Posted on 04/23/2010 1:39:42 AM PDT by JohnHuang2
How did a recently bankrupt company that is still hemorrhaging money pay back a multi-billion dollar loan five years early?
Halleluiahs are ringing throughout the media over General Motor's bailout repayment. "GM pays back government loans from US, Canada" announces the Associated Press headline.
(Excerpt) Read more at americanthinker.com ...
-- According to the Labor Department Thursday, first-time jobless claims last week totaled 456,000, down 24,000, but up 14,000 from the week ending March 27 (days before Obama said "We are beginning to turn the corner . . . the worst of the storm is over!") and up 11,000 from the week ending 3/20 and up 2,000 from the week ending 3/13 and up 17,000 from the week ending February 6. In fact, the latest claims figure (456,000) exactly matches that from the week ending January 2 (days before Obama said "The trend is pointing in the right direction") but up 2,000 from the week ending December 26. The 480,000 first-time jobless claims for the week ending April 10 nearly matches the figure for the week ending December 5 (483,000), a number which prompted Obama to say "The trend line right now is good, the direction is clear!". (H/T: Uncommon Misconceptions).
Despite the staggering "improvement" in the latest figures and the massive census hiring, the 4-week moving average for first-time jobless claims is up 2,750.
"You would think they'd be saying thank you, that's what you'd think." -- Barack H-----n Obama
-- In a separate report, the Labor Department admitted that wholesale prices jumped by a 'more-than-expected' 0.7 percent in March, while food prices spiked by 2.4 percent, the biggest surge in 26 years. "Experts" say 'move along, nothing to see here' regarding food prices since food prices are often volatile. After all, you have to go back only 26 years to find numbers like this. In fact, wholesale food prices have jumped 6.8 percent during the past year. Gasoline prices rocketed by 2.1 percent in March. On the bright side, if you exclude food, energy, capital equipment, health care, autos, trucks, publishing, telecommunications, water, air and rail transportation, all textile, wood, paper, computer, appliance and furniture products, plus the rest of the economy, the March wholesale inflation rate was ZERO PERCENT! The producer price index has soared 6 percent in the past year.
You would think they'd be saying thank you, that's what you'd think.
-- In another sign of a powerful recovery, the jobless rate rose in a total of 24 states in March, with 11 states posting rates above the national average, stuck at 9.7 percent for three months in a row. Thirty-three states have used up their jobless benefit funds and have had to borrow nearly $40,000,000,000 from the federal government to keep doling out benefits. Florida, Georgia, California and Nevada saw their jobless rates hit new record highs in March; Florida and California over 12 percent and Nevada hit 13.4 percent unemployment.
You would think they'd be saying thank you, that's what you'd think.
-- A new survey of around 950 business owners by the National Federation of Independent Business found that "capital expenditures remain near record lows, sales are still weak, and credit lines are hard to find" and "few businesses say they plan to hire new workers within the next three months," echoing the findings of another poll of small companies (100 or fewer workers), done by American Express, which had "one in five businesses [saying] their companies are 'sinking ships,' while more than half said they were merely 'staying afloat,'" (CNNMoney, 4/15).
You would think they'd be saying thank you, that's what you'd think.
Speaking of small businesses, since start-ups and bootstrap companies are a good source of job creation, and these fledgling companies depend on 'angel' investors planting the seed money, the Chris Dodd finance "reform" bill -- as even BusinessWeek admits -- "has three provisions that, taken together, could dampen angel investing far more than the Great Recession. Currently, fledgling companies can raise money from accredited investors -- high-net-worth individuals -- without regulatory approval." So, to fix this job-fueling and economic-growth-producing problem, the "Dodd bill would require money-raising startups to register with the SEC, which would get 120 days to review the filing," and review a slew of pornographic websites from government computers. "The wealth and income baselines for [angel investors] would also double. The bill proposes revoking the rule that allows angels to follow federal regulations, rather than various state rules, in funding companies . . . the anti-angel section of the Dodd bill constitutes a step in the wrong direction," (BusinessWeek, 4/20).
You would think they'd be saying thank you, that's what you'd think.
But! Existing home sales rose 6.8 percent (5.35 million units, annual rate) in March. "The process of a recovery has begun!", proclaimed the president of Naroff Economic Advisors, Joel Naroff. Oops. That quote was from back in August of 2008, when "the worst housing slump in decades [was] far from over," (MSNBC, 8/25/2008). March's rate of 5.35 million units per year is about a million units per year slower than the 6.33 million units per year rate posted for August, 2006, which MarketWatch said showed "a continued implosion in the housing market," and evidence of a "sluggish economy" under George W. Bush. And when the current $8,000 tax credit for first-time home buyers and $6,500 for repeat buyers ends at the end of this month, then what?
Anyway, that's...
My Two Cents...
"JohnHuang2"
Nice compilation of the facts. The real economic pain has not started yet. But what worries me most is just how willing the public is to have government step in and fix things. We are bouncing from one manufactured crises to another, and with each crises the government takes more control of the economy and our lives. And yet the msm continues to cheer obumber and the dems on, the media in this country is a disgrace!
So what happened anyhow, minus the color commentary? Did GM get a herd of unicorns with gold and silver dander?
I see - they only “repaid” a small piece. Big hairy deal.
Fraud?
Is there any despicable quality that our president doesn't possess?
He's a liar.
He's a traitor!
He's abandoned our ally, Israel.
He overthrew bankruptcy law to put unsecured unions obligations ahead of secured creditors in the GM bankruptcy.
He's wasteful to an extraordinary extent.
He's a socialist/Marxist.
He's a thief.
He's a psychopathic narcissist.
Et cetera, et cetera...
Well, it’s not like it’s a deep dark secret. The Bummer is counting on the details being massively ignored in order to perpetrate the “fraud.”
Later
Pretty much. They paid off what was called a 'government loan' with money from another pool of "government aid" - both are part of TARP fund money.
It's a left pocket, right pocket accounting thingy... but it made for a great political and PR theatre, with all the TV ads ready to go, and nightly newsreaders hailing it as a major achievement and why using TARP to bail out UAW, er GM and Chrysler was a great idea by Bush and Obama, and how they "saved" millions of "jobs".
Fox News Neil Cavuto Interview - GM loan repayment - FR / Fox
We, the taxpayers, are still on hook for almost $50B in UAW pension fund as a result of government-forced "prepackaged bankruptcy" that left the government "owning" most of the UAW's pension and healthcare fund - in reality, a liability to taxpayers:
GM CEO says government loans have been repaid - FR, 2010 April 21.
The company dodged a bullet in 2007 when the UAW, fighting for health care for retirees, ended a two-day strike - the first nationwide UAW strike against GM in more than 35 years. The two hammered out a deal creating a $50 billion independent health care trust (with GM ponying up most of the trust's funding), a move expected to stop health care-related red ink from piling up on the GM balance sheet.
It simply looks like Federal money laundering from my uneducated guess. We need to increase taxes to give to A to save the world.. money is confiscated and given to A who returns it to.. well not our wallet, but where? The Fed Reserve?
Then of course, there's Fox.
And I think our allies (now known as our former allies) see clearly the sloppy cut of Barky's jib.
And the people still cry for Justice!! America’s Government is Criminal!
At its core, this was just an illegal Obama-The-Street-Hustler scam to steal a large part of GM from its legitimate stockholders and give it to the labor unions.
Liars all.
WE BETTER CALL THE COPS Over-lending on a loan to achieve quick initial repayment (and thus inflate the loan's perceived value), in the private economy, is called fraud.
COUPLE CLUES (1) GM unveils ad's seeking to reengage disaffected Americans under the pretense of its supposedly paid-in-full-with-interest loan. (2) Ohaha Toadie Larry Summers is touting "success." (3) The Reserve Primary Fund's recent failure may just be a diversion and scapegoating in a broad "War on Wall Street" that Obama, Soros and FDIC's Sheila Bair, among others, are engaged in right now, to get complete control of our financial system.
BIG QUESTION---WHERE IS THE $52 BILLION PRINCIPAL? As stephenjohnbanker posted: ”GM got a total of $52 billion from the US government---$6.7 billion of that was a loan. GM merely paid back the INTEREST. What about the $52 billion PRINCIPAL?
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Americans have yet to learn the full extent of official corruption, thievery, schemes and scams involving $TRILLIONS of tax dollars aided and abetted by the dupes on Capitol Hill.
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THE WHIFF OF MADOFF J, Ezra Merkin---ousted head of GMAC (GenMotors financing arm)---got a $6 Billion taxpayer bailout---and was also feeding hundreds of millions to jailed money launderer Bernie Madoff from Merkin's four offshore investment vehicles.
BAILOUT SWILLERS Stephen A. Fineberg's private equity firm---Cerberus Capital Management LP--- owns Chrysler Motors. The US Treasury bought a $5 billion stake in GMAC (GM's financing arm), and lent $1 billion to GM. This latest loan is IN ADDITION to the $13.4 billion the US Treasury lent earlier to Merkin's GMAC, and Fineberg's Chrysler.
SWILLING TIMELINE In 2006, GM sold 51% of Merkin's GMAC to Feinberg's private equity firm Cerberus Capital Management LP (which also owns Chrysler).
HOGGING AT THE PUBLIC TROUGH In May 2004, Feinberg's "private investment group," Cerberus Capital Management, LP became majority owner of IAP Worldwide Services, Inc, one of the US Army’s largest contractors in Iraq. In Afghanistan, Feinberg's IAP runs a drug/addiction center" in Kunduz---Kunduz is the largest opium supplier in the world. BUSY LITTLE BEAVER IAP also provides infrastructure support for the British Ministry of Defence in Kandahar....apart from supporting the US Army in Basra.
BAILED OUT AND STILL SWILLING Stephen A. Feinberg's IAP also serves a broad array of federal clients including the US DOD, NASA, the US Geological Survey, the US Agency for International Development, the IRS, and a variety of other federal agencies.
BACKSTORY GMAC's Merkin and Chrysler's Feinberg paid the Israeli govt $500M to buy Bank Leumi. An “inside” deal not just anybody could get. Bank Leumi looms large in the missing billion dollar bailouts since Israel is the only place in the world where an individual can fly-in, go to a bank with a suitcase full of cash, and nobody asks where they got it, or whether taxes were paid on it.
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REFERENCE --- AUGUST 2009 Taxpayers Face Heavy Losses on Auto Bailout. A Congressional Oversight Panel recommends the Treasury Dept perform a legal analysis for providing TARP funds to (1) GM, (2) Chrysler Motors, (3) GMAC, their financing arm.Treasury Dept officials have acknowledged that most of the $23 billion TARP provided by the Bush administration is likely to be lost. Bush should have refused to do it (there was $15B fund already appropriated and committed but unspent - for "greening" of the auto industry - that should have been used) and could help convince the management of both companies to file for prepackaged bankruptcy, which would allow both companies (and maybe Ford, as well) to restructure their debts and union and pension contracts, reorganize and emerge far stronger, without taxpayers losing a dime. Now he is (rightly) being blamed by media and Democrats, who at the time demanded the auto companies bailout, for wasting taxpayers money.............The report also recommends the department perform a legal analysis of its decision to provide TARP funds to GM and Chrysler, their financing arms and many auto parts suppliers. Some critics say the law creating TARP didn't allow for such funding.
DID YOU KNOW? TARP was not designed to be a pool of money available for bailout of just anything that didn't move, like a couple of bankrupt unionized companies in the automobile industry. TARP was very specific in its purpose to provide liquidity to frozen banking and financial system and stave off the run on the banks (attack on the financial system, by proxy) and allow the 'netting' of the [frozen] assets on the books of financial institutions, in the aftermath of fall of Lehman Bros and run on trillions of dollars in the money market funds in the consequent "breaking the buck" by Reserve Primary Fund managed by Bruce Bent.
(REFERENCE The father of the money market mutual fund -- investor Bruce Bent -- was charged with fraud by US regulators over accusations he deceived investors into believing his flagship fund was safe before it "broke the buck" last year. The civil charges against the veteran money manager, his son and their investment company come eight months after the Reserve Primary Fund, loaded with Lehman Brothers debt, halted redemptions after the investment bank declared bankruptcy, sparking a run on money-market funds. The fund's net asset value fell below $1 after Lehman's bankruptcy last September, meaning that investors who thought their funds were safe had lost money. The fund is being liquidated and its collapse has spurred numerous lawsuits. Its demise has been a stunning turn for Bent, who regulators called "the public face" of the fund and "a longtime advocate of the safety and stability of money market funds." The Reserve Primary Fund's failure has been a tragedy for investors and the Bents, said Peter Crane, president of Crane Data and publisher of Money Fund Intelligence. (Excerpt) Read more at reuters.com )
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NOTE WELL In addition to his role as White House Chief of Staff, Emanuel is heavily involved in decisions made by the US Treasury.
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Behind The Real Size of the Wall Street Bailout (magazine details $14 trillion bailout)
Mother Jones | Dec. 21, 2009 / FR Posted Jan 04, 2010 by E. Pluribus Unum
A guide to the abbreviations, acronyms, and obscure programs that make up the $14 trillion federal bailout of Wall Street.
The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here. Below, a guide to the pieces of the puzzle:
Treasury Department bailout programs (controlled by Rahm Emanuel)
Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].
Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].
TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid. Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets." GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion [PDF].
--SNIP--- long read
Federal Reserve bailout programs
Commercial Paper Funding Facility: With the support from the Treasury, the Fed established the CPFF in October 2008 to increase the availability of short-term debt (commercial paper) funding. Up to $1.8 trillion [PDF] was earmarked for the program.
Mortgage-backed securities purchase: In 2009, the Fed earmarked up to $1.25 trillion to buy investments based on home loans.
Term Asset-Backed Securities Loan Facility: TALF provides financing to investors who are buying asset-backed securities. In February 2009, the Fed and Treasury announced an expansion of the program to generate up to $1 trillion in new lending.
Foreign Central Bank Currency Liquidity Swaps: The Fed has provided $755 billion [PDF] for currency liquidity swaps with foreign central banks.
--SNIP--- long read
“Over-lending on a loan to achieve quick initial repayment (and thus inflate the loan’s perceived value), in the private economy, is called fraud”
Come to think of it, that title, “FRAUD”, could cover the whole Obama administration.
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