Criminal GM discovers it can kill 13 people and it only costs them $2.9 million a pop

We bailed out these creeps, why?

The guilty should be in jail and the company dissolved. It remains arrogant about the matter to this day.

Story here:

WASHINGTON — Three months after announcing the start of a safety recall that has swelled to include 2.6 million cars, General Motors has agreed to pay the federal government $35 million -- the maximum penalty -- for failing to report the potentially deadly defect earlier. ... GM has asked a bankruptcy court in New York to rule that it is protected from economic loss claims associated with the recalled vehicles. GM went through a government-backed bankrutpcy reorganization in 2009, which voided any liability claims tied to products made before July 2009.

Osama bin Laden is dead and so are 13 GM car owners

Michiganders in particular remain in denial about the GM bailouts.

Jim Geraghty here for National Review throws some cold water in our faces:

GM continued to make cars with a life-threatening defect during the era of government ownership. Joe Biden liked to boast, “Osama bin Laden is dead and GM is alive!” Indeed he is dead, and so are 13 people who were involved in car accidents linked to a defective ignition switch. ...

The New York Times reported that engineers at GM reviewed data in the black boxes of Chevrolet Cobalts at a meeting on May 15, 2009, and confirmed that the potentially fatal defect existed in hundreds of thousands of cars. The Obama administration and GM’s management finalized the terms of the bailout at the end of that month. It’s not yet clear who at GM knew this shocking and scandalous information, but at least some GM employees knew they were selling dangerous cars at the precise moment they were asking for taxpayer money to stay in business. ...

[T]he Obama administration’s Departments of Transportation and Justice came down like a ton of bricks on a Japanese automaker about unproven allegations of defects, while the government-owned American company continued to make and sell cars with proven potentially fatal defects, even after the chief of the NHTSA’s Defects Assessment Division twice proposed investigations.

The U.S. government sold its last shares of GM stock in December 2013; some have asked whether the government did so knowing the recall would be announced in February 2014. 

Bailed-Out GM Auto Recall Surges To 4.8 Million In 2014 From 0.76 Million In 2013

Top 20 vehicles by sales volume 2013

There's your everyday, run-of-the-mill, garden-variety recall from going automobile companies like Toyota and Honda who recall vehicles and still make a profit, and then there's your government-subsidized, taxpayer-funded, otherwise bankrupt recall like one from General Motors or Chrysler.

Which would you prefer?

The New York Times reports here:

General Motors announced on Saturday morning that it was recalling 490,000 trucks and 172,000 compact cars, meaning the automaker has now recalled about 4.8 million vehicles in the United States during the first three months of the year. That is about six times the number of vehicles it recalled in all of 2013. ... G.M. recalled about 758,000 vehicles in the United States in 2013, ninth among automakers, according to the National Highway Traffic Safety Administration. Toyota was first, with about 5.3 million vehicles, followed by Chrysler with 4.7 million and Honda with almost 2.8 million.

Taxpayers lost $10 billion on the GM bailout, $1.3 billion on the Chrysler bailout.

Memo To Larry Kudlow And Other Defenders Of GM/TARP Bailouts: Free Market Capitalism This Is Not

General Motors, bailed out at a loss to the American people in 2009, has now had to recall approximately 2.6 million vehicles according to this story, many built well after the fact:

General Motors is boosting by 971,000 the number of small cars being recalled worldwide for a defective ignition switch, saying cars from the model years 2008-2011 may have gotten the part as a replacement.

The latest move brings the total number of cars affected to 2.6 million. The questionable handling of the problem, including GM's admission that it knew the switches were possibly defective as early as 2001, has embarrassed the nation's largest automaker. The recalls — which are under investigation by Congress and federal regulators — have overshadowed the improved quality of GM's newer cars.

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Improved quality? You mean like the Volt which catches on fire? The Cruze whose steering wheel comes off? If this were a free market capitalist economy, Larry, GM would have been allowed to fail instead of being allowed to keep on selling this garbage to the American people.

GM should have gone through bankruptcy instead of being bailed out. It might have been reorganized as a result, but not as a worthless union shop. Otherwise its assets would have been acquired by the highest bidders who know how to build cars. Unfortunately GM's still here making crummy cars with shitty parts, some of which could kill more people, all thanks to the taxpayers, some of whom are still dumb enough to keep buying the things. Just Google the forums and read the horror stories. I'll bet they're the same ones who don't know Monday is the deadline to sign up for ObamaCare.

I've said it before and I'll say it again: no more GM cars for me, ever. The bailout was a bridge too far.

Ditto Chrysler.

Economic Stress Continues: Average US Car 11.4 Years Old In August, Another Record

1997 Olds LSS

The story was reported here:

The average age of vehicles on America's roads has reached an all-time high of 11.4 years, according to the market research firm Polk. And that average age is sure to keep climbing, the firm said. ...  In 2002, the average vehicle was 9.6 years old. In 1995, it was 8.4 years.

----------------------------------

While cars are getting better and lasting longer, this may also be a picture of economic stagnation, and perhaps decline.

Deleveraging: Consumers Reduced Debt By Less Than 8% Between January 2008 and July 2012

And household debt is on the rise again since summer 2012, up now to just under $13.1 trillion.

Squawkers everywhere (here and here) are making a big deal of this, but I'm still not convinced. We're only talking $169 billion of borrowing in the last year, July on July.

16 million vehicle sales per year at $15,000 each is $240 billion. Presumably there are some good credit risks buying some of those new vehicles, as there always are. But with the average US car age at 11 years old in summer 2012 increasing to 11.4 years old in summer 2013, record highs, and projections expecting average age to increase still more years down the road, I'd say the very slight increase in indebtedness may have more to do with necessity playing out than with a fundamental return to healthy debt-fueled growth.

As I pointed out from a source in the earlier post on this subject, many more of the new car loans are subprime, higher loan to value to be able to afford the down payment, and longer term than they used to be. The quality of the increased indebtedness is nothing to be happy about, and tells a tale of continued economic stress, not of economic recovery.

Have Households Started To Borrow? Probably for cars.

PragCap thinks so here, but it's only been up $169 billion year over year. The monthly rate of vehicle sales annualized is up 1.6 million units over the same period. Could be that. Subprime, loan to value in excess of 100% and longer terms are all up in the space, according to Reuters here just in recent days.

Economic Stress: Top 10 Selling Cars In July All Get Combined 28-32 MPG

The top 10 selling cars in July 2013 all get a combined MPG between 28 and 32 in their four-cylinder offerings with automatic transmission. In June most consumer spending was on autos and gasoline, and when those were backed-out, remaining retail was actually down 0.1%, the first time in a year. Soaring gasoline prices have no doubt been at work in spending allocated to more fuel efficient vehicles. Gasoline has been averaging above $3.50/gallon nationally since the beginning of February. See Good Car Bad Car here for car sales data by month.

Toyota Camry 28 mpg

Honda Civic    32

Honda Accord 30

Nissan Altima  31

Chevy Cruze    30

Toyota Corolla 29

Hyundai Elantra 32

Ford Fusion (fwd) 28

Hyundai Sonata  28

Ford Focus          31

Economic Distress: Average Age Of American Car Climbs To 11.4 Years From 9.9 In 2006

Story here.

TNR Blames And Credits JK Galbraith For Contemporary Financier Fascism

It would be nice if liberals could make up their mind.

The New Republic's Tim Noah here traces TARP, Dodd-Frank and ultimately the general state of regulatory capture (Stigler) of the government by the banks to John Kenneth Galbraith's vision in his 1967 The New Industrial State:

Galbraith (who died in 2006) argued that big U.S. corporations had become immune to competition. Any effort to break them up into smaller companies would neither succeed nor—given the complex challenges of a modern economy—be especially desirable. Better to keep them in harness through a partnership with government. “Planning,” Galbraith wrote (in a sentence you could probably get arrested for writing today), “must replace the market.”

Galbraith was writing about manufacturing giants like General Motors and U.S. Steel. These seemed indestructible at the time, but of course they would soon prove all too susceptible to competition from abroad. Still, Galbraith’s vision of the regulatory state comes pretty close to describing today’s relationship between the federal government and a different oligopoly: the Big Six megabanks. ...

When the 2008 financial crisis hit, the feds went into Galbraithian planning mode. They bailed out the banks through the Troubled Asset Relief Program (TARP), arranged mergers, and, through the Dodd-Frank bill, required big banks to prepare “living wills” showing how they would dismantle themselves in orderly fashion should the need arise. ...

Conservatives were wrong to oppose the government’s bank rescue . . ..

For conservatives who feel queasy advocating the breakup of private enterprises, MIT’s Johnson offers this consolation: Remember George Stigler. Stigler, a conservative economist who died in 1991, won the Nobel for a theory that basically said Galbraith’s partnership approach didn’t work because of “regulatory capture,” i.e., the various ways corporations tame their minders—for example, by maintaining a revolving door between industry and government. Rather than try to control powerful corporations, Stigler thought government should use antitrust law to break them up and let competition rein them in.

What's wrong with this analysis is that banking is not a private enterprise and hasn't been since 1913. The then new partnership of banking with government in 1913 failed in less than 20 years, requiring Glass-Steagall in 1933, which was reactionary liberalism at work. And what we have just witnessed is an instant replay of that debacle, only in faster motion. The Gramm-Leach-Bliley Act of 1999 overturning Glass-Steagall took only 9 years to blow up. But unlike Glass-Steagall, the grotesque of interventions in the wake of this latest panic has done nothing to demarcate clearly the public vs. the private in banking, and consequently keeps the public, and the country, at risk while insuring advantage to those closest to the printing presses at the Treasury. Money goes to money, as they say out in the sticks.

It's not much solace that liberalism's fingerprints have been and continue to be all over the inception and development of financier fascism in the United States. There don't seem to be any conservatives smart enough to understand the advantage it presents to them, and to the country. Or maybe it's just that they've been captured, too.

AP Story On Auto Delinquencies Gets Peak Wrong, TransUnion Doesn't Seem To Care

The AP story here, "Late Auto Payment Rose in the Fourth Quarter: TransUnion", was picked up and dutifully reproduced at at least 900 websites containing the error "The national late-payment rate on auto loans peaked in the first three months of 2000 at 2.39 percent, the firm said":

The rate of auto loans with payments late by 60 days or more was 0.41 percent in the last three months of 2012. That's up from 0.38 percent in the previous quarter, but down from 0.46 percent a year earlier, TransUnion said.

Turek noted that the company always sees a slight uptick in the auto loan delinquency rate during the fourth quarter. The financial pressures of holiday shopping can lead some borrowers to delay or skip a loan payment — a dynamic that also leads to higher late-payment rates for credit cards and home loans.

Even so, the fourth quarter's late-payment rate remained near the lowest rate on TransUnion's records going back to 1999. That record-low rate, 0.33 percent, was recorded in the second quarter of last year.

The national late-payment rate on auto loans peaked in the first three months of 2000 at 2.39 percent, the firm said.

If the firm said that, I'd be very surprised.

Turek in 2010 previously stated, here, that the peak was in late 2008, at 0.86%, which is 160% higher than the all time low on TransUnion's scale:

"The good news is that TransUnion expects national auto delinquency rates to continue to be well below the peak of 0.86 percent -- a rate experienced during the heart of the recession in the fourth quarter of 2008."

TransUnion's own graphic shows that the scale of the national rate is measured in tenths and hundreths of a percent, while the scale measuring the worst delinquencies in the worst of times in the worst states doesn't even reach as high as 1.80%:

So something is really amiss with the AP story.

Separately, a story here from March 2011 indicates that auto loan delinquencies, measured using a different scale but with a similar difference between highs and lows in the neighborhood of 160%, were never higher than in 2008-2009, which rules out the year 2000 for worst year in modern times for auto loan delinquencies:

From late 2008 through 2009, dealers and consumers found themselves in the midst of the worst credit crisis in modern US history. Lending activity froze, thus limiting dealers’ ability to finance their inventories and provide consumers access to auto loans. With unemployment rising and home foreclosures breaking records during this time, auto loan delinquencies peaked as well. Normally, seriously delinquent (90-plus days past due) auto loans represent between 4% and 7% of outstanding auto loans. In the fourth quarter of 2008, however, such loans totaled $8.5 billion and 13.9% of outstanding auto loans. In the first quarter of 2009 that share climbed to a historic high of 15.9%. Fortunately for the auto-sales industry, delinquencies, in value and percentage terms, rapidly declined during the second half of 2010.

Messages left with two different individuals in TransUnion's media relations department in Chicago yesterday seeking confirmation of the AP story remain unanswered at this hour. 

Ohio Poll Showing Obama +10 With "Likely Voters" Prepares The Way For The Lord

The Ohio poll by Quinnipiac/CBS/NewYorkTimes here showing Obama +10 over Romney is of "likely voters", not telling us how many Democrats are represented in the results. They could be legion, in view of the fact that Rasmussen's latest poll in Ohio showed the race to be +1 Obama just days before this poll. Has anything significant happened in recent days to cause such a dramatic swing?

Despite the significance of the auto bailouts for the prognostications of local Democrat officials in Ohio, the fact that early voting in Ohio begins next week helps explain why it is necessary for Democrat sympathizers to release a favorable poll now to prepare the way of the lord.

Bailout Takers To Give Obama The Margin Of Victory In Ohio

Is Romney wrong to write-off voters who depend on direct government assistance?

Alec MacGillis for TNR, here:

When I was in Toledo last week, I asked Lucas County Treasurer Wade Kapszukiewicz, a Democrat, what he made of Obama’s strong position, and he didn’t hesitate. “It’s the bailout," he said. "It’s not just the Jeep plant in Toledo and that they build the Chevy Cruze in Youngstown. But more than that -- we have 88 counties, and in 82 of them there are supplier plants to the larger ones. When you start talking about 82 of 88 counties that have some sort of direct, literal, positive impact from this rescue, I think that on the margins has the ability to tweak the numbers.”

The moral hazard of bailouts doesn't affect just the outcome for a business, but also the outcome for the politician responsible for it.

Gov. Romney should have considered that the contributions of bankers who were helped through TARP bailouts which he supported may be outnumbered by the votes of workers whose jobs the auto-bailouts he opposed preserved. 

What Do Today's Gasoline Prices And Chevrolet Have In Common?

"When I take her to the track she really shines

She always turns in the fastest times

My four speed dual quad posi-traction 409"

Can You Imagine Auto Fleets Averaging 35 MPG In 2016 And 55 MPG In 2025?

Notice the dramatic uptick in fuel economy after the oil embargo of the 1970s. Economy went from about 12 mpg to about 20 in just about 5 years, an improvement of over 60 percent in a very short time.

Then economy was flat to declining for 30 years.

Since we've committed ourselves to the suburban lifestyle, it only makes sense to get the best fuel economy we can. And if anyone can do it, the Japs can.

Story here.

Low Tech Auto Security System

The Fascist Grip Of Banking: Rate Rigging In LIBOR, Now Also In Municipal Bonds

There is no corner of contemporary economic life which is not in thrall to state-sponsored banking, and so no corner of it which is not rigged to favor the players wielding the taxpayer backstop.

American-style fascism only seems most vivid when "banking's" losses are finally socialized through spectacular bailouts. Just as spectacular as the bailouts are the efforts to re-define nearly everything as banking in order to bring it all under its aegis. Think GE, GM, Chrysler, investment banking and AIG. That process of socialized losses continues apace on a smaller scale with every bank failure carefully orchestrated for Friday nights, to which Americans are now so thoroughly inured due to its frequency and efficiency. That is but the ubiquitous residual background radiation of the system's big bang, the collapse of banking's housing collateral, rapaciously used to leverage private shareholder and investor gains.

But even the spectacular blow-ups do not keep our attention for very long. Like the public servants who have succumbed to regulatory capture by industry, our anger is also subject to capture by the power of banking's propaganda, the central message of which is that the collapse of banking as we know it would mean nothing short of civilizational collapse. But it is merely their revolutionary version of civilization, not ours, based as it is on the dictum "How can you respect a man who needs you more than you need him?" Traditional Americans have always believed instead in "Owe no man anything".

Meanwhile the gains accruing to elites manipulating the levers of industries which have installed doors to the government are harder to ferret-out, the heads-they-win side of tails-you-lose. Lately it was LIBOR manipulation which came to the light, which has been rigged for far longer than since the latest financial crisis. Now the municipal bond market's municipal market data index, MMDI, is in the spotlight, according to this story in The New York Times, reproduced here:

Thomson Reuters, which owns Municipal Market Data, said on Monday that it “has been involved in discussions with regulators” about the rates, which influence the prices of bonds and derivatives in the $3 trillion municipal bond market.

The company released the statement after the municipal bond industry’s self-regulator, the Municipal Securities Rulemaking Board, said that its board was “concerned about the transparency” behind the creation of a few indexes used to set prices in the municipal bond market, the most important of which is the M.M.D. index.

What we may find from this is that local taxing districts have been paying way too much for roads, schools, libraries, cops and firemen, providing gains for the few financed once again on the backs of many (property) taxpayers.

Average Age Of Vehicles On Road Climbs Year Over Year To All Time High

'97 Olds LSS

As reported here:

Feel like you're driving an old car? You're not alone. In fact, the average age of vehicles in the U.S. has hit a new all-time high. Experian Automotive says the average age of the 245 million vehicles registered in the U.S. in the first quarter of this year was 11 years.

That's an increase of just over 2 months compared the first quarter of last year.

Vehicles Sales At 14.4 Million Units Annualized Through March 2012

The chart is here and the data here.

Total auto loans outstanding in Q1 2012 came to approximately $686 billion, or 6 percent of the $11.44 trillion total household debt, according to the May 2012 report of The New York Federal Reserve.

Energy Secretary Steven Chu Praises Chevy Volt, Owns No Car, Wife Drives Beemer!

Her car uses premium gas, as reported here.