The Auto Bailout

Just after Obama took office the auto industry was going down the drain and the government stepped in and save them from dying an agonizing death…….of course once we did bail them out there was a wealth of pros and cons and just an amazing amount of bat crap crazies….the usual suspects that radio guy and the Info guy and the like…..let’s just say a lot of them came out of the woodwork…….

After awhile the auto industry got back on their feet and started showing a profit and even paying the government back for their confidence in the industry to bounce back….all it needed was a little help….

Could there be more to the story of the auto bailout?  Glad you asked…….

DETROIT, MI- The auto bailout of General Motors cost taxpayers more than initially reported, according to a government report released today.

In its quarterly report, the Office of the Special Inspector General for the Troubled Assets Relief Program reports taxpayers lost $11.2 billion on the bailout of the Detroit-based automaker, up from $10.3 billion the U.S. Treasury estimated when selling its last GM shares on Dec. 9.

Overall, the report finds that taxpayers lost roughly $15 billion from the $85 billion automotive bailout of GM, Chrysler and their financial arms.

“As of March 31, 2014, taxpayers have lost $11.2 billion on the principal TARP investment in GM. Taxpayers had also lost $845 million on the sale of Ally Financial’s common stock, as well as $2.9 billion on the principal TARP investment in Chrysler Holding LLC,” reads the more than 500-page report.

Oh goody!  we were duped again.  It is amusing that I NO longer find any of this surprising…….just another indication of how the news is manipulated…..and just another lie to the American people……when will we ever learn?

Let me know if you have seen this on any of the major news outlets, please……so far I have seen NOTHING!


The Stimulus Was An Utter Disaster

College of Political Knowledge

Federal Deficit Series

We hear these words daily coming out of the mouths of Repubs…..Obama’s plan is a bust…the economy is worse because of his policies….on and on…..they prattle  and they prattle and we sink deeper into the hole that the Washington crowd has dug, all of them not one party over another….all of them!

But was the American Recovery& Reinvestment Act (the stimulus) really a failure?  Not really….why?  CBO (or maybe it was the GAO)…..anyway their report on the stim plan shows that 1.3 to 3.0 million jobs were either created or saved and that it created $2 billion of economic activity and  that it has added about 2% of the country’s GDP.  NONE ot that sounds like a failure….yes, it could have been better but at least it did stop some of the slide to the economic abyss.

The failure that one may be thinking of is that of the Bush presidency’s bank bailouts…..these institutions were bailed out so that banks would start lending the money and re-start our economic engine….guess what?  It did NOTHING to improve the economy….it did however, save a bunch of gambling banks from disaster for the games they were playing with the people’s money…..

Maybe we should stop calling everything a failure and just stick to the facts…….or at least fix the designation to the thing that was the real failure and stop playing political games for electoral advantage…..

Don’t Look Now But It Is Not Over!

We hear daily conflicting reports on how the economy is doing….first it is good, then after adjustments, not so good….we hear that banks are paying out massive bonuses and still using taxpayer cash…..we hear lots of manure daily, weekly and monthly on the condition of the American economy……investors are thrilled at the news…but the rest of us wait for our turn for attention…

Neil Barofsky of the TARP Fund office sees something a little different than the media:

Neil Barofsky, the special inspector general for the US bank bailout, released his quarterly report to Congress Saturday, saying, “It is hard to see how any of the fundamental problems in the [financial] system have been addressed to date.”

The document claimed that the financial system is more dangerous now than ever before because banks have reason to think the government will step in again when their speculative bets go bad. “Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” Barofsky wrote.

Following the financial meltdown, the biggest banks grew even bigger as they bought up their failed rivals. As Barofsky put it in his report, “To the extent that huge, interconnected, ‘too big to fail’ institutions contributed to the crisis, those institutions are now even larger, in part because of the substantial subsidies provided by TARP and other bailout programs.”

The report emphasized that, despite the trillions of dollars provided by the bailout, the banks have continued to decrease lending. Barofsky stated, “Although there was this public disclosure that the purpose of these programs was to increase lending, very little, if anything, was done to encourage or direct lending.”

The report does not sound too cheery about the future of the economy…….it seems that the same conditions that caused the economic problems are still there and waiting for the next chance to throw a monkey wrench into the machinery of the economy… amount of cash thrown at a problem will solve it if the underlying conditions remain…it is NOT rocket science….it is common sense….

Yet Another Stim Plan?

Many on the Left as well as others have been mouthing that there needs to be yet another stim plan to help us out of the recession that is crippling the US…….of course there are others, mostly on the Right, that say it will be way too expensive and it would expand the deficit even further……

So Professor, will there be yet another stim plan?  Easy and simple answer is YES……but it will not be called that…..there will be some other cutesy label put on it to try and make it look like something other than what it is…..another stim plan…..

Professor, please qualify that answer…….sure thing people……let us begin with demand….there is NO demand……with no consumer demand there will be little to no jobs created… jobs then no expansion of inventories and then NO recovery……it is just that simple….

Then how will the economy recovery?  The new stim plan will not use that label but it will employ such tactics as cash for clunkers, extension of unemployment benefits, etc….things already used that have helped the economy in a minor way…there is already some indications of this will be their tactic….like the cash for caulkers, which is suppose to help people spend money on weatherizing their homes and businesses….

Basically, this is an end run, to use a sports analogy, to help the economy to start its recovery…..personally, I do not think this will do all they intend…..the first stim plan should have been used in other ways than they used it……as I have always said… is always good to create demand….without it there is NO recovery….

But this is not just an idle issue…..

More than 230 mayors are in Washington for the winter meeting of the United States Conference of Mayors, and many said they had been forced to impose layoffs, furloughs, service reductions and fee increases to deal with falling municipal revenue. The next fiscal year looks even worse, they said.

“We are in the middle of a ‘jobs emergency’ that demands decisive and swift action,” said Elizabeth Kautz, the mayor of Burnsville, Minn., and president of the conference. “We need the Senate to pass a Main Street jobs package now.”

Mayor Kautz is a Republican, and while many Republicans in Congress oppose a second stimulus package, many of the Republican mayors here support it.

The economy is NOT looking good….but is a second stim plan really going to help or just be another massive bailout of gamblers and thieves as the first one was?  We have heard lots of lip service about jobs….but where are those jobs?….what sector is employing people?  This is just another “gimme” to Wall Street!

Make ‘Em Pay!

For months now I have been a bitch about the taxpayers money being used to give bonuses to the fat cats on Wall Street… every turn the banks have gotten a special treatment and it looked like the taxpayer was screwed…..

Today Obama will announce a plan to recover upwards of $120 billion of the money originally given the banks….

Obama’s announcement will come as U.S. unemployment is stuck in double digits and public anger is growing over big bonuses that some financial firms are poised to resume paying, barely a year after the height of the global financial crisis that made the bailout necessary.

The Obama administration official said the amount of money raised from the fees would not exceed $120 billion since this was the higher end of conservative estimates of the cost of the Troubled Asset Relief Program, or TARP.

Sounds like a pretty good idea to me….but as usual there is a downside to the plan…..The source, speaking anonymously because the fee has not officially been proposed, said government officials are also discussing exempting automakers and insurer American International Group from the fee, even though these companies are expected to represent a large chunk of the bailout losses.

There are other ways of “Making Them Pay”……that would be a Goldman-Sachs shareholder that is suing the company……this was posted in “Before Its News”:

the firm is supposed to spend about 50% of its net revenue on salaries and bonuses.  But in 2008 Goldman dished out $4.82 billion in bonuses despite earnings of only $2.32 billion..In the first quarter of 2009, it spent 259% of its net income on employee and executive compensation and in the second quarter 193%. Brown is now Goldman for exceeding its own rules on salaries and bonuses.

I makes me happy to see that at least someone is mad enough to do something as a payback for the screwing the banks have given the taxpayer….I just wish more people would take these a/holes to task….

Should He Stay Or Should He Go?

That is the question that is being batted around Washington these days…the “HE”  is Geithner the Obama Secretary of the Treasury….in recent hearings on Capital Hill…..the following is being reported in The Hill:

Treasury Secretary Timothy Geithner is coming under new pressure from conservative Republicans and liberal Democrats to resign.

Reps. Peter DeFazio (D-Ore.) and Kevin Brady (R-Texas) this week joined a small group of lawmakers publicly calling for Geithner to step down. Former Republican Rep. Rob Simmons, who is challenging Sen. Chris Dodd (D) for Senate in Connecticut, has made Geithner’s resignation a campaign issue.

This week’s criticism was sparked by a report from Neil Barofsky, the special inspector general over the $700 billion bailout program. Barofsky concluded that officials at the Federal Reserve, including Geithner, who was head of the New York Fed, made a series of missteps in the bailout of American International Group (AIG).

Barofsky faulted Fed officials, including Geithner, for a negotiating strategy regarding the firm’s complex derivatives that “offered little opportunity for success.” The report said that the Fed paid full value to settle the derivatives contracts, which meant tens of billions of dollars went to the big American and foreign banks that were AIG’s counterparties in the deals.

Maybe these little jerks should read my blog, among others, we brought up all this concern back in March…..we said then that he, Geithner,  should not have been confirmed let alone ever had been nominated…..after he was confirmed we pointed out that he would not be the “savior” he has been portrayed as……we bloggers were truly the visionaries, at least when it comes to Geithner and the economy….but we do not get any of the credit….nope….it will be the “politicians” that saw this coming and that will be a lie…..not misinformation….an out right LIE!

Repubs did not like him….only because he was nominated by Obama…if it had been the nomination by a Repub prez then he would have been eagerly accepted…..bloggers were about the only ones that wrote against his nomination and later confirmation of little Timmy Geithner as Secretary of the Treasury……

Since few recognize the contribution and the foresight of bloggers…I feel it necessary to give them an “atta boy”…… would be nice if people, especially politicians, would read and appreciate the insight us bloggers have at times…..are we always correct….hell no!….but we do have our moments…..and the Geithner situation is one of our finest….

Taxpayers Take Yet Another Screwing!

The bailout thing has been nothing but a good gang rape of the taxpayer from the beginning…..the bags of money delivered to Wall Street by the government  has done nothing for the taxpayer and everything for the greedy people on Easy Street…..

The Business journal is reporting:

CIT Group Inc. filed for bankruptcy protection Sunday after its board of directors approved of a plan to reorganize the giant small business lender.

The plan has also been approved by CIT’s creditors.

The bankruptcy of CIT is likely to hand the Treasury Department its biggest loss to date under the Troubled Asset Relief Program. It invested $2.3 billion in CIT last December.

CIT was caught in a squeeze between loans gone bad as the economy worsened in the past year and being cut off from the unsecured debt market, which it relied on for about 75 percent of its funding. More stable bank deposits made up less than 5 percent of its funds.

Wait!  Did the article say that the creditors approved the action?  Since the taxpayer is on the hook for billions……did anyone ask them if they approved?  I did not get a note asking me….how about you?

When are the people going to start exercising their muscle on all this silliness?

A New “Robber Baron”?

Recently I gave a lecture nad we had a helluva battle of words… seems those students studying finance believe that what is best for business id best for the country….I did not agree and a war of ideas ensued…..

I tried to point out that we have seen all this financial tap dancing before….back at the century of the 20th century they were called “robber barons”……

Robber baron is a term that revived in the 19th century in the United States as a reference to businessmen and bankers who dominated their respective industries and amassed huge personal fortunes, typically as a direct result of pursuing various anti-competitive or unfair business practices. The term may now be used in relation to any businessman or banker who is perceived to have used questionable business practices or scams in order to become powerful or wealthy (placing them in power of everything having controlled most business affairs.)

A pretty good definition and thought I would ask……sound familiar?

What many on Wall Street do not realize that Main Street is getting more angry with every new deal that they see coming out of Washington….they see the wealthy getting wealthier while the people struggle and fail dealing with their lives…..they (the people) see businesses that made awful decisions get money to make the same type of decisions again….while Main Street gets a foreclosure notice….Main Street sees the politicians covering Wall Streets butt while they in turn screw the people in the same region of the body.

And the financial media desperately tries to convince Main Street daily that all is well within the economy…..and in the same voice tells Main Street that there is NO consumer confidence……

All this leads one to believe that their is a new generation of Robber Barons that are manipulating the economy for their benefit and the people pay the price in their daily lioves as well as the bailouts that have done NOTHING to help Main Street.

And there is Washington…..NOTHING is being done on the scale of the bailouts of the wealthy for Main Street…..the anger persists and is growing…but will the people forget all this suffering once the economy rebounds?  My guess is they will forget…..until the Robber Barons find another way to make more money, put the economy in jeopardy and gets their pound of flesh from the taxpayer……..NOTHING changes…they just re-label it and try to hide the fact that the wealthy get the gold and the people get the shaft (to resurrect an old saying).

A Robber Baron by any other name is still a thief!  And Wall Street is full of thieves!

Could It Get Any Worse?

Markets are a yo-yo……foreclosures are rising quicker than the dead in a zombie movie….jobs are flying out of the economy….and manufacturing is at a stand still….so….could things get worse?

The quick answer is ….you bet your ass it can!

Remember all the urgency of the TARP, TALF and ARRA?  If we did not do something we would be in a sad place in the economy…….would the government, the Treasury to be exact, ever lie to the people to get their way or their money, as it were?

Want another quick answer?  Oh, you betcha ass they would!

Now I know someone somewhere, most likely in “Stumpville, Arkansas will dispute that….but I hate to be a buzz kill, but the WSJ is reporting …they did just that….

The US Treasury misled the public over the health of struggling Wall Street banks receiving emergency funds at the height of the financial crisis, creating unrealistic expectations and undermining popular trust in bailout efforts, according to an official audit.

An inspector general appointed to oversee the US government’s banking bailout has singled out president Bush’s treasury secretary, Henry Paulson, for painting an excessively rosy picture of the condition of institutions such as Bank of America, Citigroup and Merrill Lynch when the government pumped $125bn (£70bn) into America’s ten top banks in September last year.

At the time, Paulson described the banks as “healthy institutions” and said that an injection of government cash would kick-start lending in the economy. But officials in both the Treasury and the Federal Reserve had private concerns that some of them were teetering close to a financial collapse.

“The Treasury may have created unrealistic expectations about the institutions’ condition and their ability to increase lending,” says a report today by the inspector general, Neil Barofsky, who adds that the Treasury and the bail-out program “lost credibility when lending at those institutions did not in fact increase”.

He continues: “Accuracy and transparency will enhance the credibility of government programs like TARP [the troubled asset repurchase plan] and restore taxpayer confidence in the policy makers who manage them; inaccurate statements, on the other hand, could have unintended long-term consequences that could damage the trust that the American people have in their government.”

The Federal Reserve’s chairman, Ben Bernanke, and the head of the Federal Deposit Insurance Corporation, Sheila Bair, are criticised for similarly optimistic remarks in the findings, which will add to a vigorous debate about the handling of the credit crunch in the final months of Bush administration.

Paulson and Bernanke opted to pump funds into all ten of the country’s top banks to avoid creating “haves” and “have nots” that would highlight those considered to be in a more perilous state. In doing so, they tried to talk up the condition of every big institution.

Even though a couple of the big banks have repaid, at least some, of the money….they are still NOT stable and the lies of the past could very well come back to bite them in the ass.

I really hate to pee on the parade….but all the “good” news, economic good news, is made up…nothing is making Main Street feel optimistic about the chances of the economy recovering.

The final word is that the banks have done NOTHING to change the way they do business….so the conditions that caused the crash, as it were, are still in place and surviving well.

YES…things could still get worse……….

AIG May Get A New Teat

Surely you remember AIG, the giant insurance compnay that made many bad choices in the markets and then got lots of our money to help them pull through there illness.  Remember?

If you have forgotten the company, do not worry they are about to get a new taxpayer teat from which to suck more of our money.  Reuters had a report:

Insurer American International Group Inc’s  once-desperate financial state has started to stabilize, a government agency said on Monday, as an influential lawmaker said he would look at easing the terms of the insurer’s federal bailout once more.

AIG, the recipient of billions of dollars in government support, started to show signs of stabilizing in mid-2009, as financial markets improved, congressional investigators said in a report on the status of the government’s assistance to the company.

The insurer was rescued by the government in September 2008, after losing bets that it made on the U.S. housing market threatened to drive the firm into bankruptcy.

Rep. Edolphus Towns, a Democrat who chairs the Government Reform Committee, told staff to take a look at a proposal from former AIG Chief Executive Officer Hank Greenberg that could make it easier for the insurer to repay federal obligations, a committee spokeswoman told Reuters on Monday.

The proposal would cut the government stake in AIG from the current 80 percent and trim interest rates on AIG’s government loan. It also would extend the term of the loan, giving the company more time to repay.

Now are you not pleased that I have found and told you about the next big screwing the taxpayer will be taking?  Ask yourself, has the government done anything to make you debt repayment lighter?