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Governments Preparing To Bail Out DRAM Makers 494

Posted by timothy
from the bailing-buckets-the-new-best-conference-swag dept.
An anonymous reader writes "DRAM makers are facing one of the worst downturns in their history and governments around the world are lining up to help companies through the mess. Taiwan, Germany and South Korea all appear poised to offer some assistance to their DRAM chip makers. The chip makers' problems are indicative of global woes. Easy lending terms and a bright view of the future prompted them to build too many new DRAM factories. Much of the new output was aimed at Microsoft's Windows Vista, which has higher memory requirements than XP."
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Governments Preparing To Bail Out DRAM Makers

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  • Re:Bailout Bandwagon (Score:5, Informative)

    by jcr (53032) <jcr@mac. c o m> on Monday December 15, 2008 @05:21AM (#26117753) Journal

    are all industries everywhere simultaneously going broke just now?

    You can get a pretty good idea how we got into this situation from here. [mises.org]

    Not all industries are going broke, but economic activity in general is falling sharply. How long this lasts will depend on how much effort governments put into delaying and interfering with the repricing and deflation that must follow an inflationary bubble of this magnitude.

    -jcr

  • Re:Bailout Bandwagon (Score:5, Informative)

    by Dr. Hellno (1159307) on Monday December 15, 2008 @05:53AM (#26117925)
    I'd gotten the same impression, but it seems that the term has been in use for a while. Here's one example from 1979 [time.com]

    I hardly expect anyone to read that, so I'll summarize. In 1979, according to this article, the Carter administration offered 1.5 billion dollars to Chrysler in what was referred to as a bailout (also called, somewhat quaintly, a "tide-me-over"). Amazingly, the company was proposing a shift to fuel-efficient cars that would get them back to profitability "by 1981". This is all before my time, but I do know that if they ever followed that business model it can't have lasted very long. And so we find them today, stuck in the same ditch they'd driven into back in 1979.
    We've all heard that history repeats itself, but this is one of the most startlingly clear examples that I've seen. The difference today, as far as I can tell, is that in 1979 the bailout package called for Chrysler to have a clear plan going forward, and laid out strict conditions (I won't cite them here, but feel free to click on that big ol' link up there). By contrast, I've seen snippets of the recent hearings on a present-day auto-industry bailout. Irrelevant grandstanding about jets [bbc.co.uk] aside, these execs manifestly do not have any plan, and have admitted that they really don't know if the bailout will be enough to save the industry.

    We should not stand for this. The whole tired show has been seen before. The only difference, again, between the bailouts of today and those of yesteryear is that we no longer ask for any sort of accountability. That, and a couple orders of magnitude.
  • Re:Bail Out Madness (Score:5, Informative)

    by EmagGeek (574360) <gterich@ao[ ]om ['l.c' in gap]> on Monday December 15, 2008 @07:17AM (#26118359) Journal

    A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been about 200 years. These nations have progressed through this sequence: '>From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.

    Alexander Fraser Tytler (1747-1813)

  • by martin-boundary (547041) on Monday December 15, 2008 @07:24AM (#26118417)

    Beware when the (people in) government wants to impose and act out its idea of what is a morally just intervention.

    The usual quote "eternal vigilance is the price of liberty" naturally applies. However, don't forget that intervention *is* the purpose of government. It is the official mechanism for imposing the will of the people, whatever that will happens to be.

  • Re:Bailout Bandwagon (Score:2, Informative)

    by Anonymous Coward on Monday December 15, 2008 @08:48AM (#26118857)

    That much is obvious. Perhaps the words "Financial Crisis" didn't make it to Fox News yet?

    Fox News covers it. Neil Cavuto, for example, has had Dr. Paul on several times [campaignforliberty.com] to talk about it. Peter Schiff gets interviewed on various Fox News programs as well (one thing I miss about Glenn Beck on CNN was his frequent Peter Schiff and and Stephen Moore interviews).

  • Re:Bailout Bandwagon (Score:4, Informative)

    by wellingj (1030460) on Monday December 15, 2008 @09:27AM (#26119085)
    USA doesn't over produce, it under produces at the expense of the rest of the world.
    This economic crisis is just a revaluation of how much the US is worth.
  • Re:Bailout Bandwagon (Score:2, Informative)

    by larry bagina (561269) on Monday December 15, 2008 @09:39AM (#26119177) Journal

    The Chrysler of today isn't the Chrysler of 1979. Mercedes/Dahmler bought them, realized it was a huge mistake, and sold them to Cerebrus. Cerebrus basically buys companies, breaks them apart, and resells the pieces. GM and Ford have ownership stakes in "foreign" auto companies. GM and Ford have an international presence. Chrysler has been stripped of those things. At this point, bailing out Chrysler isn't saving jobs, it's saving a capital management company that made a bad bet.

  • by jcr (53032) <jcr@mac. c o m> on Monday December 15, 2008 @09:56AM (#26119309) Journal

    the _vast_ majority of free market economists believe in the absolute authority of market forces,

    The person I was responding to wasn't talking about free market economists, he was talking about economists in general. Regrettably, free market economists are a minority in the profession.

    which when left unchecked have proved how spectacularly wrong they are

    Free market economists have been proven right again and again. The great depression, the current inflationary debacle, the obvious contrasts between east and west Germany, North and South Korea, and India before and after abandoning central planning show that freedom is the way to go if you want a better economy.

    -jcr

  • Re:Bailout Bandwagon (Score:3, Informative)

    by jcr (53032) <jcr@mac. c o m> on Monday December 15, 2008 @10:10AM (#26119419) Journal

    Nah, it's the same old socialism. Robbing the productive to support the unproductive.

    -jcr

  • by TheRaven64 (641858) on Monday December 15, 2008 @10:14AM (#26119443) Journal

    As with much of the current economic downturn, the problem is liquidity, not capital. All of the manufacturers have very expensive assets (their fabs) and make things that have a large market. The problem is that due to decreasing liquidity everywhere, fewer people are buying RAM suddenly. In the long term, it is expected that this will end and people will start buying again. Once they do, the manufacturers will make large profits again. Until they do, they have large debts from building their fabs that need servicing, and not enough income to do so. If one of them goes bankrupt, then whoever buys their assets will make a killing.

    In a more healthy economy, a bank would look at them, judge them a good medium-term risk, and lend them the money to cover their outstanding debts with a relatively high interest rate. Once the demand recovered, the bank would then get its money back plus a large percentage. At the moment, however, there is a shortage of banks with sufficient liquid capital to be able to make such a loan.

    The alternative is for national governments to step in and guarantee their debts. This allows the manufacturers to keep operating in the short term. If done correctly, it will mean that the taxpayer will see a long-term benefit, since they will have the bail-out amount repaid with a reasonable amount of interest when the market recovers.

  • by jcr (53032) <jcr@mac. c o m> on Monday December 15, 2008 @10:27AM (#26119533) Journal

    Without regulation people are free to abuse others however the hell they feel like

    Try to grasp the difference between the rule of law, and the government intervening to reward some people at other people's expense. The former is what we create governments for, to secure our freedom. The latter is how governments destroy freedom.

    -jcr

  • by jcr (53032) <jcr@mac. c o m> on Monday December 15, 2008 @10:34AM (#26119595) Journal

    Social Security is as unfair and unjust as any other Ponzi scheme.

    -jcr

  • Re:Bailout Bandwagon (Score:2, Informative)

    by DinDaddy (1168147) on Monday December 15, 2008 @01:13PM (#26121211)
    An even smaller number of customers who are able to pay for their goods?
  • Re:Bailout Bandwagon (Score:3, Informative)

    by ShooterNeo (555040) on Monday December 15, 2008 @03:14PM (#26122859)

    Here's the deal : burning hydrocarbon products causes measurable economic damage to other people besides the entity burning them. I.E. : if you burn a gallon of gas, you create air pollution. Also, your country may have to fight a war to make sure that gas is available.

    Economists call these things "negative externalities". The correct approach to fixing negative externalities is to charge a tax on the activities that cause a negative externality to other people.

    This would have the net effect of making alternative energy relatively cheaper, stimulating more investment in it, and eventually replacing the use of hydrocarbons for energy altogether.

  • Re:Bailout Bandwagon (Score:1, Informative)

    by Anonymous Coward on Monday December 15, 2008 @04:34PM (#26123937)

    It is better for gas to be at $5 a gallon *constantly* than at $0.50 one year and $2 the next.

    Price stability allows individuals and companies to predict their costs and adjust. Call it kind of "economic evolution". Swings from $1 to $4 and back down in short periods of time kill both,

        * industries using oil and polluting everything for free (non-competitive during spike)
        * industries investing in tech other than oil (non-competitive after the spike)

    So, you see, the entire problem is the inelastic supply-demand of commodities, and more specifically, fossil fuels. Carbon Taxes are there to mitigate these spikes by allowing alternatives to be competitive.

    Think of it another way: why can fossil fuels pollute everything for free? Is the mercury pollution (90%+ from coal) in oceans and almost all lakes "free" to clean up? No impact on society?

    Carbon tax is a way to put a tax on pollution. Ideally, you'd want revenue neutral carbon tax, where the tax is returned as a tax cut/credit in income taxes. In that case the free market drives innovation instead of gov't subsidizing some special interest groups like it is done now.

%DCL-MEM-BAD, bad memory VMS-F-PDGERS, pudding between the ears

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