GM bankruptcy

Discussion in 'General Discussion' started by RunningOnMT, Apr 13, 2009.

  1. RunningOnMT

    RunningOnMT New Member

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    Was just watching a short interview with Stuart Varney on FOX news. He was explaining the proposed GM bankruptcy. According to him American taxpayers will be assuming the cost of the GM employees retirement plan. He said that if you currently have a 401K you will lose about half of your money to pay these GM pensions. What do you think about that??
     
  2. kingcuke

    kingcuke Member

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    It won't have any effect on your 401K, other than the general effect on the stock market. Possibly even an upswing. Employee pensions of bankrupt companies are covered by a federal agency much like the FDIC. More right wing fanaticism.

    "Welcome To PBGC

    PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans."
     

  3. RunningOnMT

    RunningOnMT New Member

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    Right wing fanaticism?
     
  4. kingcuke

    kingcuke Member

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    When the talking heads lie to stir up a controversy. i.e. the case above where the FOX guy says your 401K will drop because taxpayers will have to cover GM's pension if they go bankrupt. Fanaticism is a two way street, it's not just for liberals anymore!! Personally the only difference between the left and right is which pocket their taking my money from.

    Political language -- and with variations this is true of all political parties, from Conservatives to Anarchists -- is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.
    George Orwell, "Politics and the English Language", 1946
     
  5. 308 at my gate

    308 at my gate New Member

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    I could not have said it better myself and I totally agree with you. They exist on both sides of the fence. Although the left does have a much bigger outlet for their voice in the main stream media.
     
  6. RunningOnMT

    RunningOnMT New Member

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    Stuart Varney is a respected economic analyst who I would hardly call a right wing fanatic.
     
  7. mrkirker

    mrkirker New Member

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    ". . . lose 1/2 of my 401K"
    Hey, Yip-yow! I'm half-way back to breaking even!
     
  8. Haligan

    Haligan Well-Known Member

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    Hey RunningonMT,
    Did I log on to the liberal lunatic forum by mistake !!!

    You want to compare the tactics of the liberals to conservatives, kingcuke.
    COME ON !
    You gonna tell me that extream Chritians are as dangerous as extream Muslims, or how about the treatment of W, was as civilized and respectful as Dabamma.
    You have got to be "shaking my monkey", you can't be serious.
     
    Last edited: Apr 13, 2009
  9. ponycar17

    ponycar17 Active Member

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    Perhaps he's reaching to speak to the suppliers who will be affected by the impending GM meltdown? There's no fanaticism here if you're in the automotive world. With automotive suppliers making up a large portion of some states' tax base, and their stocks playing a large role in some portfolios it's entirely believable that 401Ks will take a hit. Automotive companies share suppliers.

    Let's say the airbag supplier for company X (who's in deep financial trouble) admits that company X contributed to 40% of the airbag maker's business. Company Y, Z and W may also use the airbag maker. If company X's orders reduce substantially, look for Company Y, Z and W to be strained badly as they're asked to pay much more for their goods from the airbag supplier to help the supplier stay afloat. This is an economic reality that's happening everywhere as GM and Chrysler's demand for product falls. The profits of the other automotive producers will fall as they're asked to pay more for goods and some suppliers will likely fail. Portfolios will fail and that WILL affect 401k's throughout the US as well as global investments.

    I know of one guy who had his Buick in the collision shop for over a month recently because there were no airbags available for the car. The collision shop owner's explanation was that the airbag company wouldn't ship a replacement airbag because GM hadn't paid them for a while. Suppliers are being beaten up by this.

    Also, Toyota wants GM to survive because of the suppliers they share in the US. The Feds just introduced a bailout for the automotive supplier business as no coincidence to what you can see happening if GM and Chrysler fail.

    Of course the taxpayers will be on the hook for pensions kingcuke. These federal insurance corporations will not be able to withstand the full burden of a massive failure much like the FDIC could not stand the burden of a massive bank failure. Their response would be to print more money, which devalues our dollar and would require increasing taxes to cover the difference. There's no doubt we'd be on the hook as tax payers by some mechanism. Don't fall back on 'fanaticism' until you've truly connected the dots. Sure, there are some dramatic scare tactics being used but they're mainly rooted in fact.

    It's a big problem we could be facing...
     
    Last edited: Apr 13, 2009
  10. Bobitis

    Bobitis Guest

    All I know is, as of the last 9 months, I'll never be able to retire.:(

    Blame who you choose.
    In my opinion, the scales are heavily weighted.

    You can beat your head with a plank, and make up all the excuses you want.

    http://www.youtube.com/watch?v=yp_l5ntikaU

    We elected them.:(
     
  11. bigbore480

    bigbore480 Member

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    right wing fanaticism
    Thats kind of like yelling a racial slurr in a ethnic bar. Look around you nancy palosi and Barack Obamma aren't all that welcome here.
     
  12. kingcuke

    kingcuke Member

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    Love is the illusion that one woman differs from another, politics is the illusion that one party differs from another.
    RunningonMT's post stated that GM pension liability will be covered by taxpayers, it won't anymore than we did when the steel companies pensions failed. The type of rhetoric promoted by FOX et al if fanaticism. I'm not saying that liberals aren't also fanatics. I'm not saying the economy doesn't suck. I do find some of the comments interesting though.
    fanaticism
    n : excessive intolerance of opposing views [syn: zealotry]

    "The world is governed more by appearances than realities, so that it is fully as necessary to seem to know something as to know it. "
    Daniel Webster
    US diplomat, lawyer, orator, & politician (1782 - 1852)


    "Political tags - such as royalist, communist, democrat, populist, fascist, liberal, conservative, and so forth - are never basic criteria. The human race divides politically into those who want people to be controlled and those who have no such desire."
    --Robert A. Heinlein
     
  13. ponycar17

    ponycar17 Active Member

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    I could be wrong but I don't think the steel industry had as complex a supplier structure and potential for residual effects as that of the auto industry. With steel, you've got raw materials and final goods. With autos, you've got potentially thousands of parts from specialized parts suppliers (mostly in the US) being fed to 5+ automotive assembly companies. That sounds pretty big to me but what do I know?...

    Now, is this the right thing in the long run? Absolutely. Could the short term effect be huge? Absolutely.
     
    Last edited: Apr 14, 2009
  14. ampaterry

    ampaterry *TFF Admin Staff Chaplain* Staff Member Supporting Member

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    If you started your 401K in the last couple of years, very true.
    If you started it at least twenty years before you intend to reture, which is the plan of the 401K, you have made money even in todays market.

    Yes, the market is down to about 50% of what it was a couple years ago -
    But it is still WAY up from what it was twenty years ago!

    As for ERISA, I believe it was needed, is needed, and should continue.
     
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