Blog

Filed under: Government/Legal, Chrysler, Earnings/Financials

Before Fiat and prior to bankruptcy, the old Chrysler, LLC needed $4 billion just to keep the doors open. The Bush Administration came through with the company-saving cash at the 11th hour, keeping the Pentastar solvent long enough to make it to bankruptcy court. Chrysler was reportedly given $15 billion in total aid, and it appears much of that money will be repaid through future payments and through incentives for Fiat to increase its stake in Chrysler from 20 percent to 35 percent. But that original $4 billion? Don’t expect that money to come back any time soon – if ever.

The Detroit News reports that what’s left of the old Chrysler LLC (which has been renamed Old Carco), has filed court papers saying that the $4 billion will likely never be repaid. New Chrysler is not legally responsible for that debt and Old Carco doesn’t exactly have considerable assets. And the government isn’t the only debt-holder that isn’t going to get its cash. Many secured and unsecured creditors will be unlikely to see their cash, thought some $21 million in secured debt could be paid. Old Carco contains the bad assets not purchased by the new Chrysler when it exited bankruptcy in the spring. The sale of those bad assets, which includes plants, tooling and miscellaneous items like old company cars, will help pay back some of the money creditors lost.

Lawyers working on the bankruptcy case say it take years before the book is finally closed on Old Carco. One item that could help drag matters out is a $25 billion lawsuit Old Carco filed against former owner, Daimler.

[Source: The Detroit News | Image: Bill Pugliano/Getty]

REPORT: Old Carco (read: “Bad Chrysler”) to not repay $4B in TARP loans originally appeared on Autoblog on Thu, 17 Dec 2009 11:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Goat cheese is one of life’s loveliest pleasures, as far as we’re concerned, but until recently we had never tried making it ourselves. Goodness, why not?! Thanks to our friends at Home Ec., who gave us this kit from Urban Cheesecraft to try, we have a delicious new hobby.

Read Full Post

Capcom has released the first gameplay trailer for Mega Man 10, the blue bomber’s latest 8-bit adventure. Hit the jump for some Mega Man and Proto Man gameplay.

Do you think the Fed is behind the curve?

— Michael Zigmont, CFA, Partner, Harvest Volatility Management, LLC

Not yet, but the big test is just around the corner.

The Fed has printed mountains of money, but the banks aren’t lending much (except to the Federal government), so most of the money is still sitting in bank reserves.  As a result, the growth of the money supply (M2) has actually been surprisingly modest.  This and the weak economy have kept a lid on inflation.

These charts from Northern Trust show what is happening. 

First, the monetary base (bank reserves) has grown tremendously over the past year, but it has been flat for the past nine months:

Meanwhile, bank lending has fallen precipitously, which has prevented most of these dollars from entering the money supply.

Combine deleveraging with a crappy economy and the growth of the actual money supply (M2) has been contained (red bars are year over year growth, blue line is 26-week growth):

Thus, so far, core inflation has remained low:

That said, as the chart above also shows, inflation has started to tick up.  If and when the banks start lending aggressively, inflation is poised to take off. 

At that point, the Fed will have to be very aggressive about raising rates–and they’ll likely have to do it when the unemployment rate is still horrifically high.  This will lead to outrage in both Congress (you’re killing the economy!) AND on Wall Street (you’re killing our profits and stopping us from lending!).  It also will require Ben Bernanke to have a backbone that he has not yet displayed (it’s easy to give money away).

To be clear: The Fed WANTS inflation to be uncomfortably high for the next few years, as this will help the country inflate away its huge debt mountain (we’ll be paying back our creditors with dollars that are worth less).  Thus, the perfect inflation rate per the Fed will be considerably higher than anyone who actually possesses dollars will want.  This will lead to lots of folks yelling that the Fed is “behind the curve” when the Fed is exactly where it wants to be.  The Fed will respond by talking tough and intentionally remaining behind the curve.

So, no, the Fed is not behind the curve YET.  But it will be soon.

Have a question you want to ask Henry?  Send an email to [email protected] with “ASK HENRY” in the subject line.  (Goofy, yes, but easy to find in a crowded inbox.)  Henry will answer as many of the interesting questions as he can.

Join the conversation about this story »

See Also:

• NEW FEATURE: Ask Henry!

Thanks to Jimmy Dean, I’ve got some tips for saving time in the kitchen and some holiday entertaining shortcuts from Lifestyle Expert Sissy Biggers to share with MomCooks readers!

Holiday Entertaining Tips

With the holidays comes the busiest cooking days of the year and the best hosts are those who are able to settle in on the couch and enjoy the quality time with their family. Below are some food prep and holiday entertaining shortcuts from Lifestyle Expert Sissy Biggers to ensure people spend less time slaving over the oven and more time with the people who mean the most.

1. Don’t be afraid to delegate!

– A good guest asks, “What can I do to help?!” Take them up on it! Whether its stuffed mushrooms, or apple pie, ask your friends and family to bring their favorite side dish or to prepare a recipe from their favorite food magazine.

2. Maximize trips to the supermarket by selecting key ingredients and holiday staples that can be used in multiple recipes.

– The same Jimmy Dean Sausage that adds traditional flavor to your stuffing can also be crumbled and stuffed into whole mushrooms for an easy hot appetizer that will keep your guest satisfied.

3. Save time by choosing recipes and side dishes that break down the process with DO-AHEAD steps that can be completed days in advance.

– Blanch green vegetables a day ahead and shock in an ice bath (to stop the cooking) and drain.

– Prepare the sausage topping for a Mushroom Bruschetta appetizer two days in advance, refrigerate and then heat before serving

4. Be sure your linens are table-ready well before the holiday and flatware is matching and polished

– NOW is the time to check your stash of cloth napkins and table coverings to be sure they are not crumpled or stained from last year’s festivities. Keep an eye out for discounted linens and choose a color scheme to compliment what you have on hand.

Holiday Recipes from Jimmy Dean

Click these links to get recipes for an appetizer, breakfast dish, and side dish all using Jimmy Dean sausage!

Sausage Cheese Balls

6 Layer Breakfast Casserole

Sausage-Stuffed Acorn Squash

Maple Sausage Corn Bread Pudding

In “Menu Mind Games,” William Poundstone dissects this Balthazar menu (full size PDF) and tells you the logic behind its design.

Can you guess the tricks being used here? Click image to find out.

The piece offers a revealing look at how restaurants use typography and layout to drive customers toward high priced items. Also interesting is the strange jargon used by industry insiders, like puzzles, anchors, stars, and plowhorses.

A star is a popular, high-profit item—in other words, an item for which customers are willing to pay a good deal more than it costs to make. A puzzle is high-profit but unpopular; a plowhorse is the opposite, popular yet unprofitable. Consultants try to turn puzzles into stars, nudge customers away from plowhorses, and convince everyone that the prices on the menu are more reasonable than they look.

Related:
Priceless: The Myth of Fair Value (and How to Take Advantage of It) by William Poundstone [Amazon]
Why We Buy: The Science of Shopping by Paco Underhill [Amazon]

In Colorado Springs, off Interstate 25, there lies a tent city that’s growing more and more by the day. They call it Obamaville, perhaps due to the relative lack of effort our President has made on behalf of our jobless citizens.

The video, courtesy of Fire Andrea Mitchell, below:

Join the conversation about this story »

See Also:

• Tent Cities Take Over As Great Recession Takes Hold
• Would You Rather Live In A Tent City Or A Ghost Town?
• Hey, President Obama, Here’s An Easy Way To Get Banks To Lend!

The U.S. Senate passed the 2010 Omnibus Appropriations bill (H.R. 3288) by a vote of 57 to 35.  This was actually a vote on a conference report worked out in House/Senate negotiations.

The bill, passed earlier by the House 221-202, was not amended by the Senate which means it will now go to President Barack Obama for his signature. The president has not indicated whether he will sign the bill. Reporters discussed the bill with White House Press Secretary Robert Gibbs on Monday.

According to Michael Blakeslee, MENC senior deputy executive director, the bill contains two provisions that benefit the cause of arts education: one for model program grants and another for professional development grants.

The model program funding appears to be for programs already in the pipeline, but the professional development grants will be for new projects so music educators may be eligible to apply for those.

Read a summary of the bill 
Follow other policy developments of interest to music educators  

—Roz Fehr, December 17, 2009. © MENC: The National Association for Music Education

My wife asked me last night, “What would you do if I won the Lotto?” I said, “I’d take half, then leave you.” “That is excellent,“ she replied. “I won $12 bucks, here’s $6, now get the heck out.”

Life throws surprises at us all the time, and unfortunately for every single person in this industry, or so it seems, the looming RESPA changes have the potential of bogging down the business. And it is not even a surprise – we’ve known about it for months! Loan agents are confused about the forms, small mortgage brokers are wondering how they’re going to adhere to the changes (even if they can figure out what those changes are), mortgage banks are wondering about their responsibilities, and investors are concerned about both their clients following the guidelines and wondering if loans that fall outside of them will cause a new series of lawsuits. And will their systems be able to handle the new process?! Even when investors notify their clients about RESPA changes, they are quick to note that their announcements are not to be relied upon as comprehensive.

Brokers are, understandably, concerned. (Is that an understatement?) For starters, the form is on HUD’s site. And remember that HUD is on your side: “HUD announced that for the first four months of 2010, the staff of the Mortgagee Review Board (MRB) will exercise restraint in enforcing new regulatory requirements under theReal Estate Settlement Procedures Act (RESPA), due to take full effect on January 1. The MRB instructed its staff to exercise such restraint in considering an action against FHA-approved lenders who have demonstrated that they are making a good faith effort to comply with RESPA’s new requirements.”

more news on Citi correspondent, Wells wholesale, Chase Homeownership Centers, Caliber Funding, GMAC Bank correspondent, the Fed, rates, and joke of the day …  <<< CLICK HERE

It’s no secret that General Motors’ Chevrolet Volt song and dance (ignoring the obvious jokes here…) have brought the automaker’s marketing department some much-deserved flack. In case you’ve been living under a rock for the past few days, we’ll recap: GM commissioned a song to explain some of the finer points of how the Volt’s high-tech powertrain functions and later decided to add a dance routine to the jingle and let it loose on an unsuspecting public at the LA Auto Show.

According to Green Car Reports, the song was initially written for kids aged seven to 12 years old but wasn’t quite ready in time for GM to use it during presentations given to 120 schools. Instead, the decision was made to add an ill-fated dance routine just ahead of the LA Show’s public access days. Making matters worse is news that former marketing head Bob Lutz originally wanted to borrow the song “Electric Car” from They Might Be Giants. We figure GM would have been much better off going that route.

As irritating as it may be, is the Chevy Volt Dance really that big of a deal? While we’d argue that it shouldn’t be, the real answer apparently depends on whom you ask. Fox News seems to think it’s pretty horrible and GM’s latest recently-appointed head marketer Susan Docherty responded, “Our Chevrolet Volt advertising, marketing and go to market strategy will be as innovative as the car. We may have missed on this one, but we won’t going forward.” We agree… it’s officially time to move on. (Unless you haven’t seen the offending dance yet – and that’s available for viewing after the jump).

[Sources: GM-Volt.com, Green Car Reports]

Continue reading GM: Chevy Volt Dance a major marketing gaffe? Sure. Let’s move on.

GM: Chevy Volt Dance a major marketing gaffe? Sure. Let’s move on. originally appeared on Autoblog on Thu, 17 Dec 2009 11:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

User experience is very much anchored in the technical details of a web app, service or any software out there, but just as important is the presentation and the overall look and feel. Firefox is a great browser used by millions of people around the world and Mozilla wanted to let those people customize their browsing experience to the fullest, a philosophy close to heart at the open-source foundation.

Earlier this year it launched Personas, a project designed to enable users to change the look of their browser in the easiest way possible. It has actually come a long way in the months since it launched and now Mozilla Labs is introducing Personas 2.0.

“The Mozilla Labs team launched Personas 1.0 in March with the idea that it shouldn’t be hard to make your internet browser more fun and personal. Over the past eight months, with your feedback and support, we iterated on the Personas experience fifteen times (10 times on the website, 5 times on the extension) and are now pleased to introduce Personas 2.0,” Mozilla’s Ryan Doherty and Suneel Gupta wrote for the Personas team.

The biggest attention in this latest release was on the site, which got a rather thorough redesign with an emphasis on a cleaner look and easier navigation, but also on the functionality. The landing page got cle… (read more)

Loans, commercial paper – you name it and banks are lending less of it.

And that’s not just in the US. It’s happening all around the world.

Morgan Stanley: It is too early to amend our forecast of an anaemic developed economy recovery just yet. However, given trends in money growth and lending we would expect the monetarists to be warning about the risks of a W-shaped recession. With that in mind, there is a danger that markets and authorities become obsessed about the fiscal implications of the crisis at a time when the real worries should still focus on private sector access to credit and money.

What is there for Monetarists to worry about? We show below charts of the growth rate (year-on-year) of bank lending to the private sector and broad money for the US, Eurozone, Japan, UK and China (Exhibits 1 to 5). What this shows is a rapid implosion of growth rates of lending from normal to negative in the UK, US and the Eurozone, and declining lending growth in Japan (and very high lending growth in China). Broad money growth declined sharply in the UK, Eurozone and Japan (for the US and China broad money growth data is unavailable), and continues to fall in the Euro Area.

Join the conversation about this story »

See Also:

• Citigroup Accused Of Predatory Lending… To A Private Equity Firm!
• China’s Big Four Banks Slash Lending In November
• Watch Lending Spreads To See When Shorts Pile Into Stocks

Citi shares have been punted all over the place since August, even breaking $5 at one point. Yet when actually presented to large institutional investors for the latest offering, Citi was only able to price its shares at $3.15. Thus the real money has spoken, and has killed the speculators. Everything above the yellow area shown below represents froth, which has been blown away. Right now Citi shares are down 7.5% to 3.19.

Join the conversation about this story »

See Also:

• Citi Underwriters Step In To Prevent Stock From Falling Below $3
• CITI OFF 8%
• Citi's Secondary Prices Weak, Treasury Holds Back On Dumping Stake To Avoid Flooding The Market

Filed under: Coupe, Performance, Etc., Europe, Videos, Lamborghini

Fate is a funny thing. It was our destiny to get a ride with Valentino Balboni in a Lamborghini LP550-2 Valentino Balboni during rush hour traffic in Los Angeles. Lucky? Absolutely, though we may have crested 50 mph once… maybe. Would we have preferred to have been in the passenger seat of this here limeade green Valentino Balboni as Lamborghini’s legendary test driver literally hoons the rear tires off the car? Dear God, yes!!

The following video is actually a pretty good demonstration of the difference between RWD and AWD vehicles. You’ll see the Mr. Balboni flinging the LP550-2 around a corner, the rear sliding out a touch before he applies just a dab of oppo’ to get the V10-powered, rear-wheel drive mini-monster back in line. This is followed by an AWD LP560-4 which simply can’t break traction and sort of gracelessly shunts and shutters its way around the corner. Faster, no doubt — but not nearly as fun to watch. And then there are sparks and smoke and trust us you’ll love this. Watch the video, after the jump.

[Source: YouTube via Jalopnik]

Continue reading VIDEO: Lamborghini’s Valentino Balboni drifting a Lamborghini Valentino Balboni

VIDEO: Lamborghini’s Valentino Balboni drifting a Lamborghini Valentino Balboni originally appeared on Autoblog on Thu, 17 Dec 2009 10:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments