Bailouts

Washington – Government In A Bubble.

I’m convinced that Washington DC is, as we have long suspected, not in the same time line as the rest of us. Some, like me, would tend to say that Washington is existing in another universe altogether.

I’ve been waiting for an adult or two to show up. With the exception of twenty four Tea-Party Patriot Representatives who didn’t fold, regardless of the pressure placed on them by our own people, I haven’t seen a lot of intestinal fortitude out there.

I guess the one thing it did accomplish was to give us, out here in the trenches, a definitive ‘no fly’ list for the upcoming elections. There may be a good explanation why most of our Republican elected representatives caved in on the worst piece of legislation since TARP but, I haven’t seen one yet. At the very least there be some splainin’ to do.

Too soon we forget how much money has been thrown at and squandered by this gang of thieves. George Bush gave up his ‘conservative principles’ to ‘save the economy’ when he signed on to his own 185 billion dollar stimulus, an amount which, in view of subsequent events, seems like child’s play by comparison.

Then we were served up TARP on the half shell… 700 billion dollars to bail out financial institutions which should have been allowed to fail.

Setting aside for a moment the astronomically absurd concept of a government, any government forcing sound financial corporations into insolvency by forcing them to loan money to people who had not a prayer of fulfilling those commitments… that’s exactly what was done here.

Next came Obama’s 825 billion dollar DeMarxist slush fund, the money from which has been flowing into the coffers of the public sector unions since Obama’s ‘immaculation’ (thanks, Rush).

Short story gone sour: Trillions of dollars poured into a failed government by a failed president. A country in the grip of a depression, clearly caused by our own government’s ineptitude. The Repubic (thanks, Mark Levin) leadership, if that’s what it can be called, has sold us out time after time. Their price has been cheap, too… at least from the Marxist perspective. Stonewall, lie and prevaricate… rabble rouse and use cheap political invective and the Repubics will fold every time.

The Republicans are about to face the wrath that thus far has been reserved for ObaMao and his wannabe Trotskyite sycophants. There may have been some principled decisions among the Republicans. I hope so. And I hope there will be some defensible explanations for those decisions. The primary list is being put together as I write.

Washington has had it its own way for far, far too long. The cozy time-warp capsule that the beltway has existed in is about to burst. How ’bout a strong dose of reality, folks? The same reality you’ve been making the rest of us live in for the last four years.

Semper Vigilans, Semper Fidelis

© Skip MacLure 2011

GM Exec: Reporting GM's Failures Hurts… Republicans?

-By Warner Todd Huston

In an odd turn of events, former GM Vice Chairman Bob Lutz thinks that anyone that criticizes GM is not only "mis-informed" but insists that those "foaming ideologues" that criticize the car giant are "damaging the Republican Party."

It is interesting that an executive in the company derided as "Government Motors" is trying to direct attention away from his minders in the Obama administration and toward the opposing party, and just before a general election at that.

It is also interesting to see Lutz defending GM as the "future" of the car business. Lately GM has not been turning out the sort of products that puts the company at the head of much of anything.

For one thing, value seems to be an area where GM is in the back of the pack. James B. Stewart of the Wall Street Journal's SmartMoney.com found late in April that car shoppers don't find GM to have much value to its products.

"Indeed, value was a theme I heard over and over," Stewart wrote, "a reminder that high gas prices and malaise about the economy are having a profound effect on consumers, even the auto buffs who tend to populate car shows. This struck me as a marketing challenge for GM. Much as many shoppers seemed to like the GM offerings, nearly all of them cited models they deemed better values elsewhere at the show."

If GM is the future of the auto industry as Lutz claims, its products are going to have to give customers the value they are looking for. Thus far they aren’t.

Speaking of the high cost of fuel, GM did seem to lead the field in one area. As Reuters recently reported, it led in inaccurate fuel gages.

The National Highway Traffic Safety Administration said on its website it opened a preliminary investigation covering Chevrolet Trailblazers, GMC Envoys, Buick Rainiers and Saab 9-7s from model years 2005-2007 after receiving 668 complaints alleging inaccurate fuel gauge readings.

In fact, there is yet another area where GM leads: in some of the industry's worst cars. Last month GM found nine of its models in the bottom eleven cars.

Those models ranked as some of the worst in value, safety, and/or reliability, and gas mileage. As David Freddoso quipped, "Thank goodness we put up $80 billion to bail out GM and Chrysler. They are now building such wonderful cars that they have achieved total dominance of the Forbes "Worst Cars on the Road" list…"

Still, Vice Chairman Lutz wants to label anyone that sleights GM as a "foaming ideologue" for doubting the company. One wonders if his spin is merely bluff or something else?

Geithner’s Spin: Auto Bailout A Success

-By Warner Todd Huston

At the Detroit Economic Club today, Treasury Secretary Timothy Geithner tried to claim the auto bailout is a success.

It certainly doesn’t seem like a success for the taxpayers. GM stock is about $30 today, and unless it gets up to $54, the taxpayers lose money on the deal. Why would it go up? You want to fight high gas prices by buying a Volt? How does $41 grand a pop sound? And still GM loses money on every one it sells even at that price. Not only that but we are seeing that government subsides for electric cars is good tax money wasted in any case.

It doesn’t get any better. Worldwide, U.S. cars aren’t selling worth beans and domestically, GM is lagging because people who hate the bailouts won’t support it with their car-buying dollars any more than they did with their votes last year when they kicked out every incumbent they could find who’d been for it. And GM still has all its old problems, too, like those big fat union pension obligations. Sadly, nothing that caused GM’s financial trouble has been fixed.

But the spin continues. Last December, Geithner said the auto bailouts were “investments,” which “will show a positive return, not a negative return.”

As the 2010 midterms proved, the people know better. They know government can’t run an automobile company and they know the deal was mostly political payback to the UAW, the biggest culprit in why GM and Chrysler were in trouble in the first place -- not that company execs did themselves proud, either.

People didn’t believe Geithner when he said we’d make money on the deal, and they were right. Today’s speech was more of the same, and it still won’t fly.

Geithner, Obama and the rest of the gang that brought us this monstrosity may or may not actually still think they kept the economy from chaos by the bailout, but they’re just believing their own scare tactics if they do.

As George Mason University Professor Todd Zywicki pointed out in depth, a normal bankruptcy would have worked just as well. Sorry, Timmy. Your spinning wheel is getting us nowhere.

Obama Lackeys Running GM Now Want US to Pay Out for Rebates

-By Warner Todd Huston

A few days ago I wrote about how the Obama administration has stuffed the upper echelons of management at General Motors with government lackeys who have no experience in the auto industry and how Obama's government will lead GM to ultimate failure. Today we see yet one more step toward GMs ruin with government plans for subsidies that the taxpayers will end up paying for.

The Washington Times' Kerry Picket reports that some Democrats and the geniuses Obama put at the top of GM, much derided as "Government Motors," are proposing that taxpayers be tapped to foot the bill for tax credits and rebates for customers that buy the failed Chevy Volt.

Michigan Senator Debbie Stabenow has proposed legislation known as the Charging America Forward Act (S.298) that will give federal cash rebates of $7,500 to anyone that buys the Chevy Volt.

The Department of Energy claims that this rebate program idea is somehow just like the Cash For Clunkers program. But this couldn't be more different.

First of all, this program is only for one car model, the Volt, not just any car model. It isn't likely that the program will stimulate the greater economy. Secondly, the Chevy Volt is a failing model. thus far in 2011 GM only sold 602 Chevy Volts. The Volt's month-to-month sales were down between January and February, too. Sales went from 321 in January to 281 in February.

The fact is that these thousands of dollars of rebates will not do much good and will cost far more in administrative costs than it is worth doing. Not to mention that it will keep GM manufacturing a car that no one seems to want. The latter is the worst part of this as GM will continue putting resources to a failed model to sustain Obama's green initiatives despite poor sales.

This is further evidence that GM is now a political body and not a car manufacturer. It is also further evidence of the seeds of failure being deeply planted in one of the nation's largest corporations.

Look what Santa Obama left for failed fatcats

Hey what was that about checking "who's naughty and who's nice"

Seems twas the night before Christmas, and all through DC,

Santa Obama decided to leave a blank check for failed mortgage firms

Paid for by you and me  

Yep. See the Washington Post for the gory details

The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress.

The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama's current term.

But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009.

The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac's chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.

Where to start?

  • the questionable constituitionality of making a monetary committment in the absence of congressional authorization. Jeez, where I went to law school my con law class taught me the executive could only spend money appropriated by Congress. Has the Constitution been amended since then to enable the Treasury to appropriate their own funds?
  • The fact that over a year after the collapse of the two GSE's neither Treasury Secretary Geithner nor Senate Banking Committee chairman Dodd have any inkling as to an exit strategy for these failed firms
  • That after making a huge brouhaha over the AIG bonuses that the Feds plan to approve equally large bonuses to executives of firms which are also failing to earn any money
  •  The fact that $400 Billion of taxpayers subsidies are not enough, and that these firms appear to be well on the way to becoming perpetual money pits for the taxpayers?

Help me out here. We are supposed to believe that universal health care is going to be deficit neutral when that opinion is coming from the same people who told us everything was hunky dory with Fannie Mae 

 

But while Dodd, the chairman of the Senate Banking Committee, insisted that the firms known as Fannie Mae and Freddie Mac were “in sound situation” and “good shape,” he also ripped the administration and the Federal Reserve Bank........ 

Dodd also warned the television talk show’s host that to suggest Fannie Mae and Freddie Mac were “in major trouble is not accurate.”

 Only off by what, $400 Billion...and counting...Chris.....Heckuva job you're doing fixing those banks. Going to see a reform package in this Congress,,,,,hey, it's only 15 months after the meltdown, why rush?.....maybe it will be chock full of goodies for ACORN like what Fan/Fred execs got this Christmas.

A modest proposal for our "leaders" in DC. How about fixing the financial mess before you decide to play doctor for the whole country.

 

From tiny ACORNs, mighty hypocrites are born

As you may have read, last night the U.S. Senate voted to defund ACORN in the wake of their "whores R us" scandal.

Many of the 83 Senators who voted "yea" are going now to desperately sweep all their close ties with the troubled activist group into the 'ole memory hole. But one Senator is going to have an especially hard time doing this.

Chris Dodd

Seems the Senator is warmly praised on ACORN's own website!

Sen. Dodd Meets with ACORN to Discuss Foreclosure Prevention

Senator Chris Dodd and Bridgeport Mayor Bill Finch with ACORN members March 28. Donna Pearce, on right, worked out a loan modification to save her home through ACORN's housing counseling.

 

BRIDGEPORT, Conn. – U.S. Senator Chris Dodd and Bridgeport Mayor Bill Finch met to discuss strategies for fighting foreclosures March 28 at the home of ACORN member Donna Pearce.Pearce thanked the senator for his support of NeighborWorks, which helps provide funding for foreclosure counseling services. She was able to work out a loan modification to save her home from foreclosure by working with ACORN’s housing counselors."I think we're all just a bit jealous of the great work ACORN does," said Finch. He later added, “We should make sure everyone who signs that paperwork to buy a house has ACORN’s number tattooed on their wrist.”Dodd recently unveiled draft legislation, the “HOPE for Homeowners Act of 2008,” that would set up a mortgage refinancing division of the Federal Housing Administration to aid homeowners overwhelmed with unaffordable mortgages. Similar legislation has also been drafted by House Financial Services Committee Chairman Barney Frank.“This proposal will help provide much-needed relief for people on the brink of foreclosure,” Dodd said. The bill, which extends only to owner-occupied houses, is aimed at “keeping families in their houses and neighborhoods financially stable.”

   Now that Dodd is running behind in his bid for re-election, time to try and make people forget he tried to divert tens of billions of dollars from the TARP bailout to fund ACORN and their allies, even if the taxpayers lost money on TARP . Thankfully, this was headed off, but Dodd got a smaller slush fund tacked on the earlier mortgage relief bill. 

Chris Dodd's various bailouts haven't done much for the overall economy,but's he's made sure they've done plenty for ACORN.

And now, time to cut them loose. Like they haven't been a rogue outfit for years. Please.

Perhaps we ought to add this picture next to the definition. Chris Dodd

 

Dodd adds spice to his political comeback trail

My Senator is going to take some time off from manhandling the financial services sector and auto industry to do some campaigning among the common folks who were not blessed to be fathered by a U.S. Senator.

He will be in the small town of Somers today attending a Chili Cook-off 

You know, not among lobbyists and financiers--just "average people" whom you can't explain the working of finance to. Since only 21% of the voters approve of how you are managing the Banking Commitee, looks like you've given up on that, eh? But you'll still eat their chili. How noble.

Any release of pungent hot air from the Senator on tomorrow's televised gabfests will be purely coincidental, I'm sure.

Of course, we've been told the Senator has retooled his staff to prepare for a real re-election campaign, not the clueless dolts who could only find enough local donors to fit in a Honda Fit.

The Politico reports Dodd's new major domo will be Edward Silverman . Here's the read

Edward Silverman will become chief of staff for the Senate Banking Committee, according to several lobbyists close to the committee. Silverman currently heads public policy for Connecticut-­based firm RBS Securities and serves as treasurer of Dodd’s leadership political action committee. .....Silverman brings the type of experience that could prevent such media firestorms from igniting in the future, said lobbyists. He spent nine years working for Dodd in the 1980s, serving as banking committee counsel, legislative director and finally chief of staff.In 1989, he joined RBS, where he currently works as managing director and head of public policy.

Hmm, who exactly is RBS Securities?

RBS Securities (formerly RBS Greenwich Capital) is the Royal Bank of Scotland Group's U.S. investment bank/broker-dealer based in Greenwich, Connecticut that specializes in fixed income arbitrage and other fixed income strategies......In 2007, RBS was named Currency Derivatives House of the year by RISK Magazine

Hmm, Royal Bank of Scotland---the AIG of the UK!

 

The Royal Bank of Scotland Group (LSE: RBS) is a majority part-nationalised British banking and insurance holding company in which HM Treasury holds a 74% controlling shareholding, through the UK Financial Investments Limited. The group is based in Edinburgh, Scotland, and is the world's largest company by assets.

And what happened to RBS? Well their CEO, Fred Goodwin was fired by the Gordon Brown government who had to de facto nationalize the firm. Why? Because the bank had too much deriviative exposure!

 

However the business (now RBS Greenwich Capital) started making money, and under pressure of comparison with rapidly-growing competitors such as Barclays Capital, saw major expansion in 2005-7, not least in private equity loans and in the sub-prime mortgage market.[10] It became one of the top three underwriters of collateralized debt obligations (CDOs).[21] This increased exposure to the eventual "credit crunch" contributed to RBS's financial problems

Yep, Dodd thinks a guy tied in to the AIG of the UK is going to plot a path out of the mess he made with AIG, Fannie Mae and every other financial firm he's gotten within a kilometer of over the past two years.

Dodd may be eating chili today, but he's still selling the same crap sandwich.

Well, this article does sorta say it all

Dodd's Troubles Open Debate on Congress' Ties With Special Interests

 Dodd has become the poster boy for critics who say the inevitable ties between longtime members of Congress and special interests are undermining efforts to revive the economy.

"He literally thinks he's going to play a critical role from saving us from ourselves," Christopher Healy, the Republican Party chairman in Connecticut, said of the Democratic senator.

"It's like putting the arsonist in charge of the volunteer fire department. He knows where the fire is because he set it. But beyond that, he can't offer much help."........

Ross Baker, a politics professor at Rutgers University and a congressional scholar, said the ties between lawmakers and special interest groups have bothered him for a long time.

"No one leaves Congress living at the same level they came in," he told FOXNews.com.

"More than anything else, it's getting insider information, getting special deals that on the face are not illegal. But they're in a privileged position."......

Critics are seizing on that now, saying Dodd should have been paying more attention to red flags in the economy.

"He wasn't asleep at the switch," Baker said. "He wasn't even at the switch."

There's really not much more than I can add. Sleazy, self-centered and incompetent. The trifecta of failure all packaged together in one article. Perhaps this sums up the worst problem with Dodd.

"They're trying to weave things together that have been reported on widely over the years," Dodd said. "They are taking some items that are frankly, old news, routine transactions, and trying to make more out of it."

For Wicca's sake, you've spent a career hanging out with grifters like Ed Downe Jr. and abandoned the helm of the Banking Committee right when the financial tsunami appeared on the horizon, and you don't realize you did anything wrong.  

You have sat too long for any good you have been doing lately... Depart, I say; and let us have done with you. In the name of God, go!

 

All in the Family? AIG and Mrs. Dodd in paradise

Looks like Senator Chris Dodd and his family go back quite a-ways with financially rewarding ties to fallen insurance giant AIG. Here's what the relentless Kevin Rennie posted yesterday on Real Clear Politics

From 2001-2004, Jackie Clegg Dodd served as an "outside" director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR.....

Clegg was compensated for her duties to the company, which was managed by a subsidiary of AIG. In 2003, according to a proxy statement, Clegg received $12,000 per year and an additional $1,000 for each Directors' and committee meeting she attended. Clegg served on the Audit and Investment committees during her final year on the board.

So the Mrs. was part of the management team at an AIG subsidiary. There's not problematic for a member of the Senate Banking Committee, now is it?

This leads Rennie to conclude "Dodd is likely more familiar with the complicated workings of AIG than he was letting on last week"

There's a local angle here Rennie misses, however. Bermuda is a notorious tax haven for foreign corporations. Bermuda does not levy income tax on foreign earnings, and allows foreign companies to incorporate there under an "exempt" status.  The insurance industry has aggressively incorporated affiliates there to skirt US and EU corporate tax rates.

In 2002 one of CT's leading manufacturers, The Stanley Works, announced plans to reincorporate in Bermuda for tax purposes,  When the hardware icon made this announcement, it because a huge issue around the firm's headquarters in the hotly contested 5th District.  Public outcry caused Stanley to back off from its plan.

The point here is I well remember Rep. James Maloney and Rep. Nancy Johnson, as well as Attorney General Dick Blumenthal scolding Stanley, but I don't recall Dodd saying boo about the plan and his name does not readily surface in web searching today on the topic.

Is that because Mrs. Dodd was running a firm that had done the same thing? Guess former Congressman Maloney would have called her firm "unpatriotic" and compared their management to "Benedict Arnold" had he paid attention.  So Dodd hid out, and let the brass at Stanley get harangued for doing something his wife's firm had already done.  

Another further layer of chutzpah is Dodd eagerly advocates a "corporate carbon tax".   while his nearest and dearest ran a company that skirted the business taxes we already have.

The more you think about it you'd rally have to be a meathead not to see these conflicts of interest.. I guess "those were the days" for Dodd-- when folks weren't turning over his rocks and not liking what's underneath.

Go to fullsize image

 

Definition of "toxic assets"

 http://www3.merriam-webster.com/opendictionary/newword_search.php?word=tox

toxic asset (noun) :

(1)  a debt that is unlikely to be recovered by a lender (as a bank)  

"My portfolio is full of toxic assets"

 (2) Politicians responsible for the financial system bailout: i.e. Chris Dodd and Tim Geithner

Go to fullsize image Senate Banking Committee Chairman Sen. Christopher Dodd, D-Conn...

 

Syndicate content