When push comes to shove, though, ask yourself, will Merkel insist on liberal orthodoxy and liquidate 10,000 German jobs, or will she cave in and pay up?

See my post on that here:

http://www.creditwritedowns.com/2009/11/germany-gives-gm-a-stiff-arm-on-state-aid.html

Not quite: Germany had already agreed to pay 4.5 billion euros toward the restructuring if GM went with Magna. GM is seeking MORE money as it plays the governments off of one another, like in the U.S. with defense contractors and congressional districts. Berlin is theoretically still on the hook for that.

It’s true that the market is oversupplied everywhere (and China hasn’t even begun to export), but Opel is a relatively solid operation, at least in comparison with the American arm, which now simply a global marketing/finance/outsourcing/lobbying business domiciled in Detroit.

Agreed.

Think we will see the ~$180 billion back from AIG or even the the $billions funneled through AIG to Sachs, Deutche and whoever else? Granted GM management screwed up; but, it still employs thousands of workers who make < than $28/hour as compared to how many $billions set aside by Sachs for bonuses?

I will rescue Labor as opposed to W$ capital.

The bailouts do offer unlimited free refils, don’t they?… Like that overpriced coffee at Starbucks… Or the all you can eat buffet at your favorite Chinese restaurant…

Vinny

@ c1ue above accurately notes the secular DECLINE in auto sales

the ‘cash4clunkers’ has pulled a lot of future US demand forward

and yet no one, NO ONE, is thinking about correcting the size of global mfg capacity (surely exceeding 40% now)

in cruel hindsight, GM and Chrysler (the least adaptive) should have been allowed to go to the wall in Q1

Schumpeterian ‘creative destruction’ and all that

As for Dimon, I think the talk of him as Treasury Secretary is just an ego and prestige boost for him. Actually getting the job would be a sure way to destroy his carefully nurtured reputation. On the other hand, the turf wars between him and Summers would almost be worth the price, if the country’s economy wasn’t crashing that is.

Finance is a little different. The bankers end up with a much larger percentage of the bailout money going directly into their personal pockets. And the bankers have a much easier time appearing to pay the money back because there are so many alternatives for replacing direct payments that are drawing too much attention with off-budget guarantees and other dodges.

If GM was the worst of it I would still have some hope. The government capture by banks goes much deeper than the capture by heavy industry.