General Motors, in Today's News 08.07.09

General Motors. General Motors has four cars in the top ten that are being traded-in under the 'cash for clunkers' program. It has one in the top ten being sold, and that one is number ten; that is, dead last. In other words, the public is dumping their GM cars and not replacing them with another GM car.

This data is what the central planners neglected to take into consideration in their drive to make GM profitable. The government board that is transforming General Motors figured that if they broke up GM, put in a new board, hired a no-nonsense board chairman, and instituted an 'accountability' system, then all would be well. GM would be making money in no time.

The only problem is the products produced by GM are, with a couple of exceptions, not desired by the public. The central planners can make all the managerial changes they want, but it still won't change this reality. 

The only way for GM to turn around is to bring out some autos that inspire the public. This unavoidable fact is exactly the same problem that the old GM faced. Solving the quality/inspiration problem will require years of work. New model cars just don't pop off the assembly line.

And so the bureaucrats great plans are heading toward achieving very little. They will try to get around their dilemma with advertising and public relations in an effort to change the opinions of the public about the GM products.

It won't work. The old GM tried to convince the public to buy their products in many, many different ways over the years. But the public was and is too smart for these smug bureaucrats. They have and will see through all the razzle-dazzle.

General Motors, in Today's News 07.16.09

General Motors.  Here is a good one: : "GM Seeks Younger Fans For Buick" (today's Wall Street Journal page B2 headline).

The central planners in their arrogant manner thought GM would be easy to transform. All that was required was to drive out the CEO and the board, put GM in bankruptcy, create a new good GM and a bad GM, install a no-nonsence CEO, and wallah, GM makes money.

There's just one problem: The GM cars don't inspire potential buyers. WSJ: "With the average U.S. Buick owner older than 70 [!!!!!], GM is trying to figure out how to attract new buyers, particularly young, more affluent ones. Buick's brand chief acknowledged Wednesday the strategy will be an uphill battle." [Emphasis added.]

Susan Docherty, chief of the Buick-Pontiac-GMC sales channel: "You talk to people in their 40s and 50s and they know it [the Buick brand]. But they say, 'This isn't for me.'"

All the machinations of the central planners runs headlong into the unpopularity of many GM brands and models, especially Buick. It will take years to redesign the models and to find a customer base for them. There is no central-planner machination that can change that reality.

And so there is not a whole lot of difference between the former GM and the new GM in terms of its ability to perform in the market. And it is this fact that will undermine all the central planners' ambitions for GM.

Government-Controlled Economy, in Today's News 07.16.09

Government-Controlled Economy. Four column headline on Page C1 of today's Wall Street Journal, "U.S. Regulators to BofA: Obey or Else". Lead paragraph, "Bank of America Corp. is operating under a secret regulatory sanction that requires it to overhaul its board and address perceived problems with risk and liquidity management, according to people familiar with the situation."

The cryptocracy really has something against Bank of America. Their drive to get Chief Executive Kenneth Lewis and the bank is back in full-force after a short respite recently.

"The MOU (memorandum of understanding with BofA) is the most serious proedural action taken against Bank of America by federal regulators since the financial crisis erupted. Citigroup Inc. has been operating since last year under a similar order with the Office of the Comptroller of the Currency..."

The cryptocracy is dead serious about ruling through a government-controlled economy. Step by step they are bringing their goal into reality. If you don't go along, they will slap you with enforcement orders to make it impossible to do business unless you comply.

It seems that the centrally planned economy in the Soviet Union is the model that cryptocracy desires. The only difference now is that in the Soviet Union if you disagreed with an order from the central planners, you would be pushing up daisies. Here, so far, if you disagree, the central planners just make your life extremely difficult.

By the way, Kenneth Lewis is no pushover. So far he has countered every attack by the cryptocracy. When they tried to move Merrill Lynch wonder-boy John Thane into a position to replace Lewis, Lewis simply fired Thane. When the cryptocracy tried to use a congressional hearing to undermine Lewis, he adeptly turned the hearing against his accusers. 

All this Bank of America business may stem from the Merrill Lynch-Bank of America merger which the central planners strongly pushed. Evidently the planners had some specific ideas about what was to happen and Lewis had his own. A lot of bad blood occurred during the negotiations. Ever since the central planners have been trying to get their revenge.

General Motors, in Today's News 07.11.09

General Motors. Today's Wall Street Journal (page B1): "General Motors Co. kicked off a new era following its exit from bankruptcy protection on Friday, with Chief Executive Frederick 'Fritz' Henderson promising to transform the auto maker into a leaner and more customer-focused company."

Three comments:

***Will it work? The government central planners and the new government-appointed board and Chairman are almost giddy with the success of their maneuver in bankruptcy court to re-form GM without its debts and unpopular car brands. Listen to them and you would think GM will slim down and be profitable in no time. 

It's dubious. First the slimming down is yet to happen. And to get rid of "hundreds of middle managers" is not so easy. Second, they are stuck with car brands and models that, with one or two exceptions, inspire no one.  It will take years to re-design those cars. And what happens in the meantime?

***Good and Bad GM. The GM described above is what the central planners call 'good GM.' Bad GM is still in bankruptcy court and will probably stay there a long, long time, until the planners figure out how to eliminate those troublesome debts and obligations. The media is all too willing to describe what Good GM is composed of. The media falls completely silent when it comes to Bad GM. When the media goes blank like this, one can be sure they are covering up something. 

***Obama. It is amazing that the self-professed pro-labor Democrats have pulled off such an anti-labor deed. And the unions say nothing! Amazing. Of course, if McCann had tried to do these things, the outcry from the Democrats would have been way up there in decibels. That the Dems could pull this off so easily, probably helps explain why the cryptocracy was so anxious to elect Obama.

Citigroup & Bank of America, in Today's News 06.05.09

Citigroup and Bank of America.  Boy, it sure doesn't pay to get on the wrong side of the owners of the world's wealth-generating machine. They are relentless and without conscience. Ever since the beginning of the economic crisis, a campaign has been waged against Citigroup and its chief officer Vikran Pandit, and against Bank of American and its chief officer Kenneth Lewis. Today's news shows that the campaign is far from over.

(Why these two banks have been targeted remains murky. The cryptocracy is the CRYPTocracy because secrecy is its mode of operation and it never reveals its true aims to the public. Perhaps in these cases, one group of families is trying to make a grab for the banks by changing the executive structure to better reflect the families' interests. Who knows? In contrast Jamie Dimon, the chief officer of JP Morgan Chase & Co seems to be blessed and can do no wrong. He and his bank face no campaign to get them whatsoever.)

Citigroup. WSJ: "The Federal Desposit Insurance Corp. is pushing for a shake-up of Citigroup Inc.'s top management, imperiling Chief Executive Vikram Pandit, people familiar with the matter said." Moreover, Sheila Blair, Chair of the FDIC recently pressed a fellow regulator to the lower the government's confidential ranking of Citi's health. And moreover, "Federal officials have reached out to Jerry Grundhofer, the former U.S. Bancorp CEO who recently joined the Citigroup's board, to gauge his interest in the top [Citigroup] job..."  

Citigroup can't catch a break. The powers-that-be are still out to break Citigroup despite the bank's extensive efforts to shrink the bank and clean up any perceived problems. Citigroup even performed better than expected on the Federal Reserve's (read Rothschild's) 'stress test.'

One complication for Pandit is his wild battle with Blair over Citigroup's failed effort to buy Wachovia Corp. It took a while for Pandit to realize he can't win such a battle. He sought to smooth things over, but it looks like his gesture is too late.

Bank of America. "Bank of America Corp. Chief Risk Officer Amy Woods Brinkley and director Robert Tillman are leaving the bank amid a U.S.-mandated review, casting the spotlight once again on the government's role in decision making at the lender." Moreover, the House Committee on Oversight and Government Reform will hold a hearing, summoning CEO Lewis to testify. "People familiar with the [congressional] probe have said investigators are focusing on possible discrepancies between Mr. Lewis's public statements, his testimony to New York Attorney General Andrew Cuomo and what he told Bank of America's board." And moreover, "...federal regulators are pressuring [Bank of America] to improve its governance and management following a recent stress test showing a need for $33.9 billion in new equity as a buffer against future loses."

If Kenneth Lewis hasn't received the message yet that the cryptocracy is out for his scalp, he better learn fast.  It looks like the dogs of war have been called out to go after Lewis and the BoA.

If all these machinations remind anyone of the behavior in the Soviet Union's leading circles, their recollections are correct.  The Obama administration, carrying out the mandate of the cryptocracy, has taken giant steps to establish a government-run economy, very similar to Soviet Union.  Individual corporations, be it banks, auto companies, or insurance companies, are no longer free to govern themselves.  All major decisions now have to meet the approval of the government's central planners.  (In this regard the Obama administration today announced they are about to appoint a pay Czar, a "Special Master for Compensation.")

The American public, whether they know it or not, now finds itself in a totally new reality.  Soviet-style bureaucracy and central planning are now an established part of American life.