Domestic auto industry to get $17.4 billion in loans

http://www.cbsnews.com/stories/2008/12/17/politics/otherpeoplesmoney/main4672633.shtml

The math doesn't add up in the freep article. At least the math works in the Detroit News article.

Great, we'll have them around for another few months.

The economy will doing fine by spring, cars will start selling again and all the "big 3 must die" supporters will be disappointed. :)

But they weren't making money even when the economy was fine. And I think the days of buying more than you can really afford, on credit, are over until people forget again.

Not true, carlisimo... Ford had a net profit the first quarter of 2008, even with escalating fuel prices and declining truck sales.

"The economy will doing fine by spring"

The average recession lasts 18 months, which would be around June...if this were a recession. Unfortunately, this is a depression and many folks are predicting late 2010, optimistically.

I hate to bring bad news, but the last depression lasted 3 presidential terms despite/because of massive government intervention. Based upon government's start here, I think 2010 is highly optimistic.

So what makes this a "depression"? Other then it makes a good doom and gloom story?

All the triggers that started the downturn have been identifed and dealt with. Right now the only thing keeping the downturn going is lack of consumer confidence. Basically that means the public (and media) are creating the recession now, not the government or the banks.

I'm not saying the economy will be booming by spring, I'm saying it will be growing and that, by definition, is the end of a recession.

dont worry, if the economy does recover soon. the 1 trillion + magic dollars created in the past year, will mean that 5 dollar gas will look cheap.

hyper super inflation here we come. Oh that will mean hyper super interest rates. Damn, that wont help auto sales will it?

"big 3 will turn it around be spring". LOL, LOL,

lets see, big .8 isn't making cars for a month. Big 1 is cutting production 30+%.

Maybe ford. GM Chrslyer, they'll probably take the bailout bucks, buy eachother out, then comeback march 31st asking for 25 billion more to make it to september

I'm not aware of any concrete statement for what a depression is, but I'd take it to mean a severe recession that persists despite government intervention for a prolonged period of time.

Basically, I take it to mean that the economy cannot be fished out by even the most drastic government intervention. The prime rate is hovering just over 0% and we're injecting absurd amounts of money into breathless industries, yet we continue to fall. To me, that's absolutely a depression.

estreka, welcome to the media driven freak out.

you do relize that during the depersion unemployment was between 25 to 30%. Or a abut 4 times what it is now.

The current national unemployment is 6.7% and while is likely to go up a bit more, lets put that in context of history.

Its only .4 points higher then in 2004. Lower then most of 1991-1993. Lower then 1980-1986. ETC ETC. So please get a better point of view then the nightly news, who's job it is to make everything 'THE WORST EVER' because otherwise how is it news?

And while at the start of the depression the crashed 40%, at its lowest it was down 80%.

So the market would have to crash another 5000 points for that to happen.

The amount of shear ignorance in society today is sickening. I dont know if I can even blame you. The news, the schools, the politicans, all are making montians out of mole hills and scaring the crap out of people. Still with the internet these days, I would think people could go and learn something before makeing stupid statments like 'Thats absolutely a depression'

They have ample time and money to rebuild their shattered reputations.

Op, when you have attained an MBA or PhD, then you may lecture me about economic definitions. Until then, I'd appreciate a little respect with regard to my MBA and the hundreds of hours spent doing research on exactly the types of topics discussed here. The definition of a depression is indeed subjective, so of course I welcome alternative viewpoints. But I don't appreciate the complete denouncement of my own point of view.

As it seems I must back up my statement, the US itself has undergone multiple depressions that reflect the losses we see today.
1. The Long Depression (called the Great Depression at the time) was similar in scope to what we see today. It began with the collapse of 1 financial institution in 1873 and spread across the entire economy.
2. The Panic of 1837 was the result of the collapse of the national bank. Unemployment was relatively unaffected, but mass inflation ensued. The result was a 7-year depression.
3. The Panic of 1819 (which resulted in a depression) was the result of overexpansion by banks. By generating a great deal of loans that became unpayable, the "credit" markets seized and folks were actually thrown in jail for nonpayment.

I'm sure if you did more research, you could find a near-endless supply of historic depressions, particularly in England. While all of these pale in comparison to the Great Depression, they are depressions nonetheless.

Don't assume the most extreme example of anything is the new standard by which all others are measured.