Thursday, January 28, 2010

Obama and Casino Capitalisme

Many Americans cannot understand that the global superiority of 'this great nation' is over and they blame Obama for that. I think that the USA went down earlier regarding prestige and well exactly when Reagan introduced his 'Casino capitalism' which created the credit crunch crisis. And what is changed? Not that much,  bankers on Wall Street are still greedy and not many regulations are implemented to avoid a next crisis.


But one remarkable thing happened; grass root conservative America became well organized and are blaming the ‘socialist’ Obama for all what went wrong with the economy while the world, obviously, consider that it all started all long time ago, starting with Reagan.. Now conservative America is fighting and wants to get rid off the government while in Europe we took over the government a long time ago. That's a difference!

Is it because of that Finland consider high speed internet as a human right while in the USA people even not want to consider a health care insurance as a human right. That makes a big difference of setting priorities. America is still a great country but needs some self assessments desperately. Will Obama find a way out? I don’t know, but he still needs a fair chance for the rest of his term in office

Government support and the Car industry

A shimmering ray of light broke through the desolate darkness that enveloped the Western automotive industry, as the minuscule Dutch car manufacturer Spyker acquired Saab of Sweden.

Good news was long overdue in the car business, which has been performing poorly in both the US and Europe. Last year government subsidies on the purchase of new cars still propped up turnover somewhat, but this has eaten into future demand. An unsustainable government policy if there ever was one. Now that subsidy programmes have expired, this year will prove to be another tough one for the industry.

Spyker’s takeover of Saab recalls the image of a frog trying to swallow a heron, especially considering that Spyker is itself operating at a loss. In the world of high finance however, an acquisition like this one is anything but impossible.

Spyker’s stock exchange listing plays a part here, since it allows the company to raise capital easily. The current transaction may therefore be called a reverse takeover. Such a deal calls for sharply priced financing which is anything but risk-free.

Saab has been operating at a loss for twenty years. Its owner, General Motors, was more than happy to find a way out that would leave its pride intact. The Swedish government also benefits from the deal now on the table. It has also put its money where its mouth is by underwriting a loan from the European Investment Bank to the newly created Saab-Spyker conglomerate, in what appears to be a form of government support to private enterprise.

Spyker, a manufacturer of sports cars, but only in very modest numbers, will now be able to enjoy the benefits of Saab’s infrastructure. Saab may yet stand to gain from Spyker’s tenacious style of management, which will prove invaluable in a globalised market that leaves little room for bit players.

One thing is sure: this merger is the next step in the turbulent reshuffling of the car industry that is currently ongoing. The ‘Big Three’ American car manufacturers are all hurting. Ford has sold its Swedish subsidiary Volvo to a Chinese competitor. General Motors has also sold its trademark Hummer, an icon of American excess, to the Chinese. In Europe, only parts of the German car industry are still standing. Its French counterpart is only kept afloat by generous credits. General Motors has reconsidered its decision to sell Opel’s German operations, but it will be closing the brand’s Belgian franchise.

The importance of a healthy automotive industry is hard to overstate. The car business is more than a string of production plants and a source of employment. It is a hotbed of technical innovation in the areas of manufacturing technology, management, and fundamental research. Direct or indirect government support will only sustain the industry temporarily. It may also delay the implementation of necessary reforms. The car industry will need to face these tough times on its own. Only the future will tell if Spyker’s acquisition of Saab will prove successful, but the car industry sure could use some of the guts and entrepreneurship that are behind it.
Source: nrc.nl

Day Opening - January 28


I'm relaxed..how about you?