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Bailout Money Still Flowing to Automakers and Insurance Giants
posted 11:43 am Mon November 10, 2008
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Washington - Bad news piled up on the economic front on Monday morning, as Circuit City declared bankruptcy and DHL announced the closing of all its U.S. service centers. Rick Wagoner, Chairman & CEO at General Motors, told CNBC, "It is time for action and the time is now, and delays bring significant risks."
Last week, the big three automakers met with Congressional leaders with hopes of getting $75 billion in bailout money.
Roben Farzad of BusinessWeek said, "They're not getting into the fine details and saying, 'look, I would take this additional $25 billion and spend it on "high fallutin'," very honorable things.' They are using it literally to pay the bills... and just to live to see another six months."
And it is not only the auto industry looking for a lifeline. Today the Treasury and Federal Reserve announced they would give insurance giant AIG $150 billion, up significantly from the $40 billion originally proposed.
Across the world, China earlier Monday announced a bailout of its own, a $586 billion economic stimulus package that sent global markets up. Wall Street jumped more than 200 points in early morning trading.
U.S. Treasury undersecretary David McCormick argued, "I think having China at the table is not a 'nice to have,' it's a 'must-have' in terms of addressing some of the challenges we see."
Now some are challenging how the US bailout was implemented. Monday, Bloomberg News filed a lawsuit against the Federal Reserve to learn the secret details of multiple bailout meetings, and according to the Washington Post, a five-sentence notice from the Treasury Department is also at issue. That notice quietly gave banks a $140 billion tax windfall.
Last week, the big three automakers met with Congressional leaders with hopes of getting $75 billion in bailout money.
Roben Farzad of BusinessWeek said, "They're not getting into the fine details and saying, 'look, I would take this additional $25 billion and spend it on "high fallutin'," very honorable things.' They are using it literally to pay the bills... and just to live to see another six months."
And it is not only the auto industry looking for a lifeline. Today the Treasury and Federal Reserve announced they would give insurance giant AIG $150 billion, up significantly from the $40 billion originally proposed.
Across the world, China earlier Monday announced a bailout of its own, a $586 billion economic stimulus package that sent global markets up. Wall Street jumped more than 200 points in early morning trading.
U.S. Treasury undersecretary David McCormick argued, "I think having China at the table is not a 'nice to have,' it's a 'must-have' in terms of addressing some of the challenges we see."
Now some are challenging how the US bailout was implemented. Monday, Bloomberg News filed a lawsuit against the Federal Reserve to learn the secret details of multiple bailout meetings, and according to the Washington Post, a five-sentence notice from the Treasury Department is also at issue. That notice quietly gave banks a $140 billion tax windfall.
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