Good money after bad?

On the mortgage lender front, SunTrust is asking for an additional $1.4 billion less than a month after receiving $3.5 billion from the initial Paulson bailout plan.

On the mortgage borrower front, 58% of mortgage holders who restructured their mortgages to avoid foreclosure were delinquent again within eight months.

So much for quick fixes. Some companies and borrowers can be saved, but clearly some aren’t going to make it no matter what.

4 Responses to Good money after bad?

  1. Splashman says:

    Yes, quick fixes apparently don’t help much. So why, again, are you supporting the idea of a “bridge loan” to the small 3?

  2. Les Jones says:

    I support bridge financing if and only if it’s tied to real changes in their compensation plan. Otherwise they will go out of business in a matter of time no matter how much money they’re loaned.

  3. Splashman says:

    I’m not just trying to be argumentative, honest. But you pointed out earlier that Detroit couldn’t make money even in relatively good economic conditions. And the general consensus is that it has been many, many years since Detroit has made cars people want to buy (meaning, cars made by foreign-based mfrs are more popular, and the only segments of Detroit’s production that have been profitable have been trucks and big SUVs).

    Your link is bad, but I infer from your above comment that you think solving the compensation disparity will lead to resolution of any other heretofore unsolvable problems Detroit has (such as making cars people want to buy). Why? (I’m not being snarky — honest question.)

    I contend the rot is too deep. There isn’t anything to salvage. Only a radical shakeup will produce the necessary change — not just in compensation, but in mindset, from top to bottom in Detroit. Bridge loans will defer the needed shakeup, and lead to more loans — that’s not even a secret any more. And the more loans that are made, the more the politicians will argue for additional loans when they inevitably become necessary, so “our” perpetually growing investment is protected.

  4. Les Jones says:

    “such as making cars people want to buy”

    Lots of people buy GM products. It was only recently that Toyota challenged them for the number 1 position.

    Ford is doing fairly well – they’re the least in trouble, and are only asking for a line of credit in case of trouble next year. The F-series is consistently one of the top one or two selling vehicles in the country.

    Chrysler on the other hand has got problems selling cars. The gov bailed them out once, Deimler-Benz bought them, then disgorged them. I wouldn’t personally buy a Chrysler, though I would buy an AMC/Jeep.