …and that I wish to butt heads with you?

    You don’t know the money supply…because it hasn’t been published in years. If you wish to write Beck and point out his errors, please do so…I’m sure he’d love to hear from you.

    You may wake up one day and realize the debt you owe to society has absolutely NOTHING to do with me, ok? …and that any forthcoming confession will not change a thing.

    I hope that day comes sooner rather than later.

    Take care.

  • avatar

    I’ve been talking all along about debt. Why is that so difficult to comprehend?

    Because **you** posted a link about the **money supply.** We’re talking about the content of something that you chose to post.

    I have made specific comments on the alleged data that you posted in your link. Since you wanted examples of factual errors, I gave them to you.

    The facts are what they are. Your link blew it completely on the facts. I’ve proven just one example of that error quite easily, and could provide more if necessary.

    It is becoming increasingly obvious that you did not understand Beck’s comments in the first place. He’s talking about something else, and you don’t evidently follow that.

  • avatar

    You don’t know the money supply…because it hasn’t been published in years.

    Er, it’s published once every week! The last release was on Thursday:

    Your statement is clearly false. Just during 2009 alone, the Fed has released thirteen reports on the subject. If you’re going to talk about the economy, it helps to get your facts straight.

  • avatar

    Do you realize each and every dollar in circulation (be it M1, M2, or M3)…be it electronic or paper…is debt?

    That’s 100% correct. Whereas once a dollar represented positive value (gold or whatnot), a store of wealth, it now represents debt?

    That is true. You can look it up, search “money as debt” and you may come across this link:

    This is not some wacko conspiracy theory…it is the system we currently operate under.

    What a complete reversal, huh? Money is debt?

    If we had no debt, we would have no money in circulation.

    So, if you wish to perform a little more research on the subject, you may come to the (correct) conclusion that “money supply” and “debt” are the same thing.

    Absolutely- I guarantee you, 100% true.

    Now, isn’t that something to ponder…you work..and as compensation, you are paid debt certificates.

    That’s how truly convoluted our system has become. Take something relatively straight-forward…that is, you work and are compensated with something of value…and completely turn it on end.

    Money supply is debt.

  • avatar

    Yep, I notice there is a column missing in those published tables…it’s called (or was called at one time) “M3”.

    So, again, please take a moment to correct me.

  • avatar

    Money supply and debt are not the same thing. So no, your point remains inaccurate.

    If you are going to tout the alleged benefits of M3, then you should explain what information that it provides that is so vital that can’t be derived from M2. I realize that there are conspiracy theorists on the internet who think that the elimination of M3 is some nefarious plot, but like a lot of amateur internet politicos, they just can’t separate fact from fantasy.

  • avatar

    If you were auditing a company’s records…say GM…and they told you…

    “Well, we owe such-and-such amount to this group of investors”….

    When all you want to know is the TOTAL debt on record….

    …you would not be able to sign off on your audit (legally) because you would NOT have an accurate picture of the true financial conditions of the company you were investigating. Of course, if you were in the mood for a legal battle, then go right ahead.

  • avatar

    Taken from wikipedia:

    M3: M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets.[11] M3 is no longer published or revealed to the public by the US central bank

    So, if knowing M1 and M2 you can “derive” M3…then you are doing quite well, there PCH.

    Gotta love the term “conspiracy theory”. I especially love the term “other larger liquid assets”…that really helps to identify the real picture.

    To be honest, this is how government acts…much like you are acting now. The idea is to get people to debate nonsense…much like glass reflectivity and black paint…as an attempt to divert attention away from the real issue.

    It’s not working. The real issue is this: The debt being placed upon people’s backs is ENOUGH.

    Now you can debate conspiracy theories, M3, M1, Glenn Beck, the Federal Reserve, etc. all you want. If a posting is incorrect, say so, point out where it is incorrect..and leave it at that.


    Things are not as difficult as you make them out to be….they are actually pretty straight forward. Individual families deal with budgets all the time. But to listen to the television, politicians, people like you…well, it’s enough to make the Pope turn to vodka. Anything and everything to avoid dealing with reality.

    Now- how about those “collateralized debt obligations” and “equity swaps”, there PCH??

  • avatar

    M3: M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets.[11] M3 is no longer published or revealed to the public by the US central bank

    I know what M3 is. I didn’t ask you to define it, but to provide some insight about what is allegedly so important about it. You failed to do that.

    The point is that M1 and M2 provide adequate statistical data to manage the money supply. M3 doesn’t provide any clarity that helps in setting policy.

    So, in your own words, explain why the loss of M3 is such a tragedy. Since you brought it up, you may as well (try to) explain it.

  • avatar

    During the solar equinox, with a 50% cloud coverage on the equator…thus a 43.72 degree angle of incidence upon a windshield of 42 degrees with a 22% coefficient of reflectivity and with an interior volume of 18 cubic feet…we can conclude an air conditioner with a 32% efficiency rating will thus incur a penalty of .00072% in the negative.

    But only between 10am and 2pm…after which we will see a liner decrease in the overall penalty up to and including 6pm

    We can thus integrate this function from -45 degrees latitude to +45 degrees latitude.

    PCH, stop it already, ok? I’m through with this debate. You said you can derive M3- so please…do so and leave it at that.

    Your energy is better suited (in my opinion) dealing with the real issues at hand.

    April 15th is right around the corner. Please give…and please, give some more. Those with an agenda need your contribution. It’s all for the best.

  • avatar

    You said you can derive M3

    First, you didn’t understand your own link. Now, you’re misinterpreting me.

    You claimed above that the Fed’s decision to stop reporting M3 was a big deal. My response: “If you are going to tout the alleged benefits of M3, then you should explain what information that it provides that is so vital that can’t be derived from M2.”

    I didn’t say that you could calculate M3 from M2. Obviously, M3 has more stuff in it than M2.

    Instead, I posed a question to you — tell me why M3 is such a big deal that the Fed can’t just use M2 to get the job done. You must believe that M2 isn’t adequate, and I want you to tell me what’s specifically wrong with it, since you obviously are hung up about it.

    You obviously didn’t address that point, and I frankly have my doubts that you could.

  • avatar

    Did you have a shot or three of courage and decide to go on the offensive…is that what this is?

    The definition above speaks for itself.

    If you don’t know the full picture then you have no basis for declaring anything sound or unsound…financially speaking.

    That’s enough…you don’t need to go any further, my friend. If M3 is bullshit and is totally irrelevant, then why grace it with such a lofty title? Why even identify it? All those “others” cease to exist…we can just sweep them under the rug, right?

    But only for the U.S. Government…as GAAP only applies to corporations, right?

    Ok,…please…go stand in front of the mirror and calculate its coefficient of reflectivity with you in it….drinking your favorite brand of vodka.

    But of course, be sure you have a dimmer switch available so you can integrate your initial finding (at say, 100 watts) over the various levels of luimens from 0 to 250 watts.

    When you are finished, please report your findings in a scientific journal and submit to the CARB…they would love to hear from you.

    You are just their type…perhaps you can apply for the Chief Engineer role.

  • avatar

    decide to go on the offensive

    There is nothing offensive about correcting Fox News’ mistakes.

    I’m sure that it feels like an attack because you don’t have an adequate rebuttal, but let’s remember that you asked for someone to identify some factual errors and I complied with your request. You could thank me for helping you by providing you with a fact-based reply, but I suppose that such gratitude won’t be forthcoming.

    The definition above speaks for itself.

    I think that we’ve established that they are different, albeit related.

    So, tell me, what makes M3 better than M2? As I stated previously, I want you to tell me **why** the absence of M3 poses a problem.

    Again, since this is **your** stated belief, I’m trying to get you to clarify and explain it. Since you believe so strongly in this position, it should be easy for you to explain it, shouldn’t it?

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