bailout

So, the Big Three automakers pleaded their cases yesterday before congress, and it turns out that they need a butt-load of cash. 34 billion dollars, to be exact.

GM may need a total of 18 billion dollars by the time the dust settles. The company would need immediate access to 4 billion dollars to pay the rest of its bills through the end of the year, and another 8 billion for the first quarter of 2009. The automaker would then need access to an additional 6 billion dollars if turnaround efforts fail.

Citigroup will live to see another day. That’s because the FDIC and the U.S. Treasury have come to the rescue with another bailout for the banking giant. The two government agencies will back more than 300 billion dollars in assets and provide another 20 billion dollars in funding to Citigroup.

The bank already received 25 billion dollars from the 700 billion dollar package. But that has not been enough to shore up the bank’s finances.

GMAC Financial Services is asking for a piece of the 700 billion dollar bailout pie from Washington. The company has also applied to be become a bank holding company. GMAC has lost nearly 8 billion dollars over the past 5 quarters.

General Motors, which used to own GMAC, has spent the last 2 days on Capitol Hill begging legislators for a chunk of the same bailout funds. Though GMAC is no longer a fully owned subsidiary of General Motors, the auto maker still owns 49% of the financial services company. GM would not have direct access to any bailout funds given to GMAC, but the company would certainly benefit: GMAC provides car loans to General Motors customers. So, if GMAC’s situation improves, then maybe GM’s will too.

Ugh. Another brutal day on Wall Street. The Dow Jones Industrial Average closed below 8,000 for the first time since March 2003. Will this be the bottom? Probably not. But hey, now may be a great time to purchase a piece of your favorite company. Almost every stock out there right now is a bargain.

The possibility of an auto industry bankruptcy and a decline in the Consumer Price Index scared investors and brought on a sell-a-thon. By the time the closing bell rang, the Dow was down more than 400 points. Maybe tomorrow will bring better news, but don’t hold your breath.

And the fun continues. New unemployment filings are at their highest level since September 11th, 2001. A whopping 516,000 people filed unemployment claims for the week ending November 8th. Almost 4 million people are out of work.

Good thing the bailout money is working its magic so well!

You remember the bailout, right? You know, the government’s 700 billion dollar cash cow that was supposed to save the economy? It’s a few billion dollars lighter, but it’s still around somewhere.

Well, today, Henry Paulson announced a drastic change in the bailout process. Instead of focusing on toxic assets in the financial industry, the Treasury Department will begin focusing on ways to help thaw the credit freeze.

AIG is slated to receive another 40 billion dollars in bailout money….well…sort of. The federal government announced plans to purchase 40 billion dollars in AIG stock, because the initial bailout(s) wasn’t enough to secure the company’s finances. At least the company isn’t lying. AIG definitely needs the money: the company posted a 3rd quarter loss of 24.47 billion dollars.

By the time this latest round is over, taxpayers would have pumped nearly 150 billion dollars in AIG.

Did you see the young guy with the shaved head who’s been following Treasury Secretary Harry Paulson for the past week? No, he’s not Secret Service, he’s Neel T. Kashkari, the interim assistant secretary for financial stability, whatever that means. It’s his job to spend the $700 billion we left on Paulson’s doorstep. That seems like a lot of pressure for someone just six years out of business school.

As late as yesterday, it wasn’t completely clear how the House would vote on the bill. But this morning, it seemed pretty obvious they were going to pass it. And pass it they did: 263-171.

Now, the bill goes to Bush for his signature. Then, let the spending bonanza begin!!!

UPDATE: President Bush has now signed the bill.

The Senate passed the new, expanded bailout bill last night, lured by the promise of Puerto Rican Rum, Auto Racing Tracks, and Wool Research, among other pork. John McCain voted for it despite being against regulation and pork barrel spending… the sweeteners were just too sweet to resist. The bill will now go to the House, which is expected to vote by tomorrow.

It’s official. The Senate is voting tonight for the new and improved bailout bill. Senators McCain, Obama, and Biden will be present for the vote, and the world will be watching. After the House failed to pass the bill, the Dow lost 777 points. It looks like the Senate will get the 60 votes they need tonight, but if this thing doesn’t pass…who knows what will happen?