Add GM, Ford, and Chrysler to this List

Via TJIC, who had a much better title, "poor credit risks remain poor credit risks, even after you give them a free pony"

Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

"Put simply, it shows that over half of mortgage modifications seemed not to be working after six months," he said.

You can absolutely, without a doubt, add the Big 3 to the list of folks who will be facing default once again just months after getting their first dollop of federal money.


  1. Tomg:

    Coming soon to a dealership near you - the Fedsel.

  2. Stephen Macklin:

    But that wont stop them from passing the Corporate Reinvestment Act.

  3. ErikTheRed:

    Anyone want to place a bet that we'll be hearing the following quote regarding the Big 3 in six months: "The results, I confess, were somewhat surprising, and not in a good way"?

  4. Steve:

    Great post!

    Would you like a Link Exchange with our new site COMMON CENTS where we blog about the issues of the day??

  5. morganovich:

    hell, it can happen to the whole government.

    credit default swaps (think of it as bond default insurance) on US government debt are now more expensive than those of the Campbell’s soup company.

    it makes sense if you think about it.

    we’ll need to stock up on canned goods for the coming governmental collapse.

    go soon while the selection is good or it’ll be cream of asparagus for you for the whole second half of 2009...

  6. JimBeaux:

    It appears to me that we're balancing on a tightrope - or tight-thread. One little unexpected problem could send the whole economy toppling over the edge of the cliff. Say, a pandemic. Heck, even an epidemic. Or another natural disaster in a major city. Or a terrorist attack. Any number of things. For months now, my gut has started to tighten and twist whenever I read about the plans of the politicians to stimulate the economy or bailout the financial situation. According to my figures, each and every taxpayer is already on the hook for $61,500 in bailout money, based on the current bailout total of 8.5 trillion ( and the number of US taxpaers. Most everyone expects the bailout total to only keep going up. The 2009 deficit is expected to be $438 billion. Adding Obama's stimulus package could take it over a trillion. I truly believe that we are on the cusp of some very dark times across the globe. I'm desperately trying to get my own personal finances in order, and yes, I am stocking up on canned goods, dried beans, rice, and bottled water. I'm not a brilliant thinker, but I'm not some mindless moron either - and I, for one, am getting more frightened by the day.

  7. dearieme:

    Governments will default on their fixed interest debt by inflation, and on their inflation-linked debt by rigging the calculation of the inflation rate. They'll renege on "entitlements" by, at the very least, means-testing them. There is no alternative - governments are insolvent.

  8. Ethan Bloch:

    "You can absolutely, without a doubt, add the Big 3 to the list of folks who will be facing default once again just months after getting their first dollop of federal money." I am in agreement with you. Wouldn't it be smarter to just let them file for bankruptcy now? Then provide them with funding to re-org into smaller, stronger automobile manufacturers?

  9. SmartDogs:

    Wow - what a stunning revelation. People who have a history of being fiscally irresponsible are more likely to default on loans than those who have not.

    ...I wonder how many federal dollars went into funding that study?

  10. Will H:

    Ford is in the best shape of the 3, they didn't ask for immediate money like the other 2, they wanted a line of credit of $9B just in case they need it in the future.

    So I was wondering why doesn't Ford oppose the bailout? If GM fails for example won't that improve Ford's market share? Or is Ford worried that if GM goes chapter 11 and reorganizes that GM would be able to have a better labor agreement and then put Ford at a disadvantage?

    If I owned a company I would burn it to the ground before I would go begging to those self righteous SOBs in Washington.

  11. Mike:

    Well the first damn thing they should do is not even consider the UAW. Let 'em strike if they want. They can hire laborers for about half the price anyway.

    Apologies to anyone who belongs or has ties to the UAW. But honestly, the crap they've been allowed to get away with at the hands of the automakers and the government is almost criminal, IMO.

  12. eCurmudgeon:

    "Wouldn't it be smarter to just let them file for bankruptcy now?"

    Not bankruptcy, Chapter 7 liquidation. If anything, any government handout funds should be for the express purpose of winding down operations at all three companies and turning the lights off in a controlled, staged manner.

  13. OClvl3:

    Saw this today and it made me laugh.

  14. ErikTheRed:

    Well, looks like the bailout won't happen this year; it just failed a cloture vote in the Senate. Apparently the Republicans acted like Republicans for once. Shocker.

  15. HS:

    What plagues these companies is the same thing that plagues America. Of the people, by the people, for the people... what happens to them is what will happen to us. I asked a Russian friend of mine what happened when his country defaulted on loans. Loss of jobs, loss of homes, loss of food... his family went to stay with his aunt on the farm while some that are still in the city stood in line for hours for butter. Same thing as a depression... just localized.

    The U.S. is defaulting on its loans if you haven't noticed over and over again.

    Printing money is last resort default.