Michael Moore on The Auto Industry

From The Hoss's Mouth

Michael Moore was Larry King's guest on CNN last Wednesday (Nov 19th) regarding the current auto industry crisis. Hoss Cents Money Magazine reviews the comments made by the renown filmmaker.

Moore does not accept the claim by the CEO'S of GM, Ford and Chrysler that the downturn in the economy is the cause of the auto industry's problems. He contends that the true reason for shrinking auto sales is the type of gas guzzling vehicles American auto makers have been producing and forcing on the American public. According to Moore, today's consumer is sophisticated and not prepared to accept being told what to buy, rather they recognize that hybrid vehicles not only save them money but also are more environmentally friendly than an SUV.





The effect of one or all of the big three American auto manufacturers going out of business would be devastating. The big three employ about 266,000, the auto dealerships 740,000, and the auto supply industry about 610,000, for a total of about 1.6 million people directly associated with the auto industry that would loss their jobs. Moore sees this crisis leading to "the end of capitalism as we know it."

He suggests as a solution a similar approach to the one Roosevelt took during World War II. The auto makers were ordered to stop making cars and to produce items needed for the war effort. Similarly, Moore proposes the auto industry be provided the loan they request, but on the condition that they produce rapid transit vehicles and non gas guzzling hybrids, as well as other energy efficient automobiles. "After all," he said, "if you provide $25 billion for me to make a movie, you own the movie, not me." This would keep the auto industry and all its associated businesses afloat, with the added benefit of more efficient transportation methods and a reduced negative effect on the economy.



The Hoss agrees with Michael Moore. Just a footnote: Can you believe the arrogance of these CEO's? They arrive in Washington in their private luxury jets, asking for a handout. That's like driving a Cadillac to the welfare office to pick up your welfare check.

Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Canadian Coup'deat

Previous Post:Tax Free Savings Account

Tax Free Savings Account

From The Hoss's Mouth

The Tax Man Gets Every Penny

Hoss Cents Free Financial Money Magazine applauds the Canadian Government for the introduction of the Tax Free Savings Account (TFSA). Effective in 2009, Canadians 18 years or older will be able to contribute up to $5000 per year to a TFSA. These accounts can be in the form of mutual funds, stocks, bonds and GICs.

Given the state of today's economic crisis, the Tax Free Savings Account will provide a much needed incentive for investors to continue to invest their savings and not run for the hills with their money.

Take a look at these highlights.

• All income earned in a TFSA, including capital gains will not be taxed even when withdrawn.

• Unused contribution room can be carried forward to future years

• Any funds withdrawn can be put back in at a later date without reducing your contribution room

• Federal income-tested benefits and credits will not be effected by a TFSA

• You can contribute to a spouse's TFSA.

• Assets can be transferred to a spouse upon death
  

The Hoss and Mrs. Hoss will have to replace the roof put on our house within the next few years. Over the next two years we can redirect $20000 of our current investments into TFSA ($5000 each per year).

This will be more than enough to pay for our roof. We can then withdraw the money from our TFSA (with no penalty) pay for the roof and then again redirect some of our current investments to top of our TFSA to $20000.

The Government of Canada has provided a tax free savings account calculator at
Tax Free Savings Account Calculator

You can use this tool to calculate your estimated tax savings. For example the Hoss and Mrs Hoss, each making a maximum $5000 per year contribution over the next 10 years with an estimated return of 5% will save a total of $6802.

This makes the Tax Free Savings Account a valuable savings tool for all Canadians and may help ease some of the concerns caused by the current economic crisis.


Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Michael Moore On The Auto Industry

Previous Post:Auto Industry Crisis

Auto Industry Crisis

From The Hoss's Mouth

The auto industry crisis is reviewed in today's Hoss Cents Free Financial Money Magazine.



The wheels are falling off of the auto industry.

On Friday, General Motors Corp. and Ford Motor Co. reported massive third quarter losses.
GM reported a loss of 25 billion dollars US in the third quarter and stated they would cut 3,600 jobs. Yes, you read it correctly, that is billion not million dollars.

GM has indicated that there is a good possibility that they could run out of cash in 2009 if economic conditions do not improve.

The auto industry crisis is wide spread. Ford reported losses of $129 million and Chrysler's problems are well known and reported in numerous money magazines.

Several news reports indicate Ford plans to cut somewhere between 500 to 2000 white collar jobs in North America.

This dire economic situation has prompted the auto industry to request $50 billion in low cost loans. This is in addition to the 25 billion in loans that Congress passed in September 2008 to help re-tool auto plants to build more fuel-efficient vehicles.

Speaking in Chicago at his first new conference, President Elect Barack Obama indicated that the Bush administration remains in charge of government until his inauguration. However, he and his transition team are looking at ways to help the auto industry. He urged the Bush administration to "do everything it can" to accelerate the distribution of the $25 million approved in September.

Obama stated: "Immediately after I become President, I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families, and restore growth and prosperity."

The Hoss does not envy the task that confronts President Elect Obama. The current economic situation is serious and will require fresh and innovative ideas to solve the auto industry crisis. A complete overhaul of the financial system may be required. The result may be something that does not even come close to today's economic models. Money as we know it may become obsolete.

Stay on track,

The Hoss


Next Hoss Cents Free Financial Money Magazine Post: Tax Free Savings Account

Previous Post:Obama or McCain

Obama or McCain

From The Hoss's Mouth

Today, Hoss Cents Free Financial Money Magazine endorses Barack Obama for President of the United States of America. The Hoss has closely watched the Presidential election campaign and has come to the conclusion that Barack Obama is the best choice to be President of the United States.

It is clear that Obama and McCain have well defined differences on such election issues as:

• Economy

• Health Care

• Education

• Taxes

• War in Iraq

• Energy

• Environment

• Free Trade

• Foreign Policy

• Abortion

Although The Hoss's philosophy is closer to that of Obama than McCain, he recognizes that supporting any candidate based only on their election platform can be a problem. Once elected, many unknown factors could and do crop up which severely limited the ability of the elected candidate to carry out election promises.

Furthermore, no one person can be expected to solely govern the United States of America. The President Elect must have the ability to select an administration that will govern the United States with the best interest of the American people.

With this in mind, The Hoss decided to not only consider each platform but also evaluate Obama and McCain's election campaign and determine which candidate demonstrates the best ability to select a team of people capable of working together towards a common goal.

McCain's choice for Vice President (Palin does not inspire confidence), the much publicized in-fighting of his campaign staff (calling Palin a "Divvia"), and failure to coordinate attendees at rallies (Joe the Plumber a no-show) clearly indicate a lack of leadership.

Obama and his staff have far out-performed McCain during this campaign. Obama has demonstrated leadership ability beyond his years. The Hoss believes Barack Obama has shown he is capable of selecting an administration that can work together for the greater good. McCain has not.

The Hoss is proud to support Barack Obama for President of the United States.

Stay on track,

The Hoss


Next Hoss Cents Free Financial Money Magazine Post: Auto Industry Crisis

Previous Post:Index Mutual Funds