Apparently reading about Sarah Palin and seeing her plastered across every news outlet in America wasn’t enough.  Now we have to read about her daughter Bristol, 18, becoming another unwed mother on welfare.  When did this become okay?  More importantly, when did an unwed, Alaskan teen having a baby became national front page news?  This families’ 15 minutes of fame are up.

The good news, though, is that it gets better.  I’m actually quite surprised that we haven’t seen this family on Jerry Springer, but perhaps that will be next.  If you believe the RNC she’ll be running for office again at some point in the future…

So anyway, in case you were fortunate enough to miss the brief, Bristol Palin’s baby-daddy is “former high school hockey player” Levi Johnston, also 18.  His mother, Sherry, was recently arrested on multiple felony drug counts after she sent a pair of text messages to police informants discussing drug transactions.  Meanwhile, back in Wasilla, Bristol continues studying for her GED while her baby-daddy works as an apprentice electrician.  Of course, governor Sarah Palin’s office declines to comment on anything (probably for fear that it will end up on YouTube), which will simply leave us to speculate.

Senator Larry Craig (R) Idaho plead guilty to disorderly conudct last year after he was arrested in a Minneapolis St. Paul International Airport bathroom by an undercover policeman who claimed Senator Craig solicited him for sex.  As part of his plea, Senator Craig denied the solicitation charges and said that he is not a homosexual.

What’s interesting about this is that Senator Larry Craig is back in the news today, after the Minnesota appeals court ruled that his rights weren’t violated before denying his bid to withdraw the guilty plea that he made earlier.  For those of you that watch the television show Boston Legal, this case may strike a chord, because the solicitation chage stemmed from Craig was arrested based on tapping his foot and moving it toward a neighboring bathroom stall occupied by another person, in this case an undercover officer.  Gentlemen – remember these things for future reference, because you never know what a public bathroom experience is going to reveal.

General Motors, Chrysler and to some end, Ford, are asking for $34 billion in subsidy loans to support their survival for the next few months.  By all acounts, it won’t be anywhere near enough, but that’s beside the point.  What’s funny about this is the sheer volume of justification that they’re having to go through to get these loans.  AIG, it would seems, got $150 billion just because, and very few questioned the need or the justification for it.

My article talked about the “perfect storm” in terms of what the auto-industry was experiencing in the credit markets, but that is probably more apropos of what is going on in the economy as a whole.  Housing is suffering, retail, including auto, is suffering, and jobs are being eliminated at an alarming rate.  Most troubling – these are not short term problems and even with a new president these aren’t going to be resolved over night.

First a little history, the phrase “perfect storm” originated with the 1997 book The Perfect Storm, and was cemented into most minds by the 2000 movie of the same title which starred George Clooney.  The phrase the perfect storm refers to the simultaneous occurence of events which, taken individually, would be far less powerful than the resulting combination of events.  Such occurrences are rare by their very nature, and any slight change in any one event would potentially lessen its overall impact.

I’m starting to think that congress should have approved the $25 billion in loans that the Big Three was asking for a few weeks back, because it seems as though they’ve all huddled back in Detroit and all of a sudden the “emergency aid” requirement is up to about $34 billion.  Today’s news even has it that GM will go under without an immediate $4 billion infusion.

In normal times, this might not be such a big deal.  Chrysler went into bankruptcy a few decades ago and emerged as a better, stronger company.  But, times have changed, and the underlying problem is the same no matter what industry we’re talking about – lenders are remiss to help companies before they get into trouble and even less likely to help those in bankruptcy.  Congress seems to be missing these facts as they continue to grill the Big Three, and while I’m not in support of a bailout, it is time to consider a loan or rescue package that will allow these companies to survive.

The Big Three Are Looking for $25 Billion Plus to Help Weather a Longer Than Expected Recession

I talked yesterday about my feelings surrounding the auto-bailout for Chrysler, Ford and General Motors, and the more I read about what Congress is doing and the debates that are flying around the more frustrated I get.  Now CNN is reporting that Congress wants the automakers to show how they plan on spending their bailout dollars before they’re willing to offer any.  Generally speaking this isn’t a bad idea, but what I find most frustrating is that they haven’t publicly asked the same from companies like AIG or banks taking money from the already approved $700 billion bailout.  Doesn’t it seem logical that any company coming to Uncle Sam for a loan/bailout would be held to the same standards?

At the same time they’re asking for $25 billion in taxpayer money – these auto company CEOs are idiots.  They all came from the same state in their own private luxury jets.  The average American will never see first class, let alone the inside of a private luxury jet, and while continuing to pay their taxes will probably end up eating Mac-and-Cheese to get through this depression recession and these beggars can’t even share a ride or fly commercial.  That’s saying two things – they are neither green nor frugal, and that should be disconcerting to everyone.  These companies need to get both quickly and those changes need to start at the top.

At what point does a bailout become a lifeline?  Is there a point anywhere in there that it becomes another bad idea?  The Federal Reserve and Treasury Department got together today and unveiled a new plan to pump upwards of $800 billion more into the struggling US economy.  Their hope is that this will jumpstart lending by banks and that suddenly consumers and small businesses will want to use that money.

These plans are as optimistic as TARP, with the Federal Reserve Bank offering as much as $200 billion to purchase securities backed by consumer debt (credit cards, auto loans, student loans, etc.).  The Treasury will then insure up to $20 billion against losses (is this confusing yet?) and then the Federal Reserve will purchase up to another $500 billion in mortgage backed securities from Fannie Mae, Freddie Mac and Ginnie Mae (lets call them the three stooges).  As if that’s not enough, the Fed will also buy another $100 billion in direct debt issued by those firms.  And that’s it for Tuesday.

Normally, I have a lot of respect for Bloomberg.com, but their recent article on the US Government’s pledge of 7.7 trillion to ease frozen credit seems a little absurd all things considered.  Their numbers include some of the following expenses:

$3.18 trillion — Already been tapped by banks and other financial institutions

$2.4 trillion — Set aside to buy short-term notes, or commercial paper, that companies use to pay bills

$1.4 trillion — Used by the FDIC to guarantee bank to bank loans

$29 billion — To help with the Bear Stearns takeover by JP Morgan Chase and Co

If you listen to the media today, the bailout of Citigroup is a huge success and the stock market is being rewarded for effective, decisive action.  If you listen to me, there is no justification for what happened in the market today and buyers and sellers are irrationally grabbing at whatever news they can.  Tomorrow will show that in all reality it’s only a matter of time before something else dips and the market tumbles again.  But, there is good news amidst the gloom and that is the surge in Citi stock up nearly 60% to close at $5.95 – much more realistic for a company the size of Citigroup, even with their problems.

Even with the bailout of Citi on the books now, it doesn’t appear that the auto-makers are any closer to getting their due share, which seems odd to me.  I hope this proves to simply be posturing by the government as this to me still seems bigger and more important than the likes of AIG.  The only difference, of course, being that most politicians don’t care who is in Detroit, but their buddies on Wall Street are a whole different story.

It’s difficult to imagine a world without Citigroup (Citibank, Citi Cards, Citi Mortgage, Primerica, etc.), but with their stock closing down another 26.41% today, to close at $4.71 (C), it’s also difficult, in these troubled financial times, to imagine a scenario that allows Citigroup to continue operations going in the direction that they are.  Once the largest bank in the United States, Citigroup’s assets and market value have fallen over 65% in November alone.  As if that isn’t bad enough, the word on the street is that government intervention or outside investment may be necessary for their survival – which is basically the kiss of death in this market.

The biggest problem here today is that Citigroup has both a liquidity and solvency issue.  Thy’re working to calm their investors, but the market is already so shell-shocked from the other failures to date that these reassurances are falling on deaf ears.  In retrospect, it’s easy to see how big a blow losing the bid for Wachovia was and following that with an announcement announcing the elimaination of 52,000 jobs worldwide compounded the problem from a public relations standpoint.