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Last week Congress signed a bill that frees up $25 billion in low interest loans for all automakers (including non-domestics if they plan to spend the money on green tech) and suppliers that spend money in the U.S. to develop green technologies. That was a big deal for Detroit automakers struggling to stay afloat during an abominable automotive downturn.
According to the Wall St. Journal, the $700 billion economic "rescue plan" fighting its way through Congress at the moment also includes money to bail automakers out of bad car loans, which in turn would supposedly go a long way toward freeing up money in the woeful car loan market. We're assuming this car loan bailout issue isn't just for Detroit automakers, as several overseas automakers offer financing here in the States, and plenty of banks are knee deep in car loans, as well. After looking at the positively radioactive sales for September, it's clear that the economic crisis is also affecting car sales. Not only are people finding it harder to get car loans even if they have good credit, but many would-be shoppers are staying away from big ticket purchases altogether until this fiscal mess gets fixed.

[Source: Blogging Stocks]


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  • 29 Comments
      • 6 Years Ago
      How do you get 120% loss on something is what I want to know?

      Also the government should already be buying these loans at free market price which for ML was like 22 cents on the dollar, so most of that 80% would be built in when these securities are bought.
      • 6 Years Ago
      It does get worse if even those who are responsible fiscally cannot even get a loan to buy a new set of wheels. Sad that they are being punished for someone else's problems.
      • 6 Years Ago
      Dang it I knew I shouldn't have paid off that car loan. I could have gotten a bailout!
      • 6 Years Ago
      Don't worry, i think all of this is illegal. Since USA is a member of WTO we have to follow their rules. Under WTO rules no government can give subsidies to an industry, like we just did with automakers. If German automakers will take their case to WTO court they will win. Remember, this loan is in effect nothing but a subsidy, Europeans do not subsidize their auto industry. Healtcare is not an issue for German carmakers because government pays for it...............but government pays for everyone, everyone gets health care (subsidy) from government not JUST automakers. This loan is FOR Automakers only and for US based automakers ONLY. Which is illegal.
      • 6 Years Ago
      FOUL!!! It's one thing to try and help a guy keep his home. But it's another thing to allow someone walk away from their auto loan because they went out and bought a Cadillac when they knew good and well all they could afford was a Chevy.

      So now the rest of us who make it a point to pay our bills, including auto loans, on time will end up getting the shaft.

      Someone needs to come and "rescue" us from this madness!


      • 6 Years Ago
      One question: Who's going to bail US out?
        • 6 Years Ago
        The world. We (the US) have a pretty good credit rating still.
          • 6 Years Ago
          Josiah: I meant "us" as in you and I middle income people. I capitalized "US"to make a statement. This bail-out requires a total average $2800 dollars PER PERSON in every family, including those that aren't even old enough to PAY taxes. I don't know about you but I don't have an extra $8400 that I could just hand over to the greedy stock market. Corporate greed is an ugly monster that is coming to light, unfortunately it's the middle income families that are going to be paying for a long time...
          • 6 Years Ago
          @Josiah:That's us as in you and I. I capitalized US for dramatic effect. This bail out is going to cost everyone an average of $2800 per person, even if you don't yet pay taxes (children). I don't know about you but I don't have an extra $8400 laying around. This whatever type of bail out you want to call it is something middle America is going to be paying for a long time. And also, the "world" isn't going to bail anyone out if their stock markets are crashing BECAUSE of the effect of OUR stock market; no matter how good our "credit" is. The "world" economy is linked thighter than you might think.
      • 6 Years Ago
      My gawd! When is this picking of the American Taxpayer's pocket is going to stop??

      Is SOMEONE going to stop this? In other countries, things like these would invoke revolutions!

      Crooks! Thives! All of them; American Corporations, Politicians....

      HELP!!!! PLEASE!!!!
      • 6 Years Ago
      The $700b bailout of banks courtesy of taxpayers/YOUR OWN $$$...in the end, you borrow YOUR OWN $$$ (with INTEREST!) from the bankers!
      • 6 Years Ago
      Good question - who is going to bail US out? no one is the answer to the question, because the bail out is being written by the same dangerous idiots who are responsible for causing the problem. Every voter in this country needs to take a good look in the mirror. Their voting practices have given us the morons who have given us the catastrophic problem. If you vote for liberal ideologues then don't act surprised when the cow falls in its own manure.
      • 6 Years Ago
      Joshia

      Um no you don't have good credit. You are 6-10 trillion in debt, and your dollar value has been on the slide for some time. That is one of the reason your country is in this mess in the first place. Every one including the goverment living on credit. While Russia is paying off it debts and building cash the USA is sinking further and further into debt.
      • 6 Years Ago
      I don't think there is any shortage of credit out there for average to above-average customers. 2nd chance may be tougher, and being $20K upside down in your SUV trade is tough to finance, as well. Cars sales are suffering because most people who don't NEED to buy a car now are waiting to see what happens. Floor traffic is way down.
      • 6 Years Ago
      Don't worry everyone... credit cards come next, then student loans.


      But ONLY for those irresponsible people who stopped paying. Those of us who do not only get to struggle to pay our way, but carry the load for the others as well through BS bailou...rescues like this.

      Forget you all. I'm moving to the Caribbean.
        • 6 Years Ago
        Todd 100K??????? You better be a PHD by now.
        • 6 Years Ago
        hyperinflation? more like stagflation the way things are going
        • 6 Years Ago
        Student loans first, please. That 100K isn't shrinking very fast.

        Oh well. Hyperinflation here we come!
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