Tuesday, June 2, 2009

Tuesday morning

Existing homes sales better than expected, still huge inventory...

Selling common to repay TARP, great market timing.

Chrysler 363 sale appeal moving along

Americans "don't care" about GM going bankrupt? Well, we're still on the hook for pensions, continued poor operations, etc. Spare us the lecturing.

The exorbitant cost of ethanol.

Wasteful spending a byproduct of federal $$$:

"It's a project fostered by local government that's never gotten off the ground for lack of private support. In other words, intelligent businessmen look across the river at Newport, Kentucky and see shops, restaurants, and movie theaters that are over capacity, and thus refuse to put their own private capital into a project that makes little economic sense. Only the government of Cincinnati won't let it die.

Now they have their wish: They have federal money to spend. With federal stimulus money, things are going to get built all over the country that will add to current overcapacity. We're going to invest in assets that have nothing to do with production and everything to do with waste.

When you borrow money to invest in non-productive assets, you get short-term gain at the expense of long-term loss. The crowding-out effect will make sure that we don't have capital to invest when we really need it to invest in real production."

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