Thursday, October 23, 2008

Government Money for Bad Auto Loans

Representative John Dingell (D-MI) and Senator Carl Levin (D-MI), and the rest of the professional jobholders from the State of Michigan, are yapping loudly in the ears of Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke about bailout money for the auto industry, which is heavily weighted here in the State of Michigan.  Let’s take a look at what they’re saying.

The state’s entire congressional delegation wrote Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke asking them to quickly use their powers under the financial bailout to buy troubled assets from auto finance companies.

Well, why would there be troubled assets in the auto finance industry, one may ask?  Would it have anything to do with this?  Click on that link and take a look at the right hand column, or Google simply “auto loans.”  The entire right hand column of that Google link is advertisements for “Bad Credit Auto Loans,” “Auto Loans for any Credit,” or “Bad Credit Easy Car Loan.”  Are any of these offers sounding familiar?  Are not these ads mirroring exactly the type of pitch subprime mortgage lenders were making?  Do we really want to go further down that road, again?

Here’s a gem of a comment from Levin’s mouth.

“They need to do for autos what they’re doing for the mortgage industry,” said Sen. Carl Levin, D-Mich.

Doesn’t that sound just like a little boy crying to his mother about Timmy having a Big Wheel so I should have one too?

But why is financing a tad more difficult to obtain today for purchasing an automobile?

Many banks and auto finance companies have tightened credit standards because they can’t borrow money to lend, or they have been reluctant to lend and risk defaults.

Doesn’t tightening credit standards make sense?  Of course it makes sense.  I assure you, if you are a borrower of good standing, you can still finance the purchase of a new car, but, if you’re a high credit risk, meaning you don’t pay your bills on time or at all, you shouldn’t be lent any money what-so-ever.  And if you’re a financial institution making loans to crappy borrowers, I wouldn’t lend you any money to lend either!

The financial system would not be in the straits it is currently supposedly in if known credit standards would have been adhered too by lenders, but the lenders screwed themselves when they knowingly threw the credit standards out the window.

This entire $700 billion bailout package is a collective f$#K and we will be paying for it for generations to come.

Mich. lawmakers want US help to free up auto loans

Posted by John Venlet on 10/23 at 02:28 PM
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