SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?


To: Lizzie Tudor who wrote (45803)11/26/2008 1:12:55 AM
From: stockman_scott  Respond to of 149317
 
Crises Force Obama to Deal With Events at ‘110 Miles Per Hour’

By Michael Tackett and Edwin Chen

Nov. 26 (Bloomberg) -- President-elect Barack Obama is finding new meaning in his campaign mantra “the fierce urgency of now.”

Events are forcing Obama to take a far more activist role than is typical of an election winner who hasn’t yet been inaugurated. The crashing economy and a power vacuum in Washington are putting pressure on him to speed up his transition and to convey the appearance of taking action weeks before he actually has the authority to do so.

“We never have seen a transition where a nation has been at war and in the middle of the most unprecedented economic crisis in history, and it is intensifying right in the middle of the transition period,” said Frank Greer, a Democratic consultant in Washington.

And it won’t get easier after he’s sworn in on Jan. 20.

“Your hardest day on the campaign trail in comparison will end up being your easiest day as president,” said Chris Lehane, a former White House aide.

Obama faces daunting questions about the fate of the U.S. automobile industry, the shape and scope of an economic-stimulus package -- likely in excess of half a trillion dollars -- and the potential rescue of more troubled financial institutions. His words now move markets even before he is sworn in.

On a possible bailout of automakers, Obama hasn’t staked out a concrete position. Rather he has strongly suggested he will support a rescue package if labor and management agree to cost- cutting measures and an aggressive push for more energy-efficient vehicles.

The Leaking Begins

Obama is also facing another new reality, namely that his campaign’s famed discipline for controlling the flow of information is giving way to leaks as he takes on the larger challenge of putting together an executive branch.

Dan Bartlett, who served as communications director for President George W. Bush, said he was told the Obama transition team didn’t want to make Cabinet announcements before Thanksgiving Day, yet was forced to when word seeped out beyond the inner circle.

The segue from campaign to transition can be difficult even without a crisis atmosphere.

“The top advisers, remember, they’re absolutely exhausted,” said Bartlett. “On top of that, they have to make personal decisions, grapple with housing issues, and what to do about their children and schools -- and then they’re also making decisions on governing, on top of the inauguration and inaugural issues -- all at a time when it’s supposed to be fun and euphoric. It can really become a grind.”

Praise From McCain

Senator John McCain, Obama’s Republican opponent in the presidential campaign, praised the transition effort so far.

“I certainly applaud many of the appointments that President-elect Obama has announced,” McCain said yesterday at a press conference in Phoenix. “Senator Obama has nominated some people to his economic team that we can work with, that are well- respected.”

Events have forced Obama into other changes as well. Presidents-in-waiting typically announce their national-security teams. Today will mark Obama’s third news conference in as many days to address the economic crisis.

Still, national security looms large: Obama has been briefed on the possibility that al-Qaeda or another terrorist group might strike during a time of perceived vulnerability.

Bush saw his transition truncated by a contested recount in Florida and faced nothing like the emergencies Obama confronts. The president did, however, withstand the legions who believed they held a political IOU for their support.

‘The Incoming Begins’

Clay Johnson, who helped run Bush’s transition, said that the day after the election “the incoming begins.”

“The volume is just unbelievable -- members of Congress, all the good-government groups, all the policy think-tanks,” he said. “Then you have other forms of incoming -- the sycophants, the toadies.”

So far, Obama has had to move quickly on both the policy and personnel fronts, while at the same time adhering to his notion that “we only have one president at a time.”

Said Lehane, “Team Obama knows that it must not just hit the ground running but hit the ground running at 110 miles an hour.”

“They are trying to react to the situation as it unfolds,” said Senator Dick Durbin of Illinois, the No. 2 ranking Democrat in the Senate. “Some of the things that Barack said over the last few days was an effort to stop the bleeding or at least slow it down.”

The control that Obama’s staff could exert during the campaign in terms of schedule and message is also colliding with the often more chaotic act of governance.

No Closed Circle

The circle is no longer closed. When background checks are done on prospective appointees, the FBI interviews witnesses, senators and staff are consulted because they will be involved in the confirmation process and interest groups are briefed. Information spreads beyond transition gatekeepers.

“Washington, D.C., is a town that craves information,” Lehane said. “It is the liquidity that drives the political- industrial complex. To be successful, you have to be able to manage that information so it doesn’t overwhelm you.”

Lehane compared the difference to baseball pitches, one straight, the other a curveball.

“In the campaign, people are throwing hard, but it’s mostly fastballs,” Lehane said. “When they get to D.C., they start throwing breaking balls.”

To contact the reporters on this story: Michael Tackett in Washington at mtackett@bloomberg.net; To contact the reporters on this story: Edwin Chen in Washington at EChen32@bloomberg.net.

Last Updated: November 26, 2008 00:01 EST



To: Lizzie Tudor who wrote (45803)11/26/2008 1:20:29 AM
From: stockman_scott  Respond to of 149317
 
Toyota Suffers First Credit Rating Cut in 10 Years (Update3)

By Makiko Kitamura and Tetsuya Komatsu

Nov. 26 (Bloomberg) -- Toyota Motor Corp.'s debt rating was cut by Fitch Ratings, the automaker's first downgrade in 10 years, as the slump in U.S. car sales drags down earnings at the company with the industry's best credit.

Fitch cut Toyota's senior unsecured debt rating two levels to AA from AAA with a negative outlook on the company, it said in a report today. The shares dropped 4.6 percent, the most in two weeks, to 2,985 yen.

A lower debt rating raises borrowing costs for Toyota, potentially hindering its ability to offer interest-free loans to boost sales in the U.S. Toyota, set to topple General Motors Corp.'s 77-year reign as the world's largest automaker this year, may also have its worst share performance since at least 1975.

``Toyota is suffering severely from the ongoing turmoil in the global automotive sector,'' said Tatsuya Mizuno, director at Fitch Ratings, in the report. ``The negative developments in the industry are so substantial and fundamental that even the strongest player -- Toyota -- can no longer support a `AAA' rating.''

The rating cut is the company's first since Moody's Investors Service reduced its long-term debt rating from Aaa to Aa1 in 1998. Moody's raised the company back up to Aaa in 2003. Standard & Poor's has rated the carmaker AAA since 1985.

``We are closely monitoring Toyota and especially the U.S. market,'' Moody's analyst Junichi Yamaki said. He declined to say whether the rating may be revised. S & P analyst Osamu Kobayashi couldn't be reached at his office.

Share Performance

Toyota's 150 billion yen 1.33 percent bonds maturing in 2012 traded at 28 basis points above Japanese government debt yesterday, up from 20 basis points at the beginning of 2008, data compiled by Bloomberg show.

The stock has dropped 51 percent this year, set for the worst annual performance since at least 1975. The company is still valued at 18 times GM and Ford Motor Co. combined. Toyota spokesman Hideaki Homma declined to comment on the rating change.

Toyota had an operating loss of 34.6 billion yen in North America in the fiscal first half, after adjusting for a one-time gain in the valuation of interest rate swaps. The company's U.S. sales through October fell 12 percent, heading toward the company's steepest annual drop since at least 1980, as the industry total slid 15 percent.

No Immunity

``Nobody is immune both from the credit crisis and the crisis in the industry,'' said Rebecca Lindland, an analyst with IHS Global Insight Inc. in Lexington, Massachusetts. ``The industry is in a lot of trouble.''

The rating cut leaves only five companies left with an AAA rating from Fitch: Exxon Mobil Corp. and Johnson & Johnson in the U.S. and Regie Autonome des Transports Parisiens, Reseau Ferre de France and Societe Nationale des Chemins de Fer Francais in France.

Declining demand has prompted Japan's largest carmaker to slash its domestic temporary workforce by 50 percent to 3,000 by the end of March.

Government Aid

The weak market has spurred U.S. automakers to seek government aid, and General Motors has said it may run short of operating cash by year's end.

``The turmoil in the U.S. and other markets may be protracted, potentially lasting for the next two to three years,'' Mizuno said.

Toyota slashed its profit forecast 56 percent earlier this month as the yen gained against the dollar and euro and the credit crunch pushed industrywide October U.S. sales to the lowest level since 1983.

The yen has gained 18 percent rise against the dollar and 32 percent against the euro this year.

Toyota based its forecasts on 103 yen to the dollar and 146 yen to the euro, compared with its previous estimate of 105 yen and 161 yen, respectively. Every 1 yen gain against the dollar and euro trims Toyota's annual operating profit by 40 billion yen and 6 billion yen.

Toyota has 289 billion yen in debt coming due this year, and owes 2.52 trillion yen next year, according to Bloomberg data.

Congress has set a Dec. 2 deadline for GM, Ford Motor Co. and Chrysler LLC to present plans that prove they will be able to survive and pay back any federal loans. GM's board is scheduled to review its final plan Nov. 30 and Dec. 1, the people said. Congress may vote on an aid package on Dec. 8.

GM said Nov. 7 that 2009 U.S. industrywide sales will be 11.7 million, down from a forecast of 14 million. Hyundai Motor Co., South Korea's largest carmaker, said yesterday that the U.S. market could fall to 10 million vehicles next year, the lowest since 1981.

To contact the reporter on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net.



To: Lizzie Tudor who wrote (45803)11/26/2008 2:17:42 AM
From: Sr K  Read Replies (2) | Respond to of 149317
 
GM had $104 billion in their pension fund at 12/2007, which was overfunded by ~$19b.

What outsider knows what Daimler did (continued contributions, stopped them, and investment performance) with the pension fund before Cerberus got it?

nytimes.com



To: Lizzie Tudor who wrote (45803)11/26/2008 1:49:36 PM
From: tejek  Read Replies (2) | Respond to of 149317
 
You got to see this video circa 2007 where they are laughing at Peter Schiffer when he is predicting the current economic crisis. The laughter is loudest at Fox.....of course.

youtube.com



To: Lizzie Tudor who wrote (45803)11/26/2008 4:01:54 PM
From: RetiredNow  Read Replies (1) | Respond to of 149317
 
Hey Lizzie, I'm glad to hear this. It's crazy, but if you take me back just 2 years, I would have said hell no to any bailouts. But given that we're in the middle of the worst recession since the Great Depression, I've changed my thinking. We've already bailed out all the rich guys and I'd like to see the middle class get some relief as well, through these bridge loans and that trust fund to help Detroit retool for green cars and green jobs.

We need to take a different attitude this time around, one that focuses on saving what industries we have left for when the economy gets going again. Then we can step back and let these companies sink or swim. But right now is not the time to be choosing who to punish arbitrarily.